2024-05-24 07:50

TotalEnergies holds AGM on Friday Vote to back company's climate strategy weaker than last year Activists target both TotalEnergies and investor Amundi PARIS, May 24 (Reuters) - Shareholders in French oil and gas major TotalEnergies (TTEF.PA) New Tab, opens new tab largely backed the company's strategy and its CEO on Friday, but support has weakened since last year as some investors called out its insufficient response to climate change. The company's progress report on its sustainability and climate goals for 2030 was approved by 79.7% of shareholders compared to 88.8% of votes last year. More than 75% of shareholders also voted for CEO and Chairman Patrick Pouyanne to continue another three-year mandate on the board, slightly lower than the 77.4% in 2021. Some investors had said they would oppose his position to protest insufficient attention to climate concerns. The board, meeting at the end of the AGM, reappointed Pouyanne as Chairman and CEO for the duration of his term on the board. Greenpeace activists climbed a building near the company's western Paris headquarters early on Friday and unfurled a banner printed with a large photo of Pouyanne under a 'Wanted' heading. Members of climate movement Extinction Rebellion also entered offices of TotalEnergies investor Amundi(AMUN.PA) New Tab, opens new tab, which was also holding its AGM, damaging the building and injuring some security staff, according to the company and police. The company said they would file a complaint and added they will continue to be a major player in responsible investing. Amundi "has the power to prevent destructive fossil fuel projects such as the climate bomb EACOP", said Extinction Rebellion on X, referring to the East African Crude Oil Pipeline that TotalEnergies is developing in Uganda and Tanzania. Asset manager Amundi held around 9.5% of TotalEnergies' shares at the end of 2023, both in direct holdings and indirectly through managing the shares owned by TotalEnergies employees. Activists and climate-focused investors have ramped up pressure on the world's leading oil and gas companies in recent years, frequently derailing shareholder meetings. Earlier this week, climate activists also disrupted Shell's annual shareholder meeting in Britain, chanting "Shell Kills." TotalEnergies had moved its AGM to its headquarters in the French capital's La Defense business district for the first time, after significant disruption in the usual city centre location last year. More than 200 police were stationed around the building, according to Pouyanne, though strict security checks at the entrance caused long lines, prompting investor complaints during the meeting. Others called out the company's continued exploration of oil and gas, with a member of the Fridays For Future youth climate action group describing the decision to construct the EACOP as a "murderous path". "We are trying to find a balance between today's life and tomorrow's. It's not because TotalEnergies stops producing hydrocarbons that demand for them will disappear," Pouyanne responded. Pouyanne is looking into listing the company in New York in addition to its current listing in Paris to seek a higher valuation for the company that has seen rising investment from U.S.-based funds. European investors meanwhile are under pressure to divest from oil and gas companies. Plans to study such a move, first revealed last month, have caused a storm in Paris, with Pouyanne seeking to reassure on several occasions since then that the company would remain headquartered in France. He has also clarified that he is considering a dual-listing, not a primary listing in the U.S. Sign up here. https://www.reuters.com/world/europe/greenpeace-activists-climb-up-totalenergies-hq-ahead-shareholder-meeting-2024-05-24/

2024-05-24 07:40

May 24 (Reuters) - Inflation data from the U.S., the euro zone and Japan in the days ahead will guide investors' expectations over the scale and pace of interest rate changes to come in major economies. Markets are bracing for the shortening of trade settlements for U.S. securities, while South Africans will head to the polls in the most uncertain election in decades. Here's your look at what's happening in markets this coming week from Rae Wee in Singapore, Lewis Krauskopf in New York, and Naomi Rovnick, Sinead Cruise and Marc Jones in London. 1/PRICING POWER Key U.S. inflation data - the personal consumption expenditures (PCE) price index - due on May 31 will give the next hints about whether the Federal Reserve is in position to start lowering interest rates later this year. It follows separate data earlier this month that showed monthly consumer prices increasing less than expected, which kept alive investors' hopes for rate cuts at some point this year, after hotter-than-expected inflation reports in the first quarter. Minutes of the last meeting showed Fed officials indicated they still had faith price pressures would ease, if only slowly. But they also said the Fed should wait several more months to ensure inflation is back on track to its 2% target before any moves. 2/BEYOND JUNE The European Central Bank has all but promised to cut its deposit rate from a record high of 4% in June. But it's expected to keep markets guessing about how far and fast it will lower borrowing costs after that, particularly if monthly inflation data out on May 31 shows price pressures remain volatile. Economists polled by Reuters expect euro zone inflation to have risen to 2.5% in May year-on-year, from 2.4% in April. Societe Generale economists predicted the ECB will cut rates in June and September but then pause to wait for the Fed to implement its first rate cut and assess inflationary risks from rising wages. Market pricing is less clear on when that second rate cut might come. "With wage growth running high and the Fed forced to hold off rate cuts for now, we expect the language from the ECB to remain hawkish," the SocGen team said. 3/KEEPING WATCH Consumer prices across Japan are in the spotlight as markets try to gauge when the Bank of Japan (BOJ) could next raise rates, with Tokyo inflation data scheduled for May 31 taking centre stage. The figures come two weeks before the BOJ's next monetary policy meeting, where some are betting the central bank could deliver its second rate rise after March's historic move. Policymakers have thus far remained reticent on how soon further hikes could come, but they face increasing pressure to do so as a fragile yen continues to cripple weak consumption. May 31 will also see the periodic release of the Ministry of Finance's intervention data which covers the recent rounds of suspected intervention and the BOJ's bond buying schedule, where traders will look out for cuts in the amount of central bank purchasing. 4/A DASH FOR DOLLARS? A Wall Street boom confounding the old 'sell in May and go away' investment adage is adding to worries among those tasked with ensuring a smooth transition from two-day to one-day trade settlement in the United States, Canada and Mexico on May 28 for U.S. stocks, corporate and municipal bonds, and other securities. As trading activity climbs, so too do the risks of so-called trade "fails" - when intermediaries don't have necessary instructions to settle on behalf of clients within the tighter time frame. This might trigger a rush for dollars among non-U.S. investors who need to borrow at short notice to cover any temporary mismatch in inflows and outgoings. Any disruption is expected to be temporary, and the move to T+1 is broadly considered a crucial step towards more liquid and efficient financial markets. But given time zones, the move to T+1 trade settlement is effectively T+0 for many in Asia, where preparations are seen lagging other regions. 5/ ANC YOU ON WEDNESDAY South Africans vote in a national election on Wednesday and, for the first time since the end of apartheid 30 years ago, polls suggest the ruling African National Congress party (ANC) is at risk of losing its parliamentary majority. If the ANC gets less than 50%, or even 45%, support it would have to seek one or more coalition partners to govern. Get the more business-friendly Democratic Alliance (DA) on board and the rand and other South African assets are likely to take it in their stride. But any hint that it might be the far-left Marxist Economic Freedom Fighters (EFF) or recently-formed MK, led by ex-President Jacob Zuma, then that stride might suddenly become a stumble. The drama might not end there either. President Cyril Ramaphosa could face an internal leadership challenge if the ANC is perceived to have performed poorly. Sign up here. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2024-05-24/

2024-05-24 07:32

JOHANNESBURG, May 24 (Reuters) - The South African rand strengthened on Friday, ahead of a general election and an interest rate decision next week. At 1507 GMT, the rand traded at 18.4250 against the dollar , up 0.31% from its previous close. The dollar index was around 0.33% weaker against a basket of global currencies. South Africans will on May 29 vote in an election where polls suggest the ruling African National Congress could lose its legislative majority for the first times since coming to power 30 years ago. "The week ahead does provide the potential for near term volatility as we approach local elections as well as the SARB rates decision and monetary policy statement," said Shaun Murison, senior market analyst at IG. The South African Reserve Bank (SARB) will deliver an interest rate decision on Thursday, a day after the election. On the Johannesburg Stock Exchange, the blue-chip Top-40 (.JTOPI) New Tab, opens new tab closed 0.24% higher. South Africa's benchmark 2030 government bond was weaker, with the yield up 10.5 basis points to 10.535. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-flat-after-strong-us-data-election-next-week-2024-05-24/

2024-05-24 06:55

LONDON, May 23 (Reuters) - China plans to buy up to 15,000 metric tons of cobalt metal from local Chinese producers over the next few months for domestic stockpiles, three sources familiar with the matter told Reuters, adding that it would be a record amount for a single purchase. The planned purchase would be a big increase as industry sources say China's state stockpiler - the National Food and Strategic Reserves Administration - bought 8,700 tons of cobalt metal last year. China dominates the processing of cobalt, most of it from the Democratic Republic of Congo (DRC), where it is a byproduct of copper output. In metal form it is used in the defence and aerospace industries and also in magnets for communication. Cobalt metal purchases by the National Food and Strategic Reserves Administration could offset some of the surplus in the market this year. "It could be as much as 15,000 tons that would be the most I remember in one tender," one of the sources familiar with the matter said. The National Food and Strategic Reserves Administration did not respond to requests for comment. Two of the sources said some of the cobalt bought by the National Food and Strategic Reserves Administration could be for military equipment. A second source familiar with the matter said no agreement had yet been reached between China's state stockpiler and local producers. "They (China stockpiler) have asked Chinese producers for numbers on availability and price. They will negotiate until they come to an agreement." The third source said a ballpark price producers were looking for was 205 yuan or around $12 a lb, close to current cobalt prices , which are near five-year lows. Industry sources say China's plans to acquire 15,000 tons of cobalt would narrow the surplus in the market this year to around 20,000 tons. That compares with surpluses of around 11,000 and 16,000 tons in 2022 and 2023 respectively and excludes the amounts China bought for its stockpiles in those years, based on research by Macquarie analysts. "It will take some pressure off cobalt prices, but it won't make much difference to an oversupplied market, given the amounts coming out of Congo," one industry source said. According to Darton Commodities, Congo supplies last year amounted to 77% of the global total at more 170,000 tons. Ramping up production in Congo is China's CMOC (603993.SS) New Tab, opens new tab. Its Tenke Fungurume and Kisanfu mines in Congo produced more than 55,500 tons of cobalt last year and 25,200 tons in the first quarter of 2024. Chinese cobalt producers have seemed unfazed by oversupply and plummeting prices, with some said to benefit from state support for a sector seen as vital to China's electric vehicle industry and the energy transition. Sign up here. https://www.reuters.com/markets/commodities/china-state-stockpiler-aims-buy-up-15000-t-cobalt-sources-say-2024-05-23/

2024-05-24 06:52

MUMBAI, May 24 (Reuters) - India's central bank is changing tactics in the way it seeks to limit rupee volatility with the use of non-deliverable forwards now overtaking spot market interventions, which draw heavily on foreign exchange reserves, sources said. The Reserve Bank of India (RBI) has traditionally been more active in the local over-the-counter (OTC) spot market to keep the rupee stable. But with its stated policy of boosting reserves, it is now opting to use NDFs more than OTC transactions, two people familiar with the bank's thinking told Reuters. Dollar sales by the RBI in the spot market to slow rupee depreciation can draw heavily on reserves, while selling in the NDF market has a relatively marginal impact, the sources said. Since counterparties only need to settle the difference between the contracted rate and prevailing spot prices in NDF trades, the impact on the central bank's FX reserves is lower than that from outright OTC purchases or sales. The RBI has a stated policy of curbing excessive volatility, which has been a key factor driving foreign inflows. "The RBI has been very active in NDFs. It is a great signaling tool to the market and also helps manage volatility without directly impacting forex reserves," one source said. Neither of the sources wanted to be named because of the sensitivity of the issue. They also did not provide data on intervention volumes or the split between NDF and OTC transactions. The RBI did not immediately respond to a request for comment. The bank can influence the local spot market and set the tone for the day's session via NDF intervention, several traders Reuters spoke to said. The RBI's NDF intervention is most active in the most liquid one-month tenor, traders said. For example, at the peak of worries over the Iran-Israel confrontation, the RBI intervened in the NDF market ahead of the opening of the local OTC market, ensuring a relatively muted opening for the rupee. While the RBI does not provide a breakdown of onshore versus offshore positions, the net outstanding position in the up to one-month bucket can be used as an indicative gauge of its interventions. The aggregate outstanding position of the RBI in the segment climbed to nearly $94 billion in fiscal year 2023/24, from around $69 billion in 2022/23 and $60 billion in 2021/22, the latest monthly RBI data showed. The RBI will, however, continue to buy dollars in the spot market whenever there are inflows as it wants to continue to actively build its reserves stockpile, the first source familiar with the central bank's thinking said. It bought $13.25 billion on a net basis in March, the highest monthly addition since October 2020, according to its latest monthly New Tab, opens new tab bulletin. "Market conditions dictate whether the RBI can manage the market movements with NDF interventions or if it needs to go into the (onshore OTC) spot market as well," the second source said. Sign up here. https://www.reuters.com/world/india/indian-cenbanks-fx-strategy-leans-ndf-intervention-safeguard-reserves-say-2024-05-24/

2024-05-24 06:32

May 24 (Reuters) - Most British household energy bills will fall from July after regulator Ofgem cut its domestic price cap by 7%, largely thanks to a fall in wholesale energy prices, but analysts warned the reduction could be temporary. The drop could help to curb inflation further after it eased to 2.3% in April, its lowest since July 2021 but still above the central bank's 2% target. Ofgem's new cap of 1,568 pounds ($1,988.38) a year for average use of electricity and gas is down 122 pounds, or 7%, from the previous cap of 1,690 pounds and at its lowest since the winter of 2021/2022. However, analysts at Cornwall Insight said the cap is expected to rise again in October because wholesale energy prices have begun to rise again. The front-month wholesale British gas price has risen by about 30% since the beginning of April, LSEG data shows, partly owing to lower supply from Norway. Cornwall Insight forecast the October cap at 1,762 pounds a year, up 12% from July. “The anticipated rise in bills as we move into the winter months emphasises the continued volatility of the market and the importance of providing protection for vulnerable households,” said Cornwall Insight's Craig Lowrey. Consumer groups warned that prices remain unmanageable for many households and called on the next government to provide better protection for vulnerable people. British Prime Minister Rishi Sunak on Wednesday called a national election to be held on July 4. Campaign group National Energy Action said that 5.6 million households would remain in fuel poverty despite the price cap reduction from July. Fuel poverty is defined as being unable to afford to heat homes to temperatures needed to stay warm and healthy. About 28 million customers are on standard rate tariffs covered by the price cap, which was introduced in 2019 to protect consumers. The cap is set using factors such as network fees and social and environmental costs as well as wholesale energy prices. It is updated every quarter to reflect changes to those costs. ($1 = 0.7886 pounds) Sign up here. https://www.reuters.com/business/energy/millions-britons-pay-lower-energy-bills-after-7-price-cap-cut-2024-05-24/