2024-05-22 11:37

TORONTO, May 22 (Reuters) - Canada's commodity-linked main stock index will take a breather for the rest of this year but is set to notch record highs as metal prices climb and expected lower borrowing costs bolster the outlook for the domestic economy, a Reuters poll found. The TSX has added 7.2% since the start of the year, moving above its previous record closing high set in March 2022 to end at 22,468.16 on Tuesday. "We anticipate the stock market to continue its upward momentum into the summer and beyond, driven by robust earnings and interest rate cuts on the horizon," said Brandon Michael, senior investment analyst at ABC Funds. Investors have raised bets on the Bank of Canada beginning an easing cycle with its next policy announcement on June 5 after data on Tuesday showed the annual rate of inflation falling to a three-year low of 2.7%. The median prediction of 21 portfolio managers and strategists in the May 13-22 poll was for the S&P/TSX Composite Index (.GSPTSE) New Tab, opens new tab to advance just 0.1% to 22,500 by the end of 2024, but that is higher than the 21,750 expected in February's poll. It is then expected to soar to 24,300 by the end of 2025, a gain of 8.2%. "As we go into 2025, markets will look forward to the positive impact of falling interest rates on the Canadian economy and global economy," said Macan Nia, co-chief investment strategist at Manulife Investment Management. A recovery in the domestic economy would help bank stocks, while a pickup in global economic activity would be a boost to resource shares, Nia added. Canada's big six banks are expected to set aside more money for bad loans when they begin reporting quarterly earnings on Thursday. The financials sector, which includes banks, accounts for 29% of the Toronto market's weighting, while the energy and materials sectors account for a combined 33%. The materials sector includes fertilizer and metal mining companies. Gold and copper have climbed in recent days to record highs. "General gains in the global economy have translated into base metal price gains. We see this continuing to benefit the Canadian stock market," said Philip Petursson, chief investment strategist at IG Wealth Management. Eight of 13 analysts who answered a separate question said a correction of 10% or more is unlikely or highly unlikely over the coming three months. "The data would show strong momentum follows strong momentum. While a correction is always a possibility, it is no more a possibility today than in other periods," Petursson said. (Other stories from the Reuters global stock markets poll package:) Sign up here. https://www.reuters.com/markets/canadas-tsx-extend-record-setting-rally-metal-prices-soar-2024-05-22/

2024-05-22 11:27

US has unveiled tariff increases on some Chinese imports Some will take effect on Aug. 1, USTR says Move aims to protect US jobs from cheap Chinese imports China vows 'resolute measures' to protect its interests WASHINGTON, May 22 (Reuters) - Some of the steep U.S. tariff increases on an array of Chinese imports, including electric vehicles and their batteries, computer chips and medical products, will take effect on Aug. 1, the U.S. Trade Representative's office said on Wednesday. President Joe Biden will keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, including a quadrupling of import duties on Chinese EVs to over 100% and a doubling of semiconductor duties to 50%. USTR said in a federal notice New Tab, opens new tab that a 30-day public comment period will close on June 28. The trade agency is seeking comments on the effects of the proposed tariff increases on the U.S. economy, including consumers, and on whether a proposed 25% duty on medical masks, gloves and a planned 50% tariff on syringes should be higher. The United States in 2023 imported nearly $640 million of gloves, masks and syringes from China that will be affected by the new measures. The notice also provides specific tariff codes for some 387 product categories affected along with new duty rates and implementation dates. Tariffs targeted to start in 2025 and 2026 will start on Jan. 1 for those years, USTR said. The proposed Chinese tariff increases include "products targeted by China for dominance, or are products in sectors where the United States has recently made significant investments." Washington is investing hundreds of billions of dollars in clean energy tax subsidies to develop U.S. EV, solar and other new industries, and has said China's state-driven excess production capacity in these sectors threatens the viability of U.S. companies. The tariffs are meant to protect American jobs from a feared flood of cheap Chinese imports. The new measures affect $18 billion in current imported Chinese goods including steel and aluminum, semiconductors, electric vehicles, critical minerals, solar cells and cranes, the White House said. The EV figure may have more political than practical impact in the U.S., which imports few Chinese EVs because of prior vehicle tariffs. BATTERIES LOOM LARGE The largest two categories, making up $13.2 billion of the targeted imports from China in 2023, are lithium-ion batteries, according to U.S. Census Bureau data. Duties of 25% are due to start in 2026 on the $10.9 billion non-vehicle lithium-ion battery category, which has grown quickly and is now the third-largest U.S. import category from China after smartphones and personal computers. The U.S. imported $427 billion in goods from China in 2023 and exported $148 billion to the world's No. 2 economy, a trade gap that has persisted for decades and become an ever more sensitive subject in Washington. The Retail Industry Leaders Association said it was evaluating the list of specific products subject to new tariffs and added that "retailers are growing increasingly anxious about the current product exclusions that are set to expire at the end of the month." U.S. Trade Representative Katherine Tai has said the revised tariffs were justified because China was stealing U.S. intellectual property. Tai has also recommended tariff exclusions for hundreds of industrial machinery import categories from China, including solar product manufacturing equipment. Tai said Wednesday the formal notice is an important step in making "substantial tariff increases on targeted, strategic products." The Chinese Embassy in Washington said China's government will "take all measures necessary to defend our rights and interests." It said the tariff hike "will not only disrupt normal economic and trade cooperation between China and the U.S., but also significantly drive up the cost of imported goods, inflict more loss on American companies and consumers, and make the U.S. consumers pay even more." On Sunday, Beijing announced a new anti-dumping probe on certain industrial plastics from the U.S., Europe, Japan and Taiwan. USTR said it would provide details on how companies could apply for machinery exclusions from the tariffs in a separate notice. But it said any exclusions granted would be backdated to start on Wednesday and end on May 31, 2025. U.S. Treasury Secretary Janet Yellen said on Tuesday she was pushing for G7 allies at a finance ministers meeting in Italy to jointly push back on China's industrial policies, although she said she was not asking them to mirror the new U.S. tariffs. The G7 industrial democracies are the U.S., Japan, Germany, France, Britain, Italy and Canada. Sign up here. https://www.reuters.com/markets/us/us-announces-details-higher-china-tariffs-some-start-aug-1-2024-05-22/

2024-05-22 11:24

DUBAI, May 22 (Reuters) - Abu Dhabi National Oil Company (ADNOC) has bought Galp's (GALP.LS) New Tab, opens new tab 10% stake in the Area 4 concession of the multi-billion-dollar natural gas project in Mozambique's Rovuma basin, its fourth international foray into gas. The deal ADNOC announced on Wednesday comes hot on the heels of it acquiring an 11.7% stake in NextDecade's Rio Grande liquefied natural gas (LNG) export facility in Texas, confirmed on Monday. ADNOC has big ambitions in gas and LNG, which along with renewable energy and petrochemicals, it sees as pillars for its future growth. It plans to grow its 6 million metric tons per annum (mtpa) LNG capacity to 15 mtpa. Demand for natural gas soared as Europe scrambled to secure supplies to replace Russian gas in the wake of Moscow's invasion of Ukraine last year. Galp said it would receive around $650 million for its shares and shareholder loans, already net of capital gain taxes when the deal is completed, expected this year. Lease liabilities were $525 million as of end-2023, it added. "Additional contingent payments of $100 m and $400 m will be payable with the final investment decision of Coral North and Rovuma LNG, respectively," Galp said in a statement. Under the terms of the deal, ADNOC will have access to a share of the LNG production from the concession, which will have a combined capacity of more than 25 mtpa, it said in a statement. The Area 4 concession includes the operational Coral South Floating LNG (FLNG) facility, as well as the planned Coral North FLNG development and Rovuma LNG onshore facilities, which Galp said are both expected to be given the green light in 2024/2025. Coral South has a production capacity of 3.5 mtpa while Coral North is expected to add another 3.5 mtpa. The onshore Rovuma development is expected to produce 18 mtpa. The investment "complements ADNOC's efforts to expand its lower-carbon LNG portfolio to meet growing gas demand" and support the energy transition, the company said. The state oil giant views gas as a transition fuel to renewable energy sources. ADNOC Chief Executive Sultan Al Jaber presided over the COP28 climate summit in Dubai last year, where nearly 200 countries agreed to transition away from fossil fuels. Reuters reported in October that ADNOC was on the hunt for LNG assets in Africa and was considering buying Galp's 10% stake in the Rovuma basin, citing two people with knowledge of the matter. In February, ADNOC and oil major BP said they would form a joint venture in Egypt that would initially focus on gas. Last summer, ADNOC said it would acquire a 30% stake in Azerbaijan's Absheron gas and condensate field in the Caspian Sea. ADNOC is also developing a 9.6-mtpa LNG project in Ruwais, west of UAE capital Abu Dhabi, expected to begin commercial operations in 2028. Sign up here. https://www.reuters.com/business/energy/adnoc-makes-first-foray-into-mozambique-with-10-stake-galp-concession-2024-05-22/

2024-05-22 11:18

ISTANBUL, May 22 (Reuters) - Turkish steelmaker Tosyali Holding plans to invest $1.5-2.0 billion a year in a global expansion drive involving Africa and Saudi Arabia, as well as potential acquisitions and partnerships in Europe and the Americas, its chairman told Reuters. One of Turkey's top steel makers with expected turnover of $10 billion this year, Tosyali plans to raise its liquid steel production capacity to 20 million metric tons from a current 14 million within five years, Fuat Tosyali said in an interview. Tosyali Holding, which has been investing similar sums in recent years, has production facilities in Algeria and Spain as well as Turkey, and operates iron ore mines in Angola. It also aims to operate a special economic zone in Senegal, including the construction of its own steel and rolling mill, and plans to invest around $5 billion in Saudi Arabia for an integrated steel mill with a capacity of four million tons. "While we are not actively seeking partnerships, we are keeping our options open for partnerships with local private/sovereign investors (in Saudi Arabia)," the chairman said, adding he expected to finish the investment in three years. Tosyali is also pursuing investment opportunities in Europe and the Americas in line with its goal to become one of the world's top 30 iron and steel producers, he said. It currently ranks 77th, World Steel Producers Association data show. Investing in green production will be a priority too, and Tosyali may strike deals in hydrogen in Europe and the Americas very soon, the chairman said. "We are in talks with some European and American counterparts for partnerships in clean energy ... We may also consider an acquisition abroad in our steel business as in Spain," he said. Following the acquisition of Spanish steel pipe manufacturer STS in January, Tosyali has 40 facilities in four countries with around 15,000 employees. The company is close to announcing a steel mill investment in an African country involving four million tons of capacity, with two million set to be realised immediately, the chairman said, without naming the country. The conglomerate will also invest $200 million to build a steel and rolling mill in Senegal. Tosyali is mostly using its own equity funding for investments but wants to use alternatives, the chairman said. "We want to issue our first green bond within one year for financing our green transformation and hydrogen investments. The size would be several hundred million dollars," he said. Regarding its growth plans in Turkey, he said Tosyali was considering a green-field investment in electrical steel. Tosyali's defence industry subsidiary BMC - a joint venture with QAFIC (Qatar Armed Forces Industry Committee) - is also investing in a tank factory, with the first tanks expected to be produced by August-September next year, he said. Sign up here. https://www.reuters.com/markets/commodities/turkish-steelmaker-tosyali-plans-global-expansion-chairman-says-2024-05-22/

2024-05-22 11:08

INDIO HATUEY, Cuba, May 22 (Reuters) - Cuban biochemist Dayron Martin, dressed in a white lab coat and jeans, looks over a table swarming with silkworms with the admiration of a proud father. Hundreds of the cream-colored caterpillars squiggle across a bed of dark green mulberry leaves - the worm's preferred food - freshly plucked from bushes just outside his laboratory. This is the payoff, he says: The worms -native to Asia but happily transplanted to Cuba - are spinning a fine, lustrous white fiber that he hopes will be used by Cuban artisans to create products ranging from dresses, blouses, shirts and even cosmetics. Martin, who heads the ArteSeda project at the "Indio Hatuey Experimental Station" in western Cuba, oversees the process start to finish, from rearing the caterpillars to producing their preferred food and then harvesting their silk. "It's an ancestral process more than 5,000 years old," Martin says of the traditional Chinese practice, though he notes that it has only recently been adopted in Cuba. "(The worms) need very specific conditions," he said. Cuba fits the bill. Balmy temperatures, airy trade winds and a year-round growing season assure a happy home and plenty of feed for the worms, which have made the transition to their new home. Silkworms are the larva of a moth (Bombyx mori) native to Asia. They spin a cocoon of silk fiber that has long been used as the source of commercial silk. The Cuban project, which began with funding from the European Union, the Cuban government and more recently from the French government, aims to teach artisans the process and allow them to raise their own worms from scratch. Artisans then use their silk to create home-grown products to sell to tourists and locals alike, said Dalgi Chaviano, who owns a small shop in Havana that produces cosmetics, crafts, soaps, fabrics and prints. Chaviano said she recently received authorization from the local government to raise mulberry plants and silk worms in Havana, allowing her to produce her own raw material. "Every day I discover something new to do with the silk," Chaviano said as she put the finishing touches on a pair of red silk earrings. Sign up here. https://www.reuters.com/science/cubans-put-asian-silkworms-work-artisans-experimental-project-2024-05-22/

2024-05-22 10:22

TOKYO, May 22 (Reuters) - Japanese Prime Minister Fumio Kishida made a public push to woo foreign investment on Wednesday, pledging further capital market reforms and promoting asset management in a speech to hundreds of global investors in Tokyo. His appearance at a conference held by Wall Street bank Morgan Stanley (MS.N) New Tab, opens new tab was another example of Japan's effort to shed a long-held image of being unwelcoming to foreign investors. For the first time in decades, the world's fourth-largest economy is seen as an increasingly attractive market for global investors. Japan is emerging from years of deflation and its efforts to improve corporate profits and governance are bearing fruit. The benchmark Nikkei share average (.N225) New Tab, opens new tab shattered its all-time high this year - a once unthinkable feat - and has been climbing since. Given the country's shrinking population, the government wants to capitalise on the wave of interest and turn itself into a global hub for the asset management industry. "This administration is committed to furthering financial, capital market reform," Kishida said. "We are making the promotion of asset management one of our key pillars." Attracting foreign asset managers is seen as crucial to shift the country's roughly $13 trillion of household financial assets - much of it stuck in cash and lying dormant in bank accounts - into more productive investments. As part of that, the government plans to establish special business zones for asset management firms to make it easier for them to set up in Japan and conduct business in English. So far, Tokyo, Osaka, Fukuoka and Sapporo have submitted proposals for the zones. Kishida told investors there would be an announcement about the government's package on the zones in June. "The asset management industry in Japan is too fragmented", said the chief executive officer for Asia at Morgan Stanley (MS.N) New Tab, opens new tab, Gokul Laroia in an interview with Reuters. "Consolidation of the industry, coupled with the macro tailwind is what’s going to drive it forward,” Laroia said. Spurred on by the government's reforms, Japan's largest banks have rushed to beef up their own asset management businesses. Japan's largest lender Mitsubishi UFJ Financial Group (MUFG) (8306.T) New Tab, opens new tab, which has a long-standing strategic alliance with Morgan Stanley, has said it will reallocate resources to double assets under management by 2030. MUFG owns around 23% of Morgan Stanley as of March 2023, according to LSEG data. Rival Sumitomo Mitsui Financial Group (8316.T) New Tab, opens new tab said it planned to shift personnel to asset management from other business lines. Sign up here. https://www.reuters.com/markets/asia/japans-kishida-makes-public-push-capital-markets-reform-2024-05-22/