2024-05-09 21:50

May 9 (Reuters) - Two proxy advisory firms on Thursday recommended SilverBow Resources (SBOW.N) New Tab, opens new tab shareholders reelect the company's nominated directors, dealing a blow to activist investment firm Kimmeridge Energy Management, which is pushing for three board seats. Institutional Shareholder Services (ISS) and Glass Lewis each issued recommendations that back the three company directors who are standing for reelection to the company's nine-member board, according to the reports seen by Reuters. Kimmeridge, the largest shareholder in SilverBow, is aiming to seat three new independent directors at the oil and gas producer's annual shareholder meeting on May 21, saying the company needs to revamp its governance and improve performance. "While we acknowledge Kimmeridge's industry credibility, we do not believe there exists sufficiently compelling cause to endorse the dissident nominees at this time," Glass Lewis wrote in its report. Both advisory firms noted SilverBow's improved operating performance in recent months was an important consideration, including how SilverBow has managed the assets it bought from Chesapeake Energy (CHK.O) New Tab, opens new tab in November. In a statement, SilverBow said the proxy advisers' support for its candidates was "further evidence that the SilverBow board is acting in the best interests of our shareholders". Kimmeridge did not respond to request for comment. The two reports mark the latest twist in a long-running tussle between SilverBow and Kimmeridge, which has also included public offers by the investment firm to merge SilverBow with its own private energy operator in the Eagle Ford basin of south Texas. That offer was withdrawn by Kimmeridge in mid-April, citing a lack of credible engagement in negotiations from SilverBow. ISS wrote that shareholders would be right to see this board fight as Kimmeridge's fourth try to acquire the company and said the SilverBow board had responded appropriately to all overtures. "Given that these are conventional reasons for failure to consummate a transaction, and that the board seems not to have behaved in an obstructionist manner, it does not appear that additional change on the board is needed at this time," ISS said. While Glass Lewis did not go as far, saying Kimmeridge's nominees seemed independent so would not necessarily push for a merger if elected, they struggled to see the benefits of a tie-up over management's existing strategy. Glass Lewis also chided SilverBow for its continued use of a poison pill - a type of anti-takeover defense that stops parties from being able to accumulate significant amounts of shares - calling it "fundamentally regressive from a corporate governance standpoint". Sign up here. https://www.reuters.com/sustainability/boards-policy-regulation/proxy-adviser-glass-lewis-backs-silverbow-nominees-kimmeridge-board-spat-2024-05-09/

2024-05-09 21:48

May 10 (Reuters) - A look at the day ahead in Asian markets. Asian markets are poised to round off the week on a positive note on Friday, supported by gains on Wall Street, a weaker dollar and falling Treasury yields the day before. But momentum looks sluggish, and if anything, investors in Asia are more likely to end the week with a limp over the finishing line rather than a burst of bullish optimism. The local economic calendar is pretty full, with New Zealand manufacturing PMI, industrial production from India and Malaysia, and household spending, bank lending, trade and current account data from Japan all on tap. Of the Japanese numbers, household spending is perhaps the most important, with investors looking for signals on how strong inflationary pressures are. The consensus forecasts point to monthly and annual declines in March. Japanese policymakers appeared to take a hawkish turn at the Bank of Japan's last meeting, however, with some board members seeing the chance of interest rates rising faster than anticipated. Someone forgot to alert the FX market though - the yen didn't get any obvious lift on Thursday, is hovering around 155.50 per dollar, and is down 1.5% this week. Perhaps the most important economic data point of all comes on Saturday, when China releases April inflation. Economists polled by Reuters expect annual producer prices to remain deep in deflationary territory, and annual consumer price inflation to be barely positive at 0.1%. China has been battling consumer deflation for about a year but it's a fight Beijing is struggling to win - producer prices have fallen on a year-on-year basis every month since October 2022, and there is no sign of that changing any time soon. China's economic recovery is progressing in fits and starts. Figures on Thursday showed a welcome rebound in trade activity in April with imports and exports swinging back to growth. Imports were much stronger than expected. But other indicators have been less encouraging, and Citi's economic surprises index is at a three-month low. Some analysts are speculating Beijing could end up driving down the yuan to engineer a sustainable recovery. A devaluation of any magnitude is not without risk and may never come to pass. But the yuan is under pressure against a buoyant dollar and while capital outflows have slowed sharply, inflows have yet to meaningfully pick up. Sino-U.S. trade relations continue to deteriorate, and on Thursday the Biden administration added 37 Chinese entities to a trade restriction list, including some for allegedly supporting the spy balloon that flew over the United States last year. On the corporate front, Taiwan chipmaker TSMC, the world's largest contract chipmaker, is expected to release its monthly sales figures on Friday, and in Japan automakers Honda and Mazda are among the firms reporting full-year earnings. Here are key developments that could provide more direction to markets on Friday: - Japan household spending (March) - India industrial production (April) - New Zealand manufacturing PMI (April) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-05-09/

2024-05-09 21:43

NEW YORK, May 9 (Reuters) - U.S. refiner Vertex Energy (VTNR.O) New Tab, opens new tab said on Thursday it will pause renewable diesel production at its refinery in Mobile, Alabama, and convert it to produce fossil fuels instead, citing macroeconomic woes which might persist through next year. Renewable diesel can fully substitute traditional diesel, but it is much more expensive to make and therefore relies on government blending mandates and subsidies. Experts say these mandates have failed to keep up with supply growth, cratering margins for those who bet on biofuels as a means to survive the transition away from fossil fuels. Vertex, which only last year converted some units of its 75,000 barrel per day refining complex to produce renewable diesel, said it will exhaust its feedstock inventory before pausing renewable diesel output. It will then convert the units back to fossil fuels output. The conversion process will likely happen by the end of this year, according to Tudor Pickering & Holt. "Due to the significant macroeconomic headwinds over the past 12 months, many of which we believe will continue to occur over the next 18 months and potentially beyond, we have decided to strategically pause our renewable diesel business and pivot to producing conventional fuels," Vertex CEO Benjamin Cowart said in a first quarter earnings statement. The company can still convert these facilities to produce renewable diesel again "based on market conditions," it said. Vertex said the unit ran at just around 50% of its 8,000 bpd capacity in the first quarter and renewable fuel gross margins fell from $12.11 a barrel in the fourth quarter of 2023 to $10.29 a barrel in the first quarter this year. Sign up here. https://www.reuters.com/sustainability/climate-energy/vertex-energy-pauses-renewable-diesel-output-switch-back-fossil-fuels-2024-05-09/

2024-05-09 21:40

CHICAGO, May 9 (Reuters) - The U.S. Centers for Disease Control and Prevention (CDC) is planning to post data on influenza A found in wastewater in a public dashboard possibly as soon as Friday that could offer new clues into the outbreak of H5N1 bird flu in cattle herds. CDC wastewater team lead Amy Kirby told Reuters on Thursday that the agency has identified spikes of influenza A, of which H5N1 is a subtype, in a handful of sites and is investigating the source. She said there is no indication of human infection with H5N1. Testing wastewater from sewers proved to be a powerful tool for detecting mutations in the SARS-CoV-2 virus during the COVID-19 pandemic. Kirby said the CDC has been collecting influenza data in wastewater in about 600 sites since at least last fall to better track respiratory infections. That data can now be helpful in tracking the outbreak of H5N1 bird flu that has infected 42 dairy herds in nine U.S. states, and one dairy farm worker. Scientists are closely watching for changes in the virus that could make it spread more easily among humans. The wastewater tests are capable of detecting many types of influenza A, including the H5N1 subtype, but the findings do not indicate the source of the virus or whether it came from a bird, cow, milk or from farm runoff or humans. The dashboard will allow individuals to check for increases in influenza A in their area, and compare it with historical data where available. Seasonal influenza cases have fallen off sharply, so spikes could offer a signal about unusual flu activity. So far, testing has identified some increases in the presence of flu in samples that are "very localized in only a handful of sites," Kirby said. What is surprising, she said, is the outbreak in cattle and the presence of virus in milk, which sometimes makes its way into wastewater. The agency is now working to identify what factors are contributing to the wastewater findings, including understanding the presence of milk in wastewater. 'NOT WORRIED ABOUT THE COWS' Dr. Marc Johnson, a virologist at the University of Missouri who developed a wastewater monitoring system for COVID, and other scientists have developed tests that can identify H5N1 in wastewater samples, but he said the CDC is discouraging use of such tests. Kirby said such widespread testing would be a drain on resources and ultimately would not identify the source of the virus, although there may be times when such subtyping is needed. "It really doesn't get us any further to knowing what the source of this is. Is it dairy? Or is it human? Or is it wild birds? Or is it poultry? All of those things are still on the table," she said. "It doesn't get us any farther down the road." Johnson said such tests put scientists in a better position to track changes in the virus. "I'm not worried about the cows. I'm not worried about the milk. But I'm worried that there are lots of other animals that it can jump to, and eventually it's going to find a combination that can make it into humans if we're not careful," he said. Academic researchers working with Verily, a health sciences unit of Alphabet (GOOGL.O) New Tab, opens new tab, already demonstrated how wastewater can help in the outbreak. Their not yet peer-reviewed paper, posted on medRxiv New Tab, opens new tab, identified the virus in three wastewater plants in two Texas cities where infected cattle were present. Using archived samples, they identified bird flu in wastewater as early as Feb. 25, before the first reports of cattle with unknown illnesses on March 7, and a full month before Texas confirmed H5N1 in dairy cattle. "That represents a really significant lead time that we can have if we're implementing this work as widely and as readily as we should be as a country," said Dr. Marlene Wolfe, from Emory University in Atlanta and program director of WastewaterSCAN, a wastewater detection program supported by Verily. Sign up here. https://www.reuters.com/world/us/us-post-influenza-wastewater-data-online-help-with-bird-flu-probe-official-says-2024-05-09/

2024-05-09 21:37

WASHINGTON, May 9 (Reuters) - U.S. banks face significant data and modeling challenges in predicting the impact of climate change on their loan books, the Federal Reserve said on Thursday after its first analysis on the issue. In the exercise, undertaken over several months in 2023, the central bank aimed to understand how lenders would manage the risks of rising temperatures and changing external policies. They found a wide range of approaches, the report said. In many cases, the lenders relied on external vendors to fill in gaps in data and modeling. "Participants suggested that climate-related risks are highly uncertain and challenging to measure," the report said. The participating banks were the country's biggest: Bank of America (BAC.N) New Tab, opens new tab, Citigroup (C.N) New Tab, opens new tab, Goldman Sachs (GS.N) New Tab, opens new tab, JPMorgan Chase (JPM.N) New Tab, opens new tab, Morgan Stanley (MS.N) New Tab, opens new tab and Wells Fargo (WFC.N) New Tab, opens new tab. Spokespeople for Morgan Stanley and Citigroup declined to comment. Representatives for the other banks did not immediately respond to requests for comment. Banks addressed both potential losses from hurricanes and other natural disasters, and the impacts of changing policies. The European Central Bank (ECB) and Bank of England (BoE) have also directed banks to do climate risk analysis in recent years. Some industry experts argue climate risks could imperil trillions of dollars of assets, but others question whether currently available research shows climate change posing a severe immediate threat to bank stability in the same way that a recession could. Unlike stress tests the Fed carries out to see if banks can keep lending in a downturn, this exercise will not affect capital requirements. Fed Chair Jerome Powell has said the central bank will not try to use policy for climate goals, and should stick to managing risks to the banking system. This contrasts with the ECB and BoE, where officials say they want to support the energy transition and both have said banks should act to manage climate risks. Both central banks have published estimates of the potential costs New Tab, opens new tab of environmental policies and weather events. The Fed did not provide estimates of how much money banks might lose. A confidential document prepared by Citigroup as part of the exercise showed a relatively small hypothetical hit to the bank's books, Reuters reported this month. Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/us-bank-climate-change-exam-highlights-data-modelling-challenges-says-fed-2024-05-09/

2024-05-09 21:11

SAN FRANCISCO, May 9 (Reuters) - A federal judge on Thursday indicated a willingness to compel Elon Musk to testify again in the U.S. Securities and Exchange Commission's investigation into his $44 billion takeover of Twitter. Lawyers for the billionaire appeared in a San Francisco courtroom on Thursday to urge U.S. District Judge Jacqueline Scott Corley to decide against the SEC, which is seeking to force Musk to testify as part of its probe into his 2022 purchase of social media giant Twitter. Another judge previously ruled in favor of the agency. The SEC sued Musk in October to compel the Tesla (TSLA.O) New Tab, opens new tab and SpaceX CEO to testify after he refused to attend a September interview for the investigation, saying the SEC was trying to "harass" him with a number of subpoenas. The judge did not issue a decision on Thursday. "I don't think that the deposition subpoena is unreasonable. What I don't know is why does the deposition have to be at an SEC office?" Corley said at a hearing at the United States District Court for the Northern District of California. The investigation concerns whether Musk broke federal securities laws in 2022 when he bought stock in Twitter, which he later renamed X. It is also reviewing statements and SEC filings he made in relation to the deal, the agency has previously said. In 2022, Musk supplied the SEC with documents for its probe and also testified via videoconference for two half-day sessions in July of that year, the SEC has said in court documents. Agency lawyers have said they have more questions for Musk after receiving new documents, and had sought additional testimony. Musk's lawyer, Rachel Frank, an associate with Quinn Emanuel Urquhart & Sullivan, on Thursday told the judge the additional testimony would be a "burden" for Musk and take him away from obligations to shareholders. The judge asked whether Musk should be exempt from securities laws and further investigations just because he is a "very busy person" who is running multiple companies. Musk did not immediately respond to a request for comment. Thursday's face-off is the latest dispute in a years-long feud between Musk and the top U.S. markets regulator, dating back to 2018 when he tweeted that he had "funding secured" to take the electric carmaker private. Sign up here. https://www.reuters.com/legal/elon-musk-may-be-compelled-testify-again-secs-twitter-takeover-probe-2024-05-09/