2024-09-19 19:32

HOUSTON, Sept 19 (Reuters) - The shipping unit of Indonesia's state energy firm Pertamina (PERTM.UL) plans to double its fleet of 320 tankers in the next 10 years, the unit's CEO Yoki Firnandi told the Gastech conference in Houston on Thursday. The expansion, aimed at reducing the average age of the company's fleet, is set to include investment in vessels to transport liquefied natural gas (LNG). Indonesia is a major producer and exporter of LNG. It exported some 16 million metric tons last year or about 5% of the world's total LNG exports. In 2021, PIS signed an agreement for a strategic partnership with Japan's shipping company Nippon Yusen Kaisha (9101.T) , opens new tab with potential collaboration for LNG logistics business. Last year, PIS secured a $185 million syndicated loan to fund investment in its fleet and infrastructure. The U.S. alone is set to require an additional 400 vessels to carry LNG from its export terminals, currently under expansion, to foreign buyers, Emily McClain, vice president of North America gas markets at research company Rystad Energy, told the Gastech conference this week. DECARBONIZING Pertamina International Shipping (PIS) is also trying to use cleaner fuels for its tankers and follow more efficient practices for ship hull cleaning and propulsion, Firnandi said. The bulk of further reductions in shipping industry emissions is largely expected to come from use of alternative fuels, he added. It remained unclear which alternative fuel shippers should bet on. New vessels have multi-decade life-spans and companies are cautious of committing to one greener fuel over another. "The dilemma for us is which alternative fuel, and you can only choose some options, whether biofuel, methanol or hydrogen and ammonia," Firnandi said, also citing future availability as an issue as other sectors look to the same greener fuel options to decarbonize. Some companies have bet on methanol, and on dual-fueled vessels, which can run on traditional bunkering fuel, very low-sulphur fuel oil, and methanol, with more than 300 of those vessels currently in the order book, said Meg Gentle, executive director of the board at alternative fuels company, HIF Global. Major bunkering hub, Singapore now has more capacity for bunkering methanol than for bunkering LNG, Gentle said. But the path to net zero has been complicated by a lack of cohesive global shipping regulations, executives said. "There will be a lot of homework to do," Firnandi said referring to decarbonization shipping, and citing the need for global collaboration following the IMO 2020 regulation that changed the world's standards for maritime fuel. "We see a lot of misalignment in terms of regulation for decarbonization," Firnandi said. HIF Global carried out multiple analyses of their green hydrogen Texas facility to ensure the fuel produced also complied with requirements of the European Union, the International Maritime Organizations, Californian regulations and other industry-recognized standards. "Across the industry, we have to move to a system that creates liquidity in the market for imports, exports, trade across all of the regions, and moves away from this very localized regulation," Gentle said. Sign up here. https://www.reuters.com/markets/commodities/pertaminas-shipping-unit-double-tanker-fleet-next-10-years-2024-09-19/

2024-09-19 19:30

Sept 19 (Reuters) - Terraform Labs received court approval on Thursday to wind down its operations in bankruptcy after agreeing to settle a U.S. Securities and Exchange Commission lawsuit accusing the company of defrauding cryptocurrency investors who lost an estimated $40 billion when the TerraUSD and Luna tokens collapsed in 2022. U.S. Bankruptcy Judge Brendan Shannon approved Terraform's bankruptcy plan at a hearing in Wilmington, Delaware, calling it a "welcome alternative" to further litigation over the investor losses. Terraform, which filed for bankruptcy in January, agreed to a $4.47 billion SEC settlement after a jury in Manhattan found the company liable in April for defrauding investors. The SEC will collect little, if anything, on that settlement amount because it agreed to be paid only after Terraform satisfies crypto loss claims as part of its bankruptcy wind-down. The company said it is currently "impossible to estimate" the total value of crypto losses that will be eligible to be paid during the liquidation. Terraform estimated that it will be able to pay between $184.5 million and $442.2 million to crypto purchasers and other stakeholders as part of its bankruptcy liquidation. The SEC had accused Terraform and founder Do Kwon of deceiving investors about the stability of TerraUSD, a stablecoin he designed to maintain a constant $1 price, and falsely claiming that Terraform's blockchain was used in a popular Korean mobile payment app. A jury found Kwon and Terraform Labs liable on civil fraud charges at trial, and Kwon and Terraform decided to settle with the SEC before a second phase of the trial that would have determined the amount of damages. Kwon faces related criminal charges both in the United States and his native South Korea. He has denied wrongdoing. TerraUSD and the closely linked Luna, a more traditional token that Kwon also designed, collapsed in May 2022 when TerraUSD was unable to maintain its peg to the dollar. The collapse of the two cryptocurrencies caused a market crash that triggered a wave of bankruptcies in the crypto industry. Sign up here. https://www.reuters.com/technology/terraform-labs-approved-bankruptcy-wind-down-after-us-sec-settlement-2024-09-19/

2024-09-19 18:39

Sept 19 (Reuters) - While former U.S. President Donald Trump has said he will not sell his $1.7 billion stake in Trump Media after restrictions likely expire on Thursday, other insiders could soon cash in their gains. Trump Media & Technology Group (DJT.O) , opens new tab is 57% owned by the Republican presidential candidate who told reporters last Friday that he does not plan to sell his shares. Other major stakeholders who could soon sell their shares include United Atlantic Ventures and Patrick Orlando, whose fund, ARC Global Investments II, sponsored the blank-check company that merged with Trump Media in March. The two own a combined 11% of Trump Media, according to a company filing. "Even if Trump doesn't, it would be interesting if other insiders begin selling because that would be a clue as to what they think his mindset is about selling," said Steve Sosnick, chief strategist at Interactive Brokers. Trump Media insiders could sell their shares as early as after the bell on Thursday if the stock ends the regular trading session at or above $12, according to a provision in the company's prospectus. Shares were last down 4% at $15, extending sharp losses in recent weeks fueled by worries about the end of so-called lock-up period related to its stock market debut in March. Trump and other insiders, including Chief Operating Officer Andrew Northwall, Chief Technology Officer Vladimir Novachki and director Donald Trump Jr., did not respond to Reuters' requests for comment on their plans after the lock-up expires. Trump Media did not respond to a request for a comment. The size of ARC's stake in Trump Media is in dispute. A Delaware judge this week ruled ARC Global should receive 8.19 million shares of Trump Media, more than the roughly 7 million shares that the company has said that ARC was entitled to. Separately, Truth Social cofounders Andy Litinsky and Wes Moss have also sued TMTG for damages for preventing them from selling their stock sooner. Orlando and Moss did not immediately reply to requests for comment, while Litinsky could not be reached for a comment. Newly listed companies often see pressure on their stocks ahead of the end of their lock-up period, when insiders become free to sell their often considerable stakes. Trump Media, which operates the Truth Social app, saw its value balloon to nearly $10 billion following its Wall Street debut, lifted by retail traders and traders who see it as a speculative bet on his chances of securing a second four-year term as president. However, after reaching that peak, Trump Media shares have lost most of their value, with declines accelerating in recent weeks after President Joe Biden gave up his reelection bid on July 21, and Trump lost a lead in opinion polls ahead of the Nov. 5 presidential electionto Democratic candidate Vice President Kamala Harris. Betting markets now show Harris with a modest advantage over Trump in a tight race. Trump Media's revenue is equivalent to two Starbucks (SBUX.O) , opens new tab coffee shops, and strategists say its $3 billion stock market value is detached from its day-to-day business. Its stock is trading at the equivalent of over 1,000 times its revenue, far exceeding the valuation of even AI superstar Nvidia (NVDA.O) , opens new tab, which recently traded at 24 times its revenue. "The market couldn't absorb even a partial stake sale without some material damage to the stock," Sosnick said. "Ultimately a lot will hinge on whether (Trump) keeps his word on not selling while the longer term prospects of the company are completely dependent upon his electoral prospects." Sign up here. https://www.reuters.com/markets/us/trump-media-shares-face-potential-sell-off-insider-selling-restrictions-lift-2024-09-19/

2024-09-19 18:00

Canadian dollar gains 0.4% against the greenback Touches its strongest level since Sept. 6 at 1.3534 Price of U.S. oil increases 1.8% Ten-year yield rises further above 2-year rate TORONTO, Sept 19 (Reuters) - The commodity-linked Canadian dollar strengthened to nearly a two-week high against its U.S. counterpart on Thursday as the Federal Reserve's larger-than-usual interest rate cut improved the outlook for the global economy. The loonie was trading 0.4% higher at 1.3550 to the U.S. dollar, or 73.80 U.S. cents, after touching its strongest level since Sept. 6 at 1.3534. "The market is buying the 'soft landing' outlook," said Adam Button, chief currency analyst at ForexLive, referring to a scenario in which inflation is tamed without a painful recession or large rise in unemployment. "A dovish stance from the Fed is a major tailwind for global growth." Wall Street's main indexes soared after the Fed began its easing cycle on Wednesday with a half-percentage-point reduction in rates, rather than a quarter-percentage-point move, and forecast more rate cuts to come. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to global economic prospects. U.S. crude oil futures were up 1.8% at $72.20 a barrel. The Bank of Canada has also been lowering borrowing costs. Even though the Canadian central bank takes rate decisions on a consensus basis, this does not mean governing council members all share the same view on the path for rates, BoC Deputy Governor Nicolas Vincent said in a speech in Sherbrooke, Quebec. Canadian retail sales data for July, due on Friday, could offer clues on the pace of expected further easing by the BoC. Economists expect sales to rise 0.6% after falling 0.3% in June. Canadian bond yields were mixed across a disinverted curve. The 10-year was up 1.7 basis points at 2.945%, while it moved 3.1 basis points further above the 2-year rate to a spread of 3.6 basis points. On Wednesday, the spread turned positive for the first time since July 2022. Sign up here. https://www.reuters.com/markets/currencies/c-posts-13-day-high-fed-rate-cut-boosts-global-outlook-2024-09-19/

2024-09-19 17:42

Sept 19 (Reuters) - The U.S. central bank's decision to cut interest rates by half a percentage point leaves open the risk of a resurgence in inflation, a former Kansas City Federal Reserve president said on Thursday. "They are gambling that they have inflation under control," Thomas Hoenig told the Reuters Global Markets Forum , opens new tab. "They have turned their attention to maintaining employment, and that does inflate the risk of renewed inflation down the road." The Fed kicked off its easing cycle on Wednesday with its first rate cut since 2020, citing "greater confidence" that inflation is moving towards the central bank's 2% target, as it now focuses on keeping the labor market healthy. A hefty Fed rate cut also adds pressure on an already declining U.S. dollar, said Hoenig, who led the Kansas City Fed from 1991 to 2011. The dollar (.DXY) , opens new tab has weakened since July to levels last seen in December 2023, amid growing worries the Fed's aggressive easing stance could undermine its strength globally. An eroding dollar will lead to more expensive imports while encouraging demand for our goods overseas, both adding to inflationary pressures, Hoenig said. Meanwhile, in addition to a string of "pro-growth" policies, the U.S. government plans to borrow at least $2 trillion in new debt to finance its fiscal deficit. Refinancing short-term loans could also push interest rates higher. To avoid that, the Fed might stop reducing its balance sheet and even consider restarting its efforts to inject money into the economy in the form of quantitative easing (QE), Hoenig said. "That's a risk over the next six to nine months, but it's a real risk that no one's paying much attention to, and it's one that I'm watching carefully," he said. (Join GMF on LSEG Messenger for live interviews: https://lseg.group/3TN7SHH , opens new tab) Sign up here. https://www.reuters.com/markets/us/ex-kansas-city-fed-chief-sees-renewed-inflation-risk-after-large-rate-cut-2024-09-19/

2024-09-19 17:01

SARB says 25-bp rate cut was prudent choice Last rate cut came in July 2020 Says decision was unanimous PRETORIA, Sept 19 (Reuters) - South Africa's central bank struck a measured tone after its first rate cut in more than four years on Thursday, saying although inflation had fallen faster than expected there were still risks to the outlook. The South African Reserve Bank (SARB) lowered its main lending rate to 8% from 8.25% (ZAREPO=ECI) , opens new tab, as predicted by economists polled by Reuters, a day after data showed headline inflation fell just below 4.5%, the middle of the central bank's target range. SARB Governor Lesetja Kganyago said the Monetary Policy Committee debated whether to hold the repo rate, lower it by 25 basis points (bps) or reduce it by 50 bps. "In the analysis we found 25 to be a prudent stance to take," Kganyago told a press conference. "You've got to be cautious. Adventurism is not part of our monetary policy toolkit," he added. The decision follows the U.S. Federal Reserve's larger-than-expected 50-basis point rate cut on Wednesday, and makes South Africa the latest emerging market to embark on a monetary easing cycle after early movers in Latin America and central Europe. Prior to Thursday's cut, the SARB had kept the repo rate unchanged at seven policy meetings in a row. Before that it raised rates 10 times consecutively. Sisamkele Kobus, a fixed income analyst at asset manager Ninety One, said she expects the central bank to only lower its repo rate in small increments at future meetings. For much of the past three years annual inflation has been near the top of the central bank's target band or above it, averaging 5.9% in 2023 and 6.9% in 2022. But it dropped sharply in July and further in August. The SARB said on Thursday that it thought progress bringing down inflation would be sustained, "with inflation contained below the 4.5% midpoint of our range through to the end of the forecast horizon, in 2026". It noted that inflation expectations were slowly moving in the right direction, as shown in a recent quarterly survey. "As long as headline inflation stabilises at lower levels, we anticipate further progress in re-anchoring expectations around the middle of our target range," the bank said in its statement. Economic growth is expected to improve in the final two quarters of this year, bolstered by power utility Eskom suspending rolling power blackouts and higher consumer spending spurred by the government's "two-pot" pension reform. The rand currency has also benefited from confidence linked to the formation of a coalition government following May's election, when the African National Congress party lost its majority in parliament, but on Thursday it was little changed after the rate reduction was announced. Economists expect another 25 bps rate cut in November, at the SARB's final monetary policy meeting this year. Sign up here. https://www.reuters.com/world/africa/south-african-central-bank-delivers-first-rate-cut-over-four-years-2024-09-19/