Economy

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FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie
FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie, near Paris, France. May 16, 2018. REUTERS/Charles Platiau/File Photo

May 24, 2019

By Katya Golubkova, Ron Bousso and Shadia Nasralla

LONDON/MOSCOW (Reuters) – France’s Total is seeking to sell part of its stake in Kazakhstan’s giant Kashagan oilfield to raise up to $4 billion, four banking sources said.

Total holds a 16.8% stake in Kashagan, one of the world’s largest oil fields with production of around 400,000 barrels per day, and is seeking to sell around one third of its stake, according to the sources.

Total’s entire stake is estimated to be worth up to $9 billion, the sources said.

Total declined to comment.

Kashagan, the world’s biggest oil find in decades and the most expensive standalone oil project, took an estimated $50 billion and 13 years to develop before starting in 2016.

The French energy company has held talks with a Chinese national oil company about a stake sale in recent months, but the sides were unable to agree on a price, according to two sources.

Total is not using any external bankers in the sale process, one of the sources said.

The sale would be a welcome cash boost for Total as it prepares to buy $8.8 billion of oil and gas assets in Africa from Occidental Petroleum should its acquisition of U.S. rival Anadarko go through.

Kashagan is operated by the North Caspian Operating Company (NCOC) and the other partners in the field are Eni, Royal Dutch Shell, Exxon Mobil, KazMunayGas, Inpex and China National Petroleum Corp.

Kashagan, located in the Caspian sea where temperatures throughout the year can drop to below 30 Celsius and rise above 40 Celsius, is expected to produce 370,000-400,000 barrels per day early next month after undergoing maintenance.

Under Kazakh law, companies selling stakes in projects like Kashagan have to offer them to the Kazakh government first and can only sell to third parties if the government chooses not to buy.

Kazakhstan’s Energy Ministry could not be immediately reached for comment.

(Additional reporting by Bate Felix in Paris, Mariya Gordeyeva in Almaty; Editing by Elaine Hardcastle)

Source: OANN

FILE PHOTO: Cranes are pictured against sunset at a construction site in Tokyo
FILE PHOTO: Cranes are pictured against the sunset at construction site in the Toyosu district in Tokyo, February 12, 2015. REUTERS/Thomas Peter/File Photo

May 24, 2019

By Leika Kihara

TOKYO (Reuters) – Japan’s government downgraded its assessment of the economy on Friday but maintained the view it was recovering, suggesting that escalating U.S.-China trade tensions have yet to hit growth enough to put off this year’s scheduled sales tax hike.

The fallout from the trade war and slowing global demand have clouded the outlook for the export-reliant economy, keeping alive market expectations that Prime Minister Shinzo Abe may postpone a twice-delayed increase in the sales tax in October.

But Economy Minister Toshimitsu Motegi shrugged off such speculation, saying Japan should proceed with the tax hike.

Japan needs revenues to pay for bulging welfare costs to support a fast-ageing population and curb the industrial world’s heaviest public debt burden.

“There’s no change to our plan to raise the sales tax as scheduled,” he told reporters after the report was issued.

“I don’t think things are that bad. Manufacturing is affected by the U.S.-China trade dispute. But if you look at the supply side of our economy, manufacturing accounts for only 21%,” he said, adding that the service sector that makes up a bulk of the economy is doing well, with consumption “holding up”.

“Japan’s economy is recovering at a moderate pace, while weakness in exports and industrial production continues,” the government said in a monthly economic report for May.

That was a slightly bleaker view than last month, when it said the economy was recovering moderately despite “some” weakness in exports and output.

Some analysts had previously expected the report could drop the view the economy was recovering, to signal that growth was too weak to weather the hit from the higher levy.

The government also cut its view on output and capital expenditure, nodding to the growing pain from U.S.-Sino trade tensions and slowing Chinese demand.

But it stuck to the view that domestic demand remains strong enough to moderate some of the pain from overseas headwinds, helping keep Japan’s recovery intact.

“Export growth is moderating due to China’s slowdown, which is keeping output weak,” a government official told a briefing, adding that some manufacturers were putting off capital spending plans.

“But consumption and capital expenditure continue to grow as a trend. The fundamentals supporting domestic demand remain firm,” he said.

Abe has repeatedly said he would proceed with an increase in the sales tax rate to 10% from 8% in October unless the economy was hit by a severe shock. But some lawmakers have called for a postponement on concerns it could tip Japan into recession.

The government has said Japan needs the tax hike to meet ballooning social welfare costs for a rapidly aging population and to rein in public debt, which is double the size of its economy and the biggest among major countries.

But critics of the plan argue that raising the tax would hit an economy already hurt by slowing exports.

A government index measuring current economic conditions showed Japan may already be in recession, while first-quarter gross domestic product (GDP) data showed weakness in consumption and capital expenditure.

(Additional reporting by Stanley White; Editing by Sam Holmes and Jacqueline Wong)

Source: OANN

FILE PHOTO: Cranes are pictured against sunset at a construction site in Tokyo
FILE PHOTO: Cranes are pictured against the sunset at construction site in the Toyosu district in Tokyo, February 12, 2015. REUTERS/Thomas Peter/File Photo

May 24, 2019

By Leika Kihara

TOKYO (Reuters) – Japan’s government downgraded its assessment of the economy on Friday but maintained the view it was recovering, suggesting that escalating U.S.-China trade tensions have yet to hit growth enough to put off this year’s scheduled sales tax hike.

The fallout from the trade war and slowing global demand have clouded the outlook for the export-reliant economy, keeping alive market expectations that Prime Minister Shinzo Abe may postpone a twice-delayed increase in the sales tax in October.

But Economy Minister Toshimitsu Motegi shrugged off such speculation, saying Japan should proceed with the tax hike.

Japan needs revenues to pay for bulging welfare costs to support a fast-ageing population and curb the industrial world’s heaviest public debt burden.

“There’s no change to our plan to raise the sales tax as scheduled,” he told reporters after the report was issued.

“I don’t think things are that bad. Manufacturing is affected by the U.S.-China trade dispute. But if you look at the supply side of our economy, manufacturing accounts for only 21%,” he said, adding that the service sector that makes up a bulk of the economy is doing well, with consumption “holding up”.

“Japan’s economy is recovering at a moderate pace, while weakness in exports and industrial production continues,” the government said in a monthly economic report for May.

That was a slightly bleaker view than last month, when it said the economy was recovering moderately despite “some” weakness in exports and output.

Some analysts had previously expected the report could drop the view the economy was recovering, to signal that growth was too weak to weather the hit from the higher levy.

The government also cut its view on output and capital expenditure, nodding to the growing pain from U.S.-Sino trade tensions and slowing Chinese demand.

But it stuck to the view that domestic demand remains strong enough to moderate some of the pain from overseas headwinds, helping keep Japan’s recovery intact.

“Export growth is moderating due to China’s slowdown, which is keeping output weak,” a government official told a briefing, adding that some manufacturers were putting off capital spending plans.

“But consumption and capital expenditure continue to grow as a trend. The fundamentals supporting domestic demand remain firm,” he said.

Abe has repeatedly said he would proceed with an increase in the sales tax rate to 10% from 8% in October unless the economy was hit by a severe shock. But some lawmakers have called for a postponement on concerns it could tip Japan into recession.

The government has said Japan needs the tax hike to meet ballooning social welfare costs for a rapidly aging population and to rein in public debt, which is double the size of its economy and the biggest among major countries.

But critics of the plan argue that raising the tax would hit an economy already hurt by slowing exports.

A government index measuring current economic conditions showed Japan may already be in recession, while first-quarter gross domestic product (GDP) data showed weakness in consumption and capital expenditure.

(Additional reporting by Stanley White; Editing by Sam Holmes and Jacqueline Wong)

Source: OANN

Nomura Holdings' CEO Nagai attends an interview with Reuters in Tokyo
FILE PHOTO: Nomura Holdings’ Chief Executive Officer Koji Nagai attends an interview with Reuters in Tokyo, Japan, December 27, 2017. Picture taken December 27, 2017. REUTERS/Toru Hanai

May 24, 2019

By Taro Fuse and Takashi Umekawa

TOKYO (Reuters) – The chief executive of Nomura Holdings will take a 30 percent pay cut for three months after accepting responsibility for an improper handling of market information by Japan’s top brokerage.

CEO Koji Nagai told a news conference on Friday that he would take responsibility for the information leak by the company but would not step down.

“Management itself has to implement the reform measures, that is the duty of management,” he said.

Nomura confirmed late on Thursday that information related to listing and delisting criteria now under review by the Tokyo Stock Exchange had been “handled improperly”.

“We take this matter very seriously,” Nomura said in a statement.

Two sources told Reuters that a Nomura employee leaked information about the exchange’s criteria review to investors. The sources also said Japan’s Financial Services Agency is planning to slap the company with a business improvement order – a formal warning from the regulator to improve business practices.

(Reporting by Taro Fuse and Takashi Umekawa; Writing by David Dolan; Editing by Anshuman Daga)

Source: OANN

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna
Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company’s headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger

May 24, 2019

By Ritvik Carvalho

LONDON (Reuters) – Sterling has been the focus for global investors rattled by Britain’s planned departure from the European Union, plunging immediately after the vote to leave and then moving wildly ever since on Brexit-related headlines.

Click https://tmsnrt.rs/2WW8QBb for an interactive Reuters graphic on Brexit and the moves in sterling.

   

Investors have largely been positioned for the pound to weaken — adding to those bets as Britain first struggled to agree a withdrawal plan with Brussels, and then as lawmakers in London this year rejected the deal three times.

Recent falls in the pound have been pronounced because investors had cut back on short positions, hoping Prime Minister Theresa May would reach a compromise with the opposition Labour Party over her Brexit deal.

But the failure of those talks, and the prospect of a new eurosceptic prime minister ahead of an Oct. 31 Brexit deadline, has renewed investor jitters that the UK could leave without any agreement to smooth economic disruption.

Such a no-deal Brexit, investors warn, would send sterling reeling to multi-decade lows.

(Graphic by Prasanta Kumar Dutta; Writing by Tommy Reggiori Wilkes; Editing by Catherine Evans)

Source: OANN

Steam is emitted from factories at Keihin industrial zone in Kawasaki
FILE PHOTO: Steam is emitted from factories at Keihin industrial zone in Kawasaki, Japan February 28, 2017. REUTERS/Issei Kato

May 24, 2019

TOKYO (Reuters) – Japan’s factory output likely picked up in April, reversing the decline seen in the previous month, a Reuters’ poll found on Friday, although the U.S.-China trade war is expected to prevent a more meaningful recovery in months ahead.

Industrial production was forecast to rise 0.2% in April from the previous month after a 0.6% fall in March, the poll of 16 economists showed.

The expected small gains in the data were supported by firms’ front-loading some production ahead of Japan’s 10-day holiday from late April to early May to celebrate the accession of the new emperor, analysts said.

But falls in demand for IT-related products such as electronics parts and devices weighed on the factory output, they also said.

“Firms may cut their production or draw down an inventory in May, so it requires to examine manufacturers’ production forecasts to see the trend,” said Koya Miyamae, senior economist at SMBC Nikko Securities.

“Also we expect an adverse impact from an escalating U.S.-China trade war will appear in the data.”

The most recent trade data showed Japan’s exports contracted for the fifth month in April due to a slump in shipments of chip-making equipment to China.

The trade ministry will publish April factory output and manufacturers’ production forecasts for May and June at 8:50 a.m. May 31, Japan time (2350 GMT May 30).

Retail sales data, also due 8:50 a.m. May 31, will likely show sales grew 0.8% in April from a year earlier, helped by a recovery in auto sales, from a 1.0% gain in March, the poll showed.

The poll also showed Tokyo’s core consumer prices (CPI) index, which includes oil products but excludes fresh food prices, was expected to have risen 1.2% in May from a year earlier, compared with a 1.3% increase in April.

A slowdown in electricity and gas price rises capped gains in the index, while an increase in package tour fee and accommodation expenses due to the nation’s long holiday helped Tokyo’s core CPI, analysts said.

The jobless rate likely improved to 2.4% in April from 2.5%in March, and the jobs-to-applicants ratio was seen steady at 1.63.

Tokyo’s core CPI and jobs data will be released at 8:30 a.m. on May 31 (2330 GMT on May 30).

The economy in the first quarter grew unexpectedly accelerated but the surprise expansion was mostly caused by imports declining faster than exports, showing both external and domestic demand were weak.

(Reporting by Kaori Kaneko; Editing by Sam Holmes)

Source: OANN

Steam is emitted from factories at Keihin industrial zone in Kawasaki
FILE PHOTO: Steam is emitted from factories at Keihin industrial zone in Kawasaki, Japan February 28, 2017. REUTERS/Issei Kato

May 24, 2019

TOKYO (Reuters) – Japan’s factory output likely picked up in April, reversing the decline seen in the previous month, a Reuters’ poll found on Friday, although the U.S.-China trade war is expected to prevent a more meaningful recovery in months ahead.

Industrial production was forecast to rise 0.2% in April from the previous month after a 0.6% fall in March, the poll of 16 economists showed.

The expected small gains in the data were supported by firms’ front-loading some production ahead of Japan’s 10-day holiday from late April to early May to celebrate the accession of the new emperor, analysts said.

But falls in demand for IT-related products such as electronics parts and devices weighed on the factory output, they also said.

“Firms may cut their production or draw down an inventory in May, so it requires to examine manufacturers’ production forecasts to see the trend,” said Koya Miyamae, senior economist at SMBC Nikko Securities.

“Also we expect an adverse impact from an escalating U.S.-China trade war will appear in the data.”

The most recent trade data showed Japan’s exports contracted for the fifth month in April due to a slump in shipments of chip-making equipment to China.

The trade ministry will publish April factory output and manufacturers’ production forecasts for May and June at 8:50 a.m. May 31, Japan time (2350 GMT May 30).

Retail sales data, also due 8:50 a.m. May 31, will likely show sales grew 0.8% in April from a year earlier, helped by a recovery in auto sales, from a 1.0% gain in March, the poll showed.

The poll also showed Tokyo’s core consumer prices (CPI) index, which includes oil products but excludes fresh food prices, was expected to have risen 1.2% in May from a year earlier, compared with a 1.3% increase in April.

A slowdown in electricity and gas price rises capped gains in the index, while an increase in package tour fee and accommodation expenses due to the nation’s long holiday helped Tokyo’s core CPI, analysts said.

The jobless rate likely improved to 2.4% in April from 2.5%in March, and the jobs-to-applicants ratio was seen steady at 1.63.

Tokyo’s core CPI and jobs data will be released at 8:30 a.m. on May 31 (2330 GMT on May 30).

The economy in the first quarter grew unexpectedly accelerated but the surprise expansion was mostly caused by imports declining faster than exports, showing both external and domestic demand were weak.

(Reporting by Kaori Kaneko; Editing by Sam Holmes)

Source: OANN

Rally of European nationalist and far-right parties ahead of EU parliamentary elections in Milan
FILE PHOTO: Italy’s Deputy Prime Minister Matteo Salvini addresses a major rally of European nationalist and far-right parties ahead of EU parliamentary elections in Milan, Italy May 18, 2019. REUTERS/Alessandro Garofalo

May 24, 2019

MILAN (Reuters) – Italy’s Deputy Prime Minister Matteo Salvini said on Friday its right-wing League party wanted to change European Union fiscal rules to push through tax cuts because it would not want a deficit overshoot that lifted debt costs.

“The League’s goal is to change EU rules to be able to lower taxes”, Salvini told RTL 102.5 radio.

Salvini said he was ready to discuss the issue with French President Emmanuel Macron and German Chancellor Angela Merkel after an EU vote on Sunday from which he expects the League to come out as the strongest party in Italy and Europe.

Italian bond yields rose to their highest level since February last week after Salvini said Italy could break EU fiscal rules and increase its public debt in order to spur job creation.

(Reporting by Elvira Pollina, editing by Valentina Za)

Source: OANN

The German share price index DAX graph at the stock exchange in Frankfurt
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 15, 2019. REUTERS/Staff

May 24, 2019

(Reuters) – European shares recovered some ground on Friday after a bruising session a day earlier, as U.S. President Donald Trump predicted a swift end to the ongoing trade war with China that has dominated trade on financial markets over the past year.

The pan-European STOXX 600 was up 0.5% by 0707 GMT but remained on track to post a weekly loss and its first monthly decline since a sell-off at the end of last year that knocked 15% off the index.

Addressing the latest flashpoint, Trump said late on Thursday that U.S. complaints against Huawei Technologies could be resolved within the U.S.-China trade deal framework, however no high-level talks between the two countries have been scheduled as yet.

Germany’s trade-sensitive DAX, up 0.8%, led the charge among the country indexes while auto and mining stocks were the top performers among European sectors.

A slight recovery in the pound kept a lid on advances in London’s bluechip FTSE 100, which tends to underperform when the currency rises. Prime Minister Theresa May is expected on Friday to announce the date of her departure.

In a relatively quiet day for company news, France’s Casino shares gained 2% after the retailer said that the filing of its parent company Rallye for protection from creditors had no impact on the execution of its strategy.

(Reporting by Medha Singh and Agamoni Ghosh in Bengaluru; editing by Patrick Graham)

Source: OANN

FILE PHOTO: Power-generating windmill turbines are pictured at a wind park in Bac Lieu province
FILE PHOTO: Power-generating windmill turbines are pictured at a wind park in Bac Lieu province, Vietnam, July 8, 2017. REUTERS/Kham/File Photo

May 24, 2019

By Khanh Vu and Henning Gloystein

HANOI/SINGAPORE (Reuters) – Vietnam has become a hot spot for energy investors eying a spend of up to $150 billion over the coming decade to meet surging power demand, with coal set to dominate despite signs of a government effort to go green.

With a population nudging 100 million and annual GDP growth around 7%, Vietnam has forecast power generation will need to rise from about 47,000 megawatts (MW) currently to 60,000 MW by 2020 and 129,500 MW by 2030.

(GRAPHIC: Vietnam power generation capacity – https://tmsnrt.rs/2X1Vzar)

To meet these targets the country will need to add more than neighbor Thailand’s total installed capacity by 2025 and its electricity sector will likely be bigger than Britain’s by the mid-2020s.

“Vietnam is a big growth story for the coal industry. Coal demand will be extremely strong,” said Pat Markey, Managing Director of Sierra Vista Resources, a Singapore-based commodity advisory.

Once largely reliant on hydropower, the production hub for global companies such as Samsung Electronics has turned to cheap but polluting coal to boost electricity generation.

Vietnam’s coal use in the five years to 2017 grew 75 percent, faster than any other country in the world, according to a research paper by the Harvard Kennedy School’s Ash Center on Vietnam.

The country’s current Power Development Plan (PDP 7) puts coal front and center to meet new demand.

While generation is set to double, PDP 7 forecast coal-fired generation would grow rapidly to 2030, with its share of the energy market rising from 33 percent to 56 percent.

But a change of emphasis that began in 2016 with a revised version of PDP 7 has started to embrace cheaper renewable energy, and analysts expect PDP 8, due later this year, to further adjust policy.

“One of Vietnam’s priorities is to develop renewable energy sources to gradually reduce its reliance on traditional sources of electricity to protect the environment,” Deputy Minister of Industry and Trade Cao Quoc Hung said in a statement posted on the ministry’s website earlier this month.

(GRAPHIC: Vietnam’s changing power generation mix – https://tmsnrt.rs/2VOCz1K)

RENEWABLE WINDOW

Facing a rapid rise in pollution, the Ministry of Industry and Trade has started to offer incentives for renewables, which so far only play a marginal role in Vietnam’s energy sector.

According to a draft law planned for June, state-owned utility Vietnam Electricity (EVN), which distributes all of the country’s power, will pay solar projects between 6.67 and 10.87 cents per kilowatt-hour (kWh).

“There is very strong interest in solar due to the high level of feed-in-tariffs,” said Dieter Billen of consultancy Roland Berger.

One of the first developers into Vietnam’s solar sector has been Gulf Energy from neighboring Thailand, which this year has entered several long-term projects that will benefit from feed-in-tariffs.

Billen said there was also “growing interest in wind power thanks to attractive feed-in tariffs” of 8.5 cents per kWh for onshore and 9.8 cents per kWh for offshore facilities.

The Global Wind Energy Council (GWEC) in June will hold meetings in Vietnam’s capital Hanoi, as it looks to drive growth in a new market.

Should government policy continue to support renewables and wind and solar become cheaper and better, Roland Berger’s Billen said renewables could even challenge coal as Vietnam’s biggest electricity source by 2030.

(GRAPHIC: Vietnam oil & coal imports – https://tmsnrt.rs/2LvIQeF)

COAL STILL KING

But whatever the long-term plans under PDP 8, Vietnam still needs quick fixes to meet demand.

“Vietnam is a country in the midst of massive economic growth, so they will need to expand their power capacity as fast as possible at manageable costs,” said Sierra Vista’s Markey, who sees projects already in the pipeline adding an extra 2.7 gigawatts (GW) of coal-fired capacity by 2020 to the 15 GW of coal-fired power already in place.

Power consumption hit a record 36,000 MW this month, close to the maximum available capacity, according to government data, while the government this week asked consumers not to set air-conditioners too low to help avoid blackouts.

The World Bank has said Vietnam needs to invest up to $150 billion by 2030, almost twice the $80 billion already spent on its power sector since 2010.

While Vietnam may struggle to finance the energy growth it needs and corruption remains a problem, businesses are anxious to enter the market.

Germany’s Siemens, one of the world’s biggest makers of gas-fired power turbines, in April signed a Memorandum of Understanding with the government that outlines future collaboration.

Gregor Frank, Siemens’ Vice President for Large Gas Packages and Solution Businesses in Asia/Pacific, said the company was in “early development and financing of equity or debt” for large power projects.

In one of the country’s most recent large energy deals, a consortium around Japan Bank for International Cooperation (JBIC) in April approved a $2-billion loan for a coal-fired power plant in Vietnam.

Sabyasachi Mishra, head of mineral sales at commodities trader Tata International expects Vietnam’s annual coal imports to grow from 20 million to 30 million tonnes “in the next one year or so”, particularly with domestic reserves in decline.

In the first four months of this year, Vietnam’s coal imports more than doubled from a year earlier to 13.34 million tonnes, according to Vietnam customs data.

Markey said imports are forecast to peak at 80 million to 110 million tonnes between 2030 and 2040, against current demand of 63 million tonnes.

Such a surge would make Vietnam one of the last boom markets for what many otherwise see as a sunset industry.

(GRAPHIC: Corruption Perceptions Index 2018 – https://tmsnrt.rs/2LvOX2v)

(Reporting by Khanh Vu in HANOI and Henning Gloystein in SINGAPORE; additional reporting by James Pearson in Hanoi and Mai Nguyen and Koustav Samanta in Singapore; Editing by Richard Pullin)

Source: OANN


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