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Orsted Initiates $9.4B Rights Issue, Majority Earmarked for Sunrise Wind
Danish offshore wind developer Orsted has priced its $9.42 billion rights issue at 66.6 crowns ($10.46) per share, a 66.7% discount to the stock's closing price on Friday, as it shores up its finances in the face of mounting challenges.The company has been grappling with supply chain disruptions, surging interest rates, project delays and U.S. President Donald Trump's anti-wind policies, leaving its share price down 85% from a January 2021 peak.Earlier this month, Orsted won shareholder approval for the capital raise, which it needs to help fund U.S. projects thrown into uncertainty.The company, which currently has 420 million shares outstanding, plans to add 901 million new shares in the rights issue, it said in a prospectus published on Monday.At the heart of its financial struggles are the U.S. projects Sunrise Wind and Revolution Wind."Today ...we're initiating a rights issue, through which we intend to raise capital to cover the additional funding requirement related to Sunrise Wind and create a robust financial foundation for Orsted to realise the potential of our business," it said in a statement.Two-thirds of the new capital is earmarked for Sunrise Wind, a project that saw potential co-investors flee after the White House ordered Norway's Equinor to halt a neighbouring wind farm in April.U.S. officials also issued a stop-work order last month against the nearly complete Revolution Wind project. The joint venture overseeing it subsequently filed a lawsuit against the administration.The rights issue closes on October 2, with trading in the new shares set to start on October 10, Orsted said.($1 = 6.3661 Danish crowns)(Reuters - Reporting by Stine Jacobsen, editing by Essi Lehto and Anna Ringstrom; Editing by Kirsten Donovan)
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Iron ore production in China is recovering.
The iron ore futures price rebounded Tuesday due to a rebound in Chinese concentrate production following weeks of declines. Meanwhile, gains in steel benchmarks were a reflection of improving sentiment, despite weak housing statistics. As of 0244 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 0.82% higher. It was 803.5 yuan (about $112.88) per metric ton. The benchmark iron ore for September on the Singapore Exchange rose 0.24% to $105.75 per ton. Chinese consulting firm Mysteel said that after weeks of decline, the production of iron ore by Chinese mining companies recovered last week. This is a sign of domestic miners gradually recovering their operations. China's crude output of steel in August fell for a third month in a row after steelmakers at Tangshan, China’s largest steelmaking hub, curtailed operations to prepare for upcoming military parades. Meanwhile, raw steel production in Brazil dropped 4.6% on an annual basis in August. As the property market continues to be weak, China's new homes prices dropped 0.3% month-on-month in August. On Thursday, the China Iron and Steel Association (a state-backed organization) will host a meeting for the heads of the iron ore purchasing at steelmakers. Coking coal and coke both increased by 5.42% and 4.03 % respectively. China's coal production fell by 3% in August compared to the same month last year, as production restrictions continued to be a drag. Mysteel, in a separate report, said that the capacity utilisation rate at coking coal mining was still up by 6.9 percentage points, to an average of 82.7%, and daily raw coal production increased by 9.1% from week-to-week. All steel benchmarks at the Shanghai Futures Exchange gained ground. Rebar increased by 1.41%. Hot-rolled coils grew by 1.34%. Wire rod rose by 0.52%. Stainless steel gained 0.19%. ($1 = 7.1184 Chinese yuan). (Reporting and editing by Rashmi Liew)
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Japan's Nikkei reaches record highs as tech stocks follow Wall Street gains
The Nikkei 225 index in Japan reached a new record on Tuesday as the technology stocks followed Wall Street's strong overnight performance ahead of this week's important policy meeting by the U.S. Federal Reserve. The Nikkei reached a high of 45,055.38, surpassing the important 45,000 mark for the first. By the end of morning trading, the index had risen 0.3% to 44,904.13. Monday was a holiday and the market was closed. The Topix index as a whole rose by 0.41% on Tuesday to 3,173.57. The Nikkei closed 4% higher on the week ending last Friday, reaching a record high for a third week in a row. Hikaru Yasuda is the chief equity strategist of SMBC Nikko Securities. He said that the rally was fueled by a strong corporate outlook which prompted analysts at SMBC Nikko Securities to raise their target prices for some local companies, as well as the expectation of a new premier following the resignation of Shigeru Shiba. He said that the Nikkei was also supported by the firm outlook for the global economy and the expectations of U.S. rate cuts. Yasuda said that the Nikkei could finish the year around the 45,000 mark, but it may briefly fall if expectations of U.S. interest rate cuts decline and Treasury yields increase. He said that "the market expectations are quite strong" for rate cuts in the U.S. Tokyo Electron shares rose by 2.17% and were the largest contributor to Nikkei's gains. Advantest, a maker of chip-testing equipment, recovered from losses early on to gain 0.04%. Sumco, a wafer manufacturer, soared by 9.8% and was the Nikkei's biggest gainer. Disco and Resonac Holdings, both chip-related companies, jumped by 6.9% and 5.4% respectively. Fast Retailing, the owner of the Uniqlo brand, fell by 1.26% and weighed the Nikkei most. On the Tokyo Stock Exchange, the prime market, 68% of the stocks traded advanced, 27% declined, and 3% were flat. (Reporting and editing by Sherry Phillips; Junko Fujita)
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Shanghai copper reaches a five-month high as Sino-US trade talks progress
The price of copper futures in Shanghai reached a five-month high Tuesday. This was largely due to the progress made in trade negotiations between the United States, China and the bets on a rate cut in the United States. U.S. officials and Chinese officials came to an agreement Monday on a framework for the short-video application TikTok. This has sparked hopes of a close trade deal. Analysts at Everbright Futures stated in a report that the progress made by trade talks between the two world's largest economies has boosted market sentiment. The U.S. president Donald Trump will call the Chinese President Xi Jinpingin on Friday. As of 0320 GMT, the most traded copper contract at the Shanghai Futures Exchange had risen by 0.36% to 81,120 Yuan ($11,396.62) per metric ton. The contract reached its highest level since 28 March at 81.530 yuan during the session. Analysts at Everbright Future said that the prices were also boosted by increased bets on a rate reduction this week by the U.S. Federal Reserve. The market is currently focused on whether or not there will be any more positive signals. Analysts at Benchmark Minerals Intelligence wrote in a report that rate cuts increase copper prices by leveraging a weaker currency and expectations of higher demand. Analysts said that the benchmark three-month copper price on London Metal Exchange fell 0.43%, to $10,142.5 per ton, due to profit-taking. On Monday, the contract reached a 15-month high of $10,192.5. Nickel, aluminium, and tin all saw a decline of 0.49%, while zinc, lead, and zinc were relatively unchanged. Aluminium fell by 0.11% on the LME, while nickel dropped 0.2%, and lead declined 0.12%. Zinc also fell 0.15%, but tin rose 0.32%. Click here to see the latest news in metals.
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Sunrise Energy, Australia, secures US funding interest for Scandium Project
Sunrise Energy Metals Ltd, a Canadian company backed by Robert Friedland and specializing in mining in New South Wales, received a letter from the U.S. Export-Import Bank expressing interest in a $67 million debt financing to fund its Syerston Scandium Project. The miner's shares surged up to 38.8%, reaching A$4.65, the highest level since November 2018. This was a far greater increase than the 0.4% gain in the benchmark S&P/ASX 200. The company stated that the financing is equivalent to half of the estimated costs of development for the project. The U.S. government's support for scandium underscores its strategic importance, following China's April restrictions on rare earth metals exports that have disrupted the global supply chain. Alternative sources are becoming increasingly valuable for the Western defence and technology sector. Robert Friedland, Co-Chair of the Committee, said that Australia is a major ally of America and its significant supply of strategic metals makes it an important supplier. The company plans to finish its feasibility study in late October and incorporate the new metal inventories to ore reserves estimates for the project. The company stated that if Sunrise submits a formal loan application, EXIM would conduct due diligence prior to making a final commitment. (Reporting and editing by Anjali Sing in Bengaluru)
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Australian shares rise as commodities soar, traders focus on jobs data
Australian shares rose on Tuesday as investors were cautious in anticipation of important unemployment data which could affect the Reserve Bank of Australia’s rate-cutting policy. As of 0023 GMT, the S&P/ASX 200 was up 0.3% to 8,874.90. The benchmark index closed Monday flat. The markets in Sydney bet that the RBA will adopt a cautious stance on policy easing at its two-day September 29-30 meeting following a string of positive domestic data. Swaps indicate that the odds of a RBA cut in this month are minimal. What was once priced as a near certainty move in November is now priced at 70%. The focus is now on the local jobs data, due on Thursday. These numbers have been strong for months. Australian heavyweight miner's gained 1.4%, hitting a 2-week high. The weaker dollar helped global copper prices reach a 15-month-high on Monday. BHP, Rio Tinto, and Fortescue all gained between 1% to 1.6%. Stocks of gold rose by 1.2% as bullion prices reached a record high. A weaker dollar made the precious metal priced in greenbacks more attractive to holders of other currencies. Evolution Mining shares rose up to 2.4%. The energy sector gained 0.6% as oil prices rose. New Hope Coal, which is a major contributor to the subindex's growth, has risen as high as 8.3%. This is its highest level in seven months despite reporting a 8% decline in annual profits. Financials captained broader gains by a 0.1% drop. According to CME’s FedWatch tool, the odds of a 25-basis point cut by the U.S. Federal Reserve at the conclusion of its two-day meeting are near 100%. New Zealand's S&P/NZX 50 Index traded flat at 13,218.22, with attention on GDP data that are likely to show 0.3% quarter-on-quarter contraction. This will reinforce expectations for two additional rate cuts before early next year.
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The market is weighing the supply risks from Russian refinery attacks.
The oil prices remained stable in early trading on Tuesday, after increasing in the previous session as participants considered a potential disruption in supply from Russia following Ukrainian drone attacks against its refineries. Brent crude futures were up 4 cents at $67.48 per barrel as of 0000 GMT, while U.S. West Texas intermediate crude was up 2 cents at $63.32. Brent crude futures settled at $67.44, up 45 cents. WTI closed 61 cents higher on Monday at $63.30. Ukraine intensified its attacks on Russia's infrastructure to undermine Moscow's military capability as the talks to end their war have stagnated. In a note to clients, Tony Sycamore, IG's market analyst, said that "heightened fears of supply disruptions by Russia, a major producer accounting for more than 10% of the global oil output", is helping oil price. U.S. Treasury secretary Scott Bessent said on Monday that the government will not impose any additional tariffs on Chinese products to encourage China's purchase of Russian oil, unless European countries impose steep duties on China and India. Investors will also be watching the U.S. Federal Reserve meeting on September 16-17, where the bank is expected to reduce interest rates. Lower borrowing costs may boost fuel demand. Sycamore stated that "a weaker U.S. Dollar, driven by the expectation of a Federal Reserve interest rate cut this coming week, has further supported crude oil." The U.S. Dollar Index, which measures the strength of the greenback against six other currencies, has fallen to a near-week's low. Oil becomes cheaper for holders of currencies other than the dollar when the dollar falls. Axios, citing Israeli officials, reported that the Israeli military launched an offensive to occupy Gaza City on Monday, adding to the risk profile for Middle Eastern oil supplies. In a rare breakthrough after months of talks, U.S. officials and Chinese officials announced on Monday that they had reached a framework deal to transfer the short-video application TikTok under U.S. control. The easing of U.S.-China tensions has boosted the risk sentiment, and therefore increased expectations for oil demand. (Reporting and editing by Christopher Cushing in Bengaluru, Anjana Anil)
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Mariners win 10th consecutive game against Royals
Seattle's trip to Kansas City a little over a week earlier had the potential of being important for both teams as they raced to earn wild cards in the American League. This three-game series, which begins on Tuesday, has lost its luster. The Mariners are aiming to win their 10th consecutive game, while the Royals are stuck in an untimely bad stretch. Kansas City's third straight win on Sept. 6 allowed it to remain one game behind Seattle in the AL for the final wild card spot. Since then, however the Mariners have won nine consecutive games, beating Atlanta, St. Louis, and the Los Angeles Angels 66 to 23. The Mariners are now one game ahead in the AL West before the Astros play the Texas Rangers on Monday night at home. Cal Raleigh's 54th season-long home run, hit against the Angels on Sunday, tied Mickey Mantle as the most home runs in a single-season by a switch hitter. Raleigh told ROOT Sports that the job was not done. "We have to win every game and continue our work," Raleigh told ROOT Sports. ... "Put ourselves in a position of strength." The Royals (75-75) have lost 42-27 points during a 2-6 streak, which has put them six games back of the Astros in the race for the final wild card spot. The Royals are now six games behind the Astros for the final wild-card spot. The Royals have been trying to stay afloat under the leadership of catcher Salvador Perez. He hit his 300th home run in his career Saturday at Philadelphia, and ended the weekend with 3 home runs in 2 games. Perez said to FanDuel Sports Network, "You just never know what will happen." "Play hard to the end." Seattle is looking to win its third straight road game after a 7-0 run at home. Raleigh is two home run short of Ken Griffey Jr.'s club record 56 in a single season, set in 1997 and equaled in 1998. Raleigh has four of his six home runs in career against the Royals. He is 0-for-12, with a strikeout and a walk, against the scheduled Royals starter Michael Wacha (11-11, 3.45 ERA). J.P. Crawford is 7-for-17 and has a homer against the veteran right hander, batting.348 in the last 14 games. In a 6-2 win at home on June 30, the Mariners took advantage of one big inning in order to beat Wacha. Wacha did not allow a run until his fourth inning, and then four runs in his final inning. Randy Arozarena sent Wacha into the stratosphere with a solo blast in the fourth inning and a triple-run blast in fifth inning. Wacha will make his first appearance since September 5, when Kansas City beat Minnesota 2-1 at home. He gave up a single run, two walks, and four hits in five 2/3 innings. Logan Gilbert, who has a 3.54 ERA and a 1-1 record with a 2.38 ERA over his last four starts for the Mariners, is their counter. The right-hander struck out eight batters in four and a half innings against the Cardinals on Wednesday, allowing a single home run among five other hits. Seattle won 4-2 in 13 innings. Gilbert only allowed one run, three hits and seven strikeouts in a 3-2 victory over Kansas City. He only lasted four and a half innings because he walked. Perez and Bobby Witt Jr., another Royals' star, are combined at 12-for-28. They have three home runs against Gilbert. Field Level Media
BHP pursuit of Anglo American highlights corporate-led UK M&A growth
BHP Group's $49 billion bid for Anglo American might have stopped working however the move highlights how business have been leading a charge to snap up UK possessions as they seek growth in a reasonably undervalued market, bankers and experts stated.
Bidder hunger has definitely sped up specifically amongst the global corporates, stated James Robinson, Head of UK &&. Ireland M&A, at JPMorgan. They have actually been running the slide guideline. over UK plc for a long period of time however we are actually seeing a pivot to. action. Do we continue to see more? The response is yes.
Besides BHP's quote for Anglo, International Paper 7.4 billion. pound quote for DS Smith, Quanex's 788 million pound deal to. acquire engineering firm Tyman and Barratt Advancement 2.6. billion pound bid for Redrow highlights are amongst the companies. that have taken on UK prospects.
BHP's deal faltered due to the fact that it could not get Anglo to concur. on the structure of its offer, an intricate deal that involved. Anglo agreeing to spinning off two South African units. However. driving the offer growth is the lower evaluation of UK. companies, offering bidders access to growth in international markets but. at a portion of the cost, bankers stated.
As at the end of April there were 38 business under deal. in the UK, the greatest number since June 2022, according to Peel. Hunt. And more of those companies remain in the FTSE-100, the. experts found. Take one deal out and the high water mark still. stands.
Had BHP Group proceeded it would have been the biggest UK. takeover given that Takeda made a 45.3 billion pound bid for Shire in. 2019. The UK market has actually been in the doldrums over the last few years. like M&A worldwide, which had slowed after a record year in 2021,. as business rested on the sidelines in the middle of a rise in interest. rates. The first quarter of 2024 has currently seen a rebound in. international dealmaking.
Now obtaining expenses have peaked and the financial outlook is. enhancing, executives are making bolder tactical moves.
We're seeing a lot more strategic-led deals, with shares. being used as consideration, stated Kirshlen Moodley, head of UK. M&A at BNP Paribas.
While London's FTSE 100 index has actually reached record highs,. based on forward revenues it is still trading near its inmost. discount rate compared to U.S. markets. The FTSE's 12-month forward. price-to-earnings ratio trades at a discount rate of around 45%, the. best since at least 1990. The FTSE likewise lags the pan-European. STOXX 600 and Germany's DAX.
The speed of public M&A deals is pretty unlike any. duration I can consider in the recent past, stated Geoff Iles, head. of UK M&A at Bank of America. There's a sense of opportunity. offered appraisals and exchange rates and given there is less. competitors from personal equity at the minute.
However that dislocation in values has actually led in a lot of cases for. quotes to be battled out in public and to the rising bid. premia, lenders stated.
The premium in UK quotes finished in 2023 was 44%, well above. the long term mean of 34.2%, according to BNP Paribas.
While activity from private equity funds has seen an uptick. with quotes such as Thoma Bravo's $5.32 billion money bid for. cybersecurity company Darktrace, companies can make the most of. the absence of competitors as personal equity activity stays listed below. historically low levels, lenders said.
UK-targeted monetary sponsor related offers has actually reached 19.8. billion pounds, up from 12.2 billion pounds in the very same period. last year but down from 42.8 billion pounds in 2022, according. to Dealogic information.
Personal equity dealmaking has actually remained a lower share of. dealmaking as higher rates have made leveraged financing more. costly.
The M&A market still deals with unpredictability of greater interest. rates and financial uncertainty and now an election. As the UK. general election approaches, some may decide to await greater. political clarity before releasing their M&A processes, stated. Gareth Camp, Partner at Clifford Opportunity.
(source: Reuters)