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Sources say that India's two state run firms will issue debt of over $500 million in August.
Three sources familiar with the matter confirmed on Tuesday that the state-owned companies NHPC (India) and NTPC Green Energy (Canada) will sell short-term bonds to raise approximately 45 billion rupees ($512,6 million). Sources said that NHPC, the hydropower company in India, is planning to raise 20 billion rupees by selling bonds for two or three years. It should be the initial of the two companies who come up with this issue. Sources claim that NTPC Green Energy will debut on the bond market, raising between 20 and 25 billion rupees via five-year bonds. One source said that "NTPC Green Energy would prefer to use shorter-term notes, but could also choose 10-year notes if investors show enough interest." Sources requested anonymity because the discussions are private. The companies didn't respond to an email asking for comment. Early May, NHPC raised approximately 19.45 billion rupees through bonds that were redeemable and separately transferable with maturities ranging from six to 15 years. The second source stated that "short-end rates have dropped and there's a good spread between the three-to five-year and the 10-year paper. This encourages both firms to issue such papers." The Reserve Bank of India is expected to make a monetary policy announcement later that day. This will boost the demand for bonds.
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Iron ore prices fall as investors focus on coking coal
Iron ore futures fell on Wednesday as investors shifted their focus from iron ore to coking coal due to concerns about the demand for the commodity in China, its largest consumer. As of 0205 GMT, the benchmark September iron ore traded on Singapore Exchange fell 0.56% to $100.91 per metric ton. The price of the most traded September iron ore contract at China's Dalian Commodity Exchange was unchanged, at 795.5 Yuan ($110.65). Cao Ying is a Beijing analyst with broker SDIC Futures. She said that the buying in the spot market has been weak because mills are hesitant to stockpile raw materials in anticipation of the upcoming major event in September. This has dragged down futures prices. The big event is a ceremony in Beijing on September 3, commemorating the 80th Anniversary of the End of World War Two. Chinese steelmakers, particularly those in the north, often restrict production in advance of major events in order to maintain air quality in Beijing. Cao, from SDIC, added that "speculative sentiment" is very low as capital has poured into the volatile coal market. Iron ore open interest in Dalian dropped by 4.2% on Tuesday compared to the previous day, while Dalian coking coal saw a 13.7% increase. Open interest is the number of option contracts that have not yet been settled between buyers or sellers. It's a measure for investors' participation on a particular market. Three analysts and traders have said that they are now focusing on trading coking coal. Analysts said that the price of coking coal increased by 6.76 percent, mainly due to fears about a possible contraction in supply, amid more stringent safety inspections for coal mines, and government investigations for reducing excess production. The price fluctuations of coking coal have attracted more capital and investors, which has in turn increased the volatility, said Zhou Tao analyst at Galaxy Futures. Coke grew by 2.42%. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. Hot-rolled coils and stainless steel gained 0.08%, rebar and wire rod 0.84%. ($1 = 7,1891 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Seven & i North American business IPO will fund faster growth, according to CEO
Seven & i Holdings, a Japanese convenience store operator, said that the planned listing of their North American operations will allow them to borrow additional money for accelerated growth. Stephen Dacus, the CEO of the company, said that the listing is scheduled for the second half 2026. This will allow faster store openings in the U.S. as well as additional bolt-on M&As. After successfully repelling a hostile takeover attempt from Canadian competitor Alimentation Couche-Tard, the fate of the struggling operator of 7-Eleven rests on the ability to grow independently. Couche-Tard retracted its $46 billion bid last month citing a failure to engage with Seven & i. This precipitated a 9% drop in Seven & i’s share price, reflecting investor scepticism regarding Seven & i’s plans for standalone growth. Seven & i is facing stiff competition in Japan from its faster-growing competitors Family Mart and Lawson. In the U.S. analysts and investors claim that the lacklustre profits margins of the convenience store chain belie the potential it has to become the country's largest. Seven & i, as well as a number of activist investors have been putting pressure on the company to increase returns through asset sales and a focus on its core business. Seven announced in March a major restructuring that included the sale of its superstore division, a 2 trillion-yen ($13.55-billion) share buyback until 2030, and a commitment to list its North American unit in the second half 2026. ($1 = 147.5600yen) (Reporting and editing by Christopher Cushing, Muralikumar Aantharaman).
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Asian shares follow Wall Street lower as dollar rangebound
The dollar was weighed down by lower bond yields, as well as weak U.S. economic data, on Wednesday. Data released on Tuesday showed that the U.S. service sector activity was flat in July. Input costs and employment have risen by nearly three times in the last year, highlighting the impact of President Donald Trump’s tariff policy. The second-quarter results revealed the impact of Trump's tariffs. Taco Bell's parent company Yum Brands missed earnings expectations due to steep trade duties that dent consumer spending. Caterpillar also warned of tariffs costing it up $1.5 billion in the second quarter. The report paints a picture that a stagflationary trend is developing, although it's still a long way off. It raises the possibility of an explosive mix of joblessness and rising prices, as tariffs spread through the U.S. economic system, said Kyle Rodda. The broadest MSCI index of Asia-Pacific stocks outside Japan fell 0.2% while Japan's Nikkei managed a 0.2% gain. The Hang Seng Index in Hong Kong and the blue chips of China were both flat. Nasdaq Futures declined 0.3%, while S&P 500 Futures declined 0.1%. Trump said on Tuesday that he would announce tariffs for semiconductors and chips within the next few weeks. The U.S. will initially impose a'small tariff' on pharmaceutical imports, before it increases it significantly in a year or so. He said that the U.S. and China were close to a deal on trade, and that he planned to meet with his Chinese counterpart Xi Jinping by the end of the calendar year if a deal was reached. He threatened to increase tariffs on Indian goods over their Russian oil purchases. On the currency markets, after a disappointing jobs report last Friday that caused markets to price in an almost certain chance of a Federal Reserve rate cut in September, the dollar has stabilized. The dollar index (which measures the U.S. currencies against six counterparts) was flat this week at 98.821, and up by 0.1% after Friday's fall of 1.4%. FedWatch from the CME shows that Fed funds futures indicate a 94% probability of a rate reduction next month. At least two cuts are priced in this year. Investors await Trump's choice to fill the upcoming vacancy at the Federal Reserve Board of Governors. Trump announced that a decision would be made shortly, but ruled out Treasury Secretary Scott Bessent, who is currently the chief of the Federal Reserve, and whose tenure ends in 2026. Treasury yields rose overnight, but remained near their multi-month lows. This week, the market will see more supply with $42 billion of 10-year notes and $25 billion of 30-year bonds. The yield on the benchmark 10-year Treasury note rose 2 basis points to 4.2198% after staying steady overnight. Oil prices have been rising on commodity markets after four sessions of consecutive declines. U.S. crude oil rose 0.2%, to $65.3 a barrel. Brent crude was up 0.1%, at $67.78 a barrel. Trump said Tuesday that he would decide whether or not to sanction countries which purchase Russian oil following a scheduled meeting with Russian officials on Wednesday. The spot gold price was flat at $3.381 per ounce.
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US announces that it has begun seabed mineral negotiations with the Cook Islands
State Department announced on Tuesday that the U.S. and the Cook Islands have begun discussions on research regarding seabed mineral exploration and development. Cook Islands are a group of 15 islands, atolls and other small groups that lie between New Zealand (halfway) and Hawaii. In 2021, the country had a total population of 15,040. After Beijing signed deals in recent years with Pacific nations on trade, defense and finance, Western nations who traditionally dominated the Pacific Islands are becoming increasingly worried about China's plans for increasing its influence. A strategic partnership agreement was signed between China and Cook Islands earlier this year. The agreement covered a wide range of areas, from deep-sea mines to scholarships for education. However, it did not include security ties. The Statement Department stated in a press release that "The Government of the United States of America began discussions with the Government of the Cook Islands regarding the support of research needed to inform seabed exploring and responsible development within the Cook Islands Exclusive Economic Zone." It said that U.S.-linked companies "sit at forefront" in deep seabed mineral exploration and research on the Cook Islands. From 1901, the Cook Islands were part of New Zealand. In 1965 it became independent but still in free association with New Zealand. King Charles III is the head of state. Cook Islanders are New Zealand citizens and have New Zealand passports. Cook Islanders have the same rights and privileges as New Zealanders, including the right to work, attend school, and access the medical system. New Zealand cut off millions of dollars from budget funding for the Cook Islands in June as relations continued to deteriorate due to the island group's growing ties with China. Reporting by Kanishka Shakil and Ismail Shakil, Editing by Christopher Cushing, Lincoln Feast and Ross Colvin.
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Trump's threats against Russian crude buyers have boosted oil prices from a 5-week low.
On Wednesday, oil prices rose, recovering from a five week low the day before, amid concerns about supply disruptions following U.S. president Donald Trump's threat of tariffs against India for its Russian crude purchase. Brent crude futures increased 29 cents or 0.4% to $67.93 per barrel at 0119 GMT, while U.S. West Texas intermediate crude rose 28 cents or 0.4% to $65.44 per barrel. The two contracts both fell more than one dollar on Tuesday, settling at their lowest level in five weeks. This was the fourth session that they had lost money, due to concerns about oversupply from OPEC+’s planned September production increase. Investors are assessing if India will reduce their Russian crude purchases as a response to Trump's threat, which could tighten the supply. But it is yet to be seen whether this will happen, said Yuki Takashima. He said that if India's imports remained steady, WTI would likely stay in the $60-$70 price range for the remainder of the month. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed on Sunday to increase oil production by 547,000 barges per day in September. This will bring an end to the most recent cut in output earlier than expected. OPEC+ produces about half the oil in the world. For several years, the group had curtailed production to help the market. This year, the group has accelerated its output to regain some market share. The U.S. demand that India stop buying Russian crude oil in order to pressure Moscow to reach a peace agreement with Ukraine may disrupt supply as Indian refiners look for alternatives, and Russian crude will be redirected to another buyer. Trump threatened on Tuesday to increase tariffs on Indian products over the country's Russian-oil purchases in the next 24 hour. Trump said that falling energy prices may also pressure Russian President Vladimir Putin into ending the war in Ukraine. New Delhi branded Trump's threats "unjustified", and pledged to protect its own economic interests. This has exacerbated the trade dispute between India and the United States. Takashima, from Nomura, also cited industry data that showed crude inventories in America, the largest oil consumer in the world, as a positive for the oil markets. Sources citing American Petroleum Institute data said Tuesday that U.S. crude stocks fell by 4.2 millions barrels during the past week. This compares to a poll estimation of a 600,000.0 barrels draw in the week ending August 1. The U.S. Energy Information Administration will release its weekly inventories on Wednesday. (Reporting and editing by Yuka Obaashi; Christian Schmollinger).
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The monsoon season peaks in South China, causing landslides to occur and an increase in viral cases
Rescue crews in south China prepared for the final downpour of heavy rain on Wednesday. They raced between torrential downpours, clearing mudslides and draining waterlogged roads that submerged cars. The East Asian monsoon is at its peak. Forecasters warn of more thunderstorms a day after the skies over Hong Kong and high-tech cities in China's Pearl River Delta went black, unleashing the heaviest rainfall of August since 1884 to the Asian financial center. Videos show that Guangdong province in southern China has transformed its shopping streets into flooded waterways, which is worsening the outbreak of Chikungunya. The mosquitoes are flourishing in the stagnant floodwaters. Guangdong reported over 7,000 cases so far. Since early July, China has been hit by heavy downpours. The East Asian monsoon is stalling over the north and south of the country. This has caused weeks of chaos in the atmosphere. The shifting pattern is attributed to climate change by meteorologists. Flash floods are displacing thousands of people and threatening billions in economic losses. Beijing allocated more than 1 billion yuan (139.21 millions) to disaster relief efforts on Tuesday, including subsidies to repair damage to grain-growing fields. After causing at least five deaths in Guangdong, over the weekend, the extreme rain is expected to subside in the next few days. This was after a massive search and rescue operation that involved over 1,300 rescuers. State media reported that rescue crews rushed on Tuesday to open drains and remove water from urban areas in between showers. The deluge caused mudslides, which brought silt, trees, and debris onto highways. They also exposed cabling, embedded infrastructure, and washed away road foundations. The rains have pushed Guangdong's flood-preparation to the limit. According to Chinese state-run media, 16 rivers in the province are at levels where they could breach their banks. Water levels at two hydrology stations have reached their highest levels since 2017 and 2018. Officials from the Ministry of Emergency Management warned on Tuesday that even though the East Asian Monsoon is beginning to fade, the worst could still be ahead. Two to three typhoons are expected to hit in August.
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Disney's ESPN acquires NFL media assets as part of a major deal
The National Football League and Walt Disney's ESPN have reached a historic agreement to buy NFL Network from the NFL in exchange for a 10% stake in the network. The deal, in which ESPN claims it will enhance the content of its upcoming ESPN streaming services, is subjected to regulatory approval. The financial terms of the deal were not disclosed. ESPN will also acquire NFL Fantasy, an online offering, as well as the rights to distribute NFL RedZone to its cable television and satellite television subscribers. Disney CEO Robert Iger made a statement saying that the announcement today "paves the road for America's most popular sports brand, ESPN, to provide an even more compelling NFL experience in a manner only Disney and ESPN can deliver," he said. According to sources, The Athletic reported that the deal would be announced soon. ESPN declined to make any comment about the reported amount. Iger said that ESPN's streaming service could be launched as soon as this month. It will cost $29.99 a month. The service will give you access to ESPN's professional and college sports portfolio, including the NFL and the NBA, the WNBA and MLB, and the NCAA Women's Basketball Championship. It also includes studio shows like "SportsCenter" or "Pardon the Interruption". In a press release, ESPN Chairman Jimmy Pitaro stated that by combining NFL media assets and ESPN's reach with innovation, they would create a premier destination to football fans. In 2003, the NFL Network was launched to take advantage of the revenues generated by subscriptions to cable and satellite services. It gained some traction by introducing Thursday Night Football but never became a competitor to ESPN. ESPN will own and operate all TV and streaming rights for the NFL Network. The NFL Network will continue to broadcast seven games per year. Roger Goodell, NFL commissioner, said that the sale of the network to ESPN would build on its remarkable legacy and provide more NFL football in innovative ways for fans. RedZone allows NFL fans to view scoring opportunities in Sunday afternoon games. The NFL will continue to produce, own and operate NFL RedZone, while retaining the rights to digitally distribute it. The NFL will also retain ownership over certain media properties such as NFL Films and platforms like the NFL Podcast Network, NFL+, and NFL+. (Reporting and editing by Lisa Richwine, Dawn Chmielewski)
Saudi Aramco second-quarter net profit drops 22% on lower revenue
Aramco, the Saudi Arabian oil giant, reported on Tuesday a 22% decline in its second-quarter profits, due mainly to lower revenues, and increased debt.
The top oil exporter in the world reported a net loss of $22.7 billion for the three-month period ended June 30. This was below a median estimate of $23.7 billion provided by 17 analysts.
Aramco’s average realized crude oil price for the quarter was $66.7 per barrel, down from $85.7 a barrel during the second quarter in 2024 and $76.3 a baril in the first three months of this year.
Total borrowing increased to $92.9 billion by June 30, up from $74.4 billion a year earlier. Gearing, which is a measure of debt, increased to 6.5%, up from minus 0.3% one year ago and 5.3% in the previous quarter.
The company has been a major cash cow for Saudi Arabia for many years. It confirmed the previously announced $21.3 billion total dividends in the second quarter. Of this, approximately $200 million is performance-linked, a system introduced in 2022 after the oil price boom following Russia's invasion in Ukraine.
Aramco announced in March that it would pay out $85.4 billion as total dividends for 2025, a drop of 37% from the $124 billion paid out last year. As the company's cash flow shrinks, Aramco will reduce its performance-linked component by 98% to $900m.
In the second quarter, free cash flow fell by nearly a fifth compared to last year.
Reports last month indicated that Aramco was close to signing a deal with a group headed by BlackRock to raise $10 billion. The company is also considering selling five of its gas powered power plants in order to raise $4 billion. Riyadh is pressing the company to boost profits and payouts.
Dividends are an important source of income for the Saudi government. It owns Aramco directly in 81.5% and through the PIF sovereign wealth fund, another 16%. This is especially true as the Saudi government spends money on diversifying the economy from oil.
Last year, oil accounted for 62% of government revenue. According to the International Monetary Fund, oil prices must be at least $90 per barrel for the Kingdom to balance its budget in 2025.
Brent crude oil, the global benchmark, was trading at $68.83 as of 0625 GMT. Reporting by Yousef Taba and Luke Tyson from Dubai; editing by Mark Potter and Christopher Cushing
(source: Reuters)