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BlueScope Steel shares drop 2% after rejecting $9 billion takeover bid
BlueScope Steel shares were down by 2% on early Thursday trading after the company turned down an A$13.2 Billion ($8.87 Billion) takeover bid from Australian conglomerate SGH and U.S. based Steel Dynamics. BlueScope's shares were trading slightly below the A$30 per share cash offer, which indicates investors believe a deal can still be struck despite the official rejection by the board. SGH shares traded 0.7% lower on Thursday after BlueScope stated that the offer "significantly undervalued" SGH after trading closed Wednesday. Steel Dynamics shares ended Wednesday's U.S. trade 2.8% lower. Macquarie analysts predicted that the takeover fight would continue. They said the bidders were likely to change their minds. Even before the board rejected the bid, some investors had said that the price would need to be raised to win their support. The bidder received the offer at a premium of 26.8% over the closing price for BlueScope's shares on the 11th December, the day before the bid. The offer wasn't disclosed until Monday evening. BlueScope stated that it has received three bids from Steel Dynamics in the last 20 years. Its Chair Jane McAloon claimed the new offer from SGH and Steel Dynamics is an attempt to "buy the company on the cheap". SGH, owned by Australian billionaire Kerry Stokes and a growing industrial company, is planning to purchase BlueScope, while selling its North American assets, to Steel Dynamics. SGH and Steel Dynamics?did not respond to requests for comments on the bid rejection. BlueScope's board said it rejected the bid because the offer was to be adjusted for future payments of dividends and would take a very long time to finalise, which would reduce the value. The company also said that it would generate between A$400 and A$900 in additional earnings if the steel spreads?and foreign exchange rate reverted to historic average levels, from recent lower levels. Steel spreads are the difference between steel prices and input costs. They are an important measure of profitability for the industry. (1 Australian dollar = 1.4877 dollars) (Reporting and editing by Scott Murdoch, Chris Reese, Jamie Freed).
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Panama's Sinolam files a lawsuit against AES and InterEnergy for alleged anticompetitive conduct
Sinolam LNG Terminal S.A., and Sinolam Smarter Energy LNG Power Co. filed a $4 Billion lawsuit in Virginia on Wednesday against U.S. utility AES Corp. Sinolam filed a complaint in Arlington County Circuit Court accusing AES and its partner of anti-competitive behavior aimed at derailing Sinolam’s planned LNG terminal and power-generating project using gas in Colon. The lawsuit?alleges that "coercive tactic," misuse of confidential data and improper influence on regulators?to delay permits or revoke licenses?have been used. Sinolam announced that it had obtained permits, power purchase contracts and long-term customer commitments. It said the projects were part of Panama's ambitions, to expand LNG related activity after the Panama Canal expansion. The complaint claims that AES executives acted from their Virginia headquarters to slow down the permit process and press for regulatory actions that would?undermine Sinolam’s authorizations. Sinolam alleges that InterEnergy also misused the information it obtained under a nondisclosure contract to help form a joint venture, which, according to Sinolam, displaces Sinolam and its potential customers. Sinolam accuses the defendants of using political influence to gain monopoly control on LNG imports and power generation. This includes ties with?Panama’s government which owns a stake in AES's AES Panama S.R.L. AES stated that the claim was "without merit" and plans to vigorously defend itself. InterEnergy didn't immediately respond to a comment request. Reporting by Yagnoseni das in Bengaluru, Editing by Tasim Zaid
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India arrests anti-fossil energy activist
Indian officials announced on Wednesday that a global environmental activist who was working to coordinate an international treaty to phase-out fossil fuels had been detained by Indian authorities and then released as part of their investigation into the use?of foreign?funds in order to 'undermine Indian energy policy. India's Enforcement Directorate conducted a search of the home of Harjeet and Jyoti Singh, who are the founders of the environmental NGO Satat Sampada. The raid was part of an investigation into the "suspicious" foreign remittances received by the organisation to promote the so-called Fossil fuel Non-Proliferation treaty in India. Vanuatu proposed the?treaty in 2022. It aims to stop fossil fuel production and transition towards green energy. The treaty is supported by 18 developing nations, including Pakistan and Colombia. The investigation comes after COP30 'climate summit, held in Belem in Brazil. Several countries were unhappy with the final outcome, which avoided stronger plans to rein in greenhouse gas emissions or phase out fossil fuels. The Indian agency stated in a press release that "while presented as a 'climate initiative,' its adoption could expose India?to legal challenges at international fora such as the International Court of Justice. It would also severely compromise the nation's economic and energy development." In a July advisory opinion, the ICJ stated that wealthy nations are responsible for curbing climate change. Singh and Awasthi?were not immediately available to comment. Tzeporah Bernman, the founder and chairperson of the Fossil Fuel Non-Proliferation Initiative, was unable to comment on the details of the investigation but stated in a press release that the treaty is meant to support India, not undermine it. The proposal aims to assist developing countries, including India, through international cooperation, financial access, and technology transfers. She said that the goal was to promote a fair and orderly transition to renewable and accessible systems with a special focus on those in most need. (Reporting and editing by Matthew Lewis in Washington, Valerie Volcovici)
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Energy ministry reports that Russian strikes have knocked out power in southeast Ukraine
The?energy ministry reported that Russian strikes on Wednesday evening knocked out almost all power supplies in two regions in southeastern Ukraine. In a Telegram statement, the Ministry said that "as a consequence of the attack, the Dnipropetrovsk region and the Zaporizhzhia region are almost completely powerless." "Critical infrastructure operates on reserve power." In recent months, Russian attacks on Ukraine's energy system have increased. Yulia Shvyrydenko, Ukraine's prime minister, said that impending snowfalls as well as temperatures dropping overnight to minus 20° Celsius (minus four degrees Fahrenheit), would likely cause power and heating problems. Svyrydenko, a Telegram user, wrote: "Ukraine’s energy system is constantly under attack by the enemy. Energy workers work in very difficult conditions just to provide light and heat for people." She said that "deteriorating weather conditions place additional strain on critical infrastructure." Public?broadcaster Suspilne reported that power cuts had affected the city of Dnipro where the metro stopped running and other parts in the region. The Dnipropetrovsk Regional Council's head told the broadcaster that he was unsure when the power would be restored. Oleksandr Vikul, the head of the military administration in Kryvyi Rih (the home town of President Volodymyr Zelenskiy in the region), warned residents that they should prepare for long power cuts and use generators as much as possible. Ukrainian Railways said that trains and signalling systems in both regions were switched to reserve systems, and that?stations are being operated using generators. The Zaporizhzhia regional governor Ivan Fedorov stated that the power cuts had caused air raid sirens to be unaudible. He stated that mobile phone?networks are working under emergency conditions, and urged residents to stay away from the networks. Fedorov stated that the hospitals in Zaporizhzhia are functioning normally, and that water will be restored quickly in the affected areas. (Reporting and editing by Jamie Freed; Ron Popeski)
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Venezuela's PDVSA announces that oil supply negotiations with the US are progressing
PDVSA, Venezuela's state oil company, said Wednesday that it was?progressing with negotiations with the United States regarding oil sales.?A board member of the company informed?the?U.S. Will need to purchase cargoes at the international price. Washington announced on Tuesday that it had reached a deal with Caracas for access to up $2 billion of Venezuelan crude. This is a sign the Venezuelan government has responded to President Donald Trump’s demand that they be open to U.S. companies and risk further military intervention. Trump has said that he wants Delcy Rodrguez, the interim Venezuelan president, to be installed in this week's after the U.S. The U.S. has deposed Nicolas Maduro and given "total access to the oil industry" of Venezuela. PDVSA stated?in a short statement? that the parties had been discussing?similar terms to those?in place?with foreign partners like Chevron, its main joint venture partner which controls all oil exported to the U.S. The company stated that "the process... is based strictly on commercial transactions, under terms which are legal and transparent for both parties." Wills Rangel is a PDVSA board director and union leader. He told us that the U.S. would need to purchase cargoes for Venezuelan oil at international prices. Rangel stated that "if they want to purchase it, it will be available in due course, at the current international price." "Not what (Trump's) intentions are, as though that?oil belonged to them since we supposedly owe. We owe nothing to the United States. Rangel said that Chevron is currently the only company exporting Venezuelan crude, due to a U.S. ban on the country. This has paralyzed the exports of Venezuelan oil to China, its main destination. (Reporting and Editing by Rod Nickel).
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De Beers CEO: African countries and business groups are eyeing De Beers stakes
De Beers' CEO,?Tony?Taylor, said that Anglo American is looking to sell its stake in De Beers and has received interest from business groups as well as African governments. Al Cook, CEO of De Beers said that Botswana Angola Namibia, all of which are major diamond producers, have shown an interest in purchasing equity in the company. He did not comment on the current status of the talks or who the parties were. In June, it was reported, citing reliable sources, that Anil 'Agarwal and Indian diamond groups, as well as Qatari investment funds, were among the people who had expressed a?interest in De Beers. Anglo American, the company that owns about 85% of De Beers has valued it at $4.9 billion. Cook responded that the focus was not on the identity of the new owner but rather on the alignment with the long-term strategy, which included its emphasis on "natural diamonds", partnerships with producer countries and growth in key market. Cook, De Beers' CEO, said that India is "an extremely important market." He believes that the demand for diamonds will double in India, and the market value of the precious stone should reach $16.7 billion by 2030. This week, the?group opened the fifth Forevermark Store, the largest in the world, in Mumbai. The group plans to expand its network to?25 outlets before the end of the year, and eventually to 100 stores. De Beers is banking on the rising demand for self-purchases as the global model of gifting has changed. The group will also be doubling down on the Element Six?business. Last year, it generated about $300 million of revenue by supplying synthetic wafers for data centers to use as heat conductors. The company discontinued its lab grown diamond jewellery brand Lightbox in 2013.
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Investors lock in profits as gold falls by more than 1%
Gold prices fell more than 1% Wednesday, as investors took profits following a recent rally. However, it has pared some of its losses since weaker-than expected U.S. job data helped to boost bets on Federal Reserve rate reductions. As of 1:36 pm, spot gold fell 0.9%, to $4,445.32 an ounce. ET (1836 GMT). Prices dropped as much as 1,7% to $4422.89 in the earlier session. U.S. Gold Futures for 'February Delivery' settled at $4,462.50, down 0.7%. David Meger is the director of metals trading for High Ridge Futures. He said, "We view today's pullback a general profit-taking after that recent surge." Meger said that the recent gold price rise is due to the Fed's easing. U.S. Job Openings declined more than expected in November after increasing marginally in October. A separate ADP report revealed that private payrolls increased less in December than was anticipated. According to data compiled LSEG, the markets expect 61 basis point rate cuts in 2019. Now, the focus is on Friday's nonfarm employment report. The geopolitical situation remains uncertain following the capture of Venezuelan President Nicolas Maduro over the weekend. U.S. president Donald Trump announced plans to refine and export Venezuelan crude on Tuesday, while the White House confirmed separate discussions about the acquisition of Greenland including possible military involvement. According to official data, China's central banks extended their gold buying streak for a 14th consecutive month in December. Meger stated that the data from China continues to show "strong demand from Asia" and is yet another reason for this recent surge to the upside. In low-rate environments, and during times of uncertainty, gold, which is a safe-haven investment, tends do well. Silver spot fell 4.1%, to $77.93 an ounce. Goldman Sachs believes that London inventories are causing sharp swings in prices and may even lead to rallies. Palladium fell 5.2% to $1,727.40, while spot platinum declined 6.5%. (Reporting and editing by Anmol Chaubey, Bengaluru. Sahal Muhammed Varun H K Alan Barona.
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Rubio: US plan for Venezuela includes stability, recovery and transition
Trump warns of more military operations following Maduro's capture Murphy, a Democrat, says that the plan is stealing oil at gunpoint' Rubio: US will make sure oil companies can access Venezuela during the recovery phase. Simon Lewis and Patricia Zengerle WASHINGTON - On Wednesday, Marco Rubio, the Secretary of State, said that the United States had a three-step strategy for Venezuela. The plan will start 'with stabilizing the country, after U.S. troops seized Nicolas Maduro,' then ensure that U.S. companies have access to Venezuela during the recovery phase, and lastly oversee a transition. Donald Trump warned that he would launch more military operations in Venezuela if Maduro's inner-circle members who took over the leadership of the country did not comply with his demands. These demands are largely aimed at obtaining Venezuelan crude oil. Trump said the U.S. will refine and sell 50 million barrels worth of Venezuelan crude as U.S. forces continue to seize oil tankers tied to Venezuela. "The bottom-line is that we now have tremendous control and?leverage?over what these interim authorities are doing," said Rubio. He spoke with?Defense Sec. Pete Hegseth following a?classified briefing given to U.S. Senators about the Trump Administration's plan for Latin America. "But this will be a transition process," Rubio said. It will ultimately be up to Venezuelans to transform their nation. Rubio has not provided any details about the planned transition. DEMOCRATS SAID PLANS ARE EQUAL TO THE STEALING OF OIL Democrats were shocked by the plans. They said that they amounted to oil theft, but lacked specifics. They also questioned why these plans couldn't be discussed at public hearings. Rubio said that the briefing contained operational details which could not be released. However, he added that after Venezuela was stopped from "descending into chaotic chaos," the U.S. will begin a phase of "recovery." This would include "ensuring that American and Western companies, as well as other companies, have fair access to the Venezuelan markets." Rubio continued, "At the same time, we must begin the process of national reconciliation within Venezuela so that the opposition can be released from prisons or brought back into the country and start to rebuild the civil society." "And the third phase will, of course be one of transition." Chris Murphy, a Connecticut Democrat senator, called the plan "a crazy plan". "They're talking about taking the Venezuelan oil under threat of gunfire for an undefined period of time as leverage to micromanage this country." Murphy told reporters that the plan's scope and absurdity was "absolutely stunning". Reporting by Patricia Zengerle and Simon Lewis; Editing by Nia William, Rod Nickel.
Dollar edged up slightly as investors awaited economic news
The Dow Jones Industrial Average, European shares and other major stock indexes rose to record highs on the Tuesday while the dollar grew as investors focused their attention on important market data that could gauge Federal Reserve policy.
Investors weighed the uncertainty surrounding Venezuelan crude production against expectations of an 'ample global supply' this year.
Maria Corina Machado has promised to return to Venezuela as soon as possible, hailing U.S. president Donald Trump for toppling Nicolas Maduro and declaring that her movement is ready to win an election free of corruption.
The White House announced on Tuesday that Trump, his team and other officials are discussing the options to acquire Greenland. The use of U.S. forces in achieving this goal is always an option.
"The market's response to the geopolitical?situation in Venezuela was well taken. But (reports) that the White House thought about taking Greenland by force... could cause some roadblocks," said Peter Cardillo.
The momentum in the market continues to grow. He said it was largely due to a January effect, which is a pattern of early-year stock buying. He added that if the labor data this week are weaker than expected it could increase expectations of U.S. interest rate cuts.
Stock Indices Climb
Chip stocks on Wall Street rose as artificial intelligence optimism returned.
Exxon Mobil shares fell 3.4% on the day. Investors bet that Washington would allow U.S. companies access to Venezuelan oil reserves after the raid in Venezuela on Monday. Trump's administration will meet with executives of oil companies to discuss increasing production in Venezuela later this week.
The Dow Jones Industrial Average increased 484.90 points or 0.99% to 49,462.08, while the S&P 500 gained 42.77 points or 0.62% to 6,944.82, and the Nasdaq Composite advanced 151.35 or 0.65% to 23,547.17.
The MSCI index of global stocks was up 7.13 points or 0.69% at 1,035.15, and hit a new high during the session.
The pan-European STOXX 600 index finished up 0.58%, and reached a new record high. The indexes of Germany and Spain reached record highs as investors were confident about the economy despite increasing geopolitical tensions.
The dollar index (which measures the greenback in relation to a basket?of currencies including the yen, the euro and others) rose by 0.17%, reaching 98.56.
U.S. ECONOMIC DATA TO SET MARKET TONE
Markets were buoyed by expectations of U.S. rate cuts. The market was focused on the U.S. employment report due Friday. This will affect the monetary policy expectations of the market. According to LSEG, financial markets are pricing two Fed rate reductions this year.
Fed Governor Stephen Miran's term as the U.S. Central Bank ends this month. He said that aggressive interest rate reductions are necessary to keep the U.S. economy moving.
The yield on the benchmark U.S. 10 year notes increased 1.2 basis points from 4.163% at late Monday.
U.S. crude oil fell $1.19, settling at $57.13 per barrel. Brent crude dropped $1.06, settling at $60.70.
Gold fell slightly in the last session after a sharp rise in the previous session. Spot gold dropped 0.12% to $4491.77 per ounce.
Nickel jumped more than 9% and copper jumped to a new all-time peak, as concerns about supply fueled a rally early in the year for industrial metals.
(source: Reuters)