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Sources say that Chinese investors are considering selling their stake in Redexis Gas Network Operator.
People with knowledge of the discussions said that Chinese investors Guoxin Guotong Fund and CNIC Corporation are considering selling their 33.3% share in Spanish 'gas network operator Redexis' as the country prepares to introduce a new framework for remuneration. Three sources confirmed that the two investors had begun a process of hiring?advisers in order to evaluate the sale. Two sources say that a?deal could value Redexis between 2 billion and 2.5 billion?euros (2.3-$2.9billion). * In 2018, the two Chinese investors bought?33.3% Redexis. According to the website of Redexis, pension funds?Arbejdsmarkedets Tillaegspension?and Universities?Superannuation Scheme own each 33.3%. Sources say that pension funds and infrastructure funds are likely to bid for the stake. * Guoxin Guotong Fund & CNIC Corporation did not reply to a request for comments via email. Redexis declined comment. According to Spain's competition watchdog, a new?"regulatory framework" for?gas pipelines covering the period of 2027-2032 is expected to be approved later this year. Sources said that the'regulatory changes' are expected to lead to more asset sales, as buyers prefer to buy regulated assets at the beginning of the regulatory cycle to reduce uncertainty.
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Starmer, UK's Starmer, vows to maintain a "cool head" after Trump's criticism
Keir starmer stated that Britain would respond to the "escalating conflict" in the Middle East with a "cooler head", after President Donald Trump had chastised Prime Minister Theresa May for not providing enough support for her strikes against Iran. Britain, a historically staunch ally to Washington, initially refused permission for the U.S. to use its military bases for an attack on Tehran. This position was only moderated when Iran attacked neighbouring countries, allowing UK bases for limited 'defensive' strikes. Trump responded to Starmer's criticism by berating him three times. This included in the Oval Office, where he said on Tuesday that "This isn't Winston Churchill we are dealing with". Starmer, who previously said that any British military action should?have a 'viable, well-thought-out plan, told the parliament on Wednesday, the so-called'special relationship' was evident every day in the conflict and did not depend on the words of U.S. President. He cited American planes that fly from British bases, British fighter jets that protect U.S. base and intelligence sharing as examples of the special relationship. "Holding on to the latest words of President Trump is not special relationship." Starmer stated that he knew people in Britain were concerned about the possibility of escalation. He said Britain would therefore act "with clarity, purpose, and?with a?cool head". Starmer was criticized from all sides in the UK for the decision. Opponents of the left called on him to condemn military action. Kemi Badenoch, a leading opposition leader on the right, and Nigel Farage, a prominent member of the left-wing opposition party attacked Starmer's failure to support Britain's most important ally in intelligence and security. Starmer stated that Britain has been in close contact with the United States regarding the pre-deployment of military assets to the region for several weeks. London announced that it would send HMS Dragon, a destroyer with air defence capabilities, and additional helicopters to counter the Iranian-made Shahed drone which hit the runway at the British Akrotiri base in Cyprus. (Reporting and writing by Sam Tabahriti; editing by William James).
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McGeever: Risk of dollar liquidity shock highlighted by Mideast crisis
This week, investors have been dumping dollars amid the turmoil in Middle East. It is a reminder of the potential rocky transition from a dollar-centric world to a multi-polar, fractured one. Investors seeking relative safety in the world's most liquid asset, the dollar, are boosting its value as the war that has spread across the region since the joint U.S. and Israeli assault on Iran last Saturday. Equity indices which were the best performers in the first two months of this year have plummeted. South Korea's KOSPI, which rose?50% in February, has fallen nearly 20% in just two days. The dollar has risen by as much as 2 percent in just two days and Treasury yields have also soared. Matt King, founder at Satori Insights says that this sudden dollar surge has nothing to do with a sudden change in growth or inflation expectations. Money flow is the issue - investors are scrambling for liquidity as they unwind the speculative frenzy that has inflated many markets over recent months. Investors in a foxhole, despite all their fears of dollar devaluation, still need and want dollars. Will Dollar Demise remain 'Glastic'? This brings up the question of what might happen in future crises, if the "long-term erosion" of the dollar's dominance continues. Since the introduction of the euro currency in 1999 and China's entry into the World Trade Organization (WTO) in 2001, the dollar has steadily declined as the leader of global trade, finance, and foreign exchange reserves. According to the International Monetary Fund, the U.S. dollar's share in global foreign exchange reserves has dropped to 57% from 70% at the beginning of the 2000s. The erosion of dollar liquidity was smooth and gradual. This has allowed the global financial system to build buffers for liquidity crises, after the historical shocks in 2008 and 2020. The U.S. alliances and rules-based order as well as the forces of globalization, which once ensured dollar liquidity lubricated the wheels of?the world economy and markets are now crumbling. In the last year, major trade, political, and military conflicts erupted, making the investment landscape in the world a very dangerous place. On March 17, Barry?Eichengreen will publish his latest book, "Money Beyond Borders": Global Currencies From Croesus To Crypto. Eichengreen examines the 2,500 year history of money and the reasons why certain currencies are important and then disappear. He also assesses the future of the dollar, as well as the role that cryptocurrencies and blockchain will play. He argues that the dollar is still the dominant currency for FX reserves, international trade, finance, and invoicing. However, he worries that the decline of the dollar on these fronts could accelerate. Eichengreen: "I am much more concerned than I used to be in the past." There is no obvious alternative to greenbacks, so we must continue to pray that the transition will be gradual and smooth. "But I think we are learning that things don't happen as smoothly anymore." "A DELICATE POINT in Time" The last few days were anything but smooth and have shown how desperately the world needs dollars. According to the Bank for International Settlements, 89% of all foreign exchange transactions are on the U.S. Dollar's side. This is the highest level in 25 years. The euro is the second most traded currency, accounting for 29% of all FX transactions. Additionally, the dollar is responsible for about half of all international payments. According to a Federal Reserve report, if you include intra-eurozone payments in the calculations, this share increases to about 60%. About 55% of bank claims in foreign currencies and international are denominated as dollars, while 60% of liabilities have the same currency. According to estimates, up to 20% of crude oil is priced in currencies other the dollar such as the euro and Chinese yuan. That means that around 80% of the world's crude oil trade is still priced in dollars. Eichengreen has said that he believes a multi-polar financial and monetary system for the global economy would be beneficial to the world. Just as a diverse ecosystem is healthy for the planet. We're still not at the point where we could rely on other global sources of liquidity to?replace the dollar. We are therefore at a delicate time," says?Eichengreen. This seems like a bit of an understatement at a time where trade wars, and even real wars, are raging. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Bloomberg News: US exempts Rosneft Germany indefinitely from Russia sanctions
Bloomberg News reported on Wednesday that the U.S. Government will exempt Rosneft's German unit from sanctions indefinitely. A person familiar with this matter was quoted as saying so. Could not verify immediately the report. The German economy ministry didn't immediately respond to an 'ask for comment'. Germany placed local units of Rosneft, a Russian oil company, under trusteeship by 2022 following Moscow's invasion of Ukraine. This broke Berlin's decades long energy relations with Russia. Assets include a'stake' in the PCK Schwedt refinery, which is a major supplier of fuel for the capital area. Bloomberg News reported that the U.S. Treasury’s Office of Foreign Assets Control was expected to make a decision by Friday. However, this timing may change. The extension of the current U.S. sanction waiver would reduce the risk of disruptions in German?refining?operations, at a time the Middle East conflict is escalating and causing global energy markets to be uneasy. Reports in 'October' stated that Washington had written assurances to the effect that Rosneft-owned?Germany operations would be exempted from new U.S. sanctions on energy. Reporting by Anna Peverieri, Barcelona. (Editing by Jan Harvey, Mark Potter and Jan Harvey)
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During talks, the foreign minister of Hungary hopes that Russia will release two ethnic Hungarian prisoner of war
Peter Szijjarto, Hungary's foreign minister, said that he hopes Russia will free two ethnic Hungarian war prisoners during his talks with Vladimir Putin in Moscow. Szijjarto traveled to Moscow one day after Hungary's prime minister Viktor Orban had a telephone call with Putin. They discussed the Middle East situation, Ukraine and whether crude oil and natural gases were available for Hungary. Orban's Government has made Russia's War on Ukraine a major topic in his campaign for the 12th April parliamentary elections, increasing tensions between Budapest & Kyiv. Szijjarto? said in a Facebook broadcast from Moscow that two ethnic Hungarian prisoner of war? have recently asked Hungary for assistance. Szijjarto stated, "I hope after our 'talks that more people will fly home on the plane as opposed to those who came this way." Ukraine is home for around 150,000 ethnic Hungarians. Most of them live in Transcarpathia. Orban's government has been at odds with Kyiv over the language rights of ethnic Hungarians for many years. Orban's government also accused Kyiv of conscripting ethnic Hungarians who Budapest claimed should not have been called into service. Last Friday, the Foreign Minister summoned Kyiv’s?ambassador in Budapest to protest against the conscription. Orban, the Hungarian prime minister,'maintained a warm relationship with Moscow after the beginning of the conflict in Ukraine and is unwilling to give up its purchases from Russia of oil and gas, which led to tensions between the EU and Hungary. Hungary announced last month that it would 'block' the next EU package of sanctions against Russia, as well as a 90-billion euro (105-billion dollar) EU loan to Ukraine for its defense against Russia until the Druzhba Pipeline resumes shipments.
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Asian petchem makers face naphtha disruption as Iran conflict widens
The Middle East supply chain is buckling under the U.S. - Iran conflict. Tanker traffic in the Strait of Hormuz has been halted and buyers are bracing themselves for delays and increased costs. Two sources familiar with the situation said that Chandra Asri, an Indonesian company, declared force majeure for all contracts on Tuesday, while Maruzen Petrochemical, a Japanese company, and Mitsui Chemical of Japan cancelled the second half April import tenders. Both Japanese companies declined comment. Asia imports Middle East naphtha in the amount of 4 million metric tonnes (36 million barrels). Naphtha, a raw material used to make petrochemicals for consumer products such as paints and plastics, is a source of Middle East naphtha. "Delays due to rerouting and increased security protocols are impacting voyages within and outside of the immediate conflict zones, complicating trade and further tightening logistical flows. This adds uncertainty to cargo scheduling and delivery deadlines," said Vasudev Baligopal, global director of petrochemicals trading at brokerage Marex. Some assets in Asia-Pacific are taking a more conservative stance towards future production. If disruptions continue, this precautionary approach may have an impact on operating rates. NAPHTHA MARGIN IS NOW AT A?4 YEAR HIGH The benchmark?naphtha refinery margin was impacted by the disruption Brent crude reached a four-year high in Asia of $173 per ton on Wednesday. The South Korean industry ministry stated on Tuesday that its petrochemical manufacturers are worried about supply disruptions if the Iran crisis continues. It is Asia's largest importer of Middle East Naphtha and 54% of the country's supply comes via the Strait of Hormuz. Lotte Chemicals, GS Caltex and LG Chem are among the buyers. South Korean industry sources said that these?firms would need to decide within the next two week whether they will source alternative regions, such as the U.S., or South Asia or reduce output. Another source said that Korean refineries, which supply naphtha for petrochemical companies, maintain crude oil stock to sustain?operations? for at least a month. Sources declined to name themselves as they weren't authorised to talk to the media. An executive from a global trading firm said that getting U.S. products will take an extra three weeks for shipping, which is very expensive. ALTERNATIVE SUPPLIES An Indian exporter stated that India would need to ensure sufficient crude supply to continue exporting naphtha. The South Asian nation's thin reserves make it a major oil importer that is most susceptible to crude supply shocks, if the Middle East war leads to a prolonged disruption of shipments. Two Singapore-based traders have said that some Asian buyers could turn to Russian naphtha if the situation becomes dire.
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Official from the OECD says that inflation is the biggest threat to debt markets, which are facing a 'big test'.
A senior OECD official said that inflation is the biggest?risk to global bond markets. This comes as energy prices have risen following?the U.S. and Israeli air war against Iran. Carmine Di Noia, OECD director of financial affairs and enterprise affairs, said in an interview before the release of Wednesday's annual debt reports by the Paris-based organization that "Now we 'are having another huge stress test." Investors are worried about inflation and higher energy costs, as oil prices have increased by 16% in the last week. Di Noia said that if this happens, the higher bond yields will "put even more pressure" on the debt markets, given financing needs remain high and borrowing costs are still high. SHORTER MATURITIES RAISES RISK OF REFINANCING The OECD anticipates that governments and businesses will borrow $29 trillion in this year. This is up from $25 trillion last year. Di Noia stated that they have reduced the maturity of the new debts they sell, and higher yields may reinforce this dynamic. He noted that the conflict had stoked unrest at a moment when investors on bond markets were changing. The OECD has warned that price-sensitive investors, such as hedge funds, are taking a 'larger role' in the markets. According to the OECD, the share of corporate bonds maturing within 10 years or less has reached its lowest level since 2009 and is expected to be the lowest ever in 2025. This increases the risk of refinancing. At a record $13.5 billion, it reached 80% for OECD nations in 2025. As more debt is due earlier and yields rise, debt costs will increase faster. The emerging markets are especially vulnerable, as over a third (35%) of their debt is due to mature in the next 3 years. The rate increases to combat inflation after the pandemic pushed up government interest rates and raised yields on bonds. The OECD stated that by 2024, these had already surpassed defence spending. AI DEBT COULD transform the corporate bond market The OECD stated that the soaring borrowing by AI firms as they race to expand their data centres and processor requirements may make corporate bonds more "equity like". The report stated that nine major hyperscalers will need to finance $4.1 trillion in capital expenditures until 2030. If the nine companies were to fund half of this on the bond market, they would be responsible for 15 percent of global corporate issuance. Amazon, Alphabet, Google, Meta, and Microsoft are among them. Di Noia stated that the convergence of the two markets could make it more difficult for investors to hedge their risk and diversify their investments, as the nine make up 12%?of the global stock market capitalisation. AI infrastructure could also require an additional investment of $5 trillion by 2030. This is likely to increase borrowing in sectors such as real estate, energy, and IT hardware. The OECD has warned that this raises questions about the market's ability to absorb a new supply in the same magnitude. This is especially true given the fact that sovereign borrowing continues to grow and the changing nature of investors. (Reporting and editing by Dhara Raasinghe, Emelia Sithole Matarise and Yoruk Bahceli)
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MORNING BID AMERICAS-Seoul-sapping selloff
By Mike Dolan March 4th - Mike Dolan, Editor at Large, Finance and Markets, explains what matters today in U.S. markets. The Middle East crisis has shocked Asia's stock market on Wednesday. South Korea's Kospi plunged 12%, its worst ever day. Japan's Nikkei index and Taiwan's benchmark both lost about 4%. The Korean won has hit its weakest level in 17 years. Seoul and other Asian centres were forced to suspend their trading due to the scale of the selling. Below, I'll go into more detail. Check out my column about why gold has lost some of its "safe-haven" shine this week. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. SEOUL-SAPPING SELLOFF The conflict has caused a rise in prices and uncertainty about the supply of energy products to Asia's major manufacturing economies. There were some signs that the markets are easing up as investors wait for further developments. The U.S. Brent crude oil price and the global Brent crude were both up another 3%, but remained below Tuesday's highs of 8 months and 19 months. Europe's stock prices popped up 0.5%, in what appeared to be a pause following two days of heavy trading. U.S. futures for stocks were also marginally higher. The dollar's increase has largely flattened, despite the fact that government bond yields continue to rise. The dollar's rise was mostly flattened out, even though government bond yields continued to climb. The President announced plans to provide insurance for shipping and possibly naval support to help energy supply companies exit an effectively shut Gulf. These moves may have a marginal impact, but it could take time. The world markets are now thinking in terms of weeks, not days, when they ask about the end of this energy blockade. Conflict in Iran and the surrounding region cannot be predicted. After the death of Ayatollah Khamenei, many are now focused on who will be the next Supreme Leader. A New York Times article that claimed Tehran officials made a secret approach to Washington on the weekend to find a solution to the conflict gave some investors hope. Investors who believe that the Gulf tensions will ease soon are wrong. There is plenty to worry about. One of the biggest concerns is about private credit funds like Blackstone and BlackRock. The ADP private sector jobs survey and ISM service sector survey are both scheduled to be released today. It is possible to 'pay more attention' to the former, given that Friday will bring out a?big U.S. Payrolls Report. Chart of the Day The European gas price has risen this week due to the disruption of energy supplies in the Middle East, and Qatar specifically. It is now at its highest level in three years - nearly 20% more than it was this time last. Gas storage levels in Europe are well below the five-year average as the Iran conflict unfolds. The EU told its member states on Wednesday that it did not expect any immediate impact to the supply of natural gas. Watch today's events * U.S., February ADP employment figures (8.15 AM EST), S&P Global/ISM Services?PMIs (9.45-10.30 AM EST). * U.S. Federal Reserve issues latest Beige Book * U.S.? corporate earnings: Broadcom Want to receive Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent the views of News. News is committed to the Trust Principles and to integrity, independence, freedom from bias, and impartiality.
Vopak delays investments in South African LNG Project to 2028
A senior executive at Vopak, the Dutch tank storage and terminal operator, said that it had pushed back a decision on a final investment (FID) for South Africa's 1st liquefied gas terminal until 2028.
A court order in September halted Eskom's plans to build a gas-powered 3,000 megawatt plant at Richards Bay. This slowed down the progress.
Oliver Naidu told a conference on energy that he was 'waiting to see how Eskom would proceed and just extended our pre FEED study.
He said that the company expects to be ready to make a final decision by the first quarter 2028.
Estimated cost of the two-phase project: $1 billion.
VOPAK IN CONSORTIUM PICKED TO BUILD, RUN THE PROJECT
Vopak has been selected as a member of the consortium formed by Transnet Pipelines in 2024 to build and operate?the Zululand energy terminal at Richards Bay Port for a period of 25 years.
Naidu stated that they expect to sign preliminary agreements in the next few months with Eskom and possibly U.S. oil major Exxon Mobil for LNG use and distribution.
He said that Exxon was one of his strongest potential customers.
ExxonMobil is a global supplier of LNG. They have identified South Africa as their top priority market.
The company did not respond immediately to a comment request.
Transnet National Ports Authority has previously stated that the Zululand Energy Terminal, located along 'South Africa's East Coast, would initially import 2 million mtpa of LNG before ramping it up to 5 mtpa by 2027. Reporting by Wendell Roelf, Editing by Sfundo parakozov and Bernadettebaum
(source: Reuters)