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Focus on next week's rate decision to determine the South African rand rate.
South Africa's currency, which is backed by commodities, was stronger on Friday against a weaker US dollar. This was helped by the higher gold price as investors rushed to the safe haven asset due to concerns over the worsening fiscal situation in the United States. At 1513 GMT the rand was trading at 17.88 per dollar, which is 0.7% higher than the closing price of Thursday. Last time, the dollar index fell by about 0.6% versus a basket currency. South Africa is one of the world's major producers of precious metals, and its currency benefits from higher gold rates. Gold prices rose more than 1% last Friday. Investors in South Africa will be focusing on the interest rate announcement by the South African Reserve Bank next week. In March, it cautiously maintained the rate citing inflationary risk from U.S. president Donald Trump's trade war with the world and the country’s disputed budget. Since then, Trump announced a 90 day pause on country specific tariffs. South Africa's inflation has dropped below the bank target range. And the finance minister has presented a revised Budget, abandoning his initial plan to increase value-added taxes, which was the most controversial element of his two previous attempts. In a research report, Lara Hodes, an economist at Investec, said that she expected rates to stay at 7.50% for the May meeting in accordance with the latest U.S. decision. "However, with inflation significantly below the midpoint in the target range and rand stronger than any time since months ago, it is possible that the MPC could decide to reduce rates by -25bp." The Top-40 Index on the stock exchange was up by 0.3%. Gold Fields, Harmony Gold, and AngloGold Ashanti are South African mining companies that last traded at a gain of about 3%. Sibanye Stillwater gained about 1% following the report of an accident in one of its mines that trapped 260 workers underground. The company reported that 79 miners have so far been brought up to the surface. The National Union of Mineworkers confirmed there had not been any deaths or injuries. The yield on the benchmark 2030 government bonds remained unchanged at 8.885%, a decrease of 1 basis point. Reporting by Sfundo parakozov, editing by Bhargav acharya and Gareth Jones.
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Platinum prices soar to a two-year high due to strong Chinese demand and tighter supply
The price of platinum surged up to a record high in two years on Friday. This was due to the sharp increase in Chinese imports and persistent supply concerns. Investors are also showing renewed interest in this metal, which is used in jewellery, catalytic converters and electronic products. Spot platinum reached its highest level in May 2023 at $1,096.40 an ounce. The metal has risen by 20% this year. Investors are looking at cheaper platinum as opposed to gold, which is why the fundamental support for platinum comes from the prospect of a third annual deficit in supply and increased demand for coins, bars and jewellery. The rise in platinum prices was attributed to speculation after the price broke through the psychologically important $1,000 per ounce level earlier this week. "China was an excellent physical buyer when the price was around $950/oz. A trader said that the spike above $1,000 would mute demand. Data released by the Customs this week shows that China imported 10 tons of platinum during April. This is the highest amount in a whole year, and represents a 47% rise compared to imports in March. Analysts noted that as gold prices reach record highs, investors are moving to platinum because it appears more affordable. Last month, spot gold reached a record high of $3.500.05 per ounce, thanks to strong investment demand and fears about tariff wars. The World Platinum Investment Council said this week that the demand for platinum jewellery has increased in China after a decline of over ten years. Concerns about the primary supply also support prices. In recent years, the price of platinum group metals, which are mainly used to neutralise harmful emissions in vehicles, has been impacted by the expansion of electric cars, reducing margins for miners. According to Metals Focus consultancy, there are still significant above-ground metal stocks. These cover the market deficit, and limit the upside potential for platinum and PGMs, as the demand from the automotive sector continues to decline. Palladium, the sister metal of platinum, fell below $1,000 on Friday after reaching a six-month peak of $1,042.70, on Wednesday. According to Tai Wong an independent metals dealer, its growth was boosted by Honda's move towards hybrids instead of EVs.
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TotalEnergies CEO defends the company against East Africa allegations
Patrick Pouyanne, the chief executive of TotalEnergies, defended his company's involvement in oil projects in East Africa after a U.N. independent human rights expert stated that the French firm must address new allegations of abuses. Michel Forst, Special Reporter on Environmental Defenders, said in a late-Thursday statement that the company should take immediate steps to protect activists connected to the East African Crude oil Pipeline and its associated oilfields. This decision followed the decision of German asset manager Union Investment, which dropped TotalEnergies bonds and shares from their sustainable investment funds due to this issue. Pouyanne spoke out against the East African project's alleged negative impacts on the environment and human rights during the annual meeting of shareholders. He said: "We develop these project with our values and principles, and we are confident of the benefits they bring to the countries and local populations." TotalEnergies, he said, is better suited to undertake projects such as the one in Uganda than other companies that may be less concerned about the environment and human rights. Union Investment announced that it made its decision following a review of a new report by the non-profit Just Finance International, which cited alleged abuses on the Kingfisher Oil site in Uganda as part of the pipeline. Forst stated that TotalEnergies failed to take any effective steps to address abuses of activists. It was "deeply disturbing" to see "it consistently reject the allegations as merely'misconceptions,' about the impact of the projects." Forst, a French company said TotalEnergies is bound by the Aarhus Convention (an agreement protecting the public's right to participate in environmental issues) to ensure that individuals are not penalised or hounded for their opposition to these projects. The company had earlier released a press release saying that it "doesn't tolerate any violence or threats against those who peacefully promote and defend human rights", and reminded those with whom it works of its position. The company said that it had worked with Ugandan officials "to ensure that the police followed due process, treated protesters well and respected their rights while detained". It said that the security team of their local unit monitors anyone arrested, and makes sure that their representatives can visit them. Forst supported the call from Union Investment to conduct an independent investigation of the alleged abuses. He asked TotalEnergies not only to make the results public, but also to act on any shortcomings.
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Ivanhoe disputes Zijin's statement about Congo mine problems
Ivanhoe Mines disputed on Friday the statement made by its Chinese partner regarding problems at their Kakula Copper Mine in Democratic Republic of Congo following seismic activity. Ivanhoe stated that the press release from Zijin Mining mentions '..multiple roof falling and rib-spreading in the eastern part of the mine'. It said "Ivanhoe Mines doesn't agree with this statement". "Preliminary evidence suggests that seismic activity... caused a redistribution underground of forces and caused'scaling,' or rockfalls, from the sides of certain mining areas." Ivanhoe said Tuesday that certain mining operations at the Kakula Underground Mine had been suspended on Sunday. The Kamoa Kakula Mining Complex is Africa's and the world's most important copper mine. The Friday update stated: "The teams are currently focusing on safely repairing the damage to the pipes and cables that support the underground pumping system infrastructure." Zijin Mining Group Ltd. warned earlier Friday in a release that the problems could have "adverse impacts" on the annual production guidance for Kamoa-Kakula complex of 520,000-580,000 metric tonnes in 2025. Last year, the mine produced 437,000 tonnes. Ivanhoe disputed this as well, stating that it could only know if production guidelines would need to change after an investigation. (Reporting and editing by Toby Chopra, Louise Heavens, and Eric Onstad)
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COMEX stocks surpass LME for the first time since 2022
The COMEX warehouses registered with the exchange have seen their copper inventories surpass those on the London Metal Exchange since March 2022. This is because traders are trying to take advantage of high copper prices in the U.S. which could lead to tariffs being imposed on metal imports. Stocks in warehouses of the U.S. COMEX exchange The number of metric tons has risen by 87% since the end February to 174 607 metric tonnes, their highest level in 2018. LME registered warehouses are different. Stocks have fallen to 164 725 metric tonnes, a 37% decrease since the end February. The global reorganization of copper inventories is a result of a directive issued by U.S. president Donald Trump in Feburary to investigate possible tariffs on imports of copper to rebuild U.S. copper production, which is critical for electric vehicles and power transmission. The premium of COMEX copper price over LME is currently $683 per tonne. This spread reached a record high of $1,572 per tonne in March, which highlights the divergence between these two markets. Alastair M. Munro, broker at Marex, said that the price premium attracted metal from other exchanges and caused pressure. In the LME, the spread between cash and the three-month contract of copper is also quite wide. The price of gasoline remains high, which indicates that the supply in the area is tightening due to the withdrawals. This decline is not limited to Western exchanges. China, which is the world's largest copper consumer, also sees inventory declines. Stocks at Shanghai Futures Exchange monitored warehouses This week, the number of metric tons fell by 9% to 98 671.
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Extinction rebellion briefly occupies BNP Paribas' entrance during TotalEnergies protest
Around a dozen climate activists from Extinction Rebellion briefly occupied the lobby entrance of the French bank BNP in Paris, Friday morning. They were protesting against BNP's alleged links with TotalEnergies which held its annual shareholders' meeting that afternoon. Some protesters wearing white masks shouted slogans briefly and tossed fake money around before the police forced them out. Extinction Rebellion stated in a press release that the action was part a campaign to target TotalEnergies, and its partners. The article said that several NGOs were criticizing TotalEnergies for not putting the "Say on Climate", or climate strategy, questions to a vote at the shareholder meeting. It also said that this was part "of the fossil fuel industry’s unabashed retreat on its human- and environmental-related commitments." TotalEnergies announced earlier this year that it would not allow investors to vote on its sustainability report progress and would only consult shareholders if the strategy changes. Instead, the company will hold a debate on climate change during its shareholders meeting. TotalEnergies stated on Friday that it respects the freedom of speech and protest, but also deplores any form of violence. BNP Paribas condemned the "aggressive actions of Extinction Rebellion" and all forms physical violence. BNP Paribas has stated that it is committed to supporting energy transition, and that all new funding that BNP Paribas provides to the energy sector will be almost exclusively allocated to low-carbon sources of energy. TotalEnergies shareholders meeting began on Friday in Paris, La Defense. Extinction Rebellion announced that activists would gather in the afternoon at "a symbolic Parisian location" for a "Counter General Energy Assembly," but did not name the location. Reporting by Lucien Libert and Nicolas Coupe; Writing by GV de Clercq
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TotalEnergies is asked to take action by UN expert on human rights concerns
An independent U.N. expert on human rights said that TotalEnergies should urgently address new allegations of abuses in its controversial oil pipeline project, which is located in East Africa. This was made ahead of Friday's annual shareholders meeting of the French energy company. Michel Forst, Special Rapporteur for environmental defenders, said in a late-Thursday statement that the company should take immediate steps to protect activists connected to the East African Crude oil Pipeline and its associated oilfields. The news broke that German asset manager Union Investment dropped the bonds and shares of the company from its sustainable investments funds. Union Investment announced that it had made its decision following a review of a new report by the non-profit Just Finance International, which cited alleged abuses on the Kingfisher Oil site in Uganda as part of the pipeline. Forst stated that TotalEnergies "failed" to "take effective steps addressing abuses", adding that it was "deeply disturbing" "that instead, the company has consistently rejected the accusations as mere "misconceptions" of the impact of the projects". Forst said that as a French firm, the company was bound to adhere to the international Aarhus Convention, which prohibits any punishment or harassment of individuals who oppose the project. TotalEnergies issued a Friday statement in which it said that it "doesn't tolerate any violence or threats against those who peacefully promote and defend human rights", and reminded those with whom it works of its position. The company said that it had worked with Ugandan officials "to ensure that the Police followed due process, that the protesters were treated well and that their rights were respected during detention". It said that the security team of their local unit monitors anyone arrested, and makes sure that their representatives can visit them. Forst supported the call from Union Investment to conduct an independent investigation of the alleged abuses. He asked Total to not only make the results public, but also to act on any shortcomings.
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Wood Group's UK chair is planning to leave the UK pending a clearer strategic direction
Wood Group, a British oilfield service company, announced on Friday that its chairman Roy Franklin will run for reelection at the annual general meeting. Franklin plans to step down when it becomes clear what direction the company is going in. Wood Group, the target of Sidara, a Dubai-based takeover company, launched an independent review into its accounting in November for certain unusual charges in its interim financial results. Wood missed the deadline for filing annual results in 2024 by late April. The company cited the pending conclusion of the audit and the timing of its completion. Since May 1, the firm's stock has been banned from trading. Wood announced on Friday that its 2024 accounting will not be completed before June 30. Franklin has been at Wood Group since nearly five years. He was previously the head of M&A for BP Exploration, a division of the energy giant BP. In the beginning of this month, Sidara extended the deadline to accept the company's takeover bid until June 12. The annual Wood Group meeting is scheduled for June 18. Reporting by DhanushVigneshbabu in Bengaluru, Editing by Shalesh Kuber
Australian shares finish slightly higher after miners limit bank's gains
Australian shares closed slightly higher on the Friday as investors remained cautious due to concerns about domestic growth and global uncertainty.
The S&P/ASX 200 closed 0.2% higher at 8,360.9. The benchmark was mostly unchanged for the week.
Caution prevailed after Republican-controlled U.S. House voted by a slim margin to pass U.S. President Donald Trump's proposed tax cut bill that could add $3.8 trillion to America's debt.
The domestic economy's outlook was also clouded Thursday by a Purchasing Manager's Index reading that was the lowest in three months.
The rate-sensitive financials increased by 0.5%, with the "Big Four" banks of the country ending between 0.1% to 0.9%.
The Index has gained 0.4% this week, boosted by the Reserve Bank of Australia’s decision to reduce rates by 25 basis-points. Markets are betting that there will be more easing in the future due to potential global trade tensions impacting the local economy.
The probability of a rate cut in July has now been priced at 60%, and a total ease of 65 basis points is expected by the end year.
The real estate stocks added 0.8%. The sub-index is up over 1% this week.
Michael McCarthy, Moomoo Australia's chief executive officer, says that the cautious approach of large funds after the RBA decision caused some volatility, as short-term investors moved quickly in. However, today's gains reflect a growing confidence in rate-sensitive industries offering defensive income streams.
While uranium miner Paladin Energy, Boss Energy, and Deep Yellow all rose by 5.8%, 4.2%, and 1.2%, respectively, following reports that Trump planned to sign executive order supporting the nuclear industry.
The benchmark S&P/NZX50 index in New Zealand ended 0.5% lower. It ended 1.5% lower after a three-week streak of gains.
A poll indicated that the Reserve Bank of New Zealand will lower its cash rate on May 28 by 25 basis points. Sherin Sunny reports from Bengaluru.
(source: Reuters)