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Russian central bank warns US Tariff hikes could slow global growth
The Russian central bank warned on Wednesday that U.S. tariff increases could slow world economic growth, fuel inflation and cause oil prices to be lower than expected for several years due to reduced global demand. On Wednesday, President Donald Trump announced "Liberation Day", a day of celebration in the United States. This would escalate a trade conflict with other countries, increase costs and threaten a decades-old trading order. The Russian regulator warned that "the increase in import duty in the USA, and the retaliatory actions by other countries, have increased the risks of a slowerdown in global growth and an acceleration in inflation." The expectation of a lower global demand is already exerting pressure on commodity prices. It added that the risks of oil prices falling below the baseline forecast for February in the future have increased. The comments, which were published on Wednesday, came from the latest board meeting held on March 21. The participants in the meeting said that although inflationary pressure was lower due to a weaker rouble and a decrease in domestic demand, it remained high. Since the beginning of the year, the rouble has gained around 25% against the U.S. Dollar. The central bank suggested that the rise could be attributed to the ease of tensions between Russia, the United States and other countries. The strengthening of the rouble may have been due to an increased interest in Russian assets in light of a better geopolitical environment. It said that this interest could have been driven by the higher interest rates in Russia in comparison to other countries. Reporting by Elena Fabrichnaya; writing by Gleb Brianski; editing by Mark Trevelyan
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JPMorgan says that tariffs will have a'meaningful impact' on over a third EM companies
Analysts at JPMorgan estimate that more than a third (35%) of emerging market firms will be "significantly" affected by U.S. tariffs once they are implemented. Taking into account the possibility that Chinese and Mexican companies would be hard hit, they estimated that 36 percent of the over 750 firms in the closely watched CEMBI EM Corporate Debt Index by the bank would fall under this bracket. In that bracket, 16% of companies could experience a "significant impact". The 36% figure was described as "not negligible" by the analysts, although they did point out that over half of the companies in the index may only be "minimally " affected. CEMBI's index includes 6,3% of companies from China, and 4,3% from Mexico. A breakdown of the sectors most affected by the CEMBI shows that 9% of firms are industrial and 6.5% are metals and mining. JPMorgan's study also found that the average spread or interest rate premium that investors require to hold EM debt does not currently indicate that markets are pricing the type of tariffs that could cause a U.S. economic recession. The spread is now 226 basis point, up from 190 in recent weeks. However, it's still over 100 basis points lower than its average post-2010 of 320 basis point. The spread could increase to close to 300 basis points if recession fears start to grow, as it did in 2018, when U.S. president Donald Trump sparked the first trade tensions. The CEMBI spread widened by 132 basis points or 60% in just nine months. This was higher than the spreads on EM sovereign debt and U.S. Corporate Credit spreads. The weight of Asia's exposed sectors is now 21%. This is a smaller number than the previous time, when it was 35%. The slightly higher weighting of industrials has been more than offset by the lower contribution of the commodities sector. CEMBI is made up of firms from the region, which make up a little over 40%. It has a large group of tech exporters who may be affected by tariffs. Mexico is the most vulnerable country in Latin America. This is not surprising, given that more than 80% of Mexico’s exports go to the U.S. Other major economies, such as Brazil, should be less at risk. JPMorgan published a report on Wednesday that said: "There will be natural differentiation between countries in terms sectors that are more or less affected, and those with further mitigating factor such as U.S. Operations."
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Putin allows Armenian fund to buy Goldman Sachs shares in Russian public companies
According to a Wednesday decree, Russian President Vladimir Putin authorized Armenian investment firm Balchug Capital, to purchase shares held by Goldman Sachs Russian subsidiary, in nine major Russian companies, mainly in the energy sector. Balchug Capital, Goldman Sachs and other companies did not respond immediately to our requests for comments. Balchug Capital is The green light According to a separate order, the U.S. Bank will purchase Goldman Sachs’ subsidiary in Russia by January. This will allow the bank to exit the Russian market, and to extract some of the capital that is stuck there. Since the beginning of the Ukraine war, Moscow has tightened its restrictions on the sale of foreign assets. Any deal involving energy companies or banks requires Putin's approval. The decree was published on the Russian government portal. It stated that Balchug Capital would be able to buy Goldman Sachs International shares in energy companies Gazprom and Rosneft as well as Lukoil and Tatneftegas. They could also purchase shares in NLMK steelmaker, InterRAO electricity operator and Rostelecom telecoms provider. Reporting by Alexander Marrow and in Moscow; Additional reporting by Felix Light, Editing by Mark Trevelyan
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China announces final price guidance on 6 billion yuan of green bonds, according to term sheets
According to a termsheet seen by, China has set final price guidance for green bonds with a three-year and five-year maturity to raise 825 million yuan. The term sheet stated that the price guidance for a three-year bond was 1.88%, and the price guide for a five-year tranche was 1.93%. The green bond issued by China's Ministry of Finance is the first of its type by China in an overseas market. The Chinese finance ministry was not immediately available for comment after regular business hours. According to a termsheet, the initial price guidance for Wednesday was that the bond would be around 2.3% over three years and around 2.35% over five years. The deal size has been limited to 6 billion yuan. The deal was announced by the Ministry of Finance of China on March 19. It followed a China-UK Economic and Financial Discussion in Beijing in January, which was chaired jointly by British Finance Minister Rachel Reeves and Chinese Vice Premier He Lifeng. Reporting by Scott Murdoch, Editing by Andrew Heavens & Hugh Lawson.
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The Russian rouble is weakening slightly amid geopolitical uncertainties
The Russian rouble was slightly weaker against the U.S. Dollar on Wednesday, as the market anticipated further developments in the talks between Russia's and the U.S. regarding Ukraine. President Vladimir Putin’s special envoy is expected to visit Washington later this week. The rouble had fallen 0.3% to 84.25 USD on the OTC market by 1115 GMT. The Russian currency has risen by about 25% this year against the dollar, mainly on expectations that geopolitical tensions will ease. Sources familiar with the plan say that Kirill Dmitriev - a key Kremlin negotiator - is expected to arrive in Washington this week for discussions with President Donald Trump's Administration, including U.S. Special Envoy Steve Witkoff. Denis Popov, an analyst at PSB Bank, said: "The news backdrop is excessively volatile, and we do not believe that it provides clear positive signals. This will continue to limit the demand for rouble-denominated assets." He added that, "due to the increased volatility in exchange rates and the uncertainty of geopolitical outlooks, we will be focusing our attention on sideways movement in the exchange rate in the near term." The rouble, which is the most commonly traded currency in Russia, was down 0.4% to 11.70 at the Moscow Stock Exchange. (Reporting and editing by Gareth Jones.)
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Singapore detains 2 teenagers: one for a plan to shoot at mosques and the other for joining Islamic State
By Jun Yuan Yong SINGAPORE, 2 April - Authorities in Singapore have used the internal security law to punish two teenagers separately. One was charged with planning to attack mosques while the other was charged for wanting to join Islamic State militants to fight on Syria, they said. Authorities said that the 17-year old male subscribed to a far-right extremist ideologie and saw himself as "East Asian supremacist". The department of internal security said that he wanted to shoot at mosques, and had tried unsuccessfully to buy weapons, including in the United States and Malaysia. It said that the teenager wanted to kill 100 Muslims to surpass the Christchurch attack of 2019, in which a gunman shot and killed 51 people in a Mosque. He could be detained for two years, without trial, under the Internal Security Act of the island. Authorities said he was identified after an investigation into a 18-year old detained in December for similar far-right extremism. The authorities in Singapore are concerned about the radicalisation of youths and have used 17 youth aged under 20 since 2015 to enforce the Internal Security Act. This law allows for suspects to remain in custody without trial for long periods of time, or be issued a restriction order that limits travel and Internet access, among other things. Nine of the 17 people detained over the last ten years planned to attack in Singapore. According to statistics, 74% are Chinese, 13.6 % Malays, 9% Indians, and 3.3% other. The second youth detained was a female aged 15 who wanted to marry a fighter for the Islamic State and raise a pro IS family, or fight in Syria with the extremist group. In February, she was given a restriction order. "Self radicalisation can occur very quickly. It took only a few weeks for the 15-year old. The public must be alert to any signs that someone in their vicinity may have radicalized," stated the department of internal security.
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BHP considers spinning off its iron ore and coal divisions
Three sources familiar with the matter said that BHP, the world's largest listed miner, considered splitting off its Australian coal and iron ore divisions as part a medium-term strategy for growth. Two sources stated that BHP, in order to focus on commodities such as potash and cobalt, was considering separating the divisions. This is similar to what it did with South32 back in 2015. The most likely outcome would be an Australian listing. They asked to remain anonymous as the matter was sensitive. BHP is pushing to green their business, and preparing to bid on Anglo American for 2023 and 2024. BHP has declined to comment. This would fundamentally reshape BHP and divorce it from the more than 50 years of iron ore mines in Australia where it was founded in 1885. About 60% of BHP's profits are derived from iron ore. By separating coal from iron ore, the majority of its carbon emissions would be reduced. BHP will keep its South Australian assets. This is in line with its strategy of being a major supplier of metals needed for energy transition. BHP has decided to not move forward with its plans at this time, but the discussions provide an insight into what the miner will consider when it recalibrates the future direction of the company with a new senior leadership. The former National Australia Bank chief Ross McEwan took over as the new BHP chairman this week after Ken MacKenzie left. A contest to replace CEO Mike Henry, who is in his fifth year at the top, will soon begin. Henry and David Lamont, BHP's CFO who stepped down in February 2024 from his role, spoke with investors about the plan to separate BHP’s future growth from declining growth businesses by the end of this decade. They decided that it was not the best time, because BHP needed the enormous amounts of cash generated from the two Australian divisions in order to fund capital expenditures at its Escondida Copper Complex in Chile and Jansen Potash Development in Canada. BHP believes that a spin-off from iron ore and coking coal will generate cash and franking credit benefits for Australian tax payers, so there may be a lot of interest on the part of Australians in any flotation. The people added that a copper and potash unit with more freedom would be able to explore new combinations, like Teck Resources. BHP's inability to buy Anglo, a copper company that would have helped cash flow and boosted the copper business, complicated the plan. The incentive to green the business is also lessened as corporations around the world retreat from environmental goals. This suggests that any further progress on this path could be a long way off. Another person said: "The strategy depends on copper and potassium being self-sustaining business, as both have large capital needs for the next five years." (Reporting and editing by Melanie Burton, Veronica Brown, and Barbara Lewis).
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Russia and Ukraine exchange new accusations over breaches of the energy ceasefire
On Wednesday, Russia and Ukraine both accused the other of launching attacks on each other's power plants in violation of an agreement brokered by the United States. Both sides claimed they would provide details of the alleged violation to the United States. This led to Moscow and Kyiv agreeing to a limited truce in hopes of a full ceasefire. The Russian defence ministry has said that Ukraine conducted drone and bombing attacks on the western Kursk area, which cut power to more than 1,500 households. Volodymyr Zelenskiy, the Ukrainian president, said that a Russian drone had hit an energy substation located in Sumy Region and that artillery shells damaged a powerline in Dnipropetrovsk. This cut off electricity for nearly 4,000 customers. The Trump administration is a sham. impatient Both sides should move more quickly to end the three-year conflict. Dmitry Peskov, Kremlin spokesperson, said that the fact that Vladimir Putin agreed to the energy truce showed that he is serious about engaging in the peace process. Kyiv as well as some of Ukraine's European allies disagree. Peskov stated that Moscow will continue to work with the Americans, despite what Peskov called daily Ukrainian attacks on Russian energy infrastructure. Zelenskiy stated on Tuesday that Russia is breaking the energy truce, and called for the U.S.A. to increase sanctions against Moscow as Trump had threatened to do. Last month, Ukraine stated that it was open to a 30-day full ceasefire. However, Putin refused to agree. This raised a number of questions regarding how the ceasefire would be monitored. There were also concerns that Ukraine might use this breathing space to mobilize more troops and purchase more weapons from Western countries.
South Korea's watchdog questions the purpose of Hanwha Aerospace $2.5 billion share sale
The South Korean financial market watchdog stated on Tuesday that Hanwha Aerospace must better explain how the proposed 3.6 trillion won (2.46 billion dollars) equity raise fits into a larger plan to restructure its company.
Financial Supervisory Service (FSS), last week, blocked controversial capital raising plans of the defence company on grounds that its filing did not contain the information necessary for investors to make rational investments decisions. It ordered the company to submit a revised submission.
Hahm Yong il, Senior Deputy Governor of FSS, said at a press briefing that "the ownership restructuring of affiliated companies and its relevance to share issue plan as well as the effect of the restructuring on firm should be noted."
Analysts questioned the intention and necessity of raising capital. On March 21, the day after the plan announcement, Hanwha Aerospace shares posted their worst session in early November 2016. They fell 13%.
Hanwha Group announced Monday that Kim Seung Youn, Chairman of South Korea's 7th largest conglomerate, was giving his sons an 11.32% share in Hanwha Aerospace, the parent company of Hanwha Corp, as part a succession plan.
Hanwha Aeropsace announced on Tuesday that its executives, which included one of Kim’s sons, had purchased shares worth about 9 billion won to demonstrate their desire to increase shareholder value.
Investors have been critical of a number of capital-raising plans in South Korea, including those by Samsung SDI, Korea Zinc, and battery maker Samsung SDI.
Corporate Governance Reforms
As of 0445 GMT, shares in Hanwha Aerospace rose 7.5% while the benchmark KOSPI index was up by 1.8%. Reporting by Jihoon Lee, Editing by Jamie Freed & Gerry Doyle
(source: Reuters)