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Enel to focus on buyback of shares after strong Q1
Enel's management announced on Thursday that it is focusing on introducing an share buyback program and negotiating a renewal of its network license in Italy. This follows steady results for the first quarter. The state-controlled group, following the example of oil majors will ask shareholders to approve at its annual meeting on 22 May a plan to buy back up to 3.5 billion euro ($3.9 billion). Investors will vote the same day on an option that allows them to cancel shares acquired without reducing group share capital. This is another way to reward shareholders, in addition to dividends. Enel Chief Financial Officer Stefano De Angelis said to analysts in a conference call following the results that he hoped "the plan would be approved on May 22." De Angelis said that the company was in talks with Italian authorities to extend its power distribution licence for 20 years. The CFO stated that Enel may deploy capital in Spain and will use some of the financial space created by the reduction of its net debt for the renewal. The group reported earnings before taxes, depreciation, and amortization (EBITDA), which were 5.97 billion euro for the first three months, slightly higher than the analyst consensus of 5,90 billion compiled on LSEG. The ordinary EBITDA of the first quarter last year has been revised down to 5.87 billion Euros, from 6.09 billion Euros, in order to remove the effects of recent dispositions. The utility's decision to cut electricity prices in Italy by 30-40% in order to retain customers, led it to lower its EBITDA than expected. De Angelis stated that the group anticipates its retail business to stabilise in Italy in the next quarters. Flavio Cattaneo the Chief executive, who was appointed in January 2012, stated that the period between January and March marked the seventh consecutive positive quarter for financial results. Enel has confirmed that it expects its EBITDA to be between 22,9 billion and 23,1 billion euros in 2025.
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Citigroup faces $1 billion lawsuit for alleged fraud by Mexican oil companies
A U.S. court of appeals ruled Thursday that Citigroup will have to face a lawsuit alleging it caused over $1 billion in losses by orchestrating a fraud at the Mexican oil and gas service company Oceanografia. Three judges of the 11th U.S. Circuit Court of Appeals in Miami said that 30 Oceanografia vendors, creditors and bondholders adequately alleged that Citigroup substantially aided the fraud. A lower court judge erred by dismissing this nine-year-old case. Circuit Court of Appeals, Miami, said that 30 Oceanografia vendors and creditors, as well as bondholders, adequately alleged Citigroup's involvement in the fraud. A lower court judge erred by dismissing the case nine years ago. Danielle Romero Apsilos, Citigroup's spokeswoman declined to comment. Juan Morillo said that his clients were pleased with the ruling. Citigroup's Banamex division had advanced cash to Oceanografia which provided drilling services for Mexico's state owned oil company Petroleos Mexicanos, and collected interest on the advances. The plaintiffs include shipping and leasing companies as well as investment funds, and Rabobank in the Netherlands. They claim that Citigroup advanced $3.3billion to Oceanografia from 2008-2014 despite knowing it had too much debt, and was forging Pemex's signatures on authorization documents. Citigroup was fined by the U.S. Securities and Exchange Commission for Banamex's lack of internal controls in 2018. Former Citigroup CEO Michael Corbat claimed that the bank terminated 12 employees. Mexican regulators confirmed that 10 employees of the bank were held criminally responsible under Mexican law. Circuit Judge Britt grant found in an 82 page decision that there were sufficient allegations to prove that Citigroup had withheld important information about Oceanografia, and the interest payments provided a financial incentive. She added, "Citigroup, as one of the most sophisticated financial institutions in the world, is a difficult conclusion to draw if the plaintiffs' claims are true. Citigroup was unaware of Oceanografia's activities." The case was returned to U.S. district judge Darrin Gayles of Miami who dismissed it on August 20, 2023. Otto Candies LLC et al v Citigroup Inc., 11th U.S. Circuit Court of Appeals. Circuit Court of Appeals No. 23-13152. Reporting by Jonathan Stempel, New York; Editing and production by Richard Chang
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Document: Mali is pressed to pay an 'enormous debt' for a regional dam
A letter obtained by reveals that Mali owes over $94 million to an entity which manages a dam, which provides electricity to Senegal, Mauritania and other countries. The debt is "a matter of life or death" to its ability to operate, the letter states. The funding gap is a warning sign of further electricity supply problems for Mali. Outages have weakened public support in recent years for the military-led government which took power in coups in 2020-2021. Manantali Dam and Power Plant was installed in 2002 with a capacity of 200 Megawatts. Its production is distributed to Mali, Senegal and Mauritania. According to a letter sent by SOGEM on April 25 to the director general of Mali's electricity utility, Energie du Mali (Mali), Mali owes SOGEM "an enormous amount" of more than 54 billion CFA francs (94.12 millions) for the management of Manantali, among other projects. The letter was signed by Mohamed Mahmoud Sid'Elemine, the director general of SOGEM. Energy du Mali admitted in a Thursday statement that it owed SOGEM 43.8 billion CFA Francs and another 11.9 billion CFA Francs to an entity separate involved in the operation and maintenance of the dam. When asked why SOGEM had not paid the sums, they said that SOGEM projects - such as other dams – had "experienced substantial delays" which had affected Mali’s energy sector. It said that the utility "had no choice but to resort to expensive solutions such as leasing generators from private operators" to make up for its expected production shortfall. The SOGEM letter touts the Manantali Project as a success for regional co-operation that cost hundreds billions of CFA Francs to implement. Mali, Burkina Faso, and Niger were members of the Alliance of Sahel States. They announced their departure from the West African political and economic bloc called ECOWAS last year. $1 = 573.7500 CFA francs (Reporting and writing by Idrissa Singare; Editing and proofreading by Ayen Deng Bior and Aiden Lewis)
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Dollar gains and optimism about US/UK trade deal boost global stock markets
Dollar and Treasury yields rose on Thursday, after U.S. president Donald Trump announced a trade deal with Britain a day after the U.S. Federal Reserve opted to wait and see on interest rates. Bitcoin gained 4.83%, reaching $101,440.22. Ethereum grew by 14.72%, to $2 063.23. The U.S. and British trade agreement is the first announced deal since Trump initiated a 90-day pause in tariffs imposed by his administration on many U.S. Trading Partners a month earlier to give time for negotiations with other countries. Investors also await planned talks between U.S. officials and Chinese officials scheduled for the weekend in Switzerland. This could be a first step to reducing the damaging trade conflict between the two largest economies in the world. Investors have shown signs of frustration over the lack concrete details this week, despite being enthusiastic about the Trump administration's signals that it is in trade negotiations over the last month. Gene Goldman said that investors are relieved to see that progress is being made on trade agreements. He added that it "seems like the administration is going in the right direction." Goldman added that the U.S. and British agreement, which is still under development, "provides some optimism heading into weekend negotiations with China." Indexes on Wall Street extended gains following the announcement. At 11:51 am (1551 GMT), Dow Jones Industrial Average rose by 573.16, or 1.39 percent, to 41.685.11, S&P 500 gained 77.14, or 1.37 percent, to 5,708.56, and Nasdaq Composite increased by 311.92, or 1.76 percent, to 18,050.09. The MSCI index of global stocks rose by 5.72 points or 0.68% to 849.75, while the pan-European STOXX 600 rose by 0.44. Investors are still digesting Wednesday's U.S. Federal Reserve policy update, in which it maintained its interest rate range at 4.25%-4.5% for the third consecutive meeting. As it navigated the economic uncertainty caused by Trump's policies, the U.S. Central Bank warned of increased risks for higher inflation and unemployment. The pound has lost ground in terms of currencies after the recent trade agreement and the widely anticipated quarter-point cut by the Bank of England. Sterling fell 0.14% to $1.327. The dollar index measures the greenback in relation to a basket including the yen, the euro and other currencies. The price of 100.44 rose by 0.55%. The dollar gained 1.16% against the Japanese yen to reach 145.49. Sweden and Norway have also hinted that they may also lower rates in the second half of this year. The Swedish crown fell 0.48% against the dollar, to 9.704. The yield on the benchmark 10-year U.S. notes increased 5.5 basis point to 4.33% from 4.275% on Wednesday. Meanwhile, the 30-year bond's yield increased 2.9 basis points, to 4.8011%. The yield on the 2-year note, which moves typically in line with Fed expectations for interest rates, increased 7.3 basis points from 3.793% to 3.866%. On the commodities market, oil futures, which had dropped by more than $1 Wednesday, rose on Thursday on hopes that the United States will reach a trade agreement with China, the two biggest oil consumers in the world. U.S. crude climbed 3.29%, to $59.98 per barrel. Brent rose to $62.93 a barrel, up by 2.96% for the day. Spot gold dropped 1.09% to $3.327.49 per ounce. U.S. Gold Futures dropped 1.48% to an ounce of $3,331.30. (Reporting and editing by Sinead carew, Johann M Cherian and Marc Jones, with Chizu Nomiyama, Will Dunham, and Will Dunham).
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What is the US-UK Economic Deal?
The United States announced on Thursday a deal with Britain to lower tariffs for some goods. U.S. duties on steel and cars will be reduced, and both sides will gain better access to the agriculture market. Here are some key points of the agreement. Basic 10% Tariff Howard Lutnick, the U.S. Secretary of Commerce, said that the basic tariff rate of 10% would remain in effect. CAR TARIFFS The British government announced that the agreement will reduce tariffs for some British-made vehicles from 27,5% to 10%. The British government announced that British carmakers would be allowed to export 100,000 cars per year at a lower tariff rate. This is almost what Britain exported in the past year. STEEL TARIFFS The British government has also announced that the 25% tariffs on British steel exported to the U.S. would be reduced to zero. PLANES Lutnick stated that British companies will now be able export parts of planes to the United States without tariffs. Boeing planes worth $10 billion are expected to be purchased by a British airline in return. AGRICULTURAL TARIFFS The British government announced that there would be a "reciprocal access to the market on beef", with British farmers receiving a quota of 13,000 metric tons free of tariff. Britain will also eliminate tariffs on U.S. beer ethanol. MOVIES The U.S. president Donald Trump has said that the talks with Britain about his plan to impose a tariff on film imports will take place separately from the agreement. He said, "James Bond is not in danger." SPEAK UP AGAIN Both sides will try to reach an agreement on a wider deal, which will include pharmaceuticals as well as a reduction of the remaining tariffs. The U.S. also agreed to give the UK preferential treatment for any future tariffs imposed in Section 232 investigations, which gives the U.S. President the power to restrict imports if it is found that they threaten national security. The UK Digital Services Tax is unchanged.
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Proxy advisor opposes Holcim Chairman's $58 Million compensation package
Ethos, a proxy advisor, has urged Holcim shareholders not to accept the company's proposed remuneration. It said that Jan Jenisch would be the highest paid manager in Swiss blue-chip firms by 2024 if he received the estimated compensation of 48 million Swiss Francs ($58 million). Ethos calculated Jenisch's realised compensation based on his share options in 2020. Since the announcement that the company intends to spin off its North American business by January 2024, these options have gained significant value. Vincent Kaufmann (CEO of Ethos Foundation) said that Jan Jenisch's variable compensation for 2024 is unacceptable. It is 25 times the base salary he received as Holcim CEO. He called on the board to eliminate the option plan. Ethos reported that Holcim is one of only a few Swiss companies still granting share options with a leveraged effect. Holcim's response to Ethos' misleading framing Jenisch's compensation was given by Holcim when asked for comment. Holcim's spokesperson stated that Ethos had misrepresented the value of the option scheme, as it was based on a rolling five-year program reflecting record performance for a period of five years, and not an annual compensation. According to Ethos, share options that were worth 890'001 Swiss Francs in 2020 are now valued at more than 36,6 million Swiss Francs. The proxy advisor stated that the package totaled 48 million Swiss francs when you add up Jenisch's compensation for his four months in the CEO role last year, his chairman compensation for the eight remaining months of 2024 and the other shares awards. This figure is dwarfed by the 19.2 million Swiss francs that Novartis CEO Vas Nairsimhan received in compensation, which prompted criticism at its AGM. $1 = 0.8249 Swiss Francs (Reporting and writing by Oliver Hirt; editing by John Revill, David Evans, and Ariane Luthi)
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What is the US-UK Economic Deal?
The United States announced on Thursday a deal with Britain to lower tariffs for some goods. U.S. duties on steel and cars will be reduced, and both sides will gain better access to the agriculture market. Here are a few of the key points in the agreement. Basic 10% Tariff Howard Lutnick, the U.S. Secretary of Commerce, said that the basic tariff rate of 10% would remain in effect. CAR TARIFFS The British government announced that the agreement will reduce tariffs for some British-made vehicles from 27,5% to 10%. The British government announced that British carmakers would be allowed to export 100,000 cars per year at a lower tariff rate. This is almost what Britain exported in the past year. STEEL TARIFFS The British government has also announced that the 25% tariffs on British steel exported to the U.S. would be reduced to zero. PLANES Lutnick stated that British companies can now export parts of planes to the United States without paying tariffs. Boeing planes worth $10 billion are expected to be purchased by a British airline in return. AGRICULTURAL TARIFFS The British government announced that there would be a "reciprocal access to the market on beef", with British farmers receiving a quota of 13,000 metric tons free of tariff. Britain will also eliminate tariffs on U.S. beer ethanol. SPEAK UP AGAIN Both sides will try to reach an agreement on a wider deal, which will include pharmaceuticals as well as reducing any remaining tariffs. The U.S. also agreed to give the UK preferential treatment for any future tariffs imposed in Section 232 investigations, which gives the U.S. President the power to restrict imports if it is found that they threaten national security. The UK Digital Services Tax is unchanged.
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Talen Energy considers alternative options for data center supply after Amazon's setback
Talen Energy, the U.S. energy company, is looking at alternative arrangements for supplying electricity to data centres after regulators rejected a plan that would have fuelled an Amazon data centre directly from Talen’s Pennsylvania nuclear plant. The prospect of striking direct deals with Big Tech data centers has sparked a huge interest in independent U.S. energy producers such as Talen. This is what has pushed the shares of these companies to new highs. Co-located arrangements in which power plants are located near or at the data centers could eliminate the year-long waiting times for connecting to the wider electrical grid. Nevertheless, some companies are now making alternative plans after the Federal Energy Regulatory Commission ruled against their arrangements. Mac McFarland, CEO of Talen, said that there were multiple ways to power data centers during a conference call with investors. Talen is also considering data center deals that include the connection of the centers to grids as part of commercial power contracts. Giant Independent Power Producer Constellation Energy earlier this week After considering co-located deals for data centers at a number of its nuclear plants, the company said that it would also focus on more conventional power arrangements in data centers. Talen and Amazon's co-located data center agreement, announced in 2024, is a world first. Talen's power agreement with Amazon would see the nuclear plant in Susquehanna supply electricity to the data center up to 960 megawatts. FERC ruled in response to this deal last year that the power Amazon uses for its data center would be limited to 300 megawatts. This was due to concerns over power reliability and cost for the broader community. Talen executives confirmed that they continue to supply electricity to Amazon's data center and plan to reach 120 Megawatts by the year end. Talen is appealing FERC’s decision, and anticipates a court date on the case within the next few weeks. (Reporting and editing by Laila K. Kearney)
Gold reserves in London vaults increase in April due to the return of US bullion
London Bullion Market Association reported on Thursday that the amount of gold in London vaults at the end April was 8,536 metric tonnes, an increase of 0.6% over the previous month. This is because more precious metal was returned to London from New York after being dislocated. After months of being high, the premium between the COMEX gold spot prices and the most actively traded COMEX futures prices was normalized in April when the Trump Administration excluded precious metals from the broader U.S. tariffs. In the period between December and March, market players increased their gold deliveries to the U.S. to cover COMEX positions in anticipation of possible import tariffs by the U.S. These additional stocks were sourced from Switzerland and London, which is the largest gold trading hub in the world. This reduced liquidity on the London market. This led London's bullion traders to borrow gold from the central banks that store their bullion at the Bank of England vaults.
The LBMA, the London Market Authority, said that while gold stocks at Bank of England decreased at a similar rate to March, the number of holdings in commercial vaults throughout London increased again by a month.
This trend confirms that gold continues to leave CME's warehouses, as the tariff fears have eased and arbitrage possibilities disappeared.
COMEX gold stocks
The LBMA reported that there were 22,859 tonnes of silver in London vaults as of April, an increase by 3.3 % compared to March. The LBMA reported that silver holdings in London increased for the first since October 2024. (Reporting and editing by Paul Simao; Polina Devtt)
(source: Reuters)