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EBRD loans 22 million Euros to Ukrainian energy firm; more deals to come
The European Bank for Reconstruction and Development announced on Thursday that it will lend 22.3 million Euros ($26.0 Million) to a Ukrainian Energy firm as part a pipeline deals. This shows its continued support for this sector, despite the corruption scandal. In a press release, the lender stated that the EBRD will provide cash to Power One, a private Ukrainian energy company to help finance new gas-piston energy plants and battery energy storage system. The investigation of an alleged $100-million nuclear energy corruption scheme has inflamed anger against the wartime Kyiv government, led by President Volodymyr Zelenskiy. This government has been dependent on funding from donors since Russia invaded Ukraine in 2022. The alleged plot involves attempts to control procurements at Energoatom, the nuclear agency and other state-owned enterprises that were not named. Since a loan of 300 million euros in 2013 was fully paid out by 2019, the EBRD did not provide financing to Energoatom. The loan is part of a total lending amount of approximately 1 billion euros in this year, which will help Ukraine improve its energy resilience and rebuild its power sector. The country is working to decentralise power by using solar, wind, and small modular gas generators. In October, Russian attacks intensified on Ukrainian energy targets. The EBRD estimates Ukraine has lost approximately 9,000 megawatts in generation capacity, and 90% of flexible generation, since the beginning of the war. This has caused economic hardships, as well as regular rolling blackouts. Since the invasion, the EBRD has invested more than 8.5bn euros. The EBRD said that it plans to sign at least two more "major" agreements later this year. Multilateral lenders invest primarily in the private sector through equity investments, loans and guarantees. ($1 = 0.8575 euro) (Reporting and editing by Karin Strohecker, Philippe Fletcher and Libby George)
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KGHM profits rise on strength of Sierra Gorda and higher prices
The Polish state-run copper company KGHM reported a 80% increase in its third-quarter profit compared to the previous year, mainly due to the performance of its Chilean Sierra Gorda Mine and higher precious metals prices. KGHM is a major copper and silver producer in the world. Its earnings are highly correlated with global commodity prices and therefore a barometer of global industrial demand. CONTEXT The Sierra Gorda Mine in Chile is a joint-venture with Australian miner South32 and has become a major engine of profit growth for KGHM. The company reported that the mine's core adjusted profit for the first nine-month period increased 60% on the previous year to $970 millions, fueled by higher production volumes and metal prices. OUTLOOK KGHM is expecting its cost base to drop after the Polish Government announced in May it would reduce the country's sole copper mining tax that is paid by the company from 2026. This move is expected to boost future profitability for the miner. By the numbers, the company reported a third quarter net loss of 433 millions zlotys (119.07million), which was less than a forecasted 663 million in a poll. Its revenue came in at 8.32 billion, which was lower than the forecast of 8.46. $1 = 3.6365 Zlotys (Reporting and editing by Matt Scuffham).
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Citgo increases profit to $167 Million, liquidity to $2.75 Billion
Citgo Petroleum announced on Thursday that its profit grew to $167 millions in the third quarter, up from $100 million the previous period. The company also said that the refiner's liquidity increased from $2.6 to $2.75. The Houston-based firm, which returned to profitability in the second quarter after two consecutive periods in losses, is fighting to stop the auction of PDV Holding in Delaware, as part of a court ordered process to pay creditors in Venezuela for defaults on debt and expropriations. The Delaware judge Leonard Stark, who oversees the auction in Delaware, denied the Venezuela parties' and Gold Reserve's motions to disqualify the judge, court officer, and advisors, allowing the sale to proceed for the time being. In a press release, the company stated that the results of the third quarter were due to improved refining margins. Carlos Jorda, the chief executive of the company, said that "our refineries performed reliably during the quarter as the market conditions improved." Citgo completed planned maintenance at its Lake Charles refinery in Louisiana and made preparations for an extensive turnaround at the Corpus Christi refinery in Texas. From the fourth quarter onwards, the company will increase its crude refining capability to 829.000 barrels per a day from 807,000 currently. Citgo said it plans to redeem $650 million of outstanding notes due in the next year using a portion its $2.75 billion liquidity at quarter's end, including cash and credit facility available. It will have paid back more than $1.8 Billion in Senior Notes and Industrial Revenue Bonds this year. Citgo's financial and cash flow results are important metrics in determining the company's value at the Delaware auction.
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Gold reaches 3-week high in hopes of US data boosting Fed rate-cut betting
Gold prices rose to a record high of more than three weeks on Thursday. This was due to expectations that the release of economic statistics following the reopening the U.S. Government could support the case for an interest rate reduction by the Federal Reserve next month. As of 11:03 am EST (1603 GMT), spot gold rose 0.2% to $4206.64 an ounce, its highest price since the 21st of October. U.S. Gold futures for delivery in December fell by 0.1%, to $4.211.50 an ounce. Jim Wyckoff is a senior analyst at Kitco Metals. He said that traders expect economic data to be released following the end of the government shutdown. This will show a weakening U.S. labour market and force the Fed towards at least one rate cut in December. Job market weakness has been indicated by private surveys. According to an agreement funding federal operations until January 30, the U.S. Government will resume its operations following a 43-day record shutdown. Fed Chair Jerome Powell warned that, while the U.S. Central Bank reduced rates last week, further easing was not guaranteed this year, due in part to a lack data. A survey showed that 80% of economists expected another 25 basis-point cut during the Fed's meeting on December 9-10. Gold is usually a beneficiary of lower interest rates, as it offers no yield. It's also viewed as a safe haven during times of economic uncertainty. Standard Chartered noted that the correlation between gold and core macro-drivers like the dollar or real yields, has weakened significantly over the last two weeks. This reflects a shift towards structural themes, such as currency debasement, and U.S. bond concerns. Silver spot fell 1.1%, to $52.83 an ounce, after reaching its highest level since the 17th of October earlier in this session. Tai Wong is an independent metals dealer. He said: "If silver does not break higher decisively we could see another profit-taking round - expect volatility in the near-term to remain high." Palladium, which fell by 1.2%, was at $1,456.50. Platinum dropped 1.9% to $1,585.10.
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Helleniq Energy's Q3 adjusted core profits double on the strength of refining margins
Helleniq Energy, a Greek oil refiner, announced a record-breaking third quarter adjusted core profit on Thursday. The increase was driven by higher refining margins as well as record sales of refined products. The group reported adjusted earnings prior to interest, taxes and depreciation (EBITDA), of 365 millions euros ($426million) for the period July-September, an increase from 183million euros during the same period in last year. Helleniq Energy reported that the profit surge was despite lower crude prices. The benchmark refining margins increased from $3.1 to $8.5 per barrel, a more than two-fold increase. Natural gas and electricity were also 30% and 7% cheaper respectively. The Athens listed group also reported record refined products sales of 4.3 millions metric tons. This was supported by high refinery accessibility and strong exports which accounted for nearly half of the total sales. The marketing operations also delivered record results, with the domestic EBITDA increasing by 4% and the international EBITDA rising by 14%. Meanwhile, the newly-consolidated power and Gas unit Enerwave contributed to the quarter 18 million euro. Helleniq Energy’s Board of Directors also approved an interim shareholder dividend of 0.20 Euro per share.
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Pension funds reject UK Plc's proposal to encourage savers to invest in local stocks
Pensions industry said that proposals from the London Stock Exchange Group, and over 100 British business executives, to encourage pension funds to invest more in UK stocks ignores the interests of savers. Last week, more than 100 senior executives, including the chairs of Anglo American, Barclays and Compass Group's CEO wrote to Britain’s finance minister urging him to take action to reverse the decline of buying domestic shares. The executives said that it was a loss of cash for companies, a way to export wealth and a threat to economic growth. They proposed, in response, that defined contribution pension plans ensure default funds (the funds into which pension savers automatically invest) place a minimum of 25% of their assets across all asset classes in UK investments. The option to opt out would remain open to savers. Pensions UK's Zoe Alexander said that schemes are already looking for UK investments that offer attractive returns, even when they take into account risk. "Going even further and requiring that a percentage of default fund assets be invested in the UK would pose a significant risk to investment return." Alexander said that the interest of the saver is being overlooked in this debate. To revive growth, governments are focusing on encouraging UK asset ownership. Many warn against forcing people to invest in a certain way, which is a power that the government reserves. According to the letter written by LSEG Chairman Don Robert and CEO David Schwimmer, UK pension funds invest 4.1% of their equity in UK listed companies. This compares with 53% in 1997, and a global median for defined contribution funds that is 13% or more. They said that if their proposal were to be implemented, it would increase the overall investment in UK equity by between 76-95 billion pounds ($127billion) by 2030. LSEG declined comment. The British finance ministry didn't immediately respond to an inquiry for comment. Some schemes have been influenced by past regulations to move away from stocks and into government bonds. Investors say that the attraction of foreign markets also played a part. The U.S. S&P has risen nearly 500% in the last five years; Britain's FTSE is up 80%. Yvonne Braun, of the Association of British Insurers, responded to LSEG’s proposal by saying that investments shouldn't be influenced externally and that savers should be "at the heart of every policy decision".
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US Judge denies motions for disqualification of officers and advisers involved in Citgo Auction
On Thursday, a U.S. court filed showed that a U.S. Judge denied Venezuela's and Gold Reserve's motions to disqualify a judge, two advisory firms, and a court official overseeing the auction of shares of Citgo Petroleum parent company, which is a U.S. refiner. The Toronto-listed Gold Reserve miner, which was the winner of the auction with its bid, and Citgo, the owner of Venezuela, both accused the firms that advised the court of receiving $170 million from Elliott Investment Management affiliates, whose offer had been recommended to the court as the auction's winning offer, as well as bondholders who would receive proceeds. Their motions regarding alleged conflict of interest were denied. This allows for the complex sale process organized by PDV Holding, Citgo's parent company, to continue. In his ruling, Delaware Judge Leonard Stark stated that the motions were procedurally flawed because they were untimely. They also lacked merit because they relied on arguments which had been waived. He said that the motions were "without merit." Gold Reserve's application for a stay in the process of sale, as well as the court's assessment of Elliott's Amber Energy's $5,9 billion offer, recommended by Robert Pincus' officer, was denied. Gold Reserve has also filed other legal actions in separate U.S. courtrooms to stop the auction. One of these is before a U.S. Court of Appeals. The judge has stated that he will make a decision about the winner of the auction by the end November. The auction is intended to pay up $19 billion in compensation to Delaware for Venezuelan debt defaults or expropriations.
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USDA targeted grants for cancellation by searching for terms such as 'diversity' and 'climate modelling'
Documents seen by have revealed that the U.S. Department of Agriculture asked its staff to search for over two dozen words and phrases relating to climate change and diversity in order to determine which grants could be terminated during the first months of the second Trump Administration. This effort was part of a broader campaign among federal agencies in order to comply with President Donald Trump’s directives that diversity, equity and inclusivity efforts and climate regulations be eliminated within the federal government. Trump called DEI "racist", "illegal", and pressured private institutions like universities to end diversity practices. Climate change has been called a "con-job" by Trump. The documents obtained by FarmSTAND during litigation against the USDA, and shared with, reveal the extent of the effort made at the agency. Its remit covers a broad range of programs, from food stamps, farm subsidies, to conservation programs. According to the Department of Government Efficiency's website, USDA terminated 600 grants worth more than $3 billion. It has never been reported how the USDA identifies grants that are to be terminated. USDA spokesperson refused to comment on any pending lawsuits. In a pair publicly accessible memos dated March 13, Agriculture Secretary Brooke Rollins stated that the review and possible termination of grants helped the agency "return to American principles" and realign its focus to its original goals of promoting agriculture and ensuring food safety, as well as protecting national forests. Terms include'socially vulnerable,' and 'carbon pricing' According to a memo dated February 6, agency officials instructed budget and finance officers that they should identify awards using the terms "diversity," 'equity, 'inclusion", "DEI," 'DEIA," environmental justice, underrepresented producers," underserved communitys,". The memo was written by USDA's acting general counsel Ralph Linden. He is now the deputy general attorney, Lynn Moaney who is deputy chief financial officer, and John Rapp, budget director. The USDA refers to "socially disadvantaged farmers" as farmers of color, sometimes including women. Until July, the USDA had prioritized enrollment for these farmers or allocated funding pools to them. Chelsea Cole, the federal financial assistance department's policy lead in the Office of the Chief Finance Officer of the agency, instructed the officials on February 24 to expand their review by including 16 topics and search terms related climate change. Documents show that the topics and terms include "climate modeling," “climate and emissions analysis," “climate smart farming and land use which does not directly profit farmers," and "carbon pricing and markets mechanics." "Renewable energy modernization" that does directly benefit farmers, "climate adaptation (sic) planning and resilience planning," and "biodiversity related to climate changes". The documents did not make it clear whether all of the grants identified were terminated or if other factors were taken into consideration for the approximately 600 canceled grant. CANCELLED GRANT The work funded by the cancelled grants included technical assistance for farmers using climate friendly practices such as planting cover crops, local purchases of food for schools and improving nutritional status for those receiving federal food assistance. Holly Bainbridge is a senior lawyer with FarmSTAND. She said that the termination process has affected organizations all over the country, and their ability create a fairer food system that supports local small farmers, that delivers food to those who are in need. FarmSTAND, Earthjustice, and Farmers Justice Center sued the USDA for grant terminations.
Gold reaches 3-week high amid hopes that US data will encourage Fed rate-cut bets
Gold prices rose to a three-week high Thursday on the back of expectations that U.S. data after the reopening of the federal government could support the case for Federal Reserve rate cuts next month.
As of 09:36 am, spot gold rose 0.4%, to $4,215.49 an ounce. ET (1147 GMT), the highest level since October 21. U.S. Gold Futures for December Delivery rose 0.2% to $4.220 an ounce.
Jim Wyckoff is a senior analyst with Kitco Metals. He said that the reopening of the government will allow data to be released. Traders expect this will reveal a weakening U.S. labour market and will push Fed towards at least lowering rates in December.
Private surveys indicated a weakening job market.
According to an agreement that funds federal operations until January 30, the U.S. Government will resume its operations following a 43-day record shutdown.
Jerome Powell, the Fed's Chair, warned against further easing in this year due to a lack data.
A survey showed that 80% of economists anticipate another 25 basis point cut at the meeting.
Gold is usually a beneficiary of lower interest rates, as it offers no return and can be seen as a safe haven during times of economic uncertainty.
Standard Chartered stated in a report that the correlation between gold and core macro-drivers like the dollar or real yields have weakened significantly over the last two weeks. This reflects a shift towards structural themes, such as currency debasement, and U.S. credit concerns.
Silver spot fell 0.2%, to $53.33 an ounce, following its previous high of October 17.
Tai Wong is an independent metals dealer. He said: "If silver does not break higher decisively we could see a second round of profit-taking. Expect volatility to remain high near-term."
Palladium dropped 1% and platinum fell 1.3% to $1,593.87.
(source: Reuters)