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Berkshire increases investments in Japanese trading companies
Warren Buffett announced on Saturday that Berkshire Hathaway, the conglomerate he leads, will likely increase Berkshire Hathaway's ownership of its five Japanese trading companies. In his letter to Berkshire shareholders each year, the billionaire investor stated that Itochu Marubeni Mitsubishi Mitsui Sumitomo and Sumitomo had agreed to "moderately" relax limits which limited Berkshire's stakes to below 10%. Berkshire’s investment in these companies will total $23.5 billion by the year 2024. Buffett wrote that Berkshire's holdings in all five companies will increase over time. Buffett, who is 94 years old, said that he and Berkshire Vice-Chairman Greg Abel, the Berkshire CEO he has designated as his successor, invest for a "very long-term." Buffett wrote: "I expect Greg and his successors to hold this Japanese position for decades, and Berkshire will work with the five companies in other productive ways." Buffett said that he and his partner liked their capital allocation, their managements, and their attitude towards their investors. Japanese trading houses, also known as "sogo-shosha," trade in many different materials, food and products. They often act as intermediaries and provide logistical assistance. The real economy is also a major concern for them, including commodities, shipping, and steel. Berkshire started investing in trading houses in 2019 due to their financial strength compared with their low stock price, and revealed their 5% ownership stakes at Buffett's 90th Birthday in August 2020. Buffett avoids businesses that he doesn't understand. He told Nikkei that in 2023, the trading houses were "really similar to Berkshire," a conglomerate with headquarters in Omaha, Nebraska which he led since 1965. Buffett stated in his shareholder letter that Berkshire has spent $13.8 billion in its current holdings, and it expects to receive $812 million in dividend income by 2025. "This was a great investment, when other people may have seen them as value traps," Cathy Seifert said. CFRA Research analyst Cathy Seifert rates Berkshire a 'hold. She said Buffett’s comments showed Berkshire had a positive relationship with trading houses. Berkshire also issued fixed rate, yen denominated bonds. Buffett, however, said that the company seeks to be "currency-neutral" and does not have a view on currency changes in the future. The conglomerate on Saturday reported $1.15 billion of foreign currency gains after taxes in 2024 from non-dollar-denominated senior debt. Reporting by Jonathan Stempel in New York, writing by Carolina Mandl in New York, editing by Rod Nickel
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Draft shows EU will reduce sustainability rules for businesses
A draft document obtained by revealed that the European Commission intends to reduce the number of businesses subject to EU sustainability reporting obligations as part of its efforts to reduce red tape. Brussels will publish next week a "omnibus proposal" to simplify green regulations for businesses. The aim is to make local industries competitive and to respond to U.S. president Donald Trump's pledge to abolish regulations. Spain and Germany, among others, have called for the European Union to weaken the rules on green reporting. The Commission's partial draft proposals for the future, seen on Saturday by the media, revealed that it is planning to make changes to the EU Corporate Sustainability Reporting Directive, which requires companies disclose information about their social and environmental sustainability. According to the proposed rules, which may still be changed before publication, only those companies with over 1,000 employees and net revenues exceeding 450 millions euros ($471million) will be required to comply. The rules currently apply to companies with over 250 employees and 40 million euros in turnover. According to the draft, the EU will also abandon its plans to adopt industry-specific reporting standards before next June. The document also detailed the plans to delay EU's Due Diligence Law - CSDDD, which aims at ensuring companies find and fix environmental and human rights issues in their supply chain by imposing due-diligence requirements on large companies. The draft proposal would only require companies to conduct in-depth evaluations of their direct business partners and subsidiaries and leave out all other subcontractors or suppliers in their supply chain.
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Berkshire increases investments in Japanese trading companies
Warren Buffett announced on Saturday that Berkshire Hathaway, the conglomerate he founded, will likely increase Berkshire's ownership of five Japanese trading companies it owns. In his annual Berkshire shareholder letter, the billionaire investor stated that Itochu Marubeni Mitsubishi Mitsui Sumitomo and Mitsui agreed to "moderately loosen" limits on Berkshire's equity stakes. Berkshire’s investment in these companies will total $23.5 billion by the year 2024. Buffett wrote that Berkshire's holdings in all five companies will increase over time. Buffett, who is 94 years old, said that he and Berkshire Vice-Chairman Greg Abel, the Berkshire CEO he has designated as his successor, invest for a "very long-term." Buffett wrote: "I expect Greg and his successors to hold this Japanese position for decades, and Berkshire will work with the five companies in other productive ways." Japanese trading houses, also known as "sogo-shosha," trade in many different materials, food and products. They often act as intermediaries and provide logistical assistance. The real economy is also heavily involved, including commodities, shipping and the steel industry. Berkshire started investing in trading houses in 2019 due to their financial strength compared with their low stock price, and revealed their 5% ownership stakes at Buffett's 90th Birthday in August 2020. Buffett avoids businesses that he doesn't understand. In 2023, Buffett told Nikkei that trading houses were "really similar" to Berkshire, the Omaha-based conglomerate which he led since 1965. Buffett stated in his shareholder letter that Berkshire has spent $13.8 billion in its current holdings, and it expects to receive $812 million in dividend income by 2025. "This was a great investment, when others might have seen them as value traps," Cathy Seifert said. CFRA Research analyst Cathy Seifert rates Berkshire a 'hold. She said Buffett’s comments showed Berkshire had a positive relationship with trading houses. Berkshire also issued fixed rate, yen denominated bonds. Buffett, however, said that the company seeks to be "currency-neutral" and does not have a view on currency changes in the future. The conglomerate reported on Saturday that it will have $1.15 billion in foreign currency gains, after taxes, by 2024. (Reporting and writing by Jonathan Stempel in New York, Carolina Mandl in New York, editing by Rod Nickel).
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Warren Buffett warns Washington after Berkshire announces record profits and cash
Berkshire Hathaway reported record profits on Saturday, even as it increased its cash stake from $334.2 billion to $334.2 trillion. Warren Buffett warned Washington in his annual shareholder letter that they should spend their money "wisely," and to take care of people who "get the short straws in life." In the letter, Buffett, who is 94 years old and arguably the most famous investor in the world, acknowledged his age, telling shareholders that he uses a cane now and will spend less of his time answering their questions at Berkshire’s annual meeting, which takes place in May. Abel's ability to manage capital has been "vividly demonstrated" by the 62-year old Abel. Berkshire reported its annual report along with Buffett's note, which showed a record operating profit of $47.44 Billion, up 27%. Berkshire Hathaway's net income was $89 billion. This includes gains from Berkshire shares such as Apple, American Express and American Express. Apple included. Berkshire’s cash stake was a reflection of high business valuations, and nine consecutive quarters in which the company sold more shares than it purchased. Buffett wrote: "Often nothing seems compelling, but very rarely do we find ourselves in the midst of opportunities." AMERICAN MIRACLE Buffett is celebrating his 60th year at Berkshire. He transformed the company from a failing fabric company to a conglomerate of dozens of companies in industries such as insurance, railroads, energy, retail, and industrial. Buffett added that Berkshire was "not done" and will continue to favor owning stocks, especially U.S. ones, over cash. He sent a warning message to Washington and lamented that capitalism has "faults and abuses, which are in some respects worse than ever," and "scoundrels" and "promoters" have been at it full force. He urged legislators to preserve the stability of the U.S. Dollar, saying that "paper money could see its value disappear if fiscal foolishness prevails" and that in the United States' history the country has "come very close to the edge." Buffett said that the long-term success and growth of Berkshire, as well as the American economy (which he called "the American miracle") depended upon the ability of people to participate. He said Uncle Sam could encourage or discourage that. Buffett, in a letter to the government, wrote: "Take care for the many, who without their fault, are the ones that get the short straws of life." "They deserve more. Never forget that you are needed to maintain a stable exchange rate, and this requires both your wisdom and vigilance. Cathy Seifert is an analyst with CFRA Research, who rates Berkshire as "hold." She said: "His way of addressing politics and the impact of the macroeconomic climate was to talk about America's business being messy." He's warning Washington, "Be careful where you step." Fewer buying opportunities Buffett stated that Berkshire had not purchased an entire company in 2016. However, he said the company is likely to increase their combined $23.5 billion investments into five Japanese trading companies: Itochu Marubeni Mitsubishi Mitsui Sumitomo. Other stocks are more expensive, however. The Standard & Poor’s 500 hit a new record on Wednesday while the Nasdaq is only 3% off its peak of December 16. Berkshire shares are also too small to dominate the indexes like they used to do decades ago. In the past year, the company's share price rose 15% while the S&P 500 grew 18%. Data show that over the past decade, Berkshire stock has increased 225%. The index, however, rose 241%, including dividends, and 185% without dividends. Bill Smead of Smead Capital Management, Phoenix's chief investment office said: "They will be able to buy a lot but Berkshire won't ever be that large compounder with double-digits." "Berkshire is a great way to own major companies and avoid trouble. Buffett, Abel, and Berkshire Vice-Chairman Ajit Jain will spend less of their time on stage at the annual meeting. Buffett told Fortune magazine in the last month he still had fun and was able to do some things fairly well while other activities were "eliminated" or "greatly minimized". The traditional film created by Buffett’s daughter Susie will not be shown at the meeting. Buffett, when asked about his age, said that he speaks regularly with his 91 year-old sister Bertie on Sundays, using a traditional phone. He said, "We discuss the relative merits and joys of canes as well as other exciting topics such the joys that come with old age." In my case, its utility is to prevent me from falling on my face.
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The oil ministry has announced that the northeast of Syria will begin supplying oil directly to Damascus.
Ahmed Suleiman, spokesman for the Syrian oil ministry, said on Saturday that Kurdish-led officials in northeast Syria are now supplying oil to Damascus from the local fields they control. This was the first time that the oil rich northeast of Syria was acknowledged as a source of oil for the islamist-run government, which was installed in December after the former president Bashar al Assad was overthrown by rebels. Suleiman claimed that the oil came from Hasakeh, Deir el-Zor provinces and the deliveries were made based on a revised version of a prior agreement between the Assad Government and Kurdish Authorities. He claimed that the new Syrian leaders had changed the articles of the deal which "served people connected to the Assad regime's interests". Sources from the semi-autonomous administration in northeast Syria said that the deal involved the shipment of 5,000 barrels a daily of crude oil from the Rmeilan Field in Hasakeh, and other fields in the Deir el-Zor Province to a refinery located in Homs. In 2010, Syria exported 380,000 barrels per day of oil (bpd), a year prior to the protests against Assad’s rule that spiraled into a 14-year conflict that destroyed the country’s infrastructure and economy, including its oil. The oilfields have changed hands several times. The Kurdish-led Syrian Democratic Forces eventually captured the northeastern fields. However, U.S. sanctions and European sanctions made legitimate imports and exports difficult. In January, the United States granted a six-month exemption from sanctions to allow certain energy transactions. The European Union will soon suspend sanctions related to transport, energy and reconstruction. Several trade sources said that Syria wants to import oil through local intermediaries in the meantime, after its first post Assad import tenders attracted little interest due to sanctions and financial risk. Internal oil trade also plays a major role in the talks between the Northeast region and the new Damascus authorities, who want to centralise control over all of Syria. According to sources, the SDF will likely have to give up control of oil revenue as part of any settlement. Mazloum Abdi, the SDF commander, said that he was willing to give up control of oil revenues to the new government if the money was shared fairly among all provinces. Reporting by Maya Gebeily from Beirut, and Timour Azhari from Damascus. Editing by Bernadette and Emelia Sithole Matarise and Kirsten Donovan.
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Iraq's Oil Ministry says that procedures for oil exports via Turkish pipeline are complete
In a statement issued on Saturday, the Iraqi oil ministry stated that all procedures were completed for the resumed exports via the Iraq-Turkey pipe. Iraq's Oil Minister said Monday that oil exports will resume from the semi-autonomous Kurdistan Region next week. This resolves a dispute of nearly two years that has disrupted oil flows, as relations between Baghdad Erbil have improved. Sources have confirmed that the Trump administration has put pressure on Iraqi officials to allow Kurdish exports of oil to resume or else face sanctions along with Iran. Later, an Iraqi official denied the pressure and threat of sanctions. Following the statements made by the oil minister earlier in the week, the federal government of Iraq (FGI) and the Kurdistan Regional Government(KRG) held technical discussions to work out the details needed for the resumed exports. This included a payment system that was acceptable to the oil companies. The Iraqi Oil Minister's announcement follows the Iraqi Parliament's approval of a budget amendment on February 2, which set a rate for oil transportation and production costs to be $16 per barrel in Kurdistan. The KRG is also required to transfer its oil production to the State Oil Marketing Organization, which is run by the government. In a statement issued on Saturday, the oil ministry asked that KRG begin delivering crude oil to SOMO to allow exports to resume. (Reporting and writing by Ahmed Rasheed, Ahmed Tolba, and Maha El Dahan. Editing by Sharon Singleton.)
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France’s EDF Reports $944M Impairment on US Offshore Wind Project
State-owned French power giant EDF is taking a 900 million euro ($944.4 million) impairment charge on the Atlantic Shores offshore wind farm project in the United States after partner Shell pulled out of the joint venture."We have every intention of pursuing the interests of the (joint venture) company to the end, but in order to reflect the new American political landscape ..., the board of directors has decided at this stage to depreciate the developments that we have carried out offshore at Atlantic Shore," EDF CEO Luc Remont told reporters.($1 = 0.9530 euros)(Reuters - Reporting by Forrest Crellin, Editing by David Goodman)
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Cuba opens the first of 92 new solar parks to combat energy crisis
Cuban President Miguel Diaz-Canel opened the first of 92 Solar Parks on Friday, as part of an initiative backed by China to reduce the number of blackouts that can last for hours in the Caribbean Island nation. The park in Havana is one of 55 that are expected to be online by this year. It will generate 1,200 megawatts. Last year, the outdated power grid of this Communist-run nation collapsed multiple times. A severe fuel shortage made it impossible for smaller clusters to operate diesel-powered generators which typically backup the system. Blackouts that lasted for years have weakened the economy, and prompted scattered protests by residents who are tired of the multi-faceted crisis which includes a scarcity of basic goods such as food and medicine. The government is heavily promoting the parks as a partial answer to people's problems, which they blame primarily on U.S. sanction. Diaz-Canel tweeted on Friday that "the recovery of the grid is a top priority, and this is its safest route." Cuba's maximum demand is around 3,500MW. However, it fails to meet 1,500MW of this, leading to power outages. Cuba and China agreed to boost solar energy in Cuba's grid in April, but neither government provided details on the financing. Hua Xin attended the Havana solar park's inauguration. Foreign journalists were not allowed to attend the event. Presently, less than 5% (or a little more) of Cuba's energy is derived from alternative sources. Cuba's 2030 goal is 24%. Marc Frank (reporting; Paul Simao, editing)
China's emissions, performance targets under danger after falling short in 2023
China is falling short on crucial targets for dealing with climatewarming emissions, and analysts stated Beijing's reliability in global climate talks might be at danger unless it enhances its efforts to get back on track.
The Chinese government has actually seldom missed targets in the past. Now, driven mainly by energy security issues, it has shown little political will to deal with the emissions gap, experts said.
China's National Development and Reform Commission (NDRC), a. planning firm, guaranteed recently to redouble efforts in. energy conservation and carbon reduction this year after it. fell short of expectations in 2023.
Analysts say it is well behind on its goal to slash energy. strength by 13.5% and carbon intensity by 18% in between 2021 and. 2025.
The strength rates-- measuring how much energy is consumed. and just how much co2 produced per unit of economic development. -- are an essential part of the country's pledge to bring emissions to a. peak before 2030 and to net no by 2060.
Keeping its targets within reach would require concerted. efforts throughout all sectors to bridge the space, said Jom Madan,. senior research study analyst with the consultancy Wood Mackenzie.
The preparation commission set targets for 2024 that fall. far short of what is required. For energy strength, the. commission mandated just a 2.5% decrease. It set no new target. for carbon strength, and made no brand-new moves to suppress making use of. coal-- the most polluting nonrenewable fuel source.
Madan anticipated that China might come close ... however not rather. accomplish its targets on energy efficiency. If the nation misses. its 2025 targets, it might raise doubts around the world about its. ability to check emissions.
The nation likewise runs the risk of a severe loss of diplomatic. credibility, said lead expert Lauri Myllyvirta of the Centre. for Research study on Energy and Clean Air.
China has actually long emphasised its capability to carry out the. nation's dedications, while criticising others for setting. lofty targets, he stated.
The NDRC did not respond to a request for comment.
As the world's greatest carbon polluter and second-largest. economy, China has actually dealt with growing global pressure to show. more climate aspiration. It has resisted, arguing that it is. already doing more than most fast-developing countries.
China's rising emissions represent 35% of the world's. annual total. On a per capita basis, the emissions level is 15%. higher per capita than the OECD average, the International. Energy Company said recently.
To fulfill its goals, Beijing should focus on effectiveness. improvements in market and building, and offer more. financial backing for business to retrofit or change outdated. facilities, Madan said. Expanding the carbon market would. help, he included.
NEW TRUTH
Formally, China's energy strength fell 0.5% in 2023, the. nation's data bureau stated last month, missing a 2%. target.
The gap would have been even worse, however China last month removed. non-fossil fuels such as nuclear and eco-friendly energy from the. equation to concentrate on tackling nonrenewable fuel sources. China is applying. this meaning retroactively, Myllyvirta said. Without the. modification, the energy strength calculation would have shown an. boost of 0.5%.
Myllyvirta approximated that China would need to cut energy. intensity by 6% in 2024 and 2025 to satisfy the 2021-2025 target--. far greater than the 2.5% objective set today.
Energy intensity might matter less in the future, nevertheless,. said Ma Jun, director of the Beijing-based Institute of Public. and Environmental Affairs. The modification in how it is computed. shows a brand-new truth for China, in which financial growth is. progressively driven by the renewables sector, and fossil-fuel. reliant markets will come under more pressure to improve. performance, Ma said.
That suggests carbon strength is going to matter more, he. stated.
Although China set no new targets for carbon strength, the. nation's financial development suggests the measure will fall about 3%. this year, analysts stated.
Nevertheless, after dropping 4.6% from 2020 to 2023, carbon. intensity would need to drop about 7% this year and next to. reach the 2025 goal, Myllyvirta stated.
Missing out on climate targets is unusual for China, which has made. task promotions contingent on ecological development to motivate. workers and firms to meet goals.
In 2022, China's corruption guard dog cautioned that some. regions were supplying fraudulent energy and carbon intensity. figures that were extremely positive.
Pressure to adhere to strength targets also triggered. economic disturbances in 2010, with provinces cutting power. materials to energy-intensive markets and requiring homes to. ration electricity.
Without a significant boost to its climate efforts now, meeting. the five-year strength targets by 2025 will be really. challenging, said Li Shuo, director of the China Climate Hub at. the Asia Society Policy Institute in Washington.
This year's federal government work report certainly did not signal. that level of decisiveness, Shou said.
(source: Reuters)