A logo of Brazil’s state-run Petrobras oil company is seen at their headquarters in Rio de Janeiro, Brazil October 16, 2019. REUTERS/Sergio Moraes/File Photo Acquire Licensing Rights
RIO DE JANEIRO, Sept 28 (Reuters) – The head of Brazil’s state oil firm Petrobras (PETR4.SA) said on Thursday it will sign a memorandum of understanding with mining giant Vale (VALE3.SA) to study potential joint ventures in renewable energy, even as looks to new suppliers for diesel.
“Vale is a consumer (of energy) and probably very interested in hydrogen production, it has some activities in energy transition that are interesting,” Petrobras CEO Jean Paul Prates told reporters, saying the companies would look for synergies.
The partnership would come at a time when Petrobras is pushing to move into renewable energy. Earlier this month, the state-run firm unveiled plans to develop offshore wind farms.
Regarding diesel, Prates said Petrobras could if necessary and strategic import the fuel from abroad as bans on Russian imports – the main source of imported diesel in Brazil – could force the country to look for suppliers elsewhere.
Russia surpassed the United States as Brazil’s top supplier this year.
“We’re going to import to meet our contracts and possibly one or two more quotas that are necessary and that we see as an opportunity to enter a new market or a new customer that is good for us,” Prates said.
Meanwhile, spiking oil prices have widened the gap between Petrobras’ refinery prices and those charged abroad, which analysts say is discouraging third-party imports. Petrobras last adjusted its gasoline and diesel prices in mid-August.
“The models, for the time being, indicate it’s possible to maintain the same level with absolutely no risk to the company’s profitability,” said Prates.
Petrobras’ refinery utilization factor is currently at a rate of 94%, he added.
Reporting by Marta Nogueira; Editing by Steven Grattan and Sarah Morland
Our Standards: The Thomson Reuters Trust Principles.
Crimea’s parliamentary speaker Vladimir Konstantinov celebrates switching to Moscow time in the Crimean city of Simferopol March 30, 2014. REUTERS/Shamil Zhumatov/file photo Acquire Licensing Rights
Sept 16 (Reuters) – Russian-installed authorities in Crimea said on Saturday they planned to sell about 100 Ukrainian properties, including one belonging to Ukrainian President Volodymyr Zelenskiy.
Vladimir Konstantinov, speaker of the Crimean parliament, said the nationalised properties would be sold “soon” and the authorities had held the first eight auctions for the properties of Ukrainian business figures.
The sale contracts amounted to more than 815 million roubles ($8.51 million), Konstantinov said in a statement on the Telegram messaging app.
Russian-installed authorities in Crimea said in February that they had nationalised around 500 properties in Crimea including some belonging to senior Ukrainian politicians and business figures.
Crimea, internationally recognised as part of Ukraine, has been controlled by Moscow since 2014, when Russia annexed the Black Sea peninsula, eight years before its full-scale invasion of Ukraine.
($1 = 95.8000 roubles)
Reporting by Reuters; Editing by William Mallard
Our Standards: The Thomson Reuters Trust Principles.
LONDON/NEW YORK, July 26 (Reuters) – Property markets knocked by high interest rates and the end of cheap financing have caught the eye of hedge funds.
U.S. and European commercial property markets face lingering office vacancies, diminished retail activity and higher refinancing costs, while investors are wary of highly indebted Chinese property.
Five hedge funds shared five trading ideas on global property markets, adding that they cannot reveal trading positions for regulatory reasons.
1/ VARADERO CAPITAL
* New-York based credit hedge fund
* Size: $2.8 billion
* Founded in 2009
* Key trade: buy commercial mortgage-backed securities issued 2012-2016
Jonathan Mizrachi, co-head of commercial real estate, believes there are bargains to be found in commercial mortgage backed securities (CMBS), or bonds which hold mortgages grouped together by their credit risk.
“Investors are generalizing CMBSs, everything is commercial mortgage backed and everything commercial mortgage backed is bad,” he said, adding that some are trading at attractive prices.
Mizrachi mainly focuses on the mezzanine, or intermediate tranches of CMBSs, issued between 2012 and 2016. These now trade at a discount and contain fewer loans with lots of historical data, so are easier to analyze, he said.
2/ BALCHUG CAPITAL
* Size: $2 billion
* Founded: 2010
* Key trade: buy Russia commercial real estate
CEO of Armenian hedge fund Balchug Capital, David Amaryan, recently purchased one of Moscow’s biggest malls, and is looking to buy more properties from investors leaving Russia.
Russia’s invasion of Ukraine and the sanctions that followed meant many Western firms have left Russia-based operations.
Investors from countries such as Armenia are acceptable to both Russian and international authorities, said Amaryan.
“They are not getting what the assets were worth before the conflict but the discounted price is a reasonable one given that Balchug is taking the risk,” he said.
3/ BEACH POINT CAPITAL MANAGEMENT
* U.S. based fund specialising in credit related investments
* Size: $14.8 billion
* Founded: 2009
* Key trade: shorting commercial real estate investment trust stocks
Ben Hunsaker, portfolio manager and head of structured credit at Beach Point Capital Management said a good shorting opportunity was to invest in sell options, or buy puts, on commercial mortgage real estate investment trust stocks (CM-REITs).
CM REITs are companies that own mortgages of multi-family residential homes as well as commercial real estate loans. The stocks of these companies, or REITs, trade without a discount. They are also packed with other kinds of debt, he added.
This debt might include collateralised loan obligations, reverse repurchase agreements and unsecured high yield corporate debt.
“Certain pockets of U.S. multi-family lending has parallels to subprime and CDOs back during the financial crisis,” Hunsaker added.
Given the speed at which some of the underlying loans were issued at just after COVID-19, Hunsaker believes the values of these loans will soon fall, bringing down the prices of the publicly traded common stocks of the CM-REITs which contain them.
4/ Land & Buildings
* Activist hedge fund
* $500 million
* Founded 2008
* Key trade: short life and sciences real estate investment trusts
Jonathan Litt, founder and chief investment manager of Land & Buildings, suggests a short position on life and science real estate investment trusts (REITs) — which own and invest in office and laboratory space to foster the research and developments of new drugs.
A short position is a bet that an asset’s price will weaken.
Cell phone data Litt bought to research a REIT run by Alexandria Real Estate Equities (ARE.N), showed that buildings which that were supposed to be almost fully occupied were only half full.
Alexandria Real Estate responded pointing to public filings which said that it was the advancement of science and related intellectual property in Alexandria’s Labspace buildings, and not employee foot traffic that drove its demand for space.
But Litt believes that the shift away from office working will also hurt life and sciences real estate, generally.
“This is going to be a problem and people haven’t seen it yet,” said Litt.
5/ ANSON FUNDS
* Multi-strategy hedge fund
* Size: $1.6 billion
* Founded in 2003
* Key trade: long British homebuilder Vistry Group (VTYV.L)
Anson CIO Moez Kassam reckons Vistry shares are likely to rise further following a recent $1.4 bln acquisition of rival Countryside that could bolster its affordable housing business.
“Vistry leveraged its strong balance sheet to snap up a key competitor, capitalizing on depressed valuations and dislocation in the sector,” he said.
Vistry last week flagged an intensifying housing slowdown, but retained its annual profit forecast citing resilient demand in its affordable homes business.
Its shares are up 28% this year and Kassam sees potential for further gains, with affordable housing companies tending to be more resilient than traditional homebuilders during downturns.
Vistry declined to comment on the hedge fund’s views.
Reporting by Nell Mackenzie in London and Carolina Mandl in New York; Editing by Dhara Ranasinghe and Alison Williams
Our Standards: The Thomson Reuters Trust Principles.
KYIV, July 21 (Reuters) – The World Bank’s private investment arm is considering $1.5 billion in investments in Ukraine’s banking, agribusiness and infrastructure sectors, a senior official with the International Finance Corporation (IFC) said on Friday.
Alfonso Garcia Mora, IFC’s Regional Vice President for Europe, Latin America and the Caribbean, hailed the resilience of Ukraine’s private sector during the war, and said the lender had provided nearly $400 million in support since the start of Russia’s invasion nearly 17 months ago.
The funds supported foreign trade and key agribusiness and IT sectors. Garcia Mora said the IT sector could be a “revolution in this country”, helping to drive Ukraine’s recovery and build back a more innovative and diversified economy.
The IFC will keep its focus on the agribusiness sector, plans to support the banking sector and is eying more long-term projects in infrastructure, he said.
“We have identified, we are working already on a pipeline of $1.5 billion … of companies which we can invest in,” Garcia Mora told Reuters in an interview as he visited Kyiv to mark the re-opening of the World Bank Group’s office in the capital.
“I would like to deliver this $1.5 billion in the next 12 to 18 months.”
Ukraine’s economy has been severely hit by Russia’s invasion, and shrank by about a third last year. While the government relies heavily on Western financial aid to be able to finance its budget and social spending, private companies struggle with affordable access to capital.
Garcia Mora said the banks had enough liquidity but needed support to reduce risks. The IFC was working on risk-sharing products and also sought to provide working capital to smaller businesses via Ukrainian banks, he said.
The lender announced on Friday that it was setting up a 20-million-euro ($22.24 million) risk-sharing facility for Ukrainian branches of OTP Bank and OTP Leasing.
It also said that along with its partner fund Horizon Capital, IFC had invested $5 million in Miratech, IT services and consulting company.
Reiterating the IFC’s commitment to supporting Ukraine’s private sector as the country plans for the post-war reconstruction, Garcia Mora said the biggest potential for private investors was in energy, transport and also agribusiness.
The government and the World Bank estimated in a joint assessment in March that the cost of reconstruction and recovery in Ukraine had reached about $411 billion. Garcia Mora said that about $140 billion could come from private investors.
($1 = 0.8993 euros)
Reporting by Olena Harmash, Editing by Frances Kerry and Timothy Heritage
Our Standards: The Thomson Reuters Trust Principles.
[1/2]U.S. President Joe Biden meets with Chinese President Xi Jinping on the sidelines of the G20 leaders’ summit in Bali, Indonesia, November 14, 2022. REUTERS/Kevin Lamarque/File Photo
July 7 (Reuters) – U.S. President Joe Biden told Chinese President Xi Jinping following his meeting with Russia’s Vladimir Putin to “be careful” because Beijing relies on Western investment, according to excerpts from an interview with CNN.
“I said: This is not a threat. This is an observation,” Biden said.
“Since Russia went into Ukraine, 600 American corporations have pulled out of Russia. And you have told me that your economy depends on investment from Europe and the United States. And be careful. Be careful.”
Putin and Xi held two days of talks in March with warm words of friendship between China and Russia and joint criticism of the West, but no sign of a diplomatic breakthrough over Ukraine.
The pair also participated in a virtual summit earlier this week.
There are heightened tensions and pessimism in the U.S.-China relationship over national security issues, including Taiwan, Russia’s war in Ukraine, growing U.S. export bans on advanced technologies and China’s state-led industrial policies.
U.S. Treasury Secretary Janet Yellen was continuing a visit to China on Saturday.
Asked what Xi’s response was, Biden said: “He listened, and he didn’t…argue. And if you notice, he has not gone full-bore in on Russia.”
“So, I think there’s a way we can work through this.”
Reporting by Costas Pitas; Editing by Sandra Maler and Leslie Adler
Our Standards: The Thomson Reuters Trust Principles.
July 6 (Reuters) – Russia’s Daria Kasatkina has expressed reservations about competing in any future WTA tournaments in Saudi Arabia, saying “not everything is about money”, amid reports the Gulf State may be set to plough huge amounts of cash into the sport.
Saudi Arabia has made massive investments in soccer, Formula One, boxing and golf in recent years and ATP Tour chief Andrea Gaudenzi said he had held discussions with its Public Investment Fund (PIF) on various projects.
WTA Chairman Steve Simon said last week there were still “big issues” with Saudi Arabia as potential hosts for WTA events, though women’s world number six Ons Jabeur said she would “100%” compete there if it benefited the players.
Critics have accused Saudi Arabia, where homosexuality is illegal, of using the PIF to engage in “sportwashing” in the face of heavy criticism of the country’s record on human rights.
Kasatkina, who came out as gay last year, said there were many issues concerning the country.
“Honestly, tough to talk about,” the world number 10 told reporters after reaching the third round at Wimbledon on Wednesday.
“It’s easier for the men because they feel pretty good there. We don’t feel the same way. Money talks in our world right now. For me, I don’t think that everything is about the money.”
Australia’s Nick Kyrgios welcomed the news of the ATP’s discussions on investment from Saudi Arabia and said it would bring players the financial rewards they deserved.
Kasatkina did not share his stance.
“Also, as Nick Kyrgios said, he would be so happy to go there just for a big check. For me, money is not the number one priority in this case.”
Reporting by Hritika Sharma in Hyderabad; Editing by Peter Rutherford
Our Standards: The Thomson Reuters Trust Principles.
DNIPROPETROVSK REGION, Ukraine, May 16 (Reuters) – A former IT programmer now serving as a Ukrainian soldier says a four-rotor commercial drone which sells over the counter for $300 can be modified to carry explosives that will destroy Russian tanks.
“Our team has done it many times. We have destroyed enemy tanks, heavy military equipment, personnel. It’s a very effective gadget,” the soldier, who uses the call sign Kakrurt, told Reuters in the central-eastern region of Dnipropetrovsk.
Kakrurt fights for Ukraine’s 35th Marine Brigade, which modifies commercially-available drones and uses them to attack Russian forces who are occupying swathes of Ukraine’s east and south.
The brigade shared two video clips with Reuters showing its drones flying into what they said were Russian trenches before detonating.
Drones have been used extensively by both Moscow and Kyiv’s forces since Russia invaded Ukraine in February last year.
Ukraine has said it is expanding its drone programme for both reconnaissance and attacking enemy targets in order to narrow the gap between its military capabilities and those of Russia.
The soldier said that Ukraine had invested hugely in drone technology.
“It’s better to make effective use of technical resources instead of people. That’s why the Ukrainian Armed Forces are developing very, very quickly in this direction,” he said.
The 35th Marine Brigade’s soldiers showed off small commercial drones with four rotors that buzzed around as they were flown by soldiers using handsets.
“Our team has decided to use civilian drones, re-make them in order to destroy the enemy. They are easy to get hold of, easy to fit for purpose,” Kakrurt said.
Another soldier, with the call sign Reshik, predicted Ukraine would make broad use of drones that fly to their target before detonating when it starts its much-anticipated counter-offensive in the coming weeks.
“Kamikaze drones will play a huge role in the counteroffensive in attacking trenches where the enemy seeks shelter and in killing the enemy,” he said.
The first soldier said the drones were not vulnerable to Russian jamming systems that use satellites, and that they were airborne for such a short period of time before detonating that radio electronic interference was also ineffective.
“Even for the radio electronic interference there is simply not enough time to start, start working and interfere with the frequencies we work on,” he said.
Writing by Tom Balmforth; editing by Angus MacSwan
Our Standards: The Thomson Reuters Trust Principles.
LAUNCESTON, Australia, May 4 (Reuters) – The strong start to the year for Asia’s imports of crude oil came to a halt in April, with arrivals dropping to a seven-month low as top buyers China and India trimmed purchases.
A total of 108 million tonnes, or 26.39 million barrels per day (bpd) was imported by Asia last month, according to data compiled by Refinitiv Oil Research.
This was down from March’s 27.6 million bpd, which in turn was lower than February’s 29.4 million bpd and the 29.13 million bpd in January.
The decline in April arrivals was led by China, the world’s largest crude importer, with Refinitiv estimating imports at 10.67 million bpd, down from the 34-month high of 12.37 million bpd in March.
It was always likely that China’s imports would pull back in April as that month and May are the peak season for refinery maintenance.
But after the strong start to the year for China’s crude oil imports, there are now several question marks over the outlook for coming months, as the rebound in the world’s second-biggest economy appears uneven.
The official manufacturing Purchasing Managers’ Index (PMI) dropped to 49.2 in April from 51.9 in March, slipping below the 50-level that demarcates expansion from contraction for the first time since December.
The PMI was also below market expectations for a positive outcome of 51.4.
Manufacturing is one of the key pillars of China’s economy from a commodity demand perspective, the others being construction and infrastructure.
The news here is somewhat mixed, with infrastructure investment rising 8.8% year-on-year in the first quarter, outpacing a 5.1 rise in overall fixed-asset investment, while property investment fell 5.8%.
There is also the question of crude prices and the lag between moves in these and imports, given the time between refiners ordering oil and its delivery can be as long as three months.
Crude oil prices were kicked higher at the start of April when the OPEC+ group of producers surprised the market by announcing an additional 1.16 million bpd of output cuts.
Benchmark Brent futures rose from just below $80 a barrel to a peak of $87.49 a barrel on April 12, but have since slipped back to end at $72.33 on Wednesday as concerns over global growth trumped fears of tighter supply.
Nonetheless, the rise in Brent futures, which was accompanied by higher official selling prices for May cargoes from Middle East exporters such as Saudi Arabia, may put a dampener on Chinese demand for May and June cargoes.
INDIA SLOWS IMPORTS
This could extend to other major buyers in Asia, with the region’s second-biggest importer India showing signs of moderating crude appetite in April.
Imports were estimated at 4.60 million bpd in April, down from the eight-month high of 5.02 million bpd in March.
It’s also worth noting that India’s refiners are continuing to switch to cheaper Russian crude, with arrivals in April at 1.68 million bpd, only slightly down from the record high of 1.72 million bpd in March.
Russia has become India’s largest crude supplier, displacing erstwhile OPEC+ ally Saudi Arabia, with India’s April imports from the kingdom dropping to the lowest since September 2021.
Russian crude is also winning against Saudi oil in China, with April arrivals of 2.10 million bpd beating out the 1.73 million bpd from the Middle East’s top exporter.
Outside of the two Asian heavyweights, there was a mixed picture with number three importer Japan recording arrivals of 2.77 million bpd, up slightly from March’s 2.52 million, while fourth-ranked South Korea saw imports slip to 2.56 million bpd in April, a 10-month low and down from 2.96 million bpd in March.
The overall view on Asia’s imports is that April showed a loss of momentum after a strong start to the year.
Whether the slower April imports are mainly because of technical and temporary factors such as refinery maintenance, or if they signal the soft global economy is starting to drag Asian demand will become clearer in May and June.
The opinions expressed here are those of the author, a columnist for Reuters.
Editing by Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
LONDON, May 4 (Reuters) – A record number of Russians have appeared in London’s Commercial Courts over the last year, despite the war in Ukraine and global sanctions, while the number of Ukrainian litigants sunk to zero, a new report showed on Thursday.
The number of Russian litigants in Commercial Court judgments jumped by 41% to 58 in the year to March 2023, second only to 441 British litigants, the annual Commercial Courts Report by consultancy Portland Communications showed.
London courts remain a global centre for commercial dispute resolution and have long bustled with well-heeled Russians bringing cases often rooted in a battle for wealth and influence following the fall of the Soviet Union – and providing a lucrative revenue stream for law firms.
But many law firms cut ties with Russian clients after the invasion of Ukraine in February 2022, which could yet affect the future number of Russian litigants, the report said.
Portland, which compiled the data from 257 judgments, said 38 Russian individuals and 19 companies were among those listed in judgments, including a case involving sanctioned Bank Otkritie and a prominent Russian businessman and his sons.
However, no Ukrainian litigants have appeared in Commercial Court judgments since July 2021, although Ukraine ranked among the most common litigant nationalities in previous years.
The invasion had affected Ukrainian parties’ ability to access courts but, given the delay between claims being filed and judgments, it was too early to attribute the data to the war, the report said.
Sixty percent of litigants appearing in Commercial Courts last year were from overseas – the highest proportion of international litigants ever recorded. Russians were followed by Americans, Indians and Singaporeans, the report showed.
Susan Hawley, executive director of pressure group Spotlight on Corruption, said the data suggested it had been “business as usual” for Russian litigants.
“It should cause the government to pause for thought about the ways in which UK courts have been a playground for foreign claimants without any real scrutiny of whether the UK should be playing host to some of these claims,” she said.
English courts are under rising pressure from a vast backlog of cases, partly due to the pandemic, shortages of lawyers and judges and an outdated court estate.
Reporting by Kirstin Ridley; Editing by Sandra Maler
Our Standards: The Thomson Reuters Trust Principles.
SINGAPORE, Feb 21 (Reuters) – HSBC Holdings PLC (HSBA.L) Group CEO Noel Quinn indicated on Tuesday that China’s commercial property sector was on the mend, after the bank booked higher-than-expected charges in the fourth quarter linked to its exposure to developers.
“The sentiment in the fourth quarter was more negative than the sentiment that emerged in January,” Quinn told Reuters in an interview, adding there were positive developments both on the demand side and the supply side linked to significant policy measures.
His comments came after Europe’s biggest bank reported a 92% surge in quarterly profit and pledged more regular dividends and share buybacks.
Still, HSBC said expected credit losses nearly trebled to $1.4 billion in the fourth quarter, impacted by charges related to its $16.8 billion exposure to China’s commercial real estate sector and companies in Britain. This was higher than market expectations of $1.05 billion.
Latest Updates
View 2 more stories
China’s property sector, which accounts for a quarter of the economy, was badly hit last year as cash-squeezed developers were unable to finish apartment construction, prompting a mortgage boycott by some buyers.
Analysts expect rate cuts and other measures announced by China to kick start a recovery in the sector towards the second half of this year, while data shows the market is stabilising.
“On the demand side, the re-opening of China post COVID is going to create increased demand over time for commercial real estate. On the supply side, there were some big policy measures announced in early January to provide additional liquidity to the commercial real estate sector,” Quinn said.
“So encouraging signs in early January. We think that will be positive for the sector, but we thought it wise to take some additional provisions at the end of December. We have a more positive outlook now,” he said.
Last week, Standard Chartered (STAN.L) flagged a challenging outlook for China’s real estate sector and said it expected a “protracted recovery.” It said it had minimal exposure to mortgages on buildings under construction.
StanChart’s statutory credit impairment charges more than doubled to $227 million in the fourth quarter from a year earlier and the charges includes $130 million for exposure to China real estate, among others.
Reporting by Anshuman Daga and Lawrence White, Editing by Louise Heavens
Our Standards: The Thomson Reuters Trust Principles.