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A cargo train loaded with coal dust, moves past the port area near City Station in Karachi
A cargo train loaded with coal dust, moves past the port area near City Station in Karachi, Pakistan September 24, 2018. Picture taken September 24, 2018. REUTERS/Akhtar Soomro

April 24, 2019

SHANGHAI (Reuters) – People living in countries along China’s new “Silk Road” favor investment in renewable energy over the construction of coal-fired power plants, according to a poll released on Wednesday ahead of a major summit in Beijing.

Environmental group E3G, which commissioned the poll, said the results showed there was little support for investment in coal, despite China’s role as a major funder of new plants.

“China should now work with governments, business and investors at the upcoming forum to make sure these demands are met,” said Nick Mabey, chief executive of E3G.

The survey was released ahead of China’s second international forum on its 2013 Belt and Road initiative, which is designed to build infrastructure and encourage trade and economic cooperation along the old Silk Road route connecting China to Europe and elsewhere.

According to a draft communique seen by Reuters, world leaders attending the summit will call for sustainable financing that promotes green growth.

But concerns have been raised that China is using the program to export substandard polluting technologies, even as it boosts the share of renewable power at home in a bid to cut smog and climate-warming greenhouse gases.

The YouGov poll of more than 6,000 people covered Indonesia, Pakistan, Philippines, South Africa, Turkey and Vietnam, which are among the top 10 locations for the construction of new coal-fired power plants, with many backed by Chinese developers.

Over 85 percent of those surveyed said they favored investment by foreign governments, banks and companies in renewable projects, while less than a third said they favored investments in coal.

More than 90 percent said solar power should be a priority. Coal-fired power was less popular than nuclear in four of the six countries.

In a separate announcement on Wednesday, a coalition of Chinese environmental groups urged Beijing to draw up green guiding principles for investment in Belt and Road countries.

“The host country’s climate objectives and the long-term impact of investment activities on the local environment must be taken into consideration,” said Yang Fuqiang, a senior climate advisor with the Natural Resources Defense Council.

(Reporting by David Stanway; editing by Richard Pullin)

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FILE PHOTO: Candidate Zelenskiy waves to supporters following the announcement of an exit poll in Ukraine's presidential election in Kiev
FILE PHOTO: Ukrainian presidential candidate Volodymyr Zelenskiy waves to supporters following the announcement of the first exit poll in a presidential election at his campaign headquarters in Kiev, Ukraine April 21, 2019. REUTERS/Viacheslav Ratynskyi

April 24, 2019

By Pavel Polityuk

KIEV (Reuters) – Ukrainian President-elect Volodymyr Zelenskiy on Wednesday called on the government and state energy company Naftogaz to hold talks with the International Monetary Fund (IMF) on lowering household gas prices from May 1.

The IMF, which is helping Ukraine with a multi-billion dollar loan program, has said it wants to see gas prices set at their market level.

Zelenskiy, who has yet to take office but won a landslide election victory on Sunday, said in a statement on his team’s Facebook page he wanted prices to be lower.

“Let’s not just in words, but in deeds show that we can take decisions in people’s interests,” the statement said.

“For the past four months, gas prices in Europe have been decreasing and now the price of gas for the population in Ukraine is higher than the price of gas on the European market.”

The same statement warned that neighboring Russia might limit energy supplies to Ukraine from June 1, and that, from Jan. 1, Moscow might move to halt gas transit through Ukraine altogether, a move it said would result in significant financial losses and gas supply risks.

“These challenges require us to take effective and fast action,” the statement said.

An IMF spokesman was not immediately available to comment.

Prime Minister Volodymyr Groysman in March said he would urge the finance ministry and Naftogaz to start talks with the IMF to try to prevent any future rise in gas tariffs.

The government raised gas prices by nearly a quarter in October, allowing it to secure a new $3.9 billion stand-by aid agreement with the IMF.

According to a previously adopted government resolution, gas prices were due to rise by 15 percent from May 1. But earlier this week the government and Naftogaz agreed a slight decrease in tariffs.

Naftogaz said prices would fall by around 3.5 percent to 8,247 hryvnias ($310.56) per 1,000 cubic meters from May 1.

(Reporting by Pavel Polityuk; Writing by Andrew Osborn; Editing by Matthias Williams)

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FILE PHOTO: Workers emerge from Bank underground station with the Bank of England and Royal Exchange building seen in the City of London financial district, London, Britain
FILE PHOTO: Workers emerge from Bank underground station with the Bank of England (L) and Royal Exchange building (R) in the City of London financial district, London, Britain, January 25, 2018. REUTERS/Toby Melville/File Photo

April 24, 2019

By Huw Jones

LONDON (Reuters) – Britain’s finance minister Philip Hammond said on Wednesday it will start the process of replacing Mark Carney as governor of the Bank of England.

“Finding a candidate with the right skills and experience to lead the Bank of England is vital for ensuring the continuing strength of our economy and for maintaining the UK’s position as a leading global financial center,” Hammond said in a statement.

Carney took up his role on July 1, 2013, and will step down on Jan. 31, 2020.

(Reporting By Huw Jones; editing by Simon Jessop)

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Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang
FILE PHOTO: Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. Picture taken December 7, 2018. REUTERS/Stringer

April 24, 2019

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices fell on Wednesday amid signs that global markets remain adequately supplied despite a jump to 2019 highs this week on Washington’s push for tighter sanctions against Iran.

Brent crude futures were at $74.13 per barrel at 0456 GMT, down 38 cents, or 0.5 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $65.93 per barrel, down 37 cents, or 0.6 percent, from their previous settlement.

Crude oil prices for spot delivery rose to 2019 highs earlier in the week after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action from Washington.

The spot price surge has put the Brent forward curve into steep backwardation, in which prices for later delivery are cheaper than for prompt dispatch.

Stephen Schork of the Schork Report energy newsletter, said the shift to backwardation in the past four months was “a sign that the market’s underlying fundamentals have shifted away from a spot market that is well supplied to a market where demand is beginning to overtake supply.”

U.S. sanctions against oil exporter Iran were introduced in November 2018, but Washington allowed its largest buyers limited imports of crude for another half-year as an adjustment period.

With Iranian oil exports likely declining sharply from May as most countries bow to U.S. pressure, global crude markets are expected to tighten in the short-run, Goldman Sachs and Barclays bank said this week.

Despite the tight spot market, analysts said global oil markets remained adequately supplied thanks to ample spare capacity from the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), Russian and also the United States.

The International Energy Agency (IEA), a watchdog for oil consuming countries, said in a statement on Tuesday that markets are “adequately supplied” and that “global spare production capacity remains at comfortable levels.”

The biggest source of new oil supply comes from the United States, where crude oil production has already risen by more than 2 million barrels per day (bpd) since early 2018 to a record of more than 12 million bpd early this year, making America the world’s biggest oil producer ahead of Russia and Saudi Arabia.

“Total oil supplies from the United States are expected to grow by 1.6 million bpd this year,” the IEA said.

Commercial inventories in the United States are also high.

U.S. crude oil inventories rose by 6.9 million barrels in the week to April 19 to 459.6 million, data from industry group the American Petroleum Institute showed on Tuesday.

(Reporting by Henning Gloystein; editing by Richard Pullin)

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U.S. dollar banknote is seen in this picture illustration
FILE PHOTO: U.S. dollar banknote is seen in this picture illustration taken May 3, 2018. REUTERS/Dado Ruvic/Illustration

April 24, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – The Australian dollar tumbled to a six-week low on Wednesday as soft domestic inflation reinforced prospects of monetary easing, while the U.S. dollar hovered near a 22-month high against its peers on after strong U.S. housing data further eased concerns towards the world’s biggest economy.

The Aussie was down 0.9 percent at $0.7040 after brushing $0.7031, its lowest since March 11.

The antipodean currency tumbled after data on Wednesday showed Australia’s headline consumer price index (CPI) come in flat in the January-March quarter, below forecasts for an 0.2 percent increase and the lowest since early 2016.

The Reserve Bank of Australia (RBA) has recently opened the door towards monetary policy easing, and Wednesday’s weak inflation reading increased views that the central bank would cut the key interest rate from an already record low of 1.5 percent.

“The weak CPI heightens the prospect of RBA cutting rates at its May 7 meeting,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.

“Higher commodity prices usually support the Aussie, but rate cut prospects are outweighing such positive factors,” Sera said.

The Aussie is a commodity-linked currency that is also usually sensitive to shifts in risk sentiment.

Crude oil prices rallied to six-month peaks this week, while the S&P 500 and Nasdaq reached record high closings overnight.

The dollar index versus a basket of six major currencies stood at 97.660 after rising to 97.777 overnight, its highest since June 2017.

U.S. data on Tuesday showing sales of new single-family homes jumped to a near 1-1/2-year high in March added to recent positive readings in retail sales and exports.

The euro , which has the largest weighting within the dollar index, was down 0.15 percent at $1.1212 after shedding 0.25 percent the previous day.

“The European economy looks particularly weak relative to the U.S. economy and this highlights the euro’s weakness,” said Takuya Kanda, general manager at Gaitame.Com Research.

“The United States is now expected to have experienced firm growth in the first quarter, reinforcing the dollar’s strength relative to the euro.”

U.S. first quarter GDP data on Friday could strengthen the case that while the current period of global expansion is in its late stages, the United States is on a firmer footing compared with other leading economies.

The dollar was steady at 111.885 yen after suffering mild losses overnight, weighed down by a decline in long-term Treasury yields.

The Canadian dollar extended overnight losses and slipped to a seven-week low of C$1.3457 per dollar amid expectations that the Bank of Canada (BoC) would forgo language pointing to further interest rate hikes.

Canada’s central bank is expected to hold its benchmark interest rate steady at a policy meeting later on Wednesday. A Reuters poll showed that the central bank is expected to stand pat until the beginning of 2020 at the earliest.

(Editing by Jacqueline Wong and Richard Borsuk)

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FILE PHOTO: U.S and China trade talks in Beijing
FILE PHOTO: Chinese staffers adjust U.S. and Chinese flags before the opening session of trade negotiations between U.S. and Chinese trade representatives at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019. Mark Schiefelbein/Pool via REUTERS

April 24, 2019

WASHINGTON (Reuters) – A top White House economic adviser said on Tuesday the United States and China were making progress in trade negotiations and he was “cautiously optimistic” about the prospects for striking a deal.

Speaking at a luncheon at the National Press Club, National Economic Council Director Larry Kudlow said the two nations still had issues to address and were discussing a “visitation exchange” as part of their ongoing talks.

“We’re not there yet, but we’ve made a heck of a lot of progress,” Kudlow said in response to questions from reporters. “We’ve come further and deeper, broader, larger-scale than anything in the history of U.S.-China trade.”

“We’ve gotten closer and we’re still working on the issues, so-called structural issues, technology transfers,” Kudlow added. “Ownership enforcement is absolutely crucial. Lowering barriers to buy and sell agriculture and industrial commodities. It’s all on the table.”

Washington and Beijing have engaged in a tit-for-tat trade war that has seen both countries imposing tariffs on billions of dollars’ worth of each others’ imports.

The United States is seeking structural changes in China’s economy, from reducing industrial subsidies to halting forced technology transfers by U.S. companies seeking to enter the Chinese market.

(Reporting by Alexandra Alper and David Alexander; Editing by Doina Chiacu and Bernadette Baum)

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Cho Eun-hye and her one-and-a-half-year-old Korean Jindo dog Hari, both wearing masks, go for a walk on a poor air quality day in Incheon
FILE PHOTO: Cho Eun-hye (R) and her one-and-a-half-year-old Korean Jindo dog Hari, both wearing masks, go for a walk on a poor air quality day in Incheon, South Korea, March 15, 2019. Picture taken on March 15, 2019. REUTERS/Hyun Young Yi

April 24, 2019

By Joori Roh and Cynthia Kim

SEJONG, South Korea (Reuters) – South Korea announced a proposed 6.7 trillion won ($5.87 billion) supplementary budget on Wednesday to tackle unprecedented air pollution levels and to boost exports bruised by weak external demand amid the Sino-U.S. trade war.

The planned stimulus package allocates 2.2 trillion won to battle air pollution, including subsidies for replacing old diesel-powered cars as well as for buying air purifiers and using renewable energy technologies, the finance ministry said.

Another 4.5 trillion won will be used to increase export credit financing and to create jobs.

“(The extra budget is) to resolve national predicament caused by fine dust and to support the public economy through pre-emptive economic measures,” the ministry said in a statement.

It sees the extra budget lifting Asia’s fourth-largest economy’s growth by 0.1 percentage point this year and adding at least 73,000 jobs, Finance Minister Hong Nam-ki told a briefing.

In March, parliament approved a bill designating the air pollution problem a “social disaster”, paving the way for President Moon Jae-in’s government to draft a fiscal stimulus program to combat it.

Also in March, exports contracted for a fourth month in a row.

Last week, the central bank cut its 2019 growth forecast to a seven-year low of 2.5 percent, underlining worries that weak external demand and trade frictions could stunt economic recovery.

A loss of jobs is also a worry.

South Korea’s unemployment rate jumped to a nine-year high in January, hurt by the government-led hikes in minimum wages and growth concerns among businesses.

Employment conditions improved slightly in March, but it is still in a difficult situation, according to the finance ministry.

To fund the proposed extra budget, the government plans to issue 3.6 trillion won of deficit-covering bonds, according to the ministry’s budget chief.

The remaining 3.1 trillion won will be financed from above-target tax revenue collected in 2018 and by funds that state-owned companies manage.

This year marks the fifth straight year for South Korea to propose an extra budget for stimulus, sparking sharp criticism that this no longer is an emergency measure.

When asked if the current economic situation warrants adjustments in fiscal spending, Finance Minister Hong said his team is making “pre-emptive responses” to boost growth, as is allowed South Korea’s economic stimulus law.

South Korea can draw up an extra budget when there is a war or large-scale disaster outbreaks, or when there are concerns over economic recessions and mass lay-offs, according to the national finance act.

Moon’s ruling Democratic Party likely faces a challenge winning parliamentary approval of the budget bill, as it only holds 43 percent of the National Assembly’s 300 seats. Moon will need to gain support from nearly 30 opposition lawmakers.

The ministry sees South Korea’s economy growing 2.6 percent this year if the extra budget bill is approved and executed in a timely manner. It plans to submit the bill on Thursday.

(Reporting by Joori Roh and Cynthia Kim; Editing by Richard Borsuk)

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FILE PHOTO: A PG&E truck carrying an American Flag drives past PG&E repair trucks in Paradise
FILE PHOTO: A PG&E truck carrying an American Flag drives past PG&E repair trucks in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage

April 23, 2019

By Jim Christie

SAN FRANCISCO (Reuters) – PG&E Corp can pay employees up to $350 million in bonuses this year to spur them to help meet the bankrupt California power provider’s safety goals to prevent wildfires, a judge said on Tuesday.

PG&E’s management has said the company needs to implement the bonus plan to carry out tasks such as clearing trees and branches around power lines to avert contact that triggers wildfires.

While the maximum cost of the plan is $350 million, PG&E has said it expects the likely cost will be around $235 million.

Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco at Tuesday’s hearing said he was persuaded to approve the bonus plan, which provides for quarterly payments, after hearing testimony from John Lowe, who is responsible for PG&E’s compensation programs.

Lowe said performance targets would be challenging to achieve and that targets for clearing trees and branches could be raised if PG&E’s state regulator requires it.

“It was helpful for me to hear from him,” Montali said. “Bottom line is I will defer to judgment of management.”

More than half of the plan’s formula for calculating bonuses is pegged to how well employees help PG&E meet safety goals. PG&E has said it aims to remove 375,000 trees around power lines this year to avert the potential for its equipment sparking blazes during California’s next wildfire season.

The plan covers 2019 and takes the place of a previously proposed 2018 bonus program that PG&E scuttled after criticism from wildfire victims and their lawyers.

Investor-owned PG&E sought Chapter 11 bankruptcy protection in January facing the prospect of, potentially, billions of dollars in liabilities in the aftermath of devastating wildfires in Northern California in 2017 and 2018 linked or suspected to be linked to its equipment.

PG&E has said it expects its equipment will be found to have caused November’s Camp Fire. The blaze was California’s deadliest and most destructive wildfire of modern times, killing 86 people and destroying the town of Paradise.

(Reporting by Jim Christie; Editing by Rosalba O’Brien and Lisa Shumaker)

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A general view of banks, hotels, office and residential buildings in the center of Cairo
FILE PHOTO: A general view of banks, hotels, office and residential buildings in the center of Cairo, Egypt, September 13, 2018. REUTERS/Amr Abdallah Dalsh

April 23, 2019

By Patrick Werr

CAIRO (Reuters) – Egypt’s government is drawing up a plan to turn over as many as 150 crumbling historic buildings to the private sector to refurbish and lease out for profit, the Minister of Public Enterprise said on Tuesday.

The plan could potentially save an eclectic mix of neo-classical, beaux arts, art nouveaux, art deco and early modern styles built mostly in the first half of the 20th century then nationalized in the early 1960s.

It could also revitalize important tourism districts in central Cairo, Alexandria and Port Said on the Suez Canal.

The buildings have fallen into various degrees of disrepair for lack of funding and maintenance, with many tenants paying tiny sums for units that have remained rent-controlled for more than half a century.

Public enterprise minister Hesham Tawfik said the government would follow the model of privately owned Al Ismaelia for Real Estate Investment, which has been slowly renovating 23 historic buildings it has bought in downtown Cairo.

“They take the buildings, they settle with individuals or companies who are renting these apartments, they do the necessary renovations, inside and outside, and they simply rent them to the private sector. And they are making some decent return on their investment,” Tawfik said.

“We intend to do this by offering parcels of buildings, and by parcels I mean four to five buildings per transaction, for the private sector to repeat what Ismaelia did, on a revenue-sharing basis,” he said at business conference.

The plan was being studied at the state Insurance Holding Co. which along with the state insurance company owns 350 buildings, 150 of which are classified as historic.

“Probably they will come up with something very soon to offer to private developers, who we will insist be Ismaelia-style, with the right social background to be able to make sure that the development is done at the right level,” Tawfik said.


The government was also preparing to sell about 2 million square meters of unused land owned by state holding companies to help pay back more than 38 billion Egyptian pounds ($2.22 billion) in debts owed to other public entities, he said.

These include the National Investment Bank, the Ministry of Petroleum, the Ministry of Electricity, pension funds and the tax authority.

Once paid, any extra proceeds will be used to finance restructuring plans for companies under the ministry, including 21 billion pounds for textile industry and 5 billion pounds for chemical and metallurgical industries, Tawfik said.

(Reporting by Patrick Werr; Editing by Angus MacSwan)

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Employees work at a harvest machine assembly line at the AGCO Agricultural Machinery Plant in Ribeirao Preto
FILE PHOTO: Employees work at a harvest machine assembly line at the AGCO Agricultural Machinery Plant in Ribeirao Preto, northeastern region of the state of Sao Paulo, Brazil, September 15, 2016. REUTERS/Nacho Doce

April 23, 2019

By Marcelo Teixeira

SAO PAULO (Reuters) – U.S. agricultural machine maker AGCO Corp said on Tuesday it would launch its flagship Fendt line of equipment in Brazil later this year, targeting large soybean farmers in the vast center-west region.

AGCO will first bring the German-made line of Fendt Vario high-power tractors to Brazil’s grain heartland, the company’s South America chief Luís Felli said at a presentation in Sao Paulo.

Next year AGCO plans to launch sales of Fendt’s biggest-yet planters and harvesters that will be produced in two plants in Brazil, looking to lure the largest-scale farming groups, he said.

Felli said most items were designed in Brazil specifically for the needs of grain producers in the center-west states such as Mato Grosso and Goiás, where much of the country’s soybean and corn is produced.

“Everybody nowadays wants to produce two crops per year in Brazil. The windows for harvesting and planting are small. You need to gain speed, and these equipment will give you speed,” he said.

Fendt South America division will be headquartered in Sorriso, right along at the key BR-163 grain-shipping road, in the northern part of Mato Grosso state. It will sell 40-line planters that carry seeds and fertilizer and can be folded to be transported to other areas.

“The largest planters of that kind until today had 17 lines, so this could make a big difference in a large farm,” Felli said.

According to him, if conditions are right, precision planters could go as fast as 12 kilometers per hour (km/h) in the field, compared to 5 km/h for a conventional planter.

AGCO will also sell Fendt harvesters with up to 50-feet long platforms and internal storage for as much as 220 60-kg bags of soybeans (485 bushels).

Felli says Brazil has at least 10,000 farmers with 5,000 hectares or more each, a large scale farming not seen anywhere else, boosting sales potential for large, powerful machinery.

The company has invested 150 million reais ($38.30 million) so far to bring the Fendt line to South America.

(Reporting by Marcelo Teixeira; Editing by Richard Chang)

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