Latest News
-
Financial Times - Friday, June 4,
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch for the accuracy of these reports. Headlines - KKR feared a political risk in the Thames Water Rescue deal UK Serious Fraud Office investigates company who sold solar farms Thurrock Council British Industry Exempted From Trump's Doubling of Steel Tariffs Rachel Reeves, British Finance Minister, will support the Manchester-Liverpool railway link as part of a boost to transport spending Andrew Bailey, Governor of the Bank of England defends UK rules on ringfencing for lenders View the full article Thames Water has suffered a major blow in its battle to avoid nationalisation. The U.S. private-equity firm KKR withdrew from a multi-billion-pound rescue plan partly because of concerns over political interference. The Serious Fraud Office in Britain (SFO), has announced that it has launched an investigation against Rockfire Investment Finance. This company sold a bond scheme that was linked to solar farms, which led to a council in England being declared bankrupt by 2022. The U.S. President Donald Trump exempted the UK from doubling steel and aluminum tariffs in the United States, while British bosses urged British Prime Minister Keir starmer to act quickly on a deal that would completely eliminate these levies As part of the Whitehall Spending Review next week, UK Chancellor Rachel Reeves approved plans to spend billions of dollars on a new rail line between Manchester and Liverpool as well as other transport schemes. Andrew Bailey, governor of the Bank of England, has defended ringfencing regulations that force UK lenders separate their retail activities from other activities. He said that removing these rules would increase mortgages and other loan costs. (Compiled by Bengaluru Newsroom)
-
Reeves, UK's Reeves, approves $21 billion in transport projects outside London
The British Finance Minister Rachel Reeves announced on Wednesday that she would commit 21.1 billion pounds (15.6 billion pounds) to transport projects outside London. These cities have been plagued by years of unfulfilled promises and underinvestment. Reeves will announce her first investment commitments in a speech to be delivered in Manchester, north-west England. Her June 11 Spending Review sets budgets for all government departments during the remainder of this parliamentary term. The Labour government of Prime Minister Keir starmer, which has suffered heavy losses in local elections, is being pressed to demonstrate that it is improving public services and infrastructure. Organisations like the OECD have identified outdated and insufficient transport links as a major factor. Reeves stated in an excerpt of her speech, provided by the Finance Ministry. She said that the growth of too few regions and large gaps in between them was the result of this type thinking. The former Conservative government led by Rishi Sunak, who cancelled a part of a north-south high-speed rail line in order to reallocate cash to local projects, had earmarked the majority of the 15,6 billion pounds. London has yet to give the green light for many cities. The budget announcement made on Wednesday represents an agreement to fund transportation projects between 2027/28 - 2031/32. These include investments in metro systems in the West Midlands and Greater Manchester as well as the North East, South Yorkshire and the North East. West Yorkshire – a city region with a population of 2.3 millions – will also have its first mass transit system. Jonny Haseldine is the head of the British Chambers of Commerce's business environment department. Since 1998, Britain has conducted periodic reviews of government spending, but this one is the first to cover several years since 2015. The only other review in 2021, which focused on the COVID epidemic, covered a single year. The Institute for Fiscal Studies, a non-partisan organization, said that this review of spending could be "one the most important domestic policy events" for Labour.
-
Virgin Australia is seeking to raise $442.8 Million in IPO term sheet.
Virgin Australia, owned by Bain Capital According to a termsheet seen on Wednesday, is hoping to raise A$685 (442,78) million in an initial public offer. Virgin has set its offer price at A$2.90 a share. The offer size is 30% of Virgin's issued capital. Bain Capital didn't immediately respond to our request for a comment. The term sheet stated that the airline, Australia's 2nd largest after Qantas, would sell 236.2 millions shares to value the company A$2.32 Billion on a fully diluted base. Virgin's enterprise value will be A$3.6 billion after subtracting its A$1.31billion net debt. According to the terms sheet, Bain's stake will drop from 70% to 39.4% after the IPO. Qatar Airways will keep a 23% share.
-
CANADA-CRUDE-Discount on Western Canada Select heavy crude widens; wildfires reduce Canadian output
The discount between the benchmark North American West Texas Intermediate (WTI) futures and Western Canada Select (WCS), widened Tuesday, but was still in historically tight territory due to wildfires that continue to disrupt Canadian oil output. WCS for Hardisty, Alberta delivery in July settled at $9 per barrel below the U.S. benchmark WTI according to brokerage CalRock. It had settled at $8.80 per barrel under the U.S. standard on Monday. Calculations show that wildfires in Canada's oil producing province of Alberta reduced Canada's daily crude output by about 7%. Although no significant infrastructure was damaged, companies shut down production of 344,000 barrels a day and evacuated some workers as a precaution. * The fires occur at a moment when Canadian heavy crude is already trading at an historically low discount, in part because of the Trans Mountain Pipeline expansion that was opened one year ago. This increased the country's capacity to export oil. Canadian crude also benefits from U.S. Sanctions on Venezuela and other nations, which boosts demand for heavy crude producers who are not sanctioned. * Oil prices rose about 2% globally on Tuesday, reaching a two-week peak as geopolitical tensions persist between Russia and Ukraine, and the U.S.
-
ONEOK purchases remaining Delaware Basin Joint Venture stake for $940 Million
U.S. Pipeline Operator ONEOK announced on Tuesday that it has purchased the remaining stake in Delaware Basin Joint Venture from NGP XI Midstream Holdings for $940 million in cash and stock. By acquiring the remaining interest of 49.9%, ONEOK gained the sole ownership of this basin. It operates natural gas gathering, processing, and storage facilities in West Texas, and New Mexico’s Delaware Basin. The total processing capacity is over 700 million cubic feet a day. In the last two years, the operator of the pipeline has diversified its portfolio through acquisitions. These include a Gulf Coast NGL system from Easton Energy, and the purchase of Medallion Midstream, and EnLink Midstream. These moves are part a larger effort to increase its presence in Permian basin amid the growing consolidation of the U.S. Energy sector. The deal is worth $530 million cash and $410 millions in ONEOK common shares, according to the company. ONEOK has a pipeline network of 60,000 miles that transports crude oil, refined products and natural gas liquids. (Reporting and editing by Mohammed Safi Shamsi in Bengaluru. Katha Kalia is based in Bengaluru.
-
US Airlines seeks 2-year delay in secondary cockpit barrier rule
The Federal Aviation Administration said that major U.S. carriers want to delay for two years, by August of this year, the requirement to install a secondary barrier in the cockpit to prevent intrusions. Airlines for America, a trade group that represents American Airlines, United Airlines and Delta Air Lines as well as other major carriers, argued in a petition to the FAA that it should delay the finalization of the 2023 requirement because the FAA has yet to approve a secondary cockpit barricade and there are no approved manuals, training programs or procedures. The FAA announced that it would be accepting public comments on the airline's request until June 23. The FAA adopted security standards for the flight deck after the September 11 hijackings of four U.S. planes. These standards are designed to prevent forcible entry and unauthorized access. In the petition, the airlines said that they expected the FAA would certify the barriers by June or July. The FAA declined to comment immediately. This rule requires aircraft manufactures to install a physical second barrier on all planes that are used for commercial passenger services in the United States. In 2023, the FAA stated that the additional barrier would protect the flight deck from intrusions when the flightdeck door is opened. Air Line Pilots Association president Jason Ambrosi criticised the industry's request. He said: "We urge FAA to reject the latest stalling tactics and implement the secondary barrier requirement, as Congress mandated, without delay." Boeing, Airbus and Airlines for America argued for three years, but unions in 2023 wanted the rule to take effect immediately after publication. According to a federal law passed in 2018, the FAA had to adopt rules by 2019. However, it has stated that it must follow certain procedural rules to be able to impose new rules. The FAA does not require retrofitting of existing aircraft. The FAA set up rules in 2007 to address the security of the flight deck when the cockpit doors were opened. These included requiring that the door must be locked while the aircraft is in operation unless it was necessary to unlock it for authorized personnel. (Reporting and editing by Leslie Adler, Marguerita Choy and David Shepardson)
-
Bayer executive: Airlines need to sign long-term agreements on greener fuels in order to increase volumes.
MONTREAL (Rtrs), June 3, 2008 - If airlines want to increase global volumes of lower-emission fuel needed for industry climate goals, they need to sign long-term agreements that will allow them to purchase larger quantities of sustainable aviation. The International Air Transport Association's airline members are committed to the goal of zero net emissions by 2050, despite warnings from experts that they will have difficulty meeting such sustainability goals because of low production of SAF - which is more costly than conventional jet fuel. IATA, who concluded a summit in India Tuesday, expects sustainable aviation fuel production to double by 2025, reaching 2 million tons, or 0.7% of airline fuel consumption. In Montreal, Matthias Berninger said that while airlines have asked for more action from energy companies and partners to increase SAF volume, there should be more long-term purchasing of the fuel. This is similar to certain commitments made in the renewable energy industry. Bayer's Monsanto division sells seeds and insecticides to farmers that grow crops used as biomass feedstocks for biofuels. Berninger said that if airlines commit to buying a certain quantity over a period of time we can guarantee farmers will grow the crop and processors will process the crop. Berninger spoke on the sidelines the International Civil Aviation Organization’s aviation climate week. "And whether or not this supply meets the demand (market) depends on the long-term buying contracts of the airline sector sending a very clearly defined demand signal similar to what we currently have in the renewables space." SAF is made from plants, waste, cooking oil, and other products. (Allison Lampert, Montreal; Editing and proofreading by David Gregorio).
-
Aerospace and airline industries warn that US tariffs may put safety at risk.
On Tuesday, groups representing U.S. and global airlines warned that new tariffs on imports of commercial aircraft, jet engine parts and other components could threaten air safety or the supply chain, and have unintended consequences. After President Donald Trump announced in April sweeping duties against trade partners, the industry is already facing 10% tariffs. The Commerce Department launched an investigation called Section 232 last month to examine the risks imported goods pose to U.S. security. This could lead to even higher tariffs for imported planes, engines, and parts. In a recent filing, the Aerospace Industries Association (which represents Boeing, Airbus and hundreds of other aerospace companies) urged the Commerce Department to extend the period for public comments on Section 232 from 90 days to 180 days, and not impose any new tariffs during that time. The group also urged for further consultations with the industry regarding "any Section 232 Tariffs" to ensure that they accurately reflect national safety concerns and don't put supply chain and aviation security at risk. The AIA highlighted the impact of a fire that occurred at a Pennsylvania aerospace fastener manufacturer in February on production, and the difficulty in finding parts from new suppliers. The group stated that it could take as long as 10 years to find a new supplier in the country and to ensure they have all of the necessary safety certifications. Airlines for America warns that tariffs will increase the cost of shipping and plane tickets. The airlines stated in comments filed with the Commerce Department that "injecting higher costs will weaken our economy and national security, and have a debilitating effect on the domestic commercial aircraft industry's capacity to grow, compete and innovate." The trade group warned that the tariffs could destabilize the aviation supply chain and lead to more counterfeit parts being sold. They also said the tariffs would have unintended and unexpected consequences. Airlines and manufacturers are lobbying Trump for a return to the tariff-free regime of the 1979 Civil Aircraft Agreement. The U.S. sector benefited from a $75 billion trade surplus each year. The agreement stipulates that parts must be approved by the Federal Aviation Administration in order to qualify for tariff-free status. (Reporting and editing by David Shepardson, Nia Williams and Chizu Nomiyama)
Singapore port congestion reveals worldwide ripple impact of Red Sea attacks
Congestion at Singapore's container port is at its worst because the COVID19 pandemic, an indication of how extended vessel rerouting to avoid Red Sea attacks has interrupted international ocean shipping with traffic jams also appearing in other Asian and European ports.
Merchants, producers and other industries that count on enormous box ships are once again battling surging rates, port backups and scarcities of empty containers, even as many consumer-oriented companies aim to develop inventories heading into the peak year-end shopping season.
Global port blockage has reached an 18-month high, with 60% of ships waiting at anchor situated in Asia, maritime information company Linerlytica stated this month. Ships with a total capacity of over 2.4 million twenty-foot equivalent container units (TEUs). were waiting at anchorages as of mid-June.
However, unlike throughout the pandemic, it is not a buying flurry. by house-bound consumers that is overloading ports.
Rather, ship timetables are being interrupted with missed. sailing schedules and fewer port calls, as vessels take longer. routes around Africa to avoid the Red Sea, where Yemen's Houthi. group has actually been attacking shipping considering that November.
Ships are therefore offloading bigger quantities at the same time at big. transhipment centers like Singapore, where cargoes are unloaded and. reloaded on various ships for the last leg of their journey,. and giving up subsequent voyages to catch up on schedules.
( Carriers) are trying to manage the situation by dropping. packages at transhipment hubs, said Jayendu Krishna, deputy. head of Singapore-based consultancy Drewry Maritime Advisors.
Liners have actually been building up boxes in Singapore and other. hubs.
Average Singapore freight offload volume jumped 22% between. January and May, significantly impacting port efficiency,. Drewry stated.
SERIOUS BLOCKAGE
Singapore, the world's second-largest container port,. has actually seen particularly severe blockage in current weeks.
The average wait time to berth a container ship was 2 to. three days, Singapore's Maritime and Port Authority (MPA) stated. in end-May, while container trackers Linerlytica and PortCast. said hold-ups might last as much as a week. Usually, berthing should. take less than a day.
Neighbouring ports are likewise supporting as some ships skip. Singapore.
The strain has shifted to Malaysia's Port Klang and Tanjung. Pelepas, said Linerlytica, while wait times have also climbed up at. Chinese ports, with Shanghai and Qingdao seeing the longest. hold-ups.
Drewry expects congestion at significant transhipment ports to. stay high, but expects some alleviating as providers add. capacity and restore schedules.
Singapore's MPA stated that port operator PSA had re-opened. older berths and lawns at Keppel Terminal and would open more. berths at Tuas Port to deal with prolonged waits.
Maersk, the world's second-largest container. carrier, stated this month it would skip 2 westbound cruisings. from China and South Korea in early July due to extreme. blockage in Asian and Mediterranean ports.
PEAK SEASON
The yearly peak shipping season has also gotten here earlier. than anticipated, worsening port congestion, carriers and. research firms stated
This seems to be driven by restocking activities,. particularly in the U.S., and by customers delivering items early. in anticipation of more powerful demand, stated Niki Frank, CEO of DHL. Worldwide Forwarding Asia Pacific.
Container rates, meanwhile, have surged, raising the risk of. another wave of rate boosts for purchasers like the. post-pandemic inflation spike which central banks are still. trying to tame.
Rates had actually stabilised into April but in May there was a. significant increase in ocean freight exports of Chinese. e-commerce, electrical cars, and eco-friendly energy-related. goods, Asia-focussed freight forwarder Dimerco said.
The peak season, which typically begins in June, was. advanced by a full month, triggering ocean freight rates to skyrocket.
Container import volume at the 10 largest U.S. seaports in. May increased 12%, fuelled by the second-highest regular monthly import. volumes considering that January 2023, stated information provider Descartes.
( U.S.) customers are continuing to spend more than last. year, and merchants are stocking up to meet demand, stated. Jonathan Gold, a National Retail Federation vice president.
Ocean imports into Europe from Asia are also showing indications. of a re-stocking season running into peak season - pressing rates. to 2024 highs, Judah Levine of freight platform Freightos said.
Container freight prices from Asia to the U.S. and Europe. have tripled because early 2024.
Rates from Asia and Singapore to the U.S. East Coast are at. their greatest since September 2022, while rates into the U.S. West Coast are greatest given that August 2022, freight platform. Xeneta said.
Some industry players believe part of the reason for the. bottlenecks at China ports is fuelled by U.S. importers hurrying. to purchase Chinese products such as steel and medical items that. will be subject to high tariff walkings from Aug. 1.
But freshly enforced U.S. tariffs would affect only about 4% of. Chinese imports to the U.S., said Jared Bernstein, chair of the. Council of Economic Advisers.
Gene Seroka, executive director of the Port of Los Angeles,. the largest U.S. gateway for Chinese ocean imports, also expects. a minimal effect.
We might see some of this freight been available in, however it is not going. to be a deluge, he said.
Concerns about possible strikes at U.S. ports this year. might also be pulling the peak season forward, while DHL stated. German port strikes were contributing to the gridlock.
All of those interruptions will likely imply greater prices for. customers, experts caution.
These are big monetary hits for carriers to absorb,. stated Peter Sand, primary analyst at Xeneta.
(source: Reuters)