Australian bonds tracked a retreat in Treasuries as investors focused on the likelihood of a Federal Reserve interest-rate hike this week. Index futures signaled a mixed picture for Asia after a late-in-the-day rally in U.S. stocks as crude oil rebounded.
Government debt of Australia and New Zealand pared back some of Monday’s gains after 10-year Treasury yields rallied from near a six-week low, with traders continuing to price in odds above 75 percent of the Fed boosting borrowing costs on Wednesday. While Hong Kong stock futures foreshadowed declines, contracts on Australian and South Korean benchmarks advanced following the Standard & Poor’s 500 Index’s rebound from a two-month low. U.S. crude closed higher after sliding below $35 a barrel.
“Markets remain nervous,” Philip Borkin, a senior economist in Auckland at ANZ Bank New Zealand Ltd. said in a note to clients. “Like equities, bond markets appeared to follow oil prices movements although moves were reasonably violent.”
A sense of unease prevails in global financial markets as investors start counting down to Wednesday’s Fed meeting, where U.S. policy makers are expected to end a seven-year era of near-zero borrowing costs. Weakness in high-risk credit markets has sparked fear of contagion, unsettling markets along with the gyrations in crude oil ahead of one of the most anticipated Fed decisions of the year. Australia’s central bank releases minutes of its December meeting Tuesday, with an update on U.S. consumer prices also due.
Yields on Australian debt due in a decade added three basis points, or 0.03 percentage point, to 2.85 percent, as rates on similar-maturity New Zealand sovereign notes climbed the same amount to 3.56 percent.
Concerns over the junk bond market were overshadowed Monday by expectations of a Fed rate hike, weighing on Treasuries. Ten-year U.S. yields rose by nine basis points to 2.22 percent after slipping 10 basis points on Friday amid a global equity selloff.
The S&P 500 ended last session up 0.5 percent as energy stocks erased their declines amid a 1.9 percent increase in U.S. oil. West Texas Intermediate crude rose to $36.31 a barrel after earlier on Monday sliding to as low as $34.53.
Unlocking Investments into Africa’s Renewable Energy Market
The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT.
The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.
Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.
In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.
Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustainable energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.
The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.
Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips
Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.
“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”
Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.
The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.
Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.
Oil Gains 1 Percent on Possible Tight Supply
Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.
Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.
Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.
“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.
Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.
“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.
While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.
Tanzania: African Development Fund Approves $116 Million Loan to Upgrade Southern Road Corridor
Afrexim and Asoko Partner to Help List African Companies
HOPE Consortium and Astral Aviation Sign MOU to Enhance Vaccine Distribution Solutions in Africa
Naira3 weeks ago
Naira Plunges Further, Exchanges at N530 to U.S Dollar
News1 week ago
Taliban Says Men and Women to Study Separately in Gender-Segregated Universities
News1 week ago
Terrorism Sponsors: UAE Names Six Nigerians, 47 Others
News3 weeks ago
Buhari Terminates Appointment of Power and Agriculture Ministers
Economy4 weeks ago
Nigeria Economy Grows 5% In Second Quarter, Its Third Consecutive Growth
Economy1 week ago
Senate Receives Buhari’s Request For $4.054B, €710M, $125M External Borrowing Approval
Energy4 weeks ago
NNPC Made A Net Profit of N287B in 2020 – Buhari
Banking Sector4 weeks ago
Zenith Bank Launches Intelligent Chatbot, ZiVA