WORLDWIDE: HEADLINES
Musk Takes 9% Stake In Twitter To Become Top Shareholder
Tesla Inc (TSLA.O) boss Elon Musk on Monday disclosed a 9.2% stake in Twitter Inc (TWTR.N), worth nearly $3 billion, making him the micro-blogging site’s largest shareholder and triggering a rise of more than 27% in the company’s shares.
Musk’s move, revealed in a regulatory filing, comes on the heels of his tweet that he was giving “serious thought” to building a new social media platform, while questioning Twitter’s commitment to free speech.
In a Twitter poll on Monday, Musk asked users if they want an edit button, after disclosing the stake. On April 1, Twitter tweeted a message on its official account, saying it was working on an edit button.
A prolific Twitter user, Musk has over 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in hot water with regulators.
Of late, however, the world’s richest person has been critical of the social media platform and its policies, and recently ran a Twitter poll asking users if they believed the platform adheres to the principle of free speech, to which over 70% voted “no.”
Twitter’s recent quarterly results and lower-than-expected user additions have raised questions about its growth prospects, even as it pursues big projects such as audio chat rooms and newsletters to end long-running stagnation.
“It does send a message to Twitter … having a meaningful stake in the company will keep them on their toes, because that passive stake could very quickly become an active stake,” said Thomas Hayes, managing member at Great Hill Capital LLC.
Musk – who, according to Forbes, has a net worth of about $300 billion – has been reducing his stake in Tesla since November, when he said he would offload 10% of his holding in the electric-car maker. He has already sold $16.4 billion worth of shares since then.
A regulatory filing on Monday showed that Musk owns 73.5 million Twitter shares, which are held by the Elon Musk Revocable Trust, of which he is the sole trustee. Vanguard is Twitter’s second-biggest shareholder, with an 8.79% stake, according to Refinitiv data.
Full coverage: REUTERS
U.S. Stops Russian Bond Payments In Bid To Raise Pressure On Moscow
The United States stopped the Russian government on Monday from paying holders of its sovereign debt more than $600 million from reserves held at American banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of U.S. dollars.
Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at U.S. financial institutions were frozen.
But the Treasury Department had been allowing the Russian government to use those funds to make coupon payments on dollar-denominated sovereign debt on a case-by-case basis.
On Monday, as the largest of the payments came due, including a $552.4 million principal payment on a maturing bond, the U.S. government decided to cut off Moscow’s access to the frozen funds, according to a U.S. Treasury spokesperson.
An $84 million coupon payment was also due on Monday on a 2042 sovereign dollar bond.
The move was meant to force Moscow to make the difficult decision of whether it would use dollars that it has access to for payments on its debt or for other purposes, including supporting its war effort, the spokesperson said.
Russia faces a historic default if it chooses to not do so.
“Russia must choose between draining remaining valuable dollar reserves or new revenue coming in, or default,” the spokesperson said.
JPMorgan Chase & Co (JPM.N), which had been processing payments as a correspondent bank so far, was stopped by the Treasury, a source familiar with the matter said.
The correspondent bank processes the coupon payments from Russia, sending them to the payment agent to distribute to overseas bondholders.
Full coverage: REUTERS
German Regulator Takes Over Gazprom Germania To Ensure Energy Supply
Gazprom Germania, an energy trading, storage and transmission business ditched by Russia’s Gazprom (GAZP.MM) on Friday, will be transferred to Germany’s regulator to ensure energy security, Economy Minister Robert Habeck said on Monday.
All voting rights in the company will be moved to the regulator, the Bundesnetzagentur, Habeck told a news conference. The move was immediately put into effect by publication in the Federal Gazette.
“The order of the trust administration serves to protect public security and order and to maintain the security of supply,” Habeck said. “This step is mandatory.”
Habeck added that security of supply was currently guaranteed at a time of crisis in energy ties between Germany and Russia in the wake of Russia’s Feb. 24 invasion of Ukraine.
The Bundesnetzagentur will be take over control up to Sept. 30, 2022. It will be entitled to remove executives, hire new staff and ask management how to proceed.
“Our goal will be to run Gazprom Germania in the interests of Germany and Europe,” Klaus Mueller, head of the Bundesnetzagentur, said in a statement.
The Economy Ministry said the move was to stave off possible acquisition of Gazprom Germania by JSC Palmary and Gazprom export business services LLC, both of Russia.
It was unclear who was behind the companies, the ministry said, implying that an acquisition was legally not permissible, given the investors were from outside the EU and about to operate critical infrastructure.
“We won’t leave energy infrastructure subject to arbitrary decisions by the Kremlin,” said Habeck.
Gazprom gave no details or explanation of its decision to terminate its participation in Gazprom Germania and all of its assets, which include subsidiaries in Britain, Switzerland and the Czech Republic.
Full coverage: REUTERS
WORLDWIDE: FINANCE/BUSINESS
Asia Shares Hover At 5-week Highs, Euro On Defensive
Asian stocks ticked up to their highest in more than a month supported by broad gains on Wall Street on Tuesday, while the euro was stuck near a one-week low against the dollar amid talk of more sanctions against Moscow.
The United States and Europe were planning new sanctions to punish Moscow over civilian killings in Ukraine, and President Volodymyr Zelenskiy warned more deaths were likely to be uncovered in areas seized from Russian invaders.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) traded up 0.16% to 601.3, the strongest since Feb. 24. The benchmark has lost 4% so far this year, dragged by big declines in Chinese shares.
U.S. stocks ended higher on Monday, driven by tech shares.
“Prime broking data in the U.S. continues to indicate the recent recovery in equities is being driven by retail money, which is likely squeezing those who were under positioned or positioned short,” Tapas Strickland, director of economics and markets at NAB, said in a note.
“Profit reporting season in the U.S. kicks off next week and it will be interesting to see how firms are interpreting the tea leaves, and whether earnings guidance is revised down,” he said.
Global stocks have had a volatile quarter as the Russia-Ukraine crisis and worries over higher commodity prices fuel inflation concerns and cloud the direction of interest rates.
Japan’s Nikkei (.N225) traded flat, the S&P/ASX 200 index (.AXJO) was 0.5% higher while South Korean stocks (.KS11) shed 0.2%.
S&P 500 stock futures eased 0.08% and Nasdaq futures slipped 0.06% after Wall Street rose on Monday.
Markets in mainland China and Hong Kong were closed for a public holiday on Tuesday. Shanghai went into a two-stage lockdown last week as authorities worked to contain the city’s biggest ever COVID-19 outbreak.
Full coverage: REUTERS
Euro Wallows On Ukraine Sanctions Worries, Aussie Calm Before RBA
The euro languished near a one-week low against the dollar on Tuesday amid talk of more sanctions against Moscow following international outrage over Ukraine civilian killings.
The Australian dollar was flat, hovering near a commodities price rally-fuelled nine-month high, ahead of the country’s central bank’s decision on interest rates later in the day.
The United States and European countries pledged on Monday to punish Moscow over civilian killings in northern Ukraine, where a mass grave and tied bodies of people shot at close range were found in a town seized back from Russian forces.
The deaths in Bucha, outside Kyiv, drew pledges of further sanctions against Moscow from the West, possibly including some restrictions on the billions of dollars in energy that Europe still imports from Russia. The Kremlin denied accusations related to the murder of civilians.
Europe’s single currency was little changed at $1.0975 after dropping as low as $1.0960 in the previous session for the first time since March 28. It had reached a one-month high of $1.1185 just days earlier amid increased optimism for an end to the Ukraine conflict.
The euro’s woes boosted the dollar index, which held near a one-week high of 99.083 reached overnight. It last stood at 98.949.
The dollar weakened 0.20% to 122.515 yen, broadly tracking moves in long-term U.S. Treasury yields, as it continued to consolidate around 122.5 after retreating from a multi-year high of 125.105 on March 28.
Bank of Japan Governor Haruhiko Kuroda put some additional pressure on the currency pair, saying the recent pace of appreciation was “somewhat rapid”, and policymakers are watching moves “carefully”.
Full coverage: REUTERS
Oil Jumps Over 3% As Deaths Near Kyiv Prompt Talk Of New Sanctions
Oil prices jumped over 3% on Monday, with investors worried about tighter supply as mounting civilian deaths in Ukraine increased pressure on European countries to impose sanctions on Russia’s energy sector.
Global benchmark Brent crude jumped$3.14, or 3%, to settle at $107.53 a barrel. U.S. West Texas Intermediate crude rose $4.01, or 4%, to settle at $103.28 a barrel. Trading was volatile with both contracts rising after being down more than $1.
German Chancellor Olaf Scholz said Russian President Vladimir Putin and his supporters would “feel the consequences” of events in Bucha, outside the capital Kyiv, where a mass grave and tied bodies shot at close range were found.
Western allies would agree on further sanctions against Moscow in coming days, he said, though the timing and reach of the new package was not clear.
France’s President Emmanuel Macron suggested sanctions on oil and coal, adding there were very “clear clues pointing to war crimes” by Russian forces.
Since Russia’s Feb. 24 invasion of Ukraine, sanctions and buyers’ avoidance of Russian oil have already dented output and raised fears of tighter supplies.
“As the U.S. and EU reduce purchases of Russian oil, it leaves China and India as the main customers that remain and many of the refineries in those countries might be reluctant to purchase Russian oil with the negative public relations associated,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
Crude dropped by about 13% last week after President Joe Biden announced a record U.S. oil reserves release and as International Energy Agency members committed to further tapping reserves. Brent crude hit $139 last month, its highest since 2008.
Saudi Arabia’s state oil producer Aramco (2222.SE) raised its May official selling price to Asia for its flagship Arab Light crude, according to pricing document seen by Reuters.
“That suggests demand for oil is still very strong, and by doing that it’s going to drain oil supplies from the United States and make supplies tighter,” said Phil Flynn, an analyst at Price Futures Group.
Oil gained support from a pause in talks in Vienna to revive the Iran nuclear deal, which would allow a lifting of sanctions on Iranian oil. Iran blamed the United States for the halt.
Full coverage: REUTERS
