Proxy adviser ISS opposes plan by Hudson’s Bay chairman to take firm private By Reuters


© Reuters. FILE PHOTO: U.S. flags fly outside of Saks Fifth Avenue in New York

By Bhargav Acharya

(Reuters) – Institutional Shareholder Services said on Friday it recommends shareholders vote against a plan by the chairman of Hudson’s Bay Co to take the Saks Fifth Avenue owner private after the bid was topped by an offer from Catalyst Capital Group Inc.

In October, Hudson’s Bay agreed to a C$1.9 billion ($1.4 billion) offer worth C$10.30 per share from shareholders led by Chairman Richard Baker.

The group, which collectively owns 57% of Hudson’s Bay, includes private equity firm Rhone Capital LLC and office-space sharing start-up WeWork’s property arm.

Private equity firm Catalyst Capital Group Inc, which owns 17.5% of Hudson’s Bay and was unhappy with the bid by the Baker-led consortium, offered C$11 per share in November.

Hudson’s Bay shares closed at C$9.13 on Friday, in a sign that investors do not expect either bid to succeed.

ISS, a shareholder advisory firm, said in a note there was “no legitimate rationale from a governance perspective for recommending shareholders accept a lower offer.”

Catalyst’s Managing Partner Gabriel de Alba welcomed ISS’s decision. He said Catalyst has been working to protect the interests of the minority shareholders, including offering all shareholders a superior proposal to the Baker group.

“We will continue to push the HBC independent directors to finally step up and do their duty to protect shareholders,” de Alba said in a statement on Saturday. [nPn8pJPXQa]

“We are concerned about existing questions that remain unanswered and what additional actions and agreements remain undisclosed,” de Alba added.

David Leith, chairman of Hudson’s Bay’s special board committee that negotiated the sale to Baker’s group, said this week that the Catalyst offer was not an option available to Hudson’s Bay shareholders.

They could either accept the Baker-led offer or Hudson’s Bay would continue as a public company, he said. [nL8N28E6CJ}

Catalyst has urged Hudson’s Bay shareholders to shoot down the deal with Baker in a vote scheduled for Dec. 17. Baker’s consortium will be excluded from the vote on the deal.

Hudson’s Bay did not respond to Reuters’ requests for comment.

Baker’s take-private offer comes seven years after he took Hudson’s Bay public, and values the company at just a third of its 2015 worth, reflecting the challenges brick-and-mortar retailers face as they compete with online shopping.

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Mexico, U.S. ‘getting close’ on finalizing USMCA: Mexican official By Reuters


© Reuters. FILE PHOTO: Flags are pictured during the fifth round of NAFTA talks involving the United States, Mexico and Canada, in Mexico City

(Reuters) – Mexico’s deputy foreign minister for North America said on Saturday that negotiators were making progress on revisions to the United States-Mexico-Canada Agreement (USMCA) trade deal.

Mexico approved USMCA this year, but U.S. ratification has been held up by Democratic lawmakers, who have voiced concerns over the enforcement of labor and environmental provisions.

“We’re getting close, I’m confident,” the minister, Jesus Seade, told reporters outside the U.S. Trade Representative’s office in Washington. He said he would likely return on Monday to continue talks.

On Friday evening, Jesus had said that many issues still needed to be resolved.

One point of contention is over steel, after U.S. Trade Representative Robert Lighthizer made a last-minute demand for a revised definition of what would constitute North American steel under automotive rules of origin.

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Analysts nudge up forecasts for Aussie dollar, kiwi already ahead: Reuters poll By Reuters


© Reuters. Analysts nudge up forecasts for Aussie dollar, kiwi already ahead: Reuters poll

By Wayne Cole

SYDNEY (Reuters) – Analysts have nudged up their forecasts for the Australian dollar as the currency proves resilient to global trade uncertainty and poor economic news at home, though the risk of radical policy easing looms for next year.

Analysts polled by Reuters see the at $0.6800 in one and three months, up a cent from last month’s poll and in line with its current $0.6830 reading.

The currency was then seen rising to $0.6900 in six months and $0.7000 on a one-year horizon, again a cent higher than in November.

This time last year, the call was for the Aussie to end 2019 at $0.7500, a seven cent miss due largely to the endless Sino-U.S. trade dispute and three rate cuts from the Reserve Bank of Australia (RBA).

The outlook for rates remains a big unknown for next year with markets wagering it will cut at least once more to 0.5% and even take the plunge into quantitative easing by buying government debt.

A run of recent data showed the economy disappointed in the third quarter and looks little better for this quarter, putting the RBA in a bind.

“We now expect a rate cut to 0.5% in February and a further cut to 0.25% in August,” said Stephen Halmarick, head of global markets research at CBA. “Those cuts and a small risk of QE in late 2020 will limit the Aussie’s upside.”

However, he also noted there had been a structural improvement in Australia’s external balances as it ran current account surpluses in both the second and third quarters, the first since 1975.

“That provides valuation support for the Aussie,” said Halmarick, tipping the currency to reach $0.7000 by end of 2020.

Forecasts for the New Zealand dollar also edged higher, with the currency seen at $0.6400 in three months and $0.6430 on a six-month horizon – both up from $0.6300 in the previous poll.

It was seen at $0.6550 in one year, compared to $0.6500 back in November. The currency was way ahead of analysts, however, having rallied sharply this week to reach $0.6542.

The has benefited from a marked improvement in recent economic data at home, a divergence that has seen it jump on the Australian dollar.

It also got a fillip when the Reserve Bank of New Zealand (RBNZ) announced bank capital requirements that were less harsh than many feared, removing one source of risk.

That was meaningful enough for ANZ to change its New Zealand rate forecast to only one cut next year instead of two.

“Contributing to our change of call is the fact that a new tailwind is on the way, with the Government signaling that a ‘significant’ increase in infrastructure spending will be announced on Dec. 11,” wrote analysts at ANZ.

(Polling by Sujith Pai and Nagamani Lingappa; Editing by Sam Holmes)

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HK air transport regulator refrains from suspending Hong Kong Airlines’ license By Reuters



(Reuters) – A Hong Kong air transport regulator said on Saturday that it has decided against suspending Hong Kong Airlines’ license, the city’s second largest airline.

The airline said on Wednesday it had drafted an “initial cash injection plan” that would allow it to make overdue salary payments on Thursday. It did not provide details of the source of the funding.

Air Transport Licensing Authority (ATLA) said in a statement on Saturday that the cash injection plans proved satisfactory, adding that it will continue to closely monitor the firm’s operations.

“ATLA has given careful consideration to factors including public interests and the policy direction of maintaining Hong Kong as an international aviation hub,” said a spokesperson at the authority.

The carrier, part-owned by cash-strapped Chinese conglomerate HNA Group, was told on Monday that it needed to shore up its financial position by Dec. 7 or risk the suspension or loss of its license.

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China’s November forex reserves ease to $3.096 trillion, focus stays on trade talks By Reuters


© Reuters. China’s November forex reserves ease to $3.096 trillion, focus stays on trade talks

BEIJING (Reuters) – China’s foreign exchange reserves fell $9 billion in November to $3.096 trillion, central bank data showed on Saturday, as Washington and Beijing remained locked in negotiations over an interim trade agreement.

Analysts polled by Reuters had expected China’s reserves, the world’s largest, would fall $4 billion to $3.101 trillion in November.

Despite the slowing Chinese economy and escalating U.S.-China trade war, its reserves have been gradually rising since late 2018, helped by tight capital controls and rising inflows from foreign investors who are snapping up the country’s stocks and bonds.

Modest changes in reserve levels in recent months have been largely ascribed to fluctuations in global exchange rates and the value of assets that China holds such as foreign bonds.

The yuan has been driven largely by twists and turns in the 17-month long trade war between China and the United States.

After sliding sharply this summer as the dispute suddenly escalated, the yuan rose for three straight months through November on hopes of a trade truce, only to slide again in early December as tensions between Washington and Beijing flared. Fresh U.S. tariffs on Chinese goods are set to take effect on Dec. 15.

It gained 0.12% against the dollar in November, but remains about 2.3% weaker for the year to date.

The dollar, meanwhile, rose about 1 percent against a basket of other major currencies in November.

The value of the country’s gold reserves fell to $91.47 billion at the end of November from $94.65 billion at the end of October.

China held 62.64 million fine troy ounces of gold at the end of November, unchanged from October.

China’s economic growth cooled to 6.0% in the third quarter, the slowest pace in nearly 30 years, and many economists believe it will decelerate further into the upper 5% range in 2020.

Still, analysts note capital outflows have been modest compared with the last economic downturn in 2015-16, when policymakers burned through roughly $1 trillion in reserves supporting the yuan.

China’s central bank has started to slowly trim interest rates in recent months, and more reductions are expected in coming quarters to avert a sharper slowdown.

But analysts believe those cuts will likely be more gradual and smaller than those in 2015. If so, moves in the yuan are likely to be influenced more by trade developments than policy easing.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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BOJ to consider offering bleaker view on output as trade war bites: sources By Reuters



By Leika Kihara

TOKYO (Reuters) – The Bank of Japan will consider offering a bleaker assessment on factory output than in October at its rate review this month, sources said, underscoring its concern over the broadening fallout from the U.S.-China trade war and slowing global demand.

A downgrade in the BOJ’s view on output – a key driver of growth – will cast doubt on its argument that Japan’s economy will sustain a moderate expansion as robust domestic demand make up for weak exports.

Factory output contracted in October in the biggest slump in nearly two years and manufacturers expect output to drop again in November, government data showed.

While the government blamed the weakness mostly on temporary shutdowns of factories due to the typhoon, analysts warned that weakening demand for cars and other big-ticket items after a sales tax hike in October was taking a toll.

“October output was quite weak. The key worry is the impact of sluggish auto demand,” one source with direct knowledge of the matter said, a view echoed by two other sources.

In its current assessment made in October, the BOJ says factory output is moving sideways. The nine-member board may offer a slightly bleaker view, such as that output is weakening, when it meets for a rate review on Dec. 18-19, the sources said.

Many analysts expect the BOJ to keep monetary policy steady this month, after Governor Haruhiko Kuroda said he saw no need to ramp up stimulus now with the economy sustaining a recovery.

Given its limited policy tool-kit, the BOJ is hoping the government’s fiscal spending package will ease the hit to growth from the global slowdown and the sales tax hike.

But a recent string of weak data is likely to keep the central bank under pressure to deploy additional monetary support to prevent another recession.

Retail sales plunged at their fastest pace since early 2015 in October, dashing policymakers’ hopes that the impact from the October tax hike will be moderate.

The BOJ will scrutinize upcoming data, such as its quarterly “tankan” business sentiment survey, to decide whether it needs to cut its overall assessment of the economy, the sources said.

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Trump administration sees partial waivers as potential fix in biofuel debate: sources By Reuters


© Reuters. U.S. President Trump hosts luncheon with UN Security Council representatives at the White House in Washington

By Stephanie Kelly and Jarrett Renshaw

NEW YORK (Reuters) – The Trump administration believes it can assuage farmer anger over its biofuels policy by agreeing to use more partial waivers for oil refineries, signaling a potential solution to a protracted battle between Big Corn and Big Oil, two key political constituencies in next year’s presidential election, according to three sources familiar with the matter.

The administration has spent months trying to appease farmers and corn-based biofuel producers after it granted 31 oil refiners exemptions to blending mandates in August, sparking outrage across the Farm Belt. It unveiled a proposal to address the issue in October that biofuel companies say does not go far enough to compensate for the ethanol demand destruction caused by the waivers.

President Donald Trump has endorsed the use of partial exemptions as a solution to the issue going forward, one of the sources said, instead of consistently issuing waivers that free refiners from 100% of their biofuel blending obligations. It is unclear if the support for the use of partial exemptions would be made official through rule making.

The U.S. Environmental Protection Agency has delivered its proposal for 2020 blending requirements to the White House Office of Management and Budget, an EPA official said on Friday. That proposal is “similar” to the plan the agency unveiled in October, the official said.

But it is possible that changes could be made before the proposal becomes final. The proposal now must go through an interagency review process, where tweaks could be made.

Under the U.S. Renewable Fuel Standard, refineries are required to blend 15 billion gallons of ethanol annually. But the EPA can exempt small facilities that demonstrate compliance would hurt them financially.

The EPA has roughly quadrupled the number of waivers it grants to oil refineries since Trump became president, something the EPA says is meant to protect blue-collar refinery jobs but which biofuels producers say is killing ethanol demand.

EPA’s current plan for 2020 would address the increased number of exemptions by raising the amount some refineries must blend next year, based on a three-year average of the volumes that the Department of Energy had advised the EPA to waive under the exemption program.

The corn lobby has criticized the plan, however, saying that it lacks certainty that the EPA will adequately make up for the exemptions going forward. The group argues that it should instead account for actual amounts waived by the agency since the EPA in recent years has been waiving higher volumes than the DOE advised.

The EPA declined to comment further on partial exemptions.

On Thursday, EPA chief Andrew Wheeler told a biofuels company that the agency is working to address industry concerns, according to a source familiar with the matter.

Wheeler acknowledged in the call that the industry wants greater certainty on blending requirements and said the agency was working to address the issue, the source said.

Wheeler said in discussions with other biofuels companies on Thursday that if the DOE recommends a partial exemption, the EPA will follow that guidance, another source said.

Any effort to change the current 2020 blending proposal to help the biofuel industry is likely to upset refiners, who say RFS requirements are costly and unfair.

The discussions reflect the difficulties Trump has faced seeking to please both the oil and corn industries, whose support he is relying on in next year’s election.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Musk’s defamation win may reset legal landscape for social media By Reuters


© Reuters. Automobile awards The golden steering wheel in Berlin

By Tom Hals

(Reuters) – Elon Musk’s daring has left its mark on electric cars and rockets, and now experts say the entrepreneur may have reshaped U.S. defamation law with his willingness to defend at a high-stakes trial a lawsuit over an off-the-cuff tweet.

The victory by Tesla (NASDAQ:) Inc’s outspoken chief executive over a Twitter message describing a British cave explorer as “pedo guy” has raised the bar for what amounts to libel online, according to some legal experts.

Musk defended his comments as trivial taunts made on a social media platform that he argued everyone views as a world of unfiltered opinion, which is protected as free speech, rather than statements of fact.

“I think this verdict reflects that there is a feeling that internet tweets and chats are more like casual conversation whether you call it opinion or rhetoric or hyperbole and should not be punished in a lawsuit,” said Chip Babcock, a lawyer who defends against defamation lawsuits.

Several other attorneys who specialize in defamation cases privately expressed surprise at the outcome of what they viewed as a strong case for the cave explorer, Vernon Unsworth. They attributed it to Musk’s fame and the perceived youthfulness of the jury.

But they also agreed it would shift the legal landscape, undercutting the cases that would have seemed viable before the trial while defendants would use it to try to reduce possible settlement values.

Musk’s court papers cast his comments as part of the rough-and-tumble world of Twitter, which rewards and encourages emotional outbursts and sucks in readers worldwide but that no one takes seriously.

Mark Sableman, a lawyer who defends defamation cases, said the freewheeling nature of social media has inevitably changed the understanding of language and what amounts to defamatory factual statements, versus opinion.

“I think defendants in modern defamation cases are likely to point to the vitriolic no-holes-barred nature of modern social media, cable TV, and political discourse, in contending that many words and accusations formerly considered defamatory are now understood only as mere opinions, not factual assertions,” he said.

In general, to prove libel, the written form of defamation, someone must show the existence of a false statement, which defendants often try to present as opinion. The plaintiff also must show it was published to a third party, it was negligent and it caused harm.

“While there is more leeway and more hyperbole online and in social media in general, courts never really accepted that argument that social media is a libel free-zone,” said Lyrissa Lidsky, a professor who specializes in defamation at the University of Missouri School of Law.

Several attorneys said Unsworth appeared to have a strong case, and noted that Musk failed to convince the judge to dismiss it at an early stage. But they cautioned that anything can happen in a courtroom where factors such as the credibility of witnesses and likeability of parties can become important factors.

“Based on the court’s pre-trial rulings on motions, Mr. Unsworth’s case going in had the potential to underpin a substantial verdict in his favor,” said John Walsh, who represents people bringing defamation cases.

Unsworth helped rescue a boys soccer team from a flooded cave in Thailand and during a TV interview criticized Musk’s “PR stunt” of showing up at site with a mini-submersible, which was never used. Musk responded with several tweets to his almost 30 million followers and a damaging email to a news outlet, and the lawsuit followed.

In recent years, judges have been wrestling with social media comments and whether to consider them factual statements or protected opinions.

U.S. President Donald Trump, singer and actress Courtney Love and actor James Woods have all been embroiled in multiple libel lawsuits over tweets, with mixed results.

Trump has had success casting Twitter as a place where combatants trade demeaning messages that users understand are not defamatory statements of fact.

Judge James Otero in Los Angeles dismissed a case against the president for a tweet blasting as a “total con job” a claim by adult film actress Stormy Daniels that she was threatened for speaking about an alleged affair with Trump. Otero described the message as “rhetorical hyperbole,” fired off with an incredulous tone that no reasonable person would take as factual statement about Daniels, whose real name is Stephanie Clifford.

Unsworth’s attorney, Lin Wood, warned social media is “tearing at the fabric of society” and the Musk verdict would worsen that trend.

“It is now said by this jury that insults are completely open season,” he said. “Everyone should be concerned about their reputations.”



Trump calls for World Bank to stop loaning to China By Reuters



WASHINGTON (Reuters) – U.S. President Donald Trump on Friday called for the World Bank to stop loaning money to China, one day after the institution adopted a lending plan to Beijing over Washington’s objections.

The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.

“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote in a post on Twitter.

Spokespeople for the White House and the World Bank did not immediately respond to requests for comment.

The World Bank loaned China $1.3 billion in the fiscal 2019 year, which ended on June 30, a decrease from around $2.4 billion in fiscal 2017.

But the fall in the World Bank’s loans to China is not swift enough for the Trump administration, which has argued that Beijing is too wealthy for international aid.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Saudi energy minister talks OPEC+ unity, backs Aramco to soar By Reuters


© Reuters. Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman Al-Saud arrives at the OPEC headquarters in Vienna

By Rania El Gamal and Dmitry Zhdannikov

VIENNA (Reuters) – OPEC and its allies would only ease supply curbs and pump more oil once global crude inventories fall and pricing reflects a tighter market, Saudi Arabia’s energy minister told Reuters.

Saudi Arabia spearheaded a deal on Friday with Russia and the other so-called OPEC+ oil producers to deepen output cuts through the first quarter of 2020.

In his first interview with Reuters since he became energy minister in September, Prince Abdulaziz bin Salman said he expected OPEC+ producers to continue cooperating beyond March.

“The jury is still out where will we be in March,” he said regarding the level of supply the market will need then.

OPEC+ producers pump more than 40% of the world’s oil and have constrained output since 2017 in an effort to balance rapidly rising output from the United States.

While all oil producers would like to increase output, Saudi Arabia would only do so when it saw global inventories fall, he said. Saudi Arabia would like to see stocks within the range of the last five years and the average of 2010-2014, he added.

“The more we are inside this contour, the better…” he said, adding another indicator would be prompt oil prices moving higher than longer dated ones, known as backwardation, which reflects a tighter market.

He said the steeper the structure was for later months, the better as it would indicate OPEC+ was doing a good job in destocking.

The OPEC+ cuts agreed on Friday run until March, while some watchers had expected them to last until June or even December 2020. Russia opposed a longer deal which some analysts interpret as a sign it may want to leave the pact soon.

Prince Abdulaziz said that was not the case and cooperation with Russia would continue. He said OPEC+ simply wanted to be more flexible in adjusting output and reacting to market needs.

“We as producers all wish for a good room to increase production… With Russia we (Saudi Arabia) are committed to a huge joint cooperation program (besides oil),” he said.

The minister also stressed the need for producers such as Iraq and Nigeria to improve their compliance with promised cuts.

Even if their compliance did not improve, however, he said Riyadh would not raise output unilaterally but instead would wait for consultations with OPEC+ at its next meeting in early March.

“I won’t take unilateral measures. I would still consult and review… It will be the group versus those who have not performed.”

Brent oil () rose 2% to more than $64 a barrel on Friday after he said that cuts agreed by OPEC+ could be as much as 2.1 million barrels per day (bpd) including Riyadh continuing to cut 400,000 bpd more than its quota.

He also said that he expected a resumption of production from oilfields jointly operated by Saudi Arabia and Kuwait “very soon.”

“But it would not affect both our countries’ commitments (with OPEC+ cuts),” he said.

The two countries halted output from the Khafji and Wafra oilfields in the so-called Neutral Zone more than three years ago, cutting some 500,000 bpd of supply.

ARAMCO VALUE

The minister said he believed state-run oil giant Saudi Aramco is worth more its $1.7 trillion valuation ahead of its initial public offering set for Dec. 11.

“We believe that the value of the company is way higher than $1.7 trillion,” he told Reuters, adding Aramco had fallen victim to a wider industry downturn which had dropped its valuation below the $2 trillion that Saudi Crown Prince Mohammed bin Salman had targeted.

“We believe too that once those shares are floating it would hopefully evolve that people (see) we were not wrong in terms of what we think this company is worth.”Even with the lower valuation, it is the world’s biggest IPO, raising $25.6 billion and topping Alibaba Group’s (N:) $25 billion listing in 2014.

The IPO involves a stake of 1.5% and is aimed at raising funds to help diversify the kingdom away from its reliance on oil and to create jobs for a growing population.

Domestic and regional investors bid for the bulk of the shares and original plans to also list on an international stock exchange were shelved.

“I cannot wait to see the faces of people who missed that opportunity and how they will be chewing their thumbs,” the minister said, calling those who invested “friends and family” set to benefit from any future rise in its value.