News Archive

Asia stocks off record highs as Wall St. flags, dollar firms on higher yields

TOKYO (Reuters) – Asian stocks retreated from record highs on Tuesday after a selloff in Apple shares and spike in bond yields knocked Wall Street lower, while the dollar found support as U.S. bond yields climbed to near four-year highs.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.1 percent after rising to an all-time high the previous day. It was still on track for a 6.5 percent monthly gain.

Australian stocks shed 0.9 percent, South Korea’s KOSPI lost 1 percent and Japan’s Nikkei dropped 1.4 percent.

Hong Kong’s Hang Seng slipped 0.9 percent and Shanghai was down 0.8 percent.

Spreadbetters expect the negative pressure to spill over to Europe, forecasting Britain’s FTSE to drop 0.7 percent at the open, Germany’s DAX to open 0.8 percent lower and France’s CAC to lose 0.6 percent at the open.

The bearish sentiment in Asia followed a softer lead from Wall Street, which has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations.

On Monday, U.S. stocks pulled back from record highs, with the Dow and the SP 500 indexes marking their biggest one-day percentage declines in about five months, weighed down by a slide in Apple shares.

The dollar, however, enjoyed a reprieve from some persistent selling in the past few weeks.

Buoyed by higher U.S. bond yields, the dollar index against a basket of six major currencies was 0.15 percent higher at 89.457, having bounced overnight from a three-year low of 88.438 plumbed on Friday when peers like the euro outshone the greenback.

The 10-year Treasury note yield stretched its overnight surge above 2.70 percent and reached its highest since April 2014 after comments from a European Central Bank official added to expectations that central banks globally will reduce stimulus as the economic outlook improves.

“This is a rise in real interest rates, also reflecting a rise in inflation expectations,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

“The yield rise may have bumped off U.S. stocks from highs, but a correction was due after their recent gains,” Ichikawa said.

The U.S. Treasury Department said on Monday that it expects to borrow $441 billion through the credit markets in the January-March quarter, less than announced previously.

Treasury yields remained elevated, however, as U.S. borrowing is expected to continue increasing steadily in the coming years as the federal government looks for ways to fund budget deficits.

Moreover, the bond market braced for potentially hawkish language from the Federal Reserve, which will begin its two-day policy meeting on Tuesday.

The focus was also on U.S. President Donald Trump’s State of the Union address scheduled later in the global day, with attention on his views on an infrastructure overhaul and trade.

The euro was down 0.2 percent at $1.2361 after slipping overnight from a three-year peak of $1.2538.

The dollar was 0.3 percent lower at 108.645 yen, unable to hold to a high of 109.205 scaled earlier.

“The dollar lost a bit of traction against the yen as losses deepened for stocks in Tokyo and the rest of Asia. U.S. yields are going up, but players are hesitant to push dollar/yen higher ahead of President Trump’s address,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

The Australian dollar shed 0.3 percent to $0.8072 after reaching $0.8136 on Friday, its highest since May 2015.

Oil prices extended losses after being pressured by the dollar’s bounce and rising U.S. crude output. [O/R]

U.S. crude futures were down 1.2 percent at $64.79 per barrel. Underpinned by the dollar’s recent slide, prices had risen to $66.66 per barrel on Thursday, the highest since December 2014.

Brent crude fell 0.85 percent to $68.88 per barrel.

Spot gold slipped to $1,334.10 an ounce, the lowest since Jan. 23, weighed by the stronger U.S. currency. The precious metal had climbed to $1,366.06 last week, its highest since August 2016.

Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam and Kim Coghill

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Babicanora bonanza for SilverCrest

The step-out drilling extended the footprint by 300m to 1.3km and drill highlights included 3.5m at 41.05g/t gold and 1,074.5g/t silver, or 4,153g/t silver equivalent.

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Exclusive: Blackstone in talks to buy majority stake in key Thomson Reuters unit

LONDON (Reuters) – U.S. private equity firm Blackstone Group LP is in advanced talks to buy an approximate 55 percent stake in the Financial and Risk business of Thomson Reuters Corp, a deal that would value the unit at about $20 billion including debt, three sources familiar with the matter said on Monday.

Thomson Reuters’ board, the sources said, is expected to meet on Tuesday to discuss Blackstone’s offer for the FR business, which supplies news, data and analytics to banks and investment houses around the world. The unit contributes more than half of Thomson Reuters’ annual revenues.

Under the terms of the Blackstone offer, Thomson Reuters would retain a 45 percent stake in the FR business as part of a partnership with the U.S. buyout firm, according to the sources.

Thomson Reuters would receive more than $17 billion for the deal, including about $4 billion in cash from Blackstone and about $13 billion financed by new debt taken on by the new FR partnership, two of the sources said. The whole FR business is valued at about $20 billion, consisting of about $7 billion in equity and $13 billion in debt, they said.

Thomson Reuters said in a statement late on Monday that “it is in advanced discussions with Blackstone regarding a potential partnership in its FR business.” The company gave no more details. A spokeswoman for Blackstone declined to comment.

If the board agrees to a deal with Blackstone, it would represent the biggest shake-up of Thomson Reuters since it was formed a decade ago by Thomson Corp’s acquisition of Reuters Group Plc. Canada’s Thomson bought London-based Reuters for 8.7 billion pounds in 2008, worth $17 billion at the exchange rate at the time.

Reuters was unable to determine who would lead the new division.

Thomson Reuters would hold on to its international news service, Reuters, along with its Legal and Tax and Accounting divisions. Reuters is expected to continue to supply news to FR’s flagship desktop product, Eikon, as well as to other products, though the details of the arrangement could not be determined.

The sources cautioned that a deal had not been finalised and could still fall apart. They declined to be identified because the negotiations are confidential.

It is unclear how the proposed deal would be viewed by trustees of the Thomson Reuters Founders Share Co, which was set up to oversee Reuters’ editorial independence when the company was first publicly listed in the 1980s.

The trustees approved Thomson’s deal for Reuters a decade ago. Thomson Reuters Founders Share Co Chairman Kim Williams did not respond to requests for comment.

Blackstone’s investment, if finalized, will put the buyout firm in direct competition with Bloomberg LP as well as News Corp’s Dow Jones division in selling data services, analytical and trading tools to Wall Street.

Blackstone has some experience in the information business. It bought Ipreo, which sells specialist software for tracking capital markets’ activities in 2014 for just under $1 billion.


Canada’s Thomson family controls more than 63 percent of Thomson Reuters shares through Woodbridge Co Ltd. The news and data provider has a market value of about $31 billion and its shares trade on the New York and Toronto stock exchanges.

Since its creation in 2008, Thomson Reuters has carried out more than 200 acquisitions, but has struggled to integrate some of the assets it took on, especially in its FR division, which was hit hard by the financial crisis.

Growth in the business has slowed as banks and brokerages shrank in the face of weak trading. But amid tougher regulations around risk-taking, the regulation and compliance business has been a bright spot.

To streamline its business, Thomson Reuters has reduced the number of products within its FR segment while shrinking its workforce.

”The progress we have made turning around the FR business and its future potential are reflected by Blackstone’s interest,“ Thomson Reuters Chief Executive Jim Smith said in a staff memo. ”We believe FR is well positioned within Thomson Reuters, but it could be even stronger with a partner like Blackstone.

The company has also sought to sell non-core assets, including its intellectual property and science business, which it sold to private equity firms Onex Corp and Baring Private Equity Asia for $3.55 billion in 2016.

Shares of Thomson Reuters have fallen 9 percent over the past 12 months compared to a 3 percent rise in the Toronto Stock Exchange’s main index in the same period.

Writing by Carmel Crimmins; Editing by Tiffany Wu

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Cardiac jump for zinc hopeful

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Eagle Graphite raises funds

The corporate minnow, planning to complete a one-for-nine share consolidation this year, claims on its website to be “western North America’s only flake graphite producer”. In its Sedar filings, though, Eagle says it is “currently in the exploration stage and has not commenced commercial operations”.

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First Majestic Silver completes US$150M offering

First Majestic plans to put the proceeds towards the cost of acquiring Primero, and for general corporate purposes if the acquisition does not go ahead.

The friendly acquisition was announced mid-month and valued at US$320 million, which included issuing equity to Primero and Wheaton Precious Metals, costs and repaying Primero’s revolving credit facility and outstanding convertible debentures.

First Majestic’s six operating mines in Mexico produced 16.2 million silver equivalent ounces in 2017, 13% less than in 2016 but in line with guidance.

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It expects the mines to produce 10.6Moz-11.8Moz of pure silver, or 15.7Moz-17.5Moz AgEq in 2018.

It planned to update guidance and incorporate Primero’s San Dimas operation following the transaction closing by the end of March.

First Majestic had $118.1 million in cash at the end of December and planned to up capex investment by 18% in 2018 to spend $125.4 million – $51 million on sustaining investments and $74.4 million on expansionary projects.

Shares in the company, which were trading around $12 a year ago, closed 2.74% lower at $7.80. 

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U.S. rejects proposals to unblock NAFTA, will seek ‘breakthroughs’

MONTREAL (Reuters) – U.S. President Donald Trump’s trade chief rejected Canadian proposals for unblocking NAFTA modernization talks on Monday but pledged to seek “breakthroughs” by late February, easing concerns that Washington would soon withdraw from the trilateral pact.

Trump, who described the North American Free Trade Agreement as a disaster that has drained manufacturing jobs to Mexico, has frequently threatened to abandon it unless it can be renegotiated to bring back jobs to the United States.

U.S. Trade Representative Robert Lighthizer said after a sixth round of NAFTA negotiations in Montreal that Trump’s views on the pact are unchanged, and cautioned that talks are still moving too slowly on U.S. priorities.

“We finally began to discuss the core issues, so this round was a step forward,” Lighthizer said. “But we are progressing very slowly. We owe it to our citizens, who are operating in a state of uncertainty, to move much faster.”

Lighthizer said he would work “very hard” toward “major breakthroughs” between now and the start of a nine-day stretch of talks in Mexico City scheduled for Feb. 26.

He said he has not considered pausing the talks for Mexico’s presidential election due to launch on April 1, and progress over the next month would determine whether a deal would be “on a fairly short track or on a longer track.”

He added that Trump would ask Congress to renew the administration’s “fast track” trade negotiating authority, which expires at the end of June.

Lighthizer’s Mexican and Canadian counterparts struck a more optimistic tone, saying that substantial progress was made in Montreal, with completion of a NAFTA chapter on anti-corruption.

Mexican Economy Minister Ildefonso Guajardo said enough progress was made for him to predict that chapters on telecoms and digital trade would be completed in Mexico City.

“For the next round, we will still have substantial challenges to overcome. Yet the progress made so far puts us on the right track to create landing zones to conclude the negotiation soon,” Guajardo said.

Officials are now openly speculating that the bid to salvage the $1.2 trillion free-trade pact will continue well beyond an end-March deadline set to avoid Mexican presidential elections.


Heading into Montreal last week, some officials had feared the United States might be prepared to pull the plug on the pact amid frustration over slow progress.

The mood lightened after Canada presented a series of suggested compromises to address U.S. demands for reform on autos and dispute settlement.

But Lighthizer criticized Canadian proposals to meet U.S. demands for higher North American content in autos, saying they would in fact reduce regional autos jobs and allow more Chinese-made parts into vehicles produced in the region.

He also dismissed a suggestion on settling disputes between investors and member states as “unacceptable” and “a poison pill” and said a recent Canadian challenge against U.S. trade practices at the World Trade organization “constitutes a massive attack on all of our trade laws.”

Canadian Foreign Minister Chrystia Freeland, who stood stony faced as Lighthizer made his remarks, later told reporters that “the negotiating process is … always dramatic.”

A Canadian government source, speaking on the condition of anonymity, noted Lighthizer had not speculated about withdrawal and said the U.S. official had been more positive in private than during previous rounds.

Officials said the negotiating teams had closed a chapter on anti-corruption measures and were close to wrapping up sections on telecommunications, sanitary measures for the agriculture industry and technical barriers to trade.

But the three sides are still far apart over U.S. demands to boost regional auto content requirements to 85 percent from the current 62.5 percent and require 50 percent U.S. content in North American-built vehicles.

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Other challenges are Washington’s demands that NAFTA largely eliminate trade and investment dispute-settlement systems and contain a “sunset” clause to force renegotiations every five years.

Critical comments by Trump, Lighthizer and others have unsettled markets that fret about the potential damage to a highly integrated North American economy if the United States gives six months’ notice it is leaving.

The Mexican round next month is an extra set of talks that officials added to help tackle the many remaining challenges. Negotiators are supposed to finish in Washington in March with the eighth and final round.

Although some officials have privately speculated about freezing the talks at the start of April, Guajardo told reporters that “we cannot afford to suspend this process.”

Writing by David Ljunggren; Additional reporting by Allison Lampert and David Ljunggren in Montreal; Editing by Nick Zieminski and Matthew Lewis

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"If you need to hedge your bitcoin position, buy gold"

The WGC released a report last week saying despite the rise of cryptocurrencies, gold held many characteristics that underpinned its role “as a mainstream financial asset that will likely continue to resonate in today’s digital world”. 

In an uncanny case of timing, the report was released a day before one of Japan’s biggest cryptocurrency exchanges confirmed hackers stole about US$500 million worth of virtual assets.

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Harquail told Mining Journal he believed bitcoin was a “risk-on” investment.

“For investors looking to protect their capital, gold is the ultimate ‘risk-off’ holding,” he said.

“It has low to negative correlations to other investment classes. 

“Gold can improve risk-adjusted returns within a broader portfolio.

“In my view, bit-coin is the ultimate ‘risk-on’.

“If you need to hedge your bitcoin position, buy gold.”

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Cora discovers new gold zone

Highlights from the first results of stage one drilling at Target 1 included 11m at 5.24g/t gold from 4m including 1m at 52.8g/t.

Sanankoro was previously owned by Hummingbird Resources (AIM:HUM) and Gold Fields (JSE:GFI), which had spent US$10 million on exploration there.

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CEO Jon Forster said the latest results vindicated the strategy of stepping away from the known areas of mineralisation and provided great encouragement for the potential of at least 15km of identified strike.

“We have numerous clear drill targets that are not yet tested by AC (air-core) or RC (reverse circulation) drilling which may have similar styles of gold mineralisation and, as a consequence, our belief in the 1 million-plus ounce potential of the project is enhanced,” he said.

Cora said mapping suggested Target 1 possibly linked to Zone B, 4km to the south.

Stage two drilling is underway at Zones A, B and C and the above results will be added to the inventory of priority follow-up infill drilling targets.

Cora, which debuted on London’s AIM in October, was up 3.86% to close at 17.5p.

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