Latin America’s Renewable Energy Revolution

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Latin America’s Renewable Energy Revolution

For centuries Latin America’s natural resources have helped move the world economy. From the silver galleons that financed the Spanish Empire to the iron and copper exports that are rebuilding China, Latin America’s natural resources have long been sold around the globe. But now the growth of renewable energy across the region is creating a new economic phenomenon – exploiting those natural resources for domestic growth.

In recent years Latin America has made huge strides in exploiting its incredible wind, solar, geothermal and biofuel energy resources. It is now on the cusp of an energy revolution that will reshape the region and create a host of business opportunities. To investigate the changes taking place Canning House helped to organise the recent Green Finance Summit in London and commissioned a Canning Paper from Latin News.

Oil addiction

At the moment Latin America is still very dependent on another one of its natural resources – oil. According to the BP’s Statistical Review, Latin America accounts for more than 20% of the world’s oil reserves, making it the second-most important oil region in the world, which, is probably why it relies so heavily on the stuff. Oil accounted for 46% of the region’s total primary energy supply (TPES) in 2013, well above the global average of 31%.

When it comes to transport, oil-based fuel is likely to keep its pole position for some time to come. Electric cars and hybrids have been slow to make an impact globally, and in Latin America they are barely present. Brazil has made impressive strides with ethanol alternatives, but oil and its derivatives remain the number one choice. Moreover, Latin America’s outdated transport fleet, which is heavily made up of cast offs from the US or older models produced locally, is going to remain behind the curve on any transition to electric vehicles for at least the medium term.

Powering up

But Latin America’s electricity sector has already begun to wean itself off its oil dependence. According to the Inter-American Bank, Latin America is expected to almost double its electricity output between 2015 and 2040 and will need an extra 1,500 terawatt hours (TWh) of power. That’s a huge amount – enough to power the entire UK’s electricity grid for five years. Practically none of Latin America’s new large-scale power plants will be oil-fuelled, which opens up the field for different technologies.

Countries in Central American and the Caribbean, whom traditionally imported oil, were the first to move away from oil-based power plants, after suffering a decade of high and volatile prices at the start of the century. In some cases, such as the Dominican Republic, that meant a switch to coal, which represents 5% of Latin America and the Caribbean’s TPES. However, growing environmental objections mean that new coal plants are unlikely to be adopted by many Latin American countries in the future.

Trump reportedly wants to hit China with tariffs on $200 billion worth of goods,

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Trump reportedly wants to hit China with tariffs on $200 billion worth of goods, which would be a massive escalation of the trade war

 

President Donald Trump wants to move forward with tariffs on another $200 billion worth of Chinese imports to the US, according to a new report. The move would be a massive escalation of the trade war with China — over 50% of Chinese imports would be subject to tariffs. US stock indexes fell following the news. 

President Donald Trump is ready to take the trade war with China to the next level, according to a new report.

Bloomberg reported Thursday that Trump had told aides that he wants to follow through on a threat to impose tariffs on another $200 billion worth of Chinese goods as early as next week. That would mean more than half of all Chinese imports would be subject to tariffs.

The tariffs could go into effect after the public-comment period ends on September 6.

According to the report, the move is not a done deal and the administration could impose the tariffs in installments to lessen the impact. Economists have warned that substantially ramping up the trade war would increase costs for US businesses and harm American companies.

The list of goods that would get hit with the tariffs is still being finalized, but the initial list showed a pronounced shift in Trump's trade-war strategy. It included many consumer goods, such as fabrics and hats, while previous tariffs have focused mostly on industrial goods like machinery.

When Trump announced the possibility of the tariffs on $200 billion worth of Chinese goods, Beijing responded by threatening tariffs on $60 billion worth of US goods. If those measures go forward, almost all US goods heading to China would be subject to tariffs.

Following the report, US stock indexes slid, with the Dow Jones industrial average off by 143 points, or 0.55%, as of 2:25 p.m. ET.

Here's a timeline of the US-China trade war so far:

March 1: President Donald Trump announces tariffs on all imports of steel and aluminum, including metals from China. March 22: Trump announces plans to impose a 25% tariff on $50 billion worth of Chinese goods. China announces tariffs in retaliation to the steel and aluminum duties and promises a response to the latest US announcement. April 3: The US trade representative announces a list of Chinese goods subject to the tariffs. There is a mandatory 60-day comment period for industries to ask for exemptions from the tariffs. April 4: China rolls out a list of more than 100 US goods worth roughly $50 billion that are subject to retaliatory tariffs. May 21: After a meeting, the two countries announce the outline of a trade deal to avoid the tariffs. May 29: The White House announces that the tariffs on $50 billion of Chinese goods will move forward, with the final list of goods released June 15. The move appears to wreck the nascent trade deal. June 15: Trump rolls out the final list of goods subject to new tariffs. Chinese imports worth $34 billion would be subject to the new 25% tariff as of July 6, with another $16 billion worth of imports subject to the tariff at a later date. China retaliates with an equivalent set of tariffs. June 18: Trump threatens a 10% tariff on another $200 billion worth of Chinese goods. July 6: The first tranche of tariffs on $34 billion worth of Chinese goods takes effect; China responds in kind. July 10: The US releases an initial list of an additional $200 billion worth of Chinese goods that could be subject to a 10% tariff. August 1: Washington more than doubles the value of its tariff threats against Beijing, announcing plans to increase the size of proposed duties on $200 billion worth of Chinese goods to 25% from 10%. August 3: China says it will impose tariffs of various rates on another $60 billion worth of US goods if Trump moves forward with his latest threat. August 7: The US announces that the second tranche of tariffs, which will hit $16 billion worth of Chinese goods, will go into effect on August 23. August 23: The US imposes tariffs on another $16 billion worth of Chinese goods, and Beijing responds with tariffs on $16 billion worth of US goods.

US tech firm leaves Ireland for US after Trump tax cuts

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Internet domain registry business Afilias has moved its headquarters out of Dublin to the US, citing recent US tax changes as a reason for the move.

It's a sign that Donald Trump's efforts to attract business home are having an impact.

"We've long had a strong US presence," said CEO Hal Lubsen. "More of the company's shares are now owned by Americans, and our executive group is increasingly becoming American.

"However," he added, "nothing really changes for our customers and our vendors. Afilias continues to be a global registry services provider; our operations will not be affected.

"As Afilias's US market heats up, the company anticipates increased hiring and investment in the US. Otherwise, no new paperwork or other changes will be requested of customers; all our offices worldwide will continue to operate as they have in the past; and pre-existing staff arrangements will not change," the company said.

Afilias has had its headquarters here since 2001, saying it had set up in Dublin originally because it thought the ".info" domain would prove popular here.

It also said the "make-up of its initial ownership and leadership groups" and "other financial considerations" had played a part in the decision.

Today its two largest customers are based in the US and this, alongside the tax changes, was a factor in the relocation.

The IDA declined to comment on the move, saying it does not comment on individual companies.

But IDA boss Martin Shanahan said earlier this year that Mr Trump's tax changes were causing businesses to rethink plans to invest in Ireland.

"We have seen a slowing of decision-making coming out of the US and our read of that is that US companies are taking stock," he said as the IDA announced its full-year results for 2017 in June.

"They are looking at the new tax rules which they're now subject to in the US and they are, as one company put it to me, running the numbers again to see what that now throws out in the context of the new tax regime."

At the end of last year Mr Trump enacted a sweeping reform of the US tax system, slashing the country's corporate tax rate. He also made changes to the way some foreign earnings are taxed as part of a drive to bring US business back to American soil.

Mr Shanahan said that as of that time the number of companies looking at Ireland has not yet been affected, and his ambition was that if companies look to set up outside the US to find new markets, Ireland will be the place they choose.

Afilias saw revenue increase from $92.7m in 2015 to $106.7m in 2016, according to its most recently filed Companies Registration Office accounts.

Profit before income tax went from $36.8m to $38.6m.

Vodafone in €9bn Australian merger

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Vodafone has agreed a mammoth AU$15bn (€9.4bn) deal to merge its Australian operations with TPG Telecom.

The mobile phone giant said the tie-up of Vodafone Hutchison Australia and TPG Telecom will create a "more powerful challenger to Telstra and Optus in Australia".

Vodafone Australia, owned by Hong Kong-based CK Hutchison and Vodafone Group, will have a majority 50.1pc stake in the merged group. TPG will hold the remaining 49.9pc stake in the group, which will be called TPG Telecom and listed on the Australian Securities Exchange.

There are no plans to rename the existing VHA or TPG brands.

The firms said the merger is expected to generate "substantial" cost savings as they plan to cut out duplicated costs and use their economies of scale. The new group will have combined revenues of more than AU$6bn (€3.7bn) and underlying earnings of more than AU$1.8bn (€1.1bn).

Nick Read, chief executive designate of Vodafone, said: "This transaction accelerates Vodafone's converged communications strategy in Australia and is consistent with our proactive approach to enhance the value of our portfolio of businesses.

"The combined listed company will be a more capable challenger to Telstra and Optus, and will be much better placed to invest in next-generation mobile and fixed-line services to benefit Australian consumers and businesses."

It is expected the merger will complete in 2019, subject to regulatory and shareholder approval.

Shares were trading 2pc lower after the announcement. (PA)

Sensex, Nifty Open Higher Despite Weak Global Cues

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Indian shares opened modestly higher on Friday, shrugging off weak global cues after a report from Bloomberg said U.S. President Donald Trump intends to move ahead with plans to impose tariffs on $200 billion in Chinese imports as early as next week.

Trump also threatened to pull out from the World Trade Organization and called European trade policies "almost as bad as China," raising fresh worries over trade friction.

Investors kept an eye on oil and rupee movements as well as GDP data for the April-June quarter due later today for directional cues.

The benchmark BSE Sensex was down 139 points or 0.36 percent at 38,829 in early trade while the broader Nifty index was up 41 points or 0.35 percent at 11,717.

The rupee fell further by 26 paise to breach the 71 mark against the dollar for the first time ever in history.

JSW Steel rose 0.3 percent after ICRA upgraded its long-term ranking.

Idea Cellular rallied 3 percent after the National Company Law Tribunal approved its merger with Vodafone India.

Yes Bank tumbled 4 percent. The RBI has approved re-appointment of Rana Kapoor as the bank CEO till further notice.

Fortis Healthcare edged up slightly after its CFO Gagandeep Singh Bedi resigned due to personal reasons.

ICICI Bank gained half a percent after the bank reappointed Chanda Kochhar on the board of ICICI Securities.

Muthoot Finance was slightly higher on fund raising reports.

Dilip Buildcon rose over 1 percent after a new order win.

JSW Energy advanced 1.8 percent after it revised offer for Prayagraj Power to over Rs 6,000 crore.

European shares slip on China weakness

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European shares fell back yesterday as weakness in Chinese markets and worries over a trade dispute between the United States and China eclipsed optimism that a Nafta deal could be struck by today's deadline.

The pan-European STOXX 600 ended the session down 0.3pc, while Germany's DAX, which is sensitive to China due to its prominence as a German export market, dropped 0.5pc.

Chinese stocks fell after a Reuters poll showed activity in the factory sector was likely to have slowed for the third straight month in August amid uncertainty over an escalating trade war with the United States.

In Europe, trade-sensitive mining stocks tumbled 0.8pc.

"It's a balancing act with, on the one hand, relatively positive momentum behind Nafta, but when the focus turns to China and trade war it doesn't seem like an end is in sight because any escalation plays to Trump's rhetoric of how he's protecting US prosperity and jobs," said Gary Waite, portfolio manager at Walker Crips Investment Management.

Though cars were also off earlier in the session, a concessionary tone from European Trade commissioner Cecilia Malmstrom on car tariffs helped lift the sector, which closed flat.

Earnings reports caused some sharp moves in individual stocks.

Shares in Europe's largest property company Unibail-Rodamco-Westfield fell 4.3pc even though the company reported a boost to profits from its acquisition of an Australian shopping centre giant.

UK commercial property firm Intu fell 3.4pc after Morgan Stanley cut the stock to underweight from equal-weight, and peer Hammerson fell 5pc. Klepierre lost 3.3pc after a Morgan Stanley downgrade.

Australia Private Sector Credit Rises More Than Expected

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Australia's private sector credit increased more than expected in July, data from the Reserve Bank of Australia showed Friday.

Private sector credit climbed a seasonally adjusted 0.4 percent month-over-month in July, following a 0.3 percent rise in June. Economists had expected the same 0.3 percent increase for the month.

On an annual basis, credit advanced 4.4 percent in July.

Individually, housing credit added 0.4 percent over the month and 5.5 percent annually in July.

At the same time, personal credit dropped 0.1 percent monthly and slid 1.4 percent from last year.

Warren Buffett Buys More Apple Stock

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Billionaire investor Warren Buffett on Thursday said he had bought "just a little" more of Apple Inc. (AAPL) in an interview with CNBC.

Buffett's Berkshire Hathaway Inc. (BRK-B, BRK-A, BRKa) revealed in a regulatory filing earlier this month that it had bought 12.4 million shares of Apple in the second quarter to a total of nearly 252 million shares as of June 30.

The Oracle of Omaha is adding to his already large stake in Apple Inc.

The Berkshire Hathaway Inc. chairman and chief executive officer said his firm has also bought back some of its own stock recently.