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Asian equities retreat after world stocks hit new record


China’s CATL looks to raise $9 bln to expand lithium-ion battery production

Chinese battery giant CATL (300750.SZ) said it was planning a private share placement to raise up to 58.2 billion yuan ($8.98 billion) to fund six projects aimed at boosting its production capacity of lithium-ion batteries.

The massive fundraising comes as the Ningdo-based firm – formally Contemporary Amperex Technology Co Ltd – expands battery manufacturing capacity around China and in Germany.

It will also be used to boost capital, CATL said in a statement late on Thursday.

As global auto industry accelerates transformation towards electrification, CATL is supplying electric vehicle batteries to a swathe of automakers including Tesla Inc (TSLA.O), Volkswagen AG (VOWG_p.DE) and Geely (GEELY.UL). It is competing with Japan’s Panasonic (6752.T) and South Korean LG Chem (051910.KS).

Full coverage: REUTERS 

Kansas City Southern may delay Canadian National deal vote

Kansas City Southern (KSU.N) said on Thursday it has turned down a $27 billion bid from Canadian Pacific Railway (CP.TO) and will delay a shareholder vote on a $29 billion deal to sell itself to Canadian National Railway Co (CNR.TO) if the rail regulator does not rule on the deal in the next five days.

Kansas City Southern shareholders are due to vote on the deal with Canadian National in seven days, on Aug. 19, but the Surface Transportation Board (STB) has yet to rule on the proposed “voting trust” structure of the transaction.

A voting trust insulates the acquisition target from the acquirer’s control until the STB clears the deal on a permanent basis.

The STB said earlier this week it would deliver its decision on the Canadian National deal by Aug. 31. Kansas City Southern said on Thursday that if the STB has not delivered its decision by Aug. 17, it would delay the vote so shareholders can review it. The new date for the vote will be determined later, it said.

The acquisition of Kansas City Southern by either of its Canadian peers would create the first direct railway linking Canada, the United States and Mexico.

Canadian National has said it will divest Kansas City Southern’s 70-mile (115 km) rail line between New Orleans and Baton Rouge to eliminate overlap between the two railroad operators. It has agreed to pay a $1 billion fee to Kansas City Southern should regulators shoot down their deal.

Canadian Pacific argues that Canadian National and Kansas City Southern compete for the business of shippers and terminals in the same region, which would lose out should the merger go through. It also points out that the STB has greenlighted its voting trust structure for a deal with Kansas City Southern.

Full Coverage: REUTERS 


Asian equities retreat after world stocks hit new record

Most Asian equity markets continued to ignore record highs hit elsewhere in the world and fell in early trading on Friday, though Australia bucked the trend.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.59%, having closed lower on each of the past three days.

Traders have been pointing to continued worries about the potential for new regulatory crackdowns in China and the fallout from the surging Delta variant of the new coronavirus in several countries in the region.

Japan’s Nikkei (.N225) dropped 0.6%.

Korea’s Kopsi (.KS11) dropped 1.45% with Samsung Electronics (005930.KS) falling to a seven-month low on concerns that memory chip prices may start to slip around the fourth quarter. L1N2PK02H

Hong Kong (.HSI) fell 0.45%, and Chinese blue chips (.CSI300) fell 0.21%.

“Rising regulatory and geopolitical risks are weighing on medium-term growth prospects (in China), especially in segments targeted by national reform or security effort,” said private bank UBP in an investment outlook.

Australia’s ASX200 (.AXJO) rose 0.53% to a new record high, lifted by healthcare and technology companies.

“For the most part (Australia) was not directly impacted by the crackdown by Chinese authorities on the tech sector,” said Kyle Rodda, an analyst at IG markets.

Large-scale regulatory changes in China’s manufacturing sector would have been a greater worry for Australian markets, he added.

Full coverage: REUTERS 

Oil falls a second day after IEA warns of slowdown in demand

Oil prices fell for a second day on Friday after the IEA warned that demand growth for crude and its products had slowed sharply as surging cases of COVID-19 worldwide has forced governments to revive restrictions on movement.

Brent crude was down 31 cents, or 0.4%, at $71.00 a barrel by 0046 GMT, after dropping 13 cents in the previous session. U.S. crude was off by 33 cents, or 0.5%, at $68.76 a barrel, having fallen 0.2% on Thursday. The benchmarks are still heading for a slight gain this week.

“We now see the global demand recovery stalling this month with oil demand only reaching 98.3 million barrels per day [mbd] in August and averaging 97.9 mbd in September, on par with the nearly 98 mbd average in July,” JPM Commodities Research said.

Full coverage: REUTERS 

Dollar holds firm near 4-month high on Fed tapering bets

The dollar held firm on Friday, staying near its highest level in four months against a basket of currencies as investors looked for more hints from the Federal Reserve on its plans to reduce monetary stimulus.

The U.S. currency was underpinned by data, released on Thursday, showing U.S. producer prices posted their largest annual increase in more than a decade in the 12 months through July. 

Although consumer price data published a day earlier has indicated that inflation may be peaking, the wholesale price data underscored the strength of inflationary pressure, helping the case for removing some of the Fed’s stimulus.

The dollar index firmed to 92.991 , not far from Wednesday’s four-month high of 93.195.

The euro eased slightly to $1.1732 , on course for a second straight week of losses and staying not far from the four-month low of $1.1706 hit on Wednesday.

The dollar changed hands at 110.42 yen , a tad below a one-month high of 110.80 set on Wednesday.

Full coverage: REUTERS 

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