LONDON, March 15 (Reuters) – Oil extended losses on Wednesday as unease over Credit Suisse spooked world markets, offsetting hopes of a Chinese oil demand recovery.
Early signs of a return to calm and stability faded after Credit Suisse’s largest investor said it could not provide the Swiss bank with more financial assistance, sending its shares and broader European stocks sliding.
“The financial sector in Europe is under significant turmoil today,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.
Brent crude fell $1.44, or 1.9%, to $76.01 a barrel by 1100 GMT. U.S. West Texas Intermediate crude futures (WTI) were down 33 cents, or 0.5%, at $71.00.
Oil had rallied earlier on figures showing that China’s economic activity picked up in the first two months of 2023 after the end of strict COVID-19 containment measures.
On Tuesday both benchmarks shed more than 4% to three-month lows, pressured by fears that the collapse of Silicon Valley Bank (SVB) last week and other U.S. bank failures could spark a financial crisis that would weigh on fuel demand.
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Wednedsay’s monthly report from the International Energy Agency provided support by flagging an expected boost to oil demand from China a day after OPEC increased its Chinese demand forecast for 2023.
Investors are now awaiting official U.S. oil inventory data later on Wednesday to see if it confirms the 1.2 million barrel rise in crude stocks reported on Tuesday by the American Petroleum Institute.
(This story has been refiled to correct typographical error in headline)
Reporting by Alex Lawler
Additional reporting by Florence Tan in Singapore and Yuka Obayashi in Tokyo
Editing by Jason Neely and David Goodman
LAKE SILS, Switzerland, March 14 (Reuters) – David Vencl emerged from the depths of Switzerland’s Lake Sils on Tuesday after a record dive beneath the ice to a depth of more than 50 meters without a wetsuit.
The 40-year-old Czech diver’s record vertical plunge to 52.1 meters in a single breath follows his entry into the Guinness World Records book for swimming the length of a frozen Czech lake in 2021.
Vencl dived through a hole in the ice then retrieved a sticker from a depth of 50 meters to prove his feat before re-emerging through the same hole. He spat some blood, sat down for a minute and then opened a bottle of champagne. A later visit to the hospital confirmed there was nothing serious.
[1/3] Czech freediver David Vencl dives to 52 metres under the ice of Lake Sils in one breath and wearing only a swimsuit in this picture taken from a video in Sils near St. Moritz, Switzerland March 14, 2023. David Vencl Organisation/Handout via REUTERS
The Swiss plunge in temperatures of between 1 and 4 degrees Celsius took him 1 minute 54 seconds, his promoter Pavel Kalous said, which was a bit slower than expected.
“He kind of enjoyed it but he admits he was a little more nervous than usual and he had some problems with breathing,” he told Reuters.
“There is nothing difficult for him to be in cold water… Lack of oxygen is something normal for him. But this was completely different because it’s really difficult to work with the pressure in your ears in cold water,” he added.
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“If you combine all these three things: cold water, lack of oxygen and the problem with working with pressure, it’s something very unique,” he added.
Reporting by Denis Balibouse in Lake Sils, Switzerland
Writing by Emma Farge
Editing by Matthew Lewis
DABOYA, Ghana, March 15 (Reuters) – U.S. commanders leading annual counter-terrorism exercises in West Africa have urged coastal countries to depend on each other to contain a spreading Islamist insurgency, rather than non-Western powers, after Mali last year hired Russian mercenaries.
Relations between Russia and the U.S. have become more hostile since Moscow invaded Ukraine over a year ago, and Washington and its allies oppose Russian influence in West Africa.
During drills this month in northern Ghana, trainers urged troops to share phone numbers with foreign counterparts operating over poorly marked borders, often just a few miles apart. Elsewhere, soldiers have also learned to use motorbikes, as the insurgents do, for their speed and manoeuvrability.
Overrun by Islamist groups, and amid a row with former colonial power France, Mali’s military government last year hired private Russian military contractor Wagner Group, whose fighters are playing key roles in Ukraine, to combat the militants. This has worried Western governments and the United Nations who say the move has led to a spike in violence.
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Mali, whose government took power in a 2021 military coup, has previously said Russian forces are not mercenaries but trainers helping local troops with equipment from Russia.
“You have governments with so many problems that they begin reaching out to other malign actors who are perhaps more exploitive of the resources in those countries,” Colonel Robert Zyla from U.S. Special Operations Command Africa (SOCAF) told Reuters at exercises in Ghana.
“Contrast that with what we’re trying to bring, which are partnerships between neighbours and other democratic nations.”
In this month’s exercises, soldiers patrolled barren scrubland dotted with thin bushes. At the centre of the strategy is engaging border communities and making sure armies work together in a region where frontiers span hundreds of miles of sparsely populated desert.
“No one country can solve this by themselves,” Zyla said. “Going forward it will be about teaching countries in the region how to reach across borders and talk.”
[1/5] Ghanaian military personnel train shooting during the annual counter-terrorism program called “Operation Flintlock”, in Daboya, Ghana March 2, 2023. REUTERS/Francis Kokoroko
FAILURE TO STOP INSURGENCY
For a decade, offensive efforts have failed to stop an Islamist insurgency that has killed thousands and displaced millions. Security experts say it could get worse after thousands of French troops were forced out of Mali and Burkina Faso by military juntas this year.
The main challenge is a lack of resources and large-scale international commitment to defence in one of the poorest parts of the world, experts said.
Ghana has bolstered troops in its northern regions. But it has no reconnaissance drones to monitor border areas, said Colonel Richard Kainyi Mensah, chief operations officer for Ghana’s special operations brigade.
“Logistics and equipment are key,” he said. “Resources are limited.”
It is not clear what more resources the U.S. and Europe are willing to give. The U.S. has been reluctant to engage after four soldiers were killed in Niger in 2017. The UK, Germany and other nations are pulling troops from a United Nations peacekeeping mission in Mali as security worsens.
Earlier this month, General Michael Langley, the commander of U.S. Africa Command, told journalists that “stabilization and security” were its focus in Africa, without providing details.
Some believe that not enough is being done.
“There’s a lot of hesitancy to deploy more than we need to,” said Aneliese Bernard, director of Strategic Stabilization Advisors, a U.S.-based risk advisory group. “The irony is that means we’re basically putting a Band-Aid on a severed limb.”
Timing is crucial, security experts and military officials said. Islamist violence that began in 2012 in Mali has spread. Armed groups have a foothold in coastal countries including Benin and Togo and threaten economic leaders Ivory Coast and Ghana.
Reporting by Cooper Inveen in Daboya and Edward McAllister in Dakar; Writing by Edward McAllister; Editing by Cynthia Osterman
MOSCOW, March 14 (Reuters) – President Vladimir Putin said on Tuesday that what was at stake in Ukraine was Russia’s very existence as a state.
Speaking at length to workers at an aviation factory in Buryatia, some 4,400 km (2,750 miles) east of Moscow, Putin expanded on his familiar argument that the West was bent on pulling Russia apart.
“So for us this is not a geopolitical task, but a task of the survival of Russian statehood, creating conditions for the future development of the country and our children,” he said.
Putin has accused the West of using Ukraine as an tool to wage war against Russia and inflict on it a “strategic defeat”. The United States and its allies say they are helping Ukraine to defend itself from an imperial-style invasion that has destroyed Ukrainian cities, killed thousands of civilians and forced millions to flee their homes.
Putin said in a response to a question that he had been worried about the economy when the West imposed unprecedented waves of sanctions last year but it had proved stronger than expected.
“We have increased our economic sovereignty many times over. After all, what did our enemy count on? That we would collapse in 2-3 weeks or in a month,” he said.
He said the enemy had been expecting that factories would grind to a halt, the financial system would collapse, unemployment would rise, protesters would take to the streets, and Russia would “sway from within and collapse”.
“This did not happen,” Putin said. “It turned out, for many of us, and even more so for Western countries, that the fundamental foundations of Russia’s stability are much stronger than anyone thought.”
Reporting by Reuters; editing by Guy Faulconbridge
VIENNA, March 4 (Reuters) – Iran has given sweeping assurances to the U.N. nuclear watchdog that it will finally assist a long-stalled investigation into uranium particles found at undeclared sites and even re-install removed monitoring equipment, the watchdog said on Saturday.
The International Atomic Energy Agency and Iran issued a joint statement on IAEA chief Rafael Grossi’s return from a trip to Tehran just two days before a quarterly meeting of the agency’s 35-nation Board of Governors.
The statement went into little detail but the possibility of a marked improvement in relations between the two is likely to stave off a Western push for another resolution ordering Iran to cooperate, diplomats said. Iran has, however, made similar promises before that have yielded little or nothing.
“Iran expressed its readiness to … provide further information and access to address the outstanding safeguards issues,” the joint statement said. A confidential IAEA report to member states seen by Reuters said Grossi “looks forward to … prompt and full implementation of the Joint Statement”.
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Iran is supposed to provide access to information, locations and people, Grossi told a news conference at Vienna airport soon after landing, suggesting a vast improvement after years of Iranian stonewalling.
[1/2] Iranian President Ebrahim Raisi meets with International Atomic Energy Agency (IAEA) Director General Rafael Grossi in Tehran, Iran, March 4, 2023. Iran’s President Website/WANA (West Asia News Agency)/Handout via REUTERS.
Iran would also allow the re-installation of extra monitoring equipment that had been put in place under the 2015 nuclear deal, but then removed last year as the deal unravelled in the wake of the U.S. withdrawal from the deal in 2018 under then-President Donald Trump.
Iran’s Atomic Energy Organization spokesperson Behrouz Kamalvandi, however, said Tehran had not agreed to give access to people.
“During the two days that Mr. Grossi was in Iran, the issue of access to individuals was never raised,” Kamalvandi told state news agency IRNA, adding there also has been no deal regarding putting new cameras in Iran’s nuclear facilities.
Follow-up talks in Iran between IAEA and Iranian officials aimed at hammering out the details would happen “very, very soon”, Grossi said.
Asked if all that monitoring equipment would be re-installed, Grossi replied “Yes”. When asked where it would be re-installed, however, he said only that it would be at a number of locations.
Reporting by Francois Murphy; Editing by Louise Heavens and David Holmes
KYIV, March 4 (Reuters) – Ukrainian forces defending Bakhmut are facing increasingly strong pressure from Russian forces, British military intelligence said on Saturday, with intense fighting taking place in and around the eastern city.
Ukraine is reinforcing the area with elite units, while regular Russian army and forces of the private military Wagner group have made further advances into Bakhmut’s northern suburbs, the British Defence Ministry said in its daily intelligence bulletin.
The Ukraine armed forces’ general staff said in a Facebook post late on Saturday that Russian troops were trying but failing to surround Bakhmut, adding defenders had repelled numerous attacks in and around the city.
The battle has raged for seven months. A Russian victory in the city, which had a pre-war population of about 70,000 and has been blasted to ruins in the onslaught, would give Moscow the first major prize in a costly winter offensive.
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Oleh Zhdanov, a prominent Ukrainian analyst of military affairs, said late on Saturday that he could not detect any immediate signs Kyiv was going to order a retreat from the city.
A Ukrainian serviceman fires an automatic grenade launcher, as Russia’s attack on Ukraine continues, in the front line city of Bakhmut, in Donetsk region, Ukraine March 3, 2023. REUTERS/Oleksandr Ratushniak
“At the moment the situation is more or less stabilized. In terms of the advancement of Russian troops, we practically stopped (it),” he said in a YouTube interview.
The British defence ministry said two key bridges in Bakhmut have been destroyed within the last 36 hours, adding that Ukrainian-held resupply routes out of the city are increasingly limited.
One of those bridges connected Bakhmut to the city’s last main supply route from the Ukrainian-held town of Chasiv Yar, about 13 km (eight miles) to the west, it said.
Russian artillery pounded the last routes out of Bakhmut on Friday, aiming to complete the encirclement of the besieged city and bring Moscow closer to its first major victory in the war in six months.
The Ukrainian general staff also said Russian attacks had been foiled in the villages of Vasyukivka, Orikhovo-Vasylivka, Dubovo-Vasylivka and Hryhorivka, all of which lie just to the north of Bakhmut’s city centre.
Russia says Bakhmut would be a stepping stone to completing the capture of the Donbas industrial region, one of Moscow’s most important objectives.
Ukraine’s President Volodymyr Zelenskiy, who has described Bakhmut as a “fortress”, on Saturday thanked defenders in the city in a video message but gave no details of the fighting.
Reporting by Max Hunder in Kyiv, David Ljunggren in Ottawa and Jose Joseph in Bengaluru; Editing by Frances Kerry and Daniel Wallis
Efforts to nudge China to nuclear talks now harder -analysts
China warhead stocks rise but still far below U.S., Russia
Long term ‘no first use’ policy in question amid build-up
HONG KONG, Feb 22 (Reuters) – Russia’s suspension of its last remaining nuclear weapons treaty with the United States may have dashed any hopes of dragging China to the table to start talking about its own rapidly accelerating nuclear arms programmes.
Regional diplomats and security analysts had held out the prospect of China somehow being convinced to join U.S.-Russian talks on extending the New START arms control treaty ahead of its expiry in 2026 as a way of alleviating growing fears over Beijing’s rapid military modernisation.
China’s nuclear arsenal sits at the core of those concerns as it grows in size and sophistication – an expansion that the United States recently noted is now gathering pace.
The Pentagon’s annual China report released last November noted that Beijing appeared to accelerate its expansion in 2021 and now has more than 400 operational nuclear warheads – a figure still far below U.S. and Russian arsenals both deployed and in reserve.
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By 2035 – when the ruling Communist Party’s leadership wants its military to be fully modernised – China will likely possess a 1,500 nuclear warhead stockpile and an advanced array of missiles, the Pentagon says.
“Compared to traditional Russian-U.S. exchanges, China is a black box – but one getting bigger every year,” an Asian security diplomat said on Wednesday.
“Putin’s suspension may have set us further back in terms of getting China to step up to the transparency table. There is so much we need to know about its policies and intentions.”
In a speech ahead of the first anniversary on Friday of Russia’s invasion of Ukraine, President Vladimir Putin announced Moscow was suspending a treaty signed in 2010 that caps at 1,550 the number of strategic nuclear warheads the United States and Russia can each deploy while providing for mutual inspections.
Analysts said the move could imperil the delicate calculus that underpins mutual deterrence between the two countries, long the largest nuclear powers by far, and spark an arms race among other nuclear states.
Tong Zhao, a U.S.-based nuclear expert at the Carnegie Endowment for International Peace, said he believed Putin’s move limits the prospects of U.S.-China nuclear cooperation.
“This is only going to make China even less interested in pursuing cooperative nuclear security with the United States,” Zhao told Reuters. “Now even this last example of arms control cooperation is being seriously undermined.”
NO FIRST USE
A nuclear power since the early 1960s, China for decades maintained a small number of nuclear warheads and missiles as a deterrent under its unique “no first use” pledge.
That pledge remains official policy but the arsenal that surrounds it has grown rapidly in recent years as part of Beijing’s broader military modernization under President Xi Jinping.
The People’s Liberation Army now has the ability to launch long-range nuclear-armed missiles from submarines, aircraft and an expanding range of silos in China’s interior – a “nuclear triad” that some experts fear could be used, for example, to coerce rivals in a conflict over Taiwan.
The Pentagon also warns of possible conditions over “no first use” as the build-up continues – questions that echo many raised by regional military attaches and security scholars.
“Beijing probably would also consider nuclear use to restore deterrence if a conventional military defeat gravely threatened PRC survival,” the Pentagon report notes, using the initials for China’s official name.
A month earlier, Washington’s Nuclear Posture Review said Beijing is reluctant to engage in strategic nuclear discussions but that both bilateral and multilateral talks are needed.
“The scope and pace of the PRC’s nuclear expansion, as well as its lack of transparency and growing military assertiveness, raise questions regarding its intentions, nuclear strategy and doctrine, and perceptions of strategic stability,” it said.
Some experts believe Beijing has long been wary of being bound by any three-way talks with Russia and the United States given how far it remains behind U.S. capabilities, at least for another decade or more.
FAILURE TO COMMUNICATE
Academics familiar with once-regular unofficial and semi-official exchanges – so-called Track 2 and Track 1.5 discussions – with Chinese counterparts over nuclear policy say they have dried up over the last five years amid wider political tensions.
Singapore-based strategic adviser Alexander Neill said he believed China might increasingly support Russia’s position rhetorically, while feeling emboldened to further accelerate its own build-up.
That would make it harder for the United States and its allies to engage Beijing on its nuclear doctrine, particularly on “no first use”.
“China has been consistent in supporting arms control between the U.S. and Russia and has long wanted to maintain the image of being a responsible stakeholder – but there are growing questions about the future,” said Neill, an adjunct fellow with Hawaii’s Pacific Forum think-tank.
“The aim of the U.S. and its allies is to get crystal clarity over its ‘no first use’ policy because there’s the Taiwan question,” he said, referring to the democratically governed island that Beijing sees as its own territory.
Carnegie’s Zhao said Putin’s announcement might increase the risk of inciting other nuclear powers to expand their nuclear arsenals and break long-held commitments not to stage fresh tests.
“If that happens, it is a very negative development in terms of international … nuclear order.”
Reporting By Greg Torode in Hong Kong and Martin Quin Pollard in Beijing; editing by Nick Macfie and Mark Heinrich
BENGALURU, Feb 22 (Reuters) – India does not want the G20 to discuss additional sanctions on Russia for its invasion of Ukraine during New Delhi’s one-year presidency of the bloc, six senior Indian officials said on Wednesday, amid debate over how even to describe the conflict.
On the sidelines of a G20 gathering in India, financial leaders of the Group of Seven (G7) nations will meet on Feb. 23, the eve of the first anniversary of the invasion, to discuss measures against Russia, Japan’s finance minister said on Tuesday.
The officials, who are directly involved in this week’s G20 meeting of finance ministers and central bank chiefs, said the economic impact of the conflict would be discussed but India did not want to consider additional actions against Russia.
“India is not keen to discuss or back any additional sanctions on Russia during the G20,” said one of the officials. “The existing sanctions on Russia have had a negative impact on the world.”
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Another official said sanctions were not a G20 issue. “G20 is an economic forum for discussing growth issues.”
Spokespeople for the Indian government and the finance and foreign ministries did not immediately respond to requests for comment.
On Wednesday, the first day of meetings to draft the G20 communique, officials struggled to find an acceptable word to describe the Russia-Ukraine conflict, delegates of at least seven countries present in the meetings said.
India tried to form a consensus on the words by calling it a “crisis” or a “challenge” instead of a “war”, the officials said, but the discussions concluded without a decision.
These discussions have been rolled over to Thursday when U.S. Treasury Secretary Janet Yellen will be part of the meetings.
Indian Foreign Minister S. Jaishankar has previously said the war has disproportionately hit poorer countries by raising prices of fuel and food.
India’s neighbours – Sri Lanka, Pakistan and Bangladesh – have all sought loans from the International Monetary Fund in recent months to tide over economic troubles brought about by the pandemic and the war.
U.S. Deputy Treasury Secretary Wally Adeyemo said on Tuesday that Washington and its allies planned in coming days to impose new sanctions and export controls that would target Russia’s purchase of dual-use goods like refrigerators and microwaves to secure semiconductors needed for its military.
The sanctions would also seek to do more to stem the trans-shipment of oil and other restricted goods through bordering countries.
In addition, Adeyemo said officials from a coalition of more than 30 countries would warn companies, financial institutions and individuals still doing business with Russia that they faced sanctions.
Indian Prime Minister Narendra Modi’s government has not openly criticised Moscow for the invasion and instead called for dialogue and diplomacy to end the war. India has also sharply raised purchases of oil from Russia, its biggest supplier of defence hardware.
Jaishankar told Reuters partner ANI this week that India’s relationship with Russia had been “extraordinarily steady and it has been steady through all the turbulence in global politics”.
Additional reporting by Krishn Kaushik; Writing by Krishna N. Das; Editing by Raju Gopalakrishnan and Nick Macfie
CHISINAU, Feb 22 (Reuters) – President Vladimir Putin revoked on Tuesday a 2012 decree that in part underpinned Moldova’s sovereignty in resolving the future of the Transdniestria region – a Moscow-backed separatist region which borders Ukraine and where Russia keeps troops.
The decree, which included a Moldova component, outlined Russia’s foreign policy 11 years ago which assumed Moscow’s closer relations with the European Union and the United States.
The order revoking the 2012 document was published on the Kremlin’s website and states that the decision was taken to “ensure the national interests of Russia in connection with the profound changes taking place in international relations”.
It is part of a series of anti-Western moves announced by Putin on Tuesday.
Alexandru Flenchea, Moldovan chairman of the joint control commission in the security zone around Transdniestria, said the cancellation did not mean that Putin was abandoning the notion of Moldovan sovereignty.
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“The decree is a policy document that implements the concept of Russia’s foreign policy,” Flenchea told Publika-TV. “Moldova and Russia have a basic political agreement that provides for mutual respect for the territorial integrity of our countries.”
The Kremlin has said that Russia’s relations with Moldova, which last week approved a new pro-Western prime minister that vowed to pursue a drive to join the EU, were very tense. It accused Moldova of pursuing an anti-Russian agenda.
Wedged between Romania and Ukraine, Moldova, one of Europe’s poorest nations, has been led since 2020 by President Maia Sandu with strong U.S. and European Union backing. U.S. President Joe Biden met her in Poland on Tuesday affirming his support.
The 2012 decree committed Russia to seeking ways to resolve the separatist issue “based on respect for the sovereignty, territorial integrity and neutral status of the Republic of Moldova in determining the special status of Transdniestria”.
The Russian-speakers of Transdniestria seceded from Moldova in 1990, one year before the dissolution of the Soviet Union, amid fears that Moldova would merge with Romania, whose language and culture it broadly shares.
A brief war pitted newly independent Moldova against the separatists in 1992. But there has been virtually no violence in the past 30 years, with Russian “peacekeepers” still posted in the tiny sliver of land, which has no international recognition.
Moldova’s foreign ministry said it would “carefully study” the document.
Reporting by Alexander Tanas, Lidia Kelly and Ron Popeski; Writing by Lidia Kelly in Melbourne; Editing by Michael Perry
UNITED NATIONS, Feb 22 (Reuters) – Marking one year of war, Ukraine and Russia lobbied countries at the United Nations on Wednesday for backing ahead of a vote by the 193-member General Assembly that the United States declared will “go down in history.”
“We will see where the nations of the world stand on the matter of peace in Ukraine,” U.S. Ambassador to the United Nations Linda Thomas-Greenfield told the General Assembly.
The General Assembly appeared set to adopt a resolution on Thursday, put forward by Ukraine and supporters, stressing “the need to reach, as soon as possible, a comprehensive, just and lasting peace” in line with the founding U.N. Charter.
U.N. Secretary-General Antonio Guterres denounced Russia’s invasion and said the Charter was “unambiguous,” citing from it: “All members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state.”
Ukraine and its supporters hope to deepen Russia’s diplomatic isolation by seeking yes votes from nearly three-quarters of the General Assembly to match – if not better – the support received for several resolutions last year.
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They argue the war is a simple case of one unprovoked country illegally invading another, while Russia portrays itself as battling a “proxy war” with West, which has been arming Ukraine and imposing sanctions on Moscow since the invasion.
“The West has … brazenly ignored our concerns and continue bringing the military infrastructure of NATO closer and closer to our borders,” Russia’s U.N. Ambassador Vassily Nebenzia told the General Assembly.
[1/6] United Nations Secretary General Antonio Guterres speaks during a high-level meeting of the United Nations General Assembly to mark one year since Russia invaded Ukraine and to consider the adoption of a resolution on Ukraine at U.N. headquarters in New York City, New York, U.S., February 22, 2023. REUTERS/Eduardo Munoz
‘VERY SIMPLE’
Nebenzia said Moscow “had no other option” but to launch what it has called a “special military operation” on Feb. 24 last year to defend Russian speakers in eastern Ukraine and ensure “the safety and security of our country, using military means.”
The draft U.N. resolution, which is non-binding, but carries political weight, mirrors a demand the General Assembly made last year for Moscow to withdraw troops and halt the hostilities. Russia has described the text as “unbalanced and anti-Russian” and urged countries to vote no.
Ukrainian Foreign Minister Dmytro Kuleba told reporters Ukraine was exercising its right to self-defense as enshrined in the U.N. Charter and that “when you are sending weapons to Ukraine, you are helping Ukraine to defend U.N. Charter.”
“Russia violated the U.N. Charter by becoming an aggressor,” he said at the United Nations. “When you are sending weapons to them, you are helping to destroy the U.N. Charter and everything that the United Nations stand for. It’s very simple.”
The General Assembly has been the focus for UN action on Ukraine, with the 15-member Security Council paralyzed due to veto power by Russia and the United States along with China, France and Britain.
The Security Council has held dozens of meetings on Ukraine in the past year and will again discuss the war on Friday at a ministerial gathering, due to be attended by U.S. Secretary of State Antony Blinken. Diplomats say Russian Foreign Minister Sergei Lavrov is not scheduled to attend.
Reporting by Michelle Nichols, editing by Kanishka Singh and David Gregorio
India’s Adani reopens two cement plants after freight dispute
Truckers believe Hindenburg report was answer to their prayers
Adani says amicable resolution reached after negotiations
DARLAGHAT, India Feb 23 (Reuters) – For truckers transporting cement from Adani’s factories in a hilly north Indian state, a U.S. short-seller’s critical research report on the giant conglomerate was a godsend they say helped them save their livelihoods.
For weeks, around 7,000 truck owners and drivers in India’s Himachal Pradesh resorted to protest rallies against Adani’s Dec. 15 decision to shut two cement plants over a dispute on freight rates. Adani argued the plants were “unviable” at the trucking rates it wanted to slash by around half.
On Monday, the Gautam Adani-led group said it had “amicably resolved” the issue with a 10-12% reduction in rates. Truckers rejoiced, with a union leader in a street address labelling it as a victory after late-night talks with Adani.
The settlement comes four weeks after U.S.-based Hindenburg Research accused Adani of stock manipulation and improper use of tax havens, allegations the group called baseless.
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The Jan. 24 report triggered a $140 billion rout in group’s stocks, sparked regulatory investigations and saw the billionaire Adani slip to 26 on the Forbes global rich list, from third.
While the truckers’ settlement will have only a small impact on the overall Adani empire, it was a big win for the drivers and owners in a state were most people live on around $7 a day.
The report “played a crucial role in our battle against India’s biggest business group, helped mobilize truckers and gain political support,” said Ram Krishan Sharma, one of the lead negotiators for protesting truckers.
Adani negotiators had refused to budge for weeks. So Hindenburg’s report, some truckers believe, was godsent.
Just a day before it was published, many truckers visited a small, revered Hindu temple in Darlaghat which overlooks one of Adani’s cement plants, and offered a traditional semolina sweet offering to a deity as they sought to resolve the dispute.
Bantu Shukla, a protest leader, showed Reuters a photo and video of truckers that day offering prayers inside the temple. Some stood with folded hands, while a person rang a temple bell in a typical Hindu worship ritual.
‘AMICABLE RESOLUTION’
Adani Group did not answer Reuters questions on whether the Hindenburg report’s fallout contributed to its decision in Himachal.
Adani Cements in a statement said it was “grateful” to all stakeholders including the unions, the local state chief minister and other departments, adding the “amicable resolution” was in interest of everyone including the state.
A source familiar with Adani’s negotiation said the group had been under pressure following what it thinks was a “negative campaign” by Adani’s opponents after the Hindenburg report, and the settlement to reopen plants is a relief.
Himachal is ruled by Prime Minister Narendra Modi’s staunch rival, the Congress party. After the Hindenburg report, Congress has renewed its claims that Modi for years has unduly favoured Adani. Both Adani and India’s government deny that.
The source added the move will also help Adani signal it can resolve commercial matters in states ruled by Modi’s rivals.
Without citing Hindenburg, the Himachal chief minister’s office on Monday said “we have been successful in resolving the issues” to end the 67-day dispute.
WHATSAPP CHATS, PRAYERS AT TEMPLE
Adani became India’s second largest cement manufacturer when it acquired ACC (ACC.NS) and Ambuja Cements (ABUJ.NS) in a $10.5 billion deal with Swiss giant Holcim (HOLN.S) last year.
In December, it shut plants in the villages of Gagal and Darlaghat in Himachal, saying truckers were charging too much.
The Adani group wanted freight rates to be lowered to around 6 rupees ($0.0725) per tonne per km, from around 11 rupees. Many truckers told Reuters they struggled to make their loan repayments as their incomes shrank after the shutdowns.
As a stalemate worsened, truckers formed WhatsApp groups to coordinate efforts, vent frustration and later share Hindenburg’s impact on Adani companies and stock prices to further drum up support.
One such WhatsApp group chat of around 1,000 truckers, reviewed by Reuters, showed sharing of a local reporter’s video discussing the sharp fall in Adani’s shares and his alleged close ties to Modi.
Although they accepted a small cut in freight rates when Adani agreed to pay 9.3-10.58 rupees per km per tonne, truckers felt they saved their jobs, and prayers at the Hindu temple were organised again this week.
“We felt our deity had accepted our prayers when we saw the fall in the share prices of Adani companies,” protest leader Shukla said. “The Hindenburg report was a gift that saved our businesses.”
(This story has been refiled to remove extraneous word in paragraph 20)
Reporting by Manoj Kumar, Aditya Kalra and Anushree Fadnavis; Editing by Lincoln Feast.
JANDARIS, Syria, Feb 12 (Reuters) – An eerie silence lay over the courtyard of Ramadan al-Suleiman’s nursery in northern Syria on Sunday as he picked his way through smashed cinderblocks, twisted metal and broken plastic swings.
The modest nursery in the town of Jandaris – about 70 km (44 miles) from the city of Aleppo – once hosted 100 toddlers, whose dusty pictures now lay strewn among the debris caused by Monday’s devastating earthquake. Some of those children and teachers would not be coming back, Suleiman said.
“We lost two of the female teachers from the important cadres at the school. We lost seven or eight students that we know of,” he told Reuters.
They were among more than 2,600 people reported so far to have died in the earthquake in opposition-held parts of northern Syria. More than 3,500 were killed across Syria in total and nearly 30,000 in Turkey.
Children’s education in Syria was already hard hit by the war that has raged since 2011. For years, schools would regularly shut because of fighting, mortar fire by rebel groups or air strikes by the Syrian government or Russia.
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The earthquake destroyed more than 115 schools in Syria and damaged hundreds more, according to a United Nations update published Saturday.
More than 100 others were being used as makeshift shelters to host thousands displaced by the earthquake, which brought apartment blocks and even tiny rural homes crashing down on residents’ heads.
Suleiman has been trying to track down some of the nursery children from whose families he has not heard.
“I went around to buildings where I know some of the students live – and 90% of them were destroyed. There are some pupils that I suspect are dead because we cannot reach their families at all,” he said.
Jandaris was particularly devastated, with many concrete buildings pulverised.
Rescuers across Syria, including in the north, have been pulling young children out from under the rubble – some of them miraculously alive even almost a week after the quake, but orphaned.
Others did not make it.
Mohammad Hassan said he still doesn’t know what happened to his seven-year-old daughter Lafeen’s friends and classmates.
“We asked around and discovered that one of her teachers died, may God bless her soul,” Hassan told Reuters as Lafeen played quietly in his lap.
“She is shocked, she asks me to go see if something happened to the kindergarten. I’m telling her nothing happened and I will take you there once it reopens.”
Reporting by Khalil Ashawi; Writing by Maya Gebeily
Editing by Raissa Kasolowsky
Government vows meticulous probe into those responsible
Nearly 25,000 buildings collapsed or badly damaged
Opposition has accused government of not enforcing regulations
Erdogan says opposition lies to besmirch government
One developer arrested as he prepared to fly from Turkey
ISTANBUL, Feb 12 (Reuters) – Turkey vowed on Sunday to investigate thoroughly anyone suspected of responsibility for the collapse of buildings in the country’s devastating earthquakes nearly one week ago and has already ordered the detention of 113 suspects.
Vice President Fuat Oktay said overnight that 131 suspects had so far been identified as responsible for the collapse of some of the thousands of buildings flattened in the 10 provinces affected by the tremors early last Monday.
“Detention orders have been issued for 113 of them,” Oktay told reporters in a briefing at the disaster management coordination centre in Ankara.
“We will follow this up meticulously until the necessary judicial process is concluded, especially for buildings that suffered heavy damage and buildings that caused deaths and injuries.”
He said the justice ministry had established earthquake crimes investigation bureaus in the quake zone provinces to investigate deaths and injuries.
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Environment Minister Murat Kurum said that 24,921 buildings across the region had collapsed or were heavily damaged in the quake, based on assessments of more than 170,000 buildings.
Rescuers were still looking for survivors in the earthquake rubble six days after the disaster, which hit parts of Syria and Turkey. The death toll has exceeded 28,000 and is expected to rise further.
Opposition parties have accused President Tayyip Erdogan’s government of not enforcing building regulations, and of mis-spending special taxes levied after the last major earthquake in 1999 in order to make buildings more resistant to quakes.
[1/7] Rescuers carry survivor Muzeyyen Ofkeli in the aftermath of a deadly earthquake, in Hatay, Turkey February 12, 2023. REUTERS/Kemal Aslan
Erdogan has said the opposition just tells lies and spreads slander to besmirch the government, obstructing investment instead of facing up to corruption in the opposition-run municipalities.
In the 10 years to 2022, Turkey slipped 47 places in Transparency International’s Corruption Perception Index to 101, having been as high as 54 out of 174 countries in 2012.
State prosecutors in Adana ordered the detention of 62 people in an investigation into collapsed buildings, while prosecutors sought the arrest of 33 people in Diyarbakir for the same reason, state-owned Anadolu news agency reported.
It said eight people had been detained in Sanliurfa and four in Osmaniye in connection with destroyed buildings believed to have faults, such as columns being removed.
Police detained the developer of one residential complex which collapsed in Antakya at Istanbul Airport as he prepared to board a plane for Montenegro on Friday evening and he was formally arrested on Saturday, according to Anadolu.
The upmarket 12-storey residential complex was completed a decade ago and contained 249 apartments. There was no information on the casualties in that building.
The arrested man told prosecutors he did not know why the complex collapsed and that his desire to go to Montenegro was unrelated, Anadolu reported.
“We fulfilled all procedures set out in legislation,” he was quoted by Anadolu as saying in his statement. “All licenses were obtained.”
Additional reporting by Dominic Evans,
Writing by Daren Butler;
Editing by Ece Toksabay and Raissa Kasolowsky
BERLIN/LONDON, Feb 13 (Reuters) – A Russian scheme to grant loan payment holidays to troops fighting in Ukraine, and for banks to write off the entire debt if they are killed or maimed, has added to growing pressure for the remaining overseas lenders in Russia to leave.
Almost a year since Moscow launched what it calls a “special military operation” in Ukraine, a handful of European banks, including Austria’s Raiffeisen Bank International (RBIV.VI) and Italy’s UniCredit (CRDI.MI), are still making money in Russia.
The loan relief scheme has not only triggered criticism from Ukraine’s central bank, which said it had appealed to Raiffeisen and other banks to stop doing business in Russia, but also from investors concerned about any reputational impact.
Raiffeisen and UniCredit are both deeply embedded in the Russian financial system and are the only foreign banks on the central bank’s list of 13 “systemically important credit institutions”, underscoring their importance to Russia’s economy, which is grappling with sweeping Western sanctions.
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Their role in supporting the Russian economy at a critical time for President Vladimir Putin has prompted some investors to go public with their misgivings.
“Companies should be very careful,” said Kiran Aziz, of Norwegian pension fund KLP, cautioning of a major risk that the banks could be used to “in other ways finance the war”. KLP funds hold shares in both Raiffeisen and UniCredit.
At the time the payment holiday law was going through parliament in September, Vyacheslav Volodin, the influential speaker of the lower house, made clear its importance to Russia.
“Soldiers and officers ensure the security of our country and we must be sure that they will be taken care of,” he said.
Eric Christian Pederson of Nordea Asset Management, which has more than 300 billion euros ($320 billion) under management, said he too was concerned about Raiffeisen and UniCredit’s Russian presence and had raised this with them.
The requirement that the banks grant payment holidays to soldiers “illustrates the dangers of operating in jurisdictions where companies can … be forced into actions that go directly against their corporate values,” he added.
“We feel that it is right for companies to withdraw from Russia, given its unprovoked attack on Ukraine,” said Pederson. Refinitiv data shows Nordea owns shares in UniCredit.
Banks restructured a total of 167,600 loans for military personnel or their family members, worth more than 800 million euros, between Sept. 21 and the end of last year, Russian central bank data shows.
Raiffeisen said that only 0.2% of its Russian loans are affected by the “government-imposed loan moratorium”, a sum it described as “negligible”. The bank has a total of almost 9 billion euros of loans in Russia, where it has been for more than 25 years, including to companies.
It made a net profit of roughly 3.8 billion euros last year, thanks in large part to a 2 billion euro plus profit from its Russia business.
UniCredit, which entered the Russian market almost 20 years ago when it acquired an Austrian bank, said that the rule was “mandatory under the federal law … for all banks”, declining to say how many of its loans had been forgiven.
The Italian bank added that its business in Russia was focused on companies rather than individuals. Of UniCredit’s more than 20 billion euro total revenue last year, Russia accounted for more than 1 billion euros.
But despite an initial sharp fall, UniCredit’s shares are now significantly higher than before Russia moved its troops into Ukraine on Feb. 24 last year, while Raiffeisen’s, with a more limited free float, have not recovered.
“Any profiteering on the ongoing war is not acceptable or aligned with our view of responsible investments,” said a spokesperson for Swedbank Robur, one of Scandinavia’s top investors, adding that reputational risk was a worry.
Swedbank Robur said it has stakes in both banks, but did not disclose figures.
Larger institutional investors, including France’s Amundi and Norway’s sovereign wealth fund, which advocates responsible investing, declined to comment when asked for their views.
WINDOW CLOSING?
Some foreign banks have made relatively quick exits.
France’s Societe Generale (SOGN.PA) severed its Russia ties in May by selling Rosbank (ROSB.MM) to businessman Vladimir Potanin’s Interros Group.
But the continued presence of two of Europe’s biggest banks is attracting the attention of regulators at the European Central Bank (ECB), one person familiar with the matter said.
Andrea Enria, the ECB’s chief supervisor, said the window to quit was “closing a bit” because Russian authorities were taking a more “hostile” approach. But he also voiced support for any bank wanting to reduce their business there or leave.
Raiffeisen and UniCredit confirmed they were in discussions about Russia with the ECB.
UniCredit said it kept the ECB “fully and regularly up to date on our strategy of orderly de-risking our exposure to Russia”.
But with money still to be made, Raiffeisen saw profit from its business in Russia more than triple last year.
Meanwhile, Russian savers lodged more than 20 billion euros with the bank, which offers a place to deposit funds with fewer sanctions risks.
This means there is no great impetus for banks to leave Russia, despite regulatory pressure.
And in Austria, which has close historical and economic ties to eastern Europe and Russia, politicians are largely silent on Raiffeisen’s continuing Russian presence, which in recent months prompted protests outside its headquarters.
Johann Strobl, Raiffeisen’s CEO, has said he is examining options for the Russian business, although points out that any move is complicated, having earlier said that the bank is not “a sausage stand” that could be closed overnight.
For some the question is more about morality than money.
Heinrich Schaller, head of RBI’s third largest shareholder Raiffeisenlandesbank Oberoesterreich and deputy chairman of Raiffeisen, is among those to have aired doubts about staying.
“Of course it is a question of morals,” he said recently. “No doubt about it.”
Whatever shareholders may say, a decree by Putin is likely to make getting out of Russia difficult. It banned investors from so-called unfriendly countries from selling shares in banks, unless the Russian President grants an exemption.
($1 = 0.9376 euros)
Additional reporting by Alexandra Schwarz-Goerlich in Vienna and Tom Sims in Frankfurt; Writing by John O’Donnell; Editing by Alexander Smith
Feb 13 (Reuters) – India’s Adani Group has halved its revenue growth target and plans to scale down fresh capital expenditure, Bloomberg News reported on Sunday.
Listed companies controlled by billionaire Gautam Adani have lost more than $100 billion in market value since Jan. 24, when U.S. short-seller Hindenburg Research accused the conglomerate of stock manipulation and improper use of offshore tax havens.
The group has rejected the allegations and denied any wrongdoing.
The Adani Group will now shoot for revenue growth of 15% to 20% for at least the next financial year, down from the original target of 40%, Bloomberg News said citing people familiar with the matter.
Holding back on investments for even as little as three months could save the conglomerate as much as $3 billion, the report said, adding that the plans are still imminent.
A spokesperson for the Adani Group said the report was “baseless, speculative”, without elaborating further.
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The group has also been a part of India’s market regulator’s investigation into its links to some of the investors in its scrapped $2.5 billion share sale.
Earlier this month, India’s ministry of corporate affairs started a preliminary review of the group’s financial statements and other regulatory submissions made over the years, Reuters reported, citing two senior government officials.
Reporting by Mrinmay Dey in Bengaluru; Editing by Kim Coghill and Savio D’Souza
ANKARA, Feb 2 (Reuters) – Turkey summoned ambassadors of nine Western countries including the United States and Sweden on Thursday to criticise their decisions to temporarily shut diplomatic missions and issue security alerts following Koran-burning incidents in Europe.
The envoys of Belgium, France, Germany, Italy, the Netherlands, Switzerland, and Britain were also summoned, according to foreign ministry sources in Ankara.
Over the last two weeks, far-right activists burned copies of the Muslim holy book, the Koran, in Sweden, Denmark and the Netherlands, acts that prompted Turkey to halt negotiations meant to lift its objections to Sweden and Finland joining NATO.
The European countries have denounced the incidents but some say they cannot prevent them because of free speech rules.
Over the last week, France, Germany, Italy and the United States were among those issuing warnings to their citizens of an increased risk of attacks in Turkey, particularly against diplomatic missions and non-Muslim places of worship.
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Germany, France and the Netherlands were among countries that temporarily closed diplomatic missions in Turkey for security reasons this week. Some cited central Istanbul areas of high concern but did not provide the source of the information.
“Such simultaneous activities do not constitute a proportional and commonsense approach and…only serve the covert agenda of terrorist organizations,” said a foreign ministry source who asked not to be further identified.
The source added that the security of all diplomatic missions is ensured in accordance with international conventions and “allies should cooperate with” Turkish authorities.
The interior minister, Suleyman Soylu, said on Twitter the embassies were waging “a new psychological war” against Turkey.
All 30 NATO members must approve newcomers. Sweden and Finland applied for membership last year in the face of Russia’s invasion of Ukraine, but ran into surprise resistance from Turkey.
Since then they have sought to win its backing including agreeing to take a harder line domestically against those Turkey says are members of the Kurdistan Workers’ Party, the PKK, designated a terrorist group by Ankara and the European Union.
On Thursday, police in NATO member Norway banned a planned anti-Islam protest including the burning of the Koran for security reasons, hours after the Turkish foreign ministry summoned Oslo’s ambassador to complain.
Diplomatic tensions rose last weekend when Turkey responded to the initial U.S. security alert by warning its citizens against “possible Islamophobic, xenophobic and racist attacks” in the United States and Europe.
The U.S. embassy confirmed its Ambassador Jeffry Flake attended a meeting at Turkey’s foreign ministry on Thursday. Two European diplomatic sources said envoys from Germany, France and the Netherlands were also summoned.
Writing by Jonathan Spicer; Editing by Alison Williams, Peter Graff and Mark Heinrich
80 years have passed since Soviet victory in Stalingrad
Putin draws parallels with Russia’s campaign in Ukraine
This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.
VOLGOGRAD, Russia, Feb 2 (Reuters) – President Vladimir Putin evoked the spirit of the Soviet army that defeated Nazi German forces at Stalingrad 80 years ago to declare on Thursday that Russia would defeat a Ukraine supposedly in the grip of a new incarnation of Nazism.
In a fiery speech in Volgograd, known as Stalingrad until 1961, Putin lambasted Germany for helping to arm Ukraine and said, not for the first time, that he was ready to draw on Russia’s entire arsenal, which includes nuclear weapons.
“Unfortunately we see that the ideology of Nazism in its modern form and manifestation again directly threatens the security of our country,” Putin told an audience of army officers and members of local patriotic and youth groups.
“Again and again we have to repel the aggression of the collective West. It’s incredible but it’s a fact: we are again being threatened with German Leopard tanks with crosses on them.”
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Russian officials have been drawing parallels with the struggle against the Nazis ever since Russian forces entered Ukraine almost a year ago.
Ukraine – which was part of the Soviet Union and itself suffered devastation at the hands of Hitler’s forces – rejects those parallels as spurious pretexts for a war of imperial conquest.
Stalingrad was the bloodiest battle of World War Two, when the Soviet Red Army, at a cost of over 1 million casualties, broke the back of German invasion forces in 1942-3.
Putin evoked what he said was the spirit of the defenders of Stalingrad to explain why he thought Russia would prevail in Ukraine, saying the World War Two battle had become a symbol of “the indestructible nature of our people”.
“Those who draw European countries, including Germany, into a new war with Russia, and … expect to win a victory over Russia on the battlefield, apparently don’t understand that a modern war with Russia will be quite different for them,” he added.
“We don’t send our tanks to their borders but we have the means to respond, and it won’t end with the use of armoured vehicles, everyone must understand that.”
[1/6] Russian service members drive a tank during a military parade marking the 80th anniversary of the victory of Red Army over Nazi Germany’s troops in the Battle of Stalingrad during World War Two, in Volgograd, Russia February 2, 2023. REUTERS/Kirill Braga
VICTORY PARADE
As Putin finished speaking, the audience gave him a standing ovation.
Putin had earlier laid flowers at the grave of the Soviet marshal who oversaw the defence of Stalingrad and visited the city’s main memorial complex, where he held a minute’s silence in honour of those who died during the battle.
Thousands of people lined Volgograd’s streets to watch a victory parade as planes flew overhead and modern and World War Two-era tanks and armoured vehicles rolled past.
Some of the modern vehicles had the letter ‘V’ painted on them, a symbol used by Russia’s forces in Ukraine.
Irina Zolotoreva, a 61-year-old who said her relatives had fought at Stalingrad, saw a parallel with Ukraine.
“Our country is fighting for justice, for freedom. We got victory in 1942 and that’s an example for today’s generation. I think we’ll win again now whatever happens.”
The focal point for the commemorations was the Mamayev Kurgan memorial complex, on a hill overlooking the River Volga dominated by a hulking statue called The Motherland Calls – of a woman brandishing a giant sword.
The five-month-long battle reduced the city that bore Soviet leader Josef Stalin’s name to rubble, while claiming an estimated 2 million dead and wounded on both sides.
Despite Stalin’s record of presiding over a famine that killed millions and political repression that killed hundreds of thousands, Russian politicians and school textbooks have in recent years stressed his role as a successful wartime leader who turned the Soviet Union into a superpower.
Reporting by Tatiana Gomozova
Writing by Andrew Osborn
Editing by Mark Trevelyan and Kevin Liffey
WASHINGTON, Feb 2 (Reuters) – U.S. Central Intelligence Agency Director William Burns said on Thursday that Chinese President Xi Jinping’s ambitions toward Taiwan should not be underestimated, despite him likely being sobered by the performance of Russia’s military in Ukraine.
Burns said that the United States knew “as a matter of intelligence” that Xi had ordered his military to be ready to conduct an invasion of self-governed Taiwan by 2027.
“Now, that does not mean that he’s decided to conduct an invasion in 2027, or any other year, but it’s a reminder of the seriousness of his focus and his ambition,” Burns told an event at Georgetown University in Washington.
“Our assessment at CIA is that I wouldn’t underestimate President Xi’s ambitions with regard to Taiwan,” he said, adding that the Chinese leader was likely “surprised and unsettled” and trying to draw lessons by the “very poor performance” of the Russian military and its weapons systems in Ukraine.
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Russia and China signed a “no limits” partnership last February shortly before Russian forces invaded Ukraine, and their economic links have boomed as Russia’s connections with the West have shriveled.
The Russian invasion had fueled concerns in the West of China possibly making a similar move on Taiwan, a democratic island Beijing says is its territory.
China has refrained from condemning Russia’s operation against Ukraine, but it has been careful not to provide the sort of direct material support which could provoke Western sanctions like those imposed on Moscow.
“I think it’s a mistake to underestimate the mutual commitment to that partnership, but it’s not a friendship totally without limits,” Burns said.
As Burns spoke, news came from U.S. officials that a suspected Chinese spy balloon had been flying over the United States for a few days, and that senior U.S. officials had advised President Joe Biden against shooting it down for fear the debris could pose a safety threat.
Burn made no mention of the episode but called China the “biggest geopolitical challenge” currently faced by the United States.
“Competition with China is unique in its scale, and that it really, you know, unfolds over just about every domain, not just military, and ideological, but economic, technological, everything from cyberspace, to space itself as well. It’s a global competition in ways that could be even more intense than competition with the Soviets was,” he said.
There was no immediate comment from China’s Washington embassy about the remarks from Burns or the balloon flight.
Burns said the next six months will be “critical” for Ukraine, where Moscow has been making incremental gains in recent weeks.
He also said Iran’s government was increasingly unsettled by affairs within the country, citing the courage of what he described as “fed up” Iranian women.
Reporting by Michael Martina, Rami Ayyub, David Brunnstrom and Phil Stewart; Editing by Christopher Cushing
Market rout deepens in Indian tycoon Adani’s shares
Adani Enterprises loses $26 bln in value since report
Falls after Adani pulled share sale, investors spooked
Analysts say signals confidence crisis in Indian market
NEW DELHI/MUMBAI, Feb 2 (Reuters) – Adani’s market losses swelled above $100 billion on Thursday, sparking worries about a potential systemic impact a day after the Indian group’s flagship firm abandoned its $2.5 billion stock offering.
Another challenge for Adani on Thursday came when S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices, effective Feb. 7, which would make the shares less appealing to sustainability-minded funds.
In addition, India’s National Stock Exchange said it has placed on additional surveillance shares of Adani Enterprises <ADEL.NS>, Adani Ports <APSE.NS> and Ambuja Cements <ABUJ.NS>. read more
However, Adani Group Chairman Gautam Adani is in talks with lenders to prepay and release pledged shares as he seeks to restore confidence in the financial health of his conglomerate, Bloomberg News reported on Thursday. read more
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The shock withdrawal of Adani Enterprises’ share sale marks a dramatic setback for founder Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but have plunged in just a week after a critical research report by U.S.-based short-seller Hindenburg Research.
Aborting the share sale sent shockwaves across markets, politics and business. Adani stocks plunged, opposition lawmakers called for a wider probe and India’s central bank sprang into action to check on the exposure of banks to the group. Meanwhile, Citigroup’s (C.N) wealth unit stopped making margin loans to clients against Adani Group securities.
The crisis marks an dramatic turn of fortune for Adani, who has in recent years forged partnerships with foreign giants such as France’s TotalEnergies (TTEF.PA) and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion stretching from ports to the power sector.
In a shock move late on Wednesday, Adani called off the share sale as a stocks rout sparked by Hindenburg’s criticisms intensified, despite it being fully subscribed a day earlier.
“Adani may have started a confidence crisis in Indian shares and that could have broader market implications,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
Adani Enterprises shares tumbled 27% on Thursday, closing at their lowest level since March 2022.
Other group companies also lost further ground, with 10% losses at Adani Total Gas (ADAG.NS), Adani Green Energy (ADNA.NS) and Adani Transmission (ADAI.NS), while Adani Ports and Special Economic Zone shed nearly 7%.
Since Hindenburg’s report on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises – described as an incubator of Adani’s businesses – has lost $26 billion in market capitalisation.
Adani is also no longer Asia’s richest person, having slid to 16th in the Forbes rankings of the world’s wealthiest people, with his net worth almost halved to $64.6 billion in a week.
The 60-year-old had been third on the list, behind billionaires Elon Musk and Bernard Arnault.
His rival Mukesh Ambani of Reliance Industries (RELI.NS) is now Asia’s richest person.
[1/4] Indian billionaire Gautam Adani addresses delegates during the Bengal Global Business Summit in Kolkata, India April 20, 2022. REUTERS/Rupak De Chowdhuri
Reuters Graphics
BROADER CONCERNS
Adani’s plummeting stock and bond prices have raised concerns about the likelihood of a wider impact on India’s financial system.
India’s central bank has asked local banks for details of their exposure to the Adani Group, government and banking sources told Reuters on Thursday.
CLSA estimates that Indian banks were exposed to about 40% of the $24.5 billion of Adani Group debt in the fiscal year to March 2022.
Dollar bonds issued by entities of Adani Group extended losses on Thursday, with notes of Adani Green Energy crashing to a record low. Adani Group entities made scheduled coupon payments on outstanding U.S. dollar-denominated bonds on Thursday, Reuters reported citing sources.
“We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” said Monica Hsiao, chief investment officer of Hong Kong-based credit fund Triada Capital.
In New Delhi, opposition lawmakers submitted notices in parliament demanding discussion of the short-seller’s report.
The Congress Party called for a Joint Parliamentary Committee be set up or a Supreme Court monitored investigation, while some lawmakers shouted anti-Adani slogans inside parliament, which was adjourned for the day.
ADANI VS HINDENBURG
Adani made acquisitions worth $13.8 billion in 2022, Dealogic data showed, its highest ever and more than double the previous year.
The cancelled fundraising was critical for Adani, which had said it would use $1.33 billion to fund green hydrogen projects, airports facilities and greenfield expressways, and $508 million to repay debt at some units.
Hindenburg’s report alleged an improper use of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.
The Adani Group has denied the accusations, saying the allegation of stock manipulation had “no basis” and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.
Adani had managed to secure share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. Maybank Securities and Abu Dhabi Investment Authority had bid for the anchor portion of the issue, investments which will now be reimbursed by Adani.
Late on Wednesday, the group’s founder said he was withdrawing the sale given the share price fall, adding his board felt going ahead with it “will not be morally correct”.
Reporting by Chris Thomas, Nallur Sethuraman, Tanvi Mehta, Ira Dugal, Aftab Ahmed, Sumeet Chatterjee, Anshuman Daga, Summer Zhen, Ross Kerber and Bansari Mayur Kamdar; Editing by Muralikumar Anantharaman, Jason Neely and Alexander Smith
Moody’s warns will find it harder to raise capital
NEW DELHI, Feb 3 (Reuters) – Financial contagion fears spread in India on Friday as the Adani Group’s crisis worsened, with ratings agency Moody’s warning the conglomerate may struggle to raise capital and S&P cutting the outlook on two of its businesses.
Chaotic scenes in both houses of India’s parliament led to their adjournment on Friday as some lawmakers demanded an inquiry after a dramatic meltdown in the stock market values of Indian billionaire Gautam Adani’s companies.
The crisis was triggered by a Hindenburg Research report last week in which the U.S.-based short-seller accused the Adani Group of stock manipulation and unsustainable debt.
Adani Group, one of India’s top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but that has failed to arrest the unabated fall in its shares.
In the latest sign of the crisis widening, India’s ministry of corporate affairs has begun a preliminary review of Adani Group’s financial statements and other regulatory submissions made over the years, two government officials told Reuters.
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Although shares in Adani companies recovered after sharp falls earlier on Friday, the seven listed firms have still lost about half their market value, totalling more than $100 billion since Hindenburg published its report on Jan. 24.
Moody’s warned the share plunge could hit the Adani Group’s ability to raise capital, although fellow credit ratings agency Fitch saw no immediate impact on its ratings.
“These adverse developments are likely to reduce the group’s ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years. We recognise that a portion of the capex is deferrable,” Moody’s said.
For Adani, a former school drop-out from Gujarat, the western home state of Indian Prime Minister Narendra Modi, the crisis presents the biggest reputational and business challenge of his life, as his firm struggles to assuage investor concerns.
Amid fears the turmoil could spill over into the broader financial system, some Indian politicians have called for a wider investigation, and sources have told Reuters the central bank has asked lenders for details of exposure to the group.
“Contagion concerns are widening, but still limited to the banking sector,” Charu Chanana, a market strategist with Saxo Markets in Singapore, said on Friday.
The Reserve Bank of India said the country’s banking system remains resilient and stable. State Bank of India said it was not concerned about the exposure to Adani Group, but further financing to its projects would be “evaluated on its own merit”.
Adani Enterprises shares closed 1.4% higher, after earlier slumping 35% to hit their lowest since March 2021. That low took its losses to nearly $33.6 billion since last week, a 70% fall.
Shares fell 5% in Adani Total Gas (ADAG.NS), a joint venture with France’s TotalEnergies (TTEF.PA), which said its exposure to Adani companies was limited.
Traffic moves past the logo of the Adani Group installed at a roundabout on the ring road in Ahmedabad, India, Feb. 2, 2023. REUTERS/Amit Dave
Adani Ports and Special Economic Zone (APSE.NS) was up 8%, while Adani Transmission (ADAI.NS) and Adani Green Energy (ADNA.NS) were both down 10%.
“There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings,” S&P said, as it cut its outlook on Adani Ports and Adani Electricity to negative from stable.
India’s divestment secretary Tuhin Kanta Pandey told Reuters that Life Insurance Corp (LIC) shareholders and customers should not be concerned about its exposure to the Adani Group.
State-run LIC (LIFI.NS) has a 4.23% stake in the flagship Adani Enterprises, while its other exposures include a 9.14% stake in Adani Ports.
Reuters Graphics
‘ONE INSTANCE’
Adani, 60, has in recent years forged partnerships with, and attracted investment from, foreign giants as he pursued global expansion in industries from ports to power.
The market and financial crisis means foreign investors, many already underweight on India as they consider its stock market overpriced, are reducing exposure.
“One instance, however much talked about globally it may be … is not going to be indicative of how well Indian financial markets are governed,” Indian Finance Minister Nirmala Sitharaman told Network18 when asked about the market weakness.
Reuters Graphics
Hindenburg’s report said key listed Adani companies had “substantial debt” and shares in the seven listed firms had a downside of 85% due to what it called sky-high valuations.
The Adani Group has called the report baseless and said over the past decade, its companies have “consistently de-levered”.
The listed Adani firms now have a combined market value of $107.5 billion, versus $218 billion before the report.
That has forced Adani to cede the crown of Asia’s richest person to Indian rival Mukesh Ambani of Reliance Industries Ltd (RELI.NS), and he has slid to 17th in Forbes’ list of the world’s wealthiest people.
He had ranked third, behind Elon Musk and Bernard Arnault.
Reporting by Aditya Kalra, Chris Thomas, Ankur Banerjee, Bansari Mayur Kamdar, Shivam Patel, Tanvi Mehta and Rae Wee in Singapore; Editing by Clarence Fernandez, Mark Potter and Alexander Smith
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