COMPANY NEWS IN BRIEF
South Africa's financial system stable despite headwinds, central bank saysSouth Africa's central bank said on Wednesday it expected the country's financial system to remain resilient despite risks from worldwide elections, persistent geo-political tensions and weak domestic market conditions.
With more than 70 countries going to the polls this year - among them South Africa last month - the South African Reserve Bank said the possible changes in policy that might result had heightened market volatility.
The governing African National Congress (ANC) lost its majority for the first time in three decades in national and provincial elections on May 29.
The ANC said on Wednesday that it was leaning towards a government of national unity with several parties, which last happened at the fall of apartheid in 1994.
The rand has traded erratically since last week as news of the election outcomes filtered through to investors.
The party has held discussions with the business friendly Democratic Alliance and radical left Economic Freedom Fighters, among others.
The central bank said in the first edition of its Financial Stability Review, the biannual health check of the financial system, that high exposure to government debt and the weak fiscal position overall, undermined market resilience.
Steady progress had been made to strengthen the domestic financial safety net through the introduction of deposit insurance and a broader financial sector stress-test which included banks and insurance companies, the central bank said.
Globally, geo-political tensions and stickier inflation meant some economies were experiencing divergent recoveries, increasing market volatility.
Despite these risks, the central bank said it expected the financial system to remain resilient over the forecast period to May 2025.
-REUTERS-
Egyptian fertilizer plants shut down temporarily due to gas supply pressures
Gas supplies will gradually resume flowing as of Thursday to fertilizer factories in Egypt after several chemical and fertilizer companies shut down plants on a temporary basis, the petroleum ministry said.
The companies said in bourse disclosures that increased consumption-driven pressures on the natural gas network led to fluctuations in supply. Some cited high temperatures as a reason for the disruption, as more gas was used for power generation.
On Tuesday, a joint statement by the petroleum and electricity ministries announced an extension of rolling power cuts across the country for an extra hour to allow for preventative maintenance on its regional gas and power networks, and because of increased consumption caused by a heatwave.
Temperatures rose to between 38-40 degrees Celsius (100.4°F) across Egypt on Tuesday and Wednesday and are expected to rise further on Thursday and Friday.
Egypt Kuwait Holding, Misr Fertilizers Company, and Abu Qir Fertilizers and Chemical Industries said they were shutting down plants for 24 hours until network pressure stabilised.
Egyptian Chemical Industries Corp, Sidi Kerir Petrochemicals Co. also announced closures, but did not give a timeline.
Supplies of the natural gas that helps Egypt generate electricity have been dwindling at a time when an expanding population and urban development have been pushing up electricity demand. When temperatures rise, air conditioning use drives up power consumption.
-REUTERS-
US regulators to open antitrust inquiries of Microsoft, OpenAI and Nvidia, NYT reports
The U.S. Justice Department and the Federal Trade Commission have reached a deal that allows them to proceed with antitrust investigations into the dominant roles that Microsoft, OpenAI and Nvidiaplay in the artificial intelligence industry, the New York Times reported on Wednesday, citing people familiar with the matter.
Under the deal, the U.S. Department of Justice will take the lead in investigating whether Nvidia violated antitrust laws, while the FTC will examine the conduct of OpenAI and Microsoft, the report said. While OpenAI's parent is a nonprofit, Microsoft has invested, opens new tab $13 billion in a for-profit subsidiary, for what would be a 49% stake.
The Microsoft-OpenAI partnership is also under informal scrutiny in other regions.
The regulators struck the deal over the past week and it is expected to be completed in the coming days, the report said, citing two people with knowledge of the matter.
The FTC is said to be looking into Microsoft's $650 million deal with AI startup Inflection AI, the Wall Street Journal reported on Thursday, citing a person familiar with the matter.
The moves signal growing regulatory scrutiny into the AI industry. In January, the FTC ordered OpenAI, Microsoft, Alphabet, Amazon and Anthropic to provide information on recent investments and partnerships involving generative AI companies and cloud service providers.
In July last year, the FTC opened an investigation into OpenAI on claims it had run afoul of consumer protection laws by putting personal reputations and data at risk.
Last week, U.S. antitrust chief Jonathan Kanter, opens new tab referred to "structures and trends in AI that should give us pause," at an AI conference, adding that the technology relies on massive amounts of data and computing power, which can give already-dominant firms a substantial advantage.
Microsoft, OpenAI, Nvidia, the Justice Department and FTC did not immediately respond to requests for comment outside regular business hours.
-REUTERS-
Boeing CEO to testify before US Senate panel on June 18
Outgoing Boeing CEO Dave Calhoun will testify before a U.S. Senate panel on June 18 after a series of incidents raised concerns about safety and quality, and led regulators to cap the planemaker's production of its best-selling 737 MAX.
Senator Richard Blumenthal, who chairs the Permanent Subcommittee on Investigations, said Calhoun would testify about a series of issues.
The Federal Aviation Administration (FAA) in February barred Boeing, opens new tab from boosting 737 MAX production after a door panel blew out during a Jan. 5 flight on a 737 MAX 9 operated by Alaska Airlines.
Blumenthal said after two fatal crashes in 2018 and 2019 that killed 346 people, "Boeing made a promise to overhaul its safety practices and culture. That promise proved empty, and the American people deserve an explanation."
Calhoun has said he will leave by the end of the year as part of a broader management shakeup, as Boeing faces multiple government investigations and pressure from investors and airlines to find a new CEO.
The longstanding Boeing board member and General Electric (GE.N), opens new tab veteran took the helm of the company in 2020 after the ousting of his scandal-tinged predecessor.
Contenders for the top job at Boeing include Spirit AeroSystems CEO (SPR.N), opens new tab Pat Shanahan and Boeing Commercial Airplanes president Stephanie Pope, according to industry sources.
Boeing said it welcomed the chance for Calhoun to discuss its actions to strengthen safety and quality during his Senate testimony.
The U.S. Justice Department said last month Boeing had breached its obligations in a 2021 agreement that shielded the planemaker from criminal prosecution over the fatal 737 MAX crashes. Boeing faces a criminal probe into the Alaska Airlines incident as well.
Boeing has said it believes it has honored the terms of the deferred prosecution agreement.