Aurelia Butler

(Reuters) – Berkshire Hathaway (NYSE:BRKa) Inc said on Saturday that Vice Chairman Greg Abel, who is next in line to succeed billionaire Warren Buffett as chief executive, sold his 1% stake in the company’s Berkshire Hathaway Energy unit for $870 million.In its quarterly report, Berkshire said the energy unit bought out Abel in June under an agreement among them and the family of the late billionaire philanthropist Walter Scott, which owns an 8% stake.Buffett’s Omaha, Nebraska-based conglomerate took a $362 million charge to capital, reflecting the premium over how much the stake’s value was reflected on its books.Berkshire now owns 92% of Berkshire Hathaway Energy, whose businesses include energy, utility and pipeline operations and a large U.S. real estate brokerage.Scott, an Omaha native, was a longtime Berkshire director and Buffett friend who died last September at age 90.Abel’s sale suggests that the Scott family’s stake may be worth $7 billion. Berkshire ended June with more than $105 billion of cash.”I suspect that if Abel is selling, Walter Scott’s estate might also liquidate,” said Edward Jones & Co analyst James Shanahan.CFRA Research analyst Cathy Seifert added: “It was a little surprising there wasn’t an earlier regulatory filing for such a significant transaction.”Shanahan and Seifert cover Berkshire.Scott’s family could not immediately be reached for comment. Berkshire Hathaway Energy did not immediately respond to a request for comment.Abel, 60, a hockey fan who grew up in Edmonton, Alberta, joined Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, eight years before Berkshire took it over.He became MidAmerican’s chief in 2008, and Berkshire’s vice chairman overseeing its dozens of non-insurance businesses in 2018.Buffett turns 92 on August 30. He said in May 2021 that if he stepped down, Abel would become Berkshire’s chief executive.Abel and Ajit Jain, a Berkshire vice chairman overseeing its insurance businesses, were each paid $19 million in each of the last three years. Buffett sets their compensation.Shanahan said Abel’s sale “makes me wonder if he will buy Berkshire stock. He doesn’t own very much, and might use proceeds to have more skin in the game.” More

(Reuters) – The U.S. Federal Reserve should consider more 75 basis-point interest rate hikes at coming meetings in order to bring high inflation back down to the central bank’s goal, Fed Governor Michelle Bowman said on Saturday.”I supported the FOMC’s decision last week to raise the federal funds rate another 75 basis points,” Bowman said in prepared remarks to a Kansas Bankers Association event in Colorado, referring to the Federal Open Market Committee that sets monetary policy. “My view is that similarly-sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way.”A procession of policymakers this week have shown stiffening resolve to continue the aggressive monetary tightening, with nearly all of them making plain the central bank remains determined to press ahead with rate hikes until it sees strong and long-lasting evidence that inflation is on track to back down to the Fed’s 2% target.Fed Chair Jerome Powell already flagged last week the central bank may consider another “unusually large” rate hike at the Sept. 20-21 meeting, seen as a decision between a 50 basis- point or 75 basis-point move, with officials guided in their decision making by a ream of critical data points covering inflation, employment, consumer spending and economic growth between now and then. Inflation has for months confounded expectations that it would ease and is now, by the Fed’s preferred measure, running at more than three times the target.The Fed is under renewed pressure to deliver another 75 basis-point interest rate hike at its upcoming meeting next month as fresh data on Friday showed job gains unexpectedly accelerating despite soaring inflation and rising borrowing costs.Bowman added that she still retains an open mind on the magnitude of hikes depending on how the economy evolves.”While I expect that ongoing rate increases will be appropriate, given the uncertainty in how those data and conditions will evolve, I will allow that information to guide my judgment on how big the increases will need to be,” she said, although she noted that she expects supply-chain issues partly driving inflation to likely persist. More

Western capitals are increasingly alarmed about the deepening economic co-operation between Turkey’s president Recep Tayyip Erdoğan and Vladimir Putin, warning of the mounting risk that the Nato member state could be hit by punitive retaliation if it helps Russia avoid sanctions.Six western officials told the Financial Times that they were concerned about the pledge made on Friday by the Turkish and Russian leaders to expand their co-operation on trade and energy after a four-hour meeting in Sochi.One EU official said that the 27-member bloc was monitoring Turkish-Russian co-operation “more and more closely”, voicing concern that Turkey was “increasingly” becoming a platform for trade with Russia.Another described Turkey’s behaviour towards Russia as “very opportunistic”, adding: “We are trying to make the Turks pay attention to our concerns.”Washington has warned repeatedly that it will hit countries that help Russia to evade sanctions with “secondary sanctions” that target violations beyond the US legal jurisdiction, however the EU has been more reticent about doing this.US deputy Treasury secretary Wally Adeyemo met Turkish officials and Istanbul bankers in June to warn them not to become a conduit for illicit Russian money.One senior western official suggested that countries could call on their companies and banks to pull out of Turkey if Erdoğan follows through on the commitments he set out on Friday — a highly unusual threat against a fellow Nato member state that could cripple the country’s $800bn economy if foreign firms agreed to comply.The official said nations that have imposed sanctions on Russia could act against Ankara by “calling on Western firms to either pull out of relationships in Turkey, or to shrink their relationships with Turkey, in light of the risk that would be created by Turkey expanding their relationship with Russia”.However that suggestion was dismissed by several other western officials, who questioned how it would work in practical and legal terms and whether it would be a good idea.Turkey is deeply integrated into the western financial system and brands from Coca-Cola and Ford to Bosch and BP have longstanding and often highly profitable operations in the country.“There are very significant economic interests that would probably fight hard against such negative actions,” said one European official. But the official added that he would “not rule out any negative actions [if] Turkey gets too close to Russia”. While he conceded that a formal EU decision on sanctions against Turkey would be challenging given divisions within the bloc, he suggested that some individual member states could take action. “For example they could ask for restrictions on trade finance or ask the large financial companies to reduce finance to Turkish companies,” he said.Three European officials said that there had not yet been any official discussions in Brussels about possible repercussions for Turkey. Several others cautioned that the full details and repercussions of the discussions in Sochi were not yet clear. The warnings come a day after Putin and Erdoğan — who has pursued what he calls a “balanced” approach to Kyiv and Moscow since the full-scale Russian invasion of Ukraine in February — held a long tête-à-tête that culminated in a joint pledge to increase bilateral trade volumes and deepen economic and energy ties.Deputy prime minister Alexander Novak, Moscow’s top energy official, told reporters that Turkey had agreed to begin paying for Russia’s gas in roubles, according to Interfax. Putin and Erdoğan discussed further developing banking ties and settlements in roubles and lira, he added. Speaking on his plane back from Russia, Erdoğan told journalists that there were also “very serious developments” on the use of Russia’s MIR payment card system, which allows Russians in Turkey to pay by card at a time when Visa and Mastercard have suspended operations in their home country. Erdoğan said that MIR cards would help Russian tourists to pay for shopping and hotels. Western officials fear that they could also be used to help bypass sanctions. Diplomatic relations between Turkey and the west are already strained. Washington hit Ankara with sanctions in 2020 in retaliation for the purchase of an S-400 air defence system from Moscow, although the measures targeted the country’s defence industry rather than the broader economy. 

Erdoğan, who has repeatedly threatened to veto Sweden’s and Finland’s admission into Nato, is viewed in many western capitals as an increasingly unreliable ally. Yet Turkey is a vital partner for Europe on counter terrorism and refugees. The country hosts around 3.7mn Syrians as part of a deal struck with the EU in 2016 that helped to stem the flow of migrants to Europe. The conflict between Russia and Ukraine has underlined Turkey’s strategically important location, controlling access to the straits that link the Black Sea to the Mediterranean. Erdoğan also played a key role in securing the grain deal signed by Russia and Ukraine last month that aimed to avert a global food crisis. More

DHAKA (Reuters) -Bangladesh raised fuel prices by around 50% on Saturday, a move that will trim the country’s subsidy burden but put more pressure on inflation that is already running above 7%.The South Asian country’s $416 billion economy has been one of the fastest-growing in the world for years.However, soaring energy and food prices due to the Russia-Ukraine war have inflated its import bill, forcing the government to seek loans from global agencies, including the International Monetary Fund.The price for petrol has been increased by 51.2% to 130 taka ($1.38) a litre, 95-octane gasoline by 51.7% to 135 taka and diesel and kerosene by 42.5%, the power, energy and mineral resources ministry said in a statement. The fuel price increase was inevitable given global market conditions, the ministry added, noting state-run Bangladesh Petroleum Corporation had incurred a loss of more than 8 billion taka ($85 million) on oil sales in the six months to July.”The new prices will not seem tolerable to everyone. But we had no other choice. People have to be patient,” Nasrul Hamid, state minister for power, energy and mineral resources, told reporters on Saturday. He said prices would be adjusted if global prices fall.”It was necessary but I never imagined such a drastic hike. I don’t know whether the government is fulfilling the prerequisite to have an IMF loan,” a government official said.Terming the government’s move as ‘rubbing salt in the wounds’, main opposition Bangladesh Nationalist Party (BNP) Secretary General Mirza Fakhrul Islam Alamgir said the hike would have a terrible impact on the economy.Bangladesh’s inflation rate has been above 6% for nine consecutive months, and hit 7.48% in July, putting pressure on poorer families to meet their daily expenses and raising the risk of social unrest.”We are already struggling to make ends meet. Now that the government has raised fuel prices, how will we survive?,” said Mizanur Rahman, a private sector employee.The government last raised diesel and kerosene prices by 23% in November which in turn prompted a nearly 30% rise in transport fares.Global oil prices have eased from their highs in recent weeks and closed on Friday at their lowest levels since February, rattled by worries a recession could hit fuel demand. [O/R] Benchmark Brent crude futures fell below $95 per barrel on Friday, down from a peak of $133.18 in March.Amid dwindling foreign exchange reserves, the government has taken a series of measures, including placing curbs on luxury goods imports and on fuel imports including liquefied natural gas (LNG) and shutting diesel-run power plants as it resorted to recurring power outages. The country’s foreign exchange reserves stood at $39.67 billion as of Aug. 3, sufficient to cover only about five months of imports and down from $45.89 billion a year earlier.($1 = 94.4400 taka) More