20hours ago, 21 Feb, Friday
Gold futures post highest settlement since mid-February 2013Gold futures climbed Thursday, sending bullion up for a sixth straight session to its highest finish in seven years,as persistent worries about China’s coronavirus and a benign interest-rate environment provide a runway higher for the precious metal. Gold for April delivery on Comex rose $8.70, or 0.5%, to settle at $1,620.50, after a similar rise on Wednesday. Prices for the most-active contract posted the highest finish since Feb. 14, 2013, according to FactSet data. At the mean time, investors snapped up U.S. Treasurys, pushing yields down sharply, as traders noted the growing number of COVID-19 cases outside of China’s borders, raising concerns that a broader contagion could weigh on regional Asian economies.
China cuts benchmark lending rate, in line with expectationChina cut the benchmark lending rate on Thursday, as widely expected, as the authorities move to lower financing costs for businesses and support an economy jolted by a severe coronavirus outbreak.The one-year loan prime rate (LPR) CNYLPR1Y=CFXS, the new benchmark lending gauge introduced in August, was lowered by 10 basis points to 4.05% from 4.15% at the previous monthly fixing. The five-year LPR CNYLPR5Y=CFXS was lowered by 5 basis points to 4.75% from 4.80%. All 51 respondents in a Reuters snap survey had expected a reduction in the LPR, with 38 respondents, or about 75% of participants, tipping a 10 basis points cut to both tenors. The LPR cut followed a similar move in the central bank’s medium-term lending rate on Monday. Investors are betting the authorities will roll out more monetary easing and fiscal stimulus in the near term to help smaller businesses that are struggling to tide over the crisis.
Morgan Stanley to Buy E-Trade, Linking Wall Street and Main Street
Morgan Stanley is betting its future on Main Street. The Wall Street giant moved further from its investment banking origins on Thursday with an agreement to buy the discount brokerage E-Trade for about $13 billion, the biggest takeover by a major American lender since the 2008 global financial crisis.
The addition of E-Trade would allow Morgan Stanley tap into a new source of revenue: the smaller-volume trades of the country’s so-called mass affluent, people who are wealthy enough to have some savings but not rich enough to buy into hedge funds or seek out a money manager. If it goes through, the deal will put Morgan Stanley, which does not have retail bank branches to draw in new asset-management customers, on firmer footing with competitors like Bank of America and Wells Fargo.
It would also give Morgan Stanley a big share of the market for online trading, an additional 5.2 million customer accounts and $360 billion in assets.
Morgan Stanley’s chief executive, James P. Gorman, said the merger would disrupt neither E-Trade clients nor Morgan Stanley customers, but ultimately result in more services for all.
CDC issues new travel notices for Hong Kong and Japan
The Centers for Disease Control and Prevention issued new advisories on Wednesday for travelers going to Hong Kong and Japan in the wake of the deadly coronavirus spreading across the world.
The advisories are notably only a "level 1," a "watch," meaning travelers should exercise "usual precautions," unlike the "level 3" issued for China Jan. 27, which warns to "avoid nonessential travel."
China's "level 3" advisory excludes Hong Kong, Macao and Taiwan. In the new Japan and Hong Kong advisories, the CDC specifically mentions it "does not recommend canceling or postponing travel." According to the CDC, many cases of the new coronavirus have been associated with travel to or from mainland China, or close contact with a travel-related case, but multiple instances of community spread have been reported in Hong Kong.Travelers going to Hong Kong or Japan should stay away from sick people and wash their hands with soap and water or use hand sanitizer with 60% to 95% alcohol, the CDC says.
2days ago, 20 Feb, Thursday
BlackRock Makes Alternative Investment Push With YieldStreet Partnership
YieldStreet, the fintech bringing alternative investments to accredited investors just got a big credibility boost, partnering with BlackRock, the world’s largest asset manager to launch a new closed-end fund.The YieldStreet Prism Fund provides investors with access to a variety of alternative investments be it a short term financing for a small business or a litigation financing deal. The investments cover a range of industries including real estate, shipping, and marine finance, legal finance, art finance, and commercial loans. BlackRock manages the liquid assets side of the fund and YieldStreet takes care of the rest. The fund is expected to liquidate after about four years and aims to have a 7% distribution rate on an annual basis. The fund charges about 1.5% in fees. “It’s the first time investors can make a singular investment and access a large, diversified product,” said Michael Weisz, founder, and president of YieldStreet. “The project has been over a year in the making and marks a paradigm shift.” Alternative investing has long been the domain of institutional investors but YieldStreet and fintechs like it are changing that. They are creating investment platforms, giving regular investors access to deals typically reserved for the institutional players. YieldStreet investors can put money toward everything from art financing to aviation. It competes against wealth management arms of the major banks for deals, charging companies and investors less in fees.
United just extended China and Hong Kong cancellationsUnited Airlines is extending its suspension of flights to China and Hong Kong until April 24, citing the ongoing coronavirus outbreak. The airline typically flies about a dozen daily flights between the US and the China or Hong Kong, including to the cities of Beijing, Chengdu, and Shanghai. United previously planned on resuming flights to Hong Kong on February 20, and to the Chinese mainland on March 28.
AI development should be regulated, says Elon MuskTesla and SpaceX CEO Elon Musk has said advanced artificial intelligence development should be regulated, including AI created by his own companies. He tweeted the remark in response to an article published this week by MIT Technology Review about OpenAI (which Musk co-founded but has since left), describing how it has drifted from its initial purpose of developing AI safely and fairly to become secretive and preoccupied with raising money. When Musk was asked if he meant AI should be regulated by individual governments or on a global scale, for example by the UN, he replied: “Both.” This is far from the first time Musk has expressed concerns about the potential negative consequences of AI development. He’s previously described it as “our biggest existential threat” and “potentially more dangerous than nukes.” In 2018 he told Recode that he thought a government committee should spend a year or two “gaining insight about AI” then come up with regulations to ensure AI is developed and used safely.
China Expels 3 Wall Street Journal Reporters as Media Relations Sour
HONG KONG — China on Wednesday said it would expel three Wall Street Journal reporters working in mainland China, in a significant escalation of Beijing’s pressure on the foreign news media.
At a daily news briefing on Wednesday, a spokesman for China’s Ministry of Foreign Affairs said the reporters’ credentials would be revoked in retaliation for a headline on an essay that ran in The Journal’s editorial pages earlier this month. The headline read, “China Is the Real Sick Man of Asia.”
Chinese officials have “demanded that The Wall Street Journal recognize the seriousness of the error, openly and formally apologize, and investigate and punish those responsible, while retaining the need to take further measures against the newspaper,” Geng Shuang, the ministry spokesman, said in a transcript provided by the Chinese government.“The Chinese people do not welcome media that publish racist statements and smear China with malicious attacks,” he added.
Hong Kong unemployment surges in wake of coronavirus outbreakHong Kong’s unemployment surged to a three-year high as consumption figures plunged in the city caused by months of unrest and the Covid-19 outbreak. Economists forecast the Asian financial center could post an unprecedented second year of economic contraction in a row. The city’s unemployment rate rose to 3.4% for the period of November 2019 to January this year, the highest since 2017, data from the Hong Kong government said Tuesday. As of January, Hong Kong’s unemployment rate has increased for five consecutive months. “The recent coronavirus infection has seriously disrupted many economic activities, especially tourist-related industries,” said Law Chi-kwong, secretary for Labour and Welfare Bureau in Hong Kong. Industries including retail, catering and lodging have a combined unemployment rate of 5.2% , and it further rose to 5.7% with regards to the construction industry, the highest rate in six years, Law noted.
KraneShares launches China ESG ETFChina ETF specialist KraneShares has launched a China equity ETF with an environmental, social and governance (ESG) tilt. The KraneShares MSCI China ESG Leaders UCITS ETF (KESG) has listed on the London Stock Exchange (LSE) with an expense ratio of 0.4%. KESG tracks the MSCI China ESG Leaders 10/40 index, a market-cap weighted index that selects companies with the highest with ESG scores relative to their sector peers. The 10/40 concentration constraint means each group is capped at 10% and all group entities with a weight of more than 5% should not exceed 40% of the index by weight. The launch of KESG is a result of KraneShares’ high client demand for a China-focused ESG UCITS ETF.
2days ago, 19 Feb, Wednesday
Goldman Sachs AM launches environmental impact equity fundGoldman Sachs Asset management (GSAM) has launched an environmental impact fund headed up by Alexis Deladerrière and the firm’s global equity team. The Goldman Sachs Global Environmental Impact Equity Portfolio, which will be run using bottom-up stock selection process, aims to hold companies that positively contribute to clean energy, resource efficiency, sustainable consumption and protection, a circular economy, or water sustainability. Deladerrière, who is a managing director, head of international developed markets equity and a global equity portfolio manager at GSAM, has been at the company for more than 17 years and has managed global equity portfolios since 2012.
Chinese real estate developers move their property sales onlineChina Evergrande Group, one of the country’s largest real estate developers, secured the sale of over 47,540 commercial properties worth Rmb58bn through its new online property sale network within three days, the company said in a web press conference on Sunday. The data is based on a reservation system on Evergrande’s online platform — which was launched on February 13 and supports virtual reality apartment viewing — where a client can put down a deposit of Rmb5,000 to reserve a property. The China Real Estate Association earlier this month urged developers to move their property sales online to help contain the spread of the coronavirus. Evergrande has also announced a 25% discount for all residential and commercial properties sold for the rest of the month, starting Monday, followed by a 23% discount in March.
30 measures rolled out to promote Shanghai as an international financial centreThe CBIRC, CSRC, the People’s Bank of China, the municipal government of Shanghai and the State Administration of Foreign Exchange jointly rolled out 30 measures to promote Shanghai as an international financial centre and support the integration of the Yangtze River Delta Economic Zone. The zone encompasses Anhui province, Jiangsu province, Shanghai municipality and Zhejiang province. Alongside a host of measures, the regulators vowed to push the renminbi internationalisation process and improve green finance policies. Additionally, the regulators said they would encourage commercial banks to set up their wealth management arms in Shanghai and invest in infrastructure projects and private companies’ shares. It will also encourage insurers to invest in the technology and innovation sector. The regulators will also start allowing foreign institutions to collaborate with large domestic commercial banks to set up joint venture wealth management firms in Shanghai on a trial basis. Shanghai will be the first to eliminate the 51% foreign ownership ceiling on life insurers. Foreign institutions are also encouraged to set up majority held securities houses, fund management firms and pension funds in Shanghai. The regulators plan to bring more foreign investors into the domestic bond market and further develop the renminbi FX derivatives market. Lastly, they will work to integrate Shanghai’s financial legal system with the international one and explore the possibility of giving foreign institutions the option to sign master agreements with either ISDA, the National Association of Financial Market Institutional Investors or the Securities Association of China.
China Securities Regulatory Commission (CSRC) published new rules regarding share issuanceThe China Securities Regulatory Commission (CSRC) published new rules regarding share issuance for companies listed on the main boards and the ChiNext board — a Nasdaq-styled board on the Shenzhen Stock Exchange for fast-growing and high tech firms — on Friday evening. ChiNext companies no longer need to have a debt to asset ratio higher than 45% to sell shares to the public. If ChiNext companies want to sell shares through private placements, they no longer need to have been profitable for two consecutive years. The CSRC also encouraged issuers to introduce strategic investors by shortening the lock-up period. Additionally, the issuance approval given by the CSRC will be valid for 12 months, double the previous six month validity.
Ray Dalio And Bridgewater Donating $10 Million To Combat CoronavirusThe family charity of billionaire Ray Dalio and his hedge fund company Bridgewater Associates LP are donating $10 million to combat the spread of the coronavirus. According to Bloomberg, the money will go towards Peking University First Hospital, Union Hospital for Clinical Care, and three medical teams led by academics in Wuhan. Dalio and Bridgewater are joining a number of other companies and executives making large donations to combat the coronavirus. For example, the charitable foundation arm of Blackstone Group is donating $1 million to expand the distribution of supplies and provide aid to over 30 communities in China. And Citadel is donating $7.5 million for the cause. Plus UBS Group AG is committing $1 million to front line responders. Goldman Sachs will donate a total of $1 million to support medical efforts regarding the virus of the Chinese Red Cross, International Medical Corps. and the Centers for Disease Control and Prevention Foundation Emergency Response Fund, the memo said.
Bill & Melinda Gates Foundation Dedicates Additional $100 million to fight CoronavirusThe Bill & Melinda Gates Foundation announced earlier this month that it will immediately commit up to $100 million for the global response to the 2019 novel coronavirus (2019-nCoV). The funding will help strengthen detection, isolation and treatment efforts; protect at-risk populations; and develop vaccines, treatments and diagnostics. The new funding is inclusive of $10 million the foundation committed to the outbreak in late January.
4days ago, 18 Feb, Tuesday
Japan on brink of recession as economy contracts, virus heightens riskTOKYO (Reuters) - Japan’s economy shrank at the fastest pace in almost six years in the December quarter as a sales tax hike hit consumer and business spending, raising the risk of a recession as China’s coronavirus outbreak chills global activity. Analysts say the widening fallout from the epidemic, which is damaging output and tourism, could have a significant impact on Japan if it’s not contained in coming months. “There’s a pretty good chance the economy will suffer another contraction in January-March. The virus will mainly hit inbound tourism and exports, but could also weigh on domestic consumption quite a lot,” said Taro Saito, executive research fellow at NLI Research Institute.
1week ago, 15 Feb, Saturday
The Qinghai Provincial Investment Group failed to reach a bond default settlement with creditorsA state-owned Chinese aluminum producer’s proposal to settle $850 million of defaulted bonds is meeting strong resistance from investors, throwing in doubt a restructuring plan that entails steep losses for bondholders. On Friday, offshore creditors of Qinghai Provincial Investment Group Co. published a letter to Chinese government entities including top regulators in a Hong Kong newspaper, calling on the defaulter to withdraw its offer of a debt overhaul. The move comes a week after a call with bondholders was cut short when some of them lost their temper over the debt plan. The bondholder showdown comes just days ahead of the company’s proposal that will expire at 4pm, London time, Feb. 17. Qinghai Provincial offered earlier this month to let holders sell the defaulted notes at discounts as deep as 63%. Some bondholders are also considering demanding immediate repayment of three dollar bonds, a practice known as an “acceleration,” a starting point for the legal process. The investors’ response is crucial as Beijing appears to be developing a formula for resolving offshore bond failures by state-owned enterprises, after Qinghai Provincial and a major commodities trader proposed nearly identical losses on holders of their defaulted bonds.
1week ago, 14 Feb, Friday
Harvard, Yale under investigation for failing to report foreign fundingThe Education Department has opened an investigation into Harvard and Yale amid suspicions that the Ivy League schools failed to report about hundreds of millions of dollars in funding from foreign countries, some of which are openly hostile to the U.S. Officials said in a letter this week that they are probing whether the universities accepted about $375 million from China, Iran, Russia, Qatar and Saudi Arabia, the Wall Street Journal reported. In some cases, the schools actively sought out the foreign funding from sources potentially looking to steal research or “spread propaganda benefiting foreign governments,” according to Education Department documents. The funding did not, however, go towards reducing tuition costs for students. Universities are required by law to report gifts and contracts from foreign sources worth more than $250,000 per year.
1week ago, 13 Feb, Thursday
Harvard head of Public Health: Coronavirus likely now ‘gathering steam’The Centers for Disease Control and Prevention in US said Wednesday it is preparing for the new coronavirus, which has killed at least 1,115 and sickened more than 45,000 worldwide, to “take a foothold in the U.S”, according to latest report from CNBC. “There’s likely to be a period of widespread transmission in the U.S., and I hope we will avert the kind of chaos that some other places are seeing.” Harvard’s Marc Lipsitch, professor of epidemiology at the Harvard T.H. Chan School of Public Health and head of the School’s Center for Communicable Disease Dynamics, talked to the Gazette on Tuesday.
"And a couple of things are striking. One is that there are countries that really should be finding cases and haven’t yet, like Indonesia and maybe Cambodia. They are outside the range of uncertainty you would expect even given variability between countries. So our best guess is that there are undetected cases in those countries. Indonesia said a couple of days ago that it had done 50 tests, but it has a lot of air travel with Wuhan, let alone the rest of China. So 50 tests is not enough to be confident you’re catching all the cases. That’s one bit of evidence that to me was really striking. Second, I was reading The Wall Street Journal that Singapore had three cases so far that were not traced to any other case. Singapore is the opposite of Indonesia, in that they have more cases than you would expect based on their travel volume, probably because they’re better at detection. And even they are finding cases that they don’t have a source for. That makes me think that many other places do as well. Of course, we’re making guesses from limited information, but I think they’re pretty likely to be correct guesses, given the totality of information."“At some point, we are likely to see community spread in the U.S. or in other countries,” Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, told reporters on a conference call. “This will trigger a change in our response strategy.” The CDC said Tuesday that a mistake at a lab led U.S. health officials to release an infected coronavirus patient from a San Diego hospital. The patient had been evacuated from Wuhan, the epicenter of the outbreak, on a government-chartered flight last week. Jacob Wilson, a 33-year-old American evacuee from Louisiana who works at a tech start-up in Wuhan—the Chinese epicenter of the virus—told The Daily Beast he signed the petition in order to correct what he called “damn near criminal” and “irresponsible” actions by Centers for Disease Control and Prevention (CDC) officials responsible for the base’s quarantine protocols. The petition asks that “everyone in the facility be tested;” that the evacuees be given masks and disinfectants; that hand sanitizers be available in public areas, including a playground; that they not be forced to gather in large groups; that town hall meetings be conducted via conference call; and that public areas be regularly disinfected throughout the day. Dr. Christopher Braden, a medical epidemiologist with the CDC, said last week that the federal agency was “doing everything possible” to care for the hundreds of American evacuees in their care under mandatory quarantine. But at least some experts suggested such problems would persist as long as there were looming uncertainties about viral transmission. On February 10th, Santa Clara County declares local health emergency. Two people have tested positive for the coronavirus in Santa Clara County, a county of about two million residents. The two cases are not related and the county says there is no evidence that there is a person to person spread of the new virus in the county. Both patients, a man and a woman, recently traveled to Wuhan, China and have stayed home since returning to the U.S. except to seek medical attention. The first patient is a Santa Clara County resident who had returned home from China on January 24. He traveled through San Jose airport, officials said. The county said he came into contact with “very few” people since returning to the U.S. from China and has been “self-isolating.” The second infected person is a visitor of Santa Clara County and traveled through SFO on January 23 to visit family. If the United States begins to see instances in several parts of the country in which a single case ignites four “generations” of human-to-human infection, Redfield said — meaning a person who contracted the virus infects a person, who infects another person, who then infects another person — then the CDC is likely to conclude containment of the virus has failed. “Once we get greater than three — so four or more is our view — [generations of] human-to-human transmission in the community … and we see that in multiple areas of the country that are not contiguous, then basically the value of all of the containment strategies that we’ve done now then really become not effective,” he said. “That’s when we’re in full mitigation.”
1week ago, 12 Feb, Wednesday
Ray Dalio: Investors have overreacted, markets will recover soonRay Dalio, the billionaire founder of Bridgewater Associates, which manages $160 billion in global investments, says the impact of the coronavirus outbreak on markets has been exaggerated and is likely to be short lived. Investor concerns over the pandemic “probably had a bit of an exaggerated effect on the pricing of assets because of the temporary nature of that, so I would expect more of a rebound,” Dalio, said at a conference in Abu Dhabi on Tuesday. “It most likely will be something that in another year or two will be well beyond what everyone will be talking about.” According to Bloomberg report by Nicolas Parasie, Dalio said investors should instead focus on issues such as wealth and political gaps, the emergence of China -- and what that means for the competitive landscape -- technology and the environment. Some Wall Street bulls say they fear the virus could lead to a stock market correction and that it currently poses the single biggest threat the market’s rally. Coronavirus has shut down business across the Chinese provinces that account for more than 80% of GDP and 90% of exports for the world’s second-largest economy as the government instructs workers to stay home in an effort to contain the outbreak. "When you don’t know, the best investment strategy is to be smartly diversified across geographic locations, across asset classes, and across currencies,” Dalio recently wrote in a LinkedIn post. Dalio said fears of the spreading coronavirus have triggered a “flight-to-quality market action” that continues to pressure stocks while giving a lift to hedges such as gold, bonds and the dollar. “We want to pay attention to what’s actually happening, what people believe is happening that is reflected in pricing (relative to what’s likely), and what indicators that will indicate the reversal,” wrote Dalio, who’s made more money for his clients since 1975 than any other hedge fund, according to Bloomberg.
Malaysian securities commission issues guidance to enhance shareholder activismThe Securities Commission Malaysia (‘SC’) issued the Annual General Meeting Corporate Governance Checklist for Shareholders (‘AGM CG Checklist’) on 5 February 2020 with the aim of promoting meaningful dialogue between shareholders and the board of directors at annual general meetings (‘AGM’) of companies. According to the Chairman of the SC, the AGM CG Checklist is meant to guide shareholders on key issues they may need to consider or raise at an AGM before exercising their voting rights. Among these issues are the matters pertaining to the appointment of directors, approval of directors’ fees, appointment of auditors, contents of the annual report, and the adequacy of sustainability and anti-corruption measures adopted by a company. The AGM CG Checklist also provides guidance on matters to be considered by shareholders before and after an AGM. Although the AGM CG Checklist was developed for shareholders, the SC encouraged other stakeholders, such as consumers and potential investors, to use the checklist to understand and evaluate the performance, policies and practices of companies. The AGM CG Checklist was developed by the SC in collaboration with the Institutional Investors Council Malaysia and the Minority Shareholders Watch Group and its publication is one of the deliverables under the SC’s Corporate Governance Strategic Priorities (2017-2020).
2weeks ago, 8 Feb, Saturday
Following Guangzhou, Shenzhen are now in lockdown to prevent virus spread8th February 2020 – (Shenzhen) Shenzhen Wuhan Pneumonia Epidemic Prevention and Control Headquarters announced that with immediate effect, housing estates in the city will be in lockdown. Residents with a history of travelling in epidemic zones in the last 14 days will be isolated at home; those who were in close contact with infected patients will be placed in isolation. Vehicles entering Shenzhen must apply online in advance before entering Shenzhen from today onwards. Earlier yesterday, the local government of Guangzhou announced today that lockdown measures have been implemented at housing estates and villages in Guangzhou. Non-residents are not allowed to enter each housing estate and village. Residents must enter and leave with resident passes and temperature check will be conducted. Residents returning from overseas or other provinces must submit all their travel history and health declaration online.