‘My wife’s income is over $100,000. My income is under $15,000 per year. She has a 30-year pension coming, a 401(k), savings, and her checking account.'
(Bloomberg) -- Elon Musk continued to whipsaw the price of Bitcoin, briefly sending it to the lowest since February after implying in a Twitter exchange Sunday that Tesla Inc. may sell or has sold its cryptocurrency holdings.Bitcoin slid below $45,000 for the first time in almost three months after the billionaire owner of the electric-car maker seemed to agree with a Twitter post that said Tesla should divest what at one point was a $1.5 billion stake in the largest cryptocurrency. It traded at $45,270 as of 5:51 p.m. in New York, down about $4,000 from where it ended Friday.The online commentary was the latest from the mercurial billionaire in a week of public statements that have roiled digital tokens. He lopped nearly $10,000 off the price of Bitcoin in hours last Wednesday after saying Tesla wouldn’t take it for cars. A few days earlier, he hosted “Saturday Night Live” and joked that Dogecoin, a token he had previously promoted, was a “hustle,” denting its price. Days later he tweeted he was working with Doge developers to improve its transaction efficiency.Musk’s disclosure in early February that Tesla used $1.5 billion of its nearly $20 billion in corporate cash to buy Bitcoin sent the token’s price to record and lent legitimacy to electronic currencies, which have become more of a mainstream asset in recent years despite some skepticism.His latest dustup with Bitcoin started with a tweet from a person using the handle @CryptoWhale, which said, “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him...”The Tesla chief executive officer responded, “Indeed.”The twitter account @CryptoWhale, which calls itself a “crypto analyst” in its bio, also publishes a Medium blog on market and crypto trends.Musk has spent hours Sunday hitting back at several different users on Twitter who criticized his change of stance on Bitcoin last week, a move he said was sparked by environmental concerns over the power demands to process Bitcoin transactions. He said at the time that the company wouldn’t be selling any Bitcoin it holds.An outspoken supporter of cryptocurrencies with cult-like following on social media, Musk holds immense sway with his market-moving tweets. He has been touting Dogecoin and significantly elevated the profile of the coin, which started as a joke and now ranks the 5th largest by market value.Dogecoin is down 9.6% in the last 24 hours, trading at 47 cents late Sunday afternoon, according to data from CoinMarketCap.com.Tesla didn’t immediately respond to an email seeking comment on Musk’s tweet on Sunday.Read More: Elon Musk Just Reopened an Old Wound in the Bitcoin WorldMusk’s Sunday social-media escapades were the latest chapter in one of the zaniest weeks in a crypto world famous for its wildness. For die hards, the renewed slumps in Bitcoin and other tokens have done nothing to deter crypto enthusiasts who say digital coins could many times their current value if they transform the financial system.“We’re looking at the long-term and so these blips, they don’t faze us,” Emilie Choi, president and chief operating officer of crypto exchange Coinbase Global Inc., said last week on Bloomberg TV about the wild swings prevalent in the market. “You’re looking for the long-term opportunity and you kind of buckle up and go for it.”Seat belts were needed by anyone watching the crypto world in the past eight days. Aside from Musk’s antics that sent Doge and Bitcoin on wild rides, a host of other developments pushed around prices.Tether, the world’s largest stablecoin, disclosed a reserves breakdown that showed a large portion in unspecified commercial paper. Steve Cohen’s Point72 Asset Management announced that it would begin trading cryptocurrencies. And a longstanding critique of the space reared its head again: illicit usage.It was reported that the owners of the Colonial Pipeline paid a $5 million ransom in untraceable digital currencies to hackers that attacked its infrastructure, while Bloomberg also reported that Binance Holdings Ltd., the world’s biggest cryptocurrency exchange, was under investigation by the Justice Department and Internal Revenue Service in relation to possible money-laundering and tax offenses.But, “for many crypto assets such as Bitcoin and Ethereum, the long-term story has not changed,” said Simon Peters, an analyst at multi-asset investment platform eToro. “This emerging asset class continues to revolutionize many aspects of financial services, and while nothing goes up in a straight line, the long-term fundamentals for crypto assets remain as solid as ever.”Bitcoin was already swinging wildly on the weekend before Musk tweeted. The two days tend to be particularly volatile for cryptocurrencies, which -- unlike most traditional assets -- trade around the clock every day of the week. Bitcoin’s average swing on Saturdays and Sundays so far this year comes in at 4.95%.That type of volatility is owing to a few factors: Bitcoin’s held by relatively few people, meaning that price swings can be magnified during low-volume periods. And, the market remains hugely fragmented with dozens of platforms operating under different standards. That means cryptocurrencies lack a centralized market structure akin to that of traditional assets.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Automaker Stellantis and iPhone assembler Foxconn said on Monday they would announce a strategic partnership on Tuesday. Last year then Fiat Chrysler, now part of Stellantis, said it planned to set up a joint venture with Hon Hai Precision Industry, Foxconn's parent company, to build electric cars and develop internet-connected vehicles in China. Fiat Chrysler merged with France's Peugeot maker PSA at the beginning of the year to create Stellantis, the world's fourth-largest carmaker, to relaunch in China as one of its main goals.
LONDON (Reuters) -British businesses ramped up their search for new staff as pubs, restaurants and other hospitality and travel firms got ready for Monday's lifting of coronavirus restrictions in England, a survey showed. But an exodus of foreign workers is aggravating a shortage of candidates, with more than 10 jobs on offer for every job-seeker in some cities, according to the survey by job search website Adzuna. Job adverts on Adzuna jumped to 987,800 in the first week of May, up by 18% from the end of March, which was before the reopening of non-essential retailers and hospitality firms for outdoor service on April 12.
(Bloomberg) -- China’s central bank injected medium-term cash into the financial system, in a push to keep borrowing costs stable as China’s economy continues its recovery from the virus pandemic.The People’s Bank of China added 100 billion yuan ($15.5 billion) of one-year funds with its medium-term lending facility on Monday, matching the amount coming due in a move that was expected by analysts. The authorities kept the interest rate unchanged at 2.95%.By keeping liquidity ample, the operation is seen to be supportive of the nation’s liquidity-sensitive stocks and also bonds. The cost on China’s 10-year note was little changed Monday. In the money market, the seven-day repurchase rate rose 19 basis points to 2.18%, near its daily average level over the past year. It recently hit a four-month low.The benchmark CSI 300 Index rose as much as 1.8%. Data showed China’s economic activity moderated in April from its record expansion in the first quarter. That eased concerns about further tightening of fiscal and monetary policies, according to Zhang Gang, a strategist with Central China Securities Co. The nation’s top leaders recently described the recovery as “unbalanced and unstable,” pledging further efforts to drive a rebound in domestic demand.China’s sovereign notes gained for three weeks in a row as of Friday, the longest run since January. That’s even as Treasury yields have climbed and a surprisingly quick jump in the nation’s factory-gate prices were seen to pose a challenge to current monetary policy. Factors behind the resilience include ample liquidity and capital inflows, which accelerated in April. While the loose conditions could be tested by a rise in debt sales in May, the PBOC’s vow to keep cash supply ample has boosted confidence.“The PBOC will stay supportive of liquidity to ensure the supply of local government bonds can be readily absorbed, when inflation does not appear to be a major concern for the central bank,” said Frances Cheung, a rates strategist at Oversea-Chinese Banking Corp. Beijing will step up injecting short-term cash soon, she added. “With the expected pick-up in issuance of bonds, chance is for some net injections as and when are needed.”The PBOC has done the minimum in its daily operations to manage short-term liquidity over the past two months. It has been injecting 10 billion yuan of cash daily-- no matter the size of funds coming due -- since the start of March. That’s a sign the central bank is so far pleased with the subdued volatility in the money market.(Updates with market moves in par 3)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
If you're owed money this year, the investing icon has some advice on how to use it.
(Bloomberg) -- Microsoft Corp. conducted an investigation into co-founder Bill Gates’s involvement with an employee almost two decades ago after it was informed in 2019 of his attempt to start a romantic relationship with that person.The board reviewed the matter and held a “thorough investigation” with the help of an external law firm, the software giant said. It didn’t reach a conclusion to the probe because Gates had stepped down before it was completed, Microsoft said.“Microsoft received a concern in the latter half of 2019 that Bill Gates sought to initiate an intimate relationship with a company employee in the year 2000,” Microsoft said in a statement. “A committee of the Board reviewed the concern, aided by an outside law firm, to conduct a thorough investigation. Throughout the investigation, Microsoft provided extensive support to the employee who raised the concern.”Dow Jones earlier reported that Microsoft’s directors found Gates’ involvement with the female employee to be inappropriate and decided last year that he had to step down from the board, citing people familiar with the matter who weren’t identified.Microsoft didn’t provide further details on the investigation.The billionaire said in March last year that he was stepping down from the board to devote more time to philanthropy. Gates hasn’t been active in a day-to-day role since 2008, Microsoft said at that time. Gates co-founded the software company in 1975 and served as its CEO until 2000, the same year his foundation was started, and was chairman until February 2014.‘An Affair’A spokeswoman for Gates said his decision to leave the board has nothing to do with the romantic involvement with an employee.“There was an affair almost 20 years ago which ended amicably,” she said, adding that his “decision to transition off the board was in no way related to this matter.”The belated investigation into the affair came at a time that was marked by a groundswell of discussion at Microsoft about the treatment of women and Me-Too conversations in the broader industry. Since 2000, Microsoft had also put in place processes for investigating allegations and overhauled them with the goal of making them stronger, the company said.Intel Corp. Chief Executive Officer Brian Krzanich resigned after the board was informed that he had had a consensual relationship with a subordinate, even though that relationship had ended years before and predated his appointment to the top job at the company. The board conducted investigations internally and via external counsel to confirm the violation of the company’s policies and made the announcement June 2018.Gates and Melinda French Gates announced their divorce earlier this month after 27 years of marriage. Several reports, including those that emerged over the weekend, said she had raised concerns over his dealings with convicted sex offender Jeffrey Epstein.The New York Times had reported in 2019 that Gates had met with Epstein several times, and once stayed late at his New York townhouse. Epstein had died in jail two months prior while awaiting trial on federal charges related to sex trafficking.Gates’s spokeswoman denied the reports. The “characterization of his meetings with Epstein and others about philanthropy is inaccurate,” she said. “The rumors and speculation surrounding Gates’ divorce are becoming increasingly absurd.”While Gates’ dealings with Epstein weren’t a part of the scope of the Microsoft investigation, it was discussed by some board members, according to a person familiar with the matter, who asked not to be identified because the information isn’t public.Stock TransfersThe split also put a spotlight on the Gates fortune, valued at about $144 billion by the Bloomberg Billionaires Index, as well as their foundation.The Bill and Melinda Gates Foundation is the largest of its kind on the planet. With more than 1,600 employees and offices around the world, it has already distributed more than $50 billion since its inception to causes like vaccine development and women’s empowerment.Last week, Cascade Investment, the investment company created by Gates, transferred stock in Deere & Co. to his wife, bringing the total amount she’s received since they announced their divorce to more than $3 billion.The investment vehicle transferred about 2.25 million shares worth about $851 million, according to a regulatory filing. That followed similar disclosures tied to Mexican companies Coca-Cola Femsa and Grupo Televisa and about $1.8 billion of stock in Canadian National Railway Co. and AutoNation Inc.Read More: Gates Divorce Roils World’s Biggest Family Philanthropy EngineFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Billionaire George Soros’s investment firm snapped up shares of ViacomCBS, Discovery and Baidu as they were being sold off in massive blocks during the collapse of Bill Hwang’s Archegos Capital Management.Soros Fund Management bought $194 million of ViacomCBS Inc., Baidu Inc. stock valued at $77 million, as well $46 million of Vipshop Holdings Ltd. and $34 million of Tencent Music Entertainment Group during the first quarter, according to a regulatory filing released Friday. A person familiar with the fund’s trading said the company didn’t hold the shares prior to Archegos’s implosion.Archegos, the family office of former hedge fund manager Hwang, fell apart during the last week of March after amassing large leveraged positions in a concentrated portfolio of U.S. and Chinese companies. At its peak, the family office had more than $20 billion of capital and total bets exceeding $100 billion.Hwang was wiped out in just days after investments including ViacomCBS and Discovery tumbled, triggering margin calls from global banks, who then sold the stocks in the big block trades. The fiasco is expected to cost the finance industry about $10 billion, has prompted an investigation by the U.S. Securities and Exchange Commission and caused heads to roll at Credit Suisse Group AG, where the hit exceeds $5 billion.The 13F filing provides one of the first examples of how a hedge fund attempted to capitalize on the distressed remains of Archegos. It also offers an insight into Soros’s investment firm, which is run by Chief Investment Officer Dawn Fitzpatrick.She told Bloomberg in March that she was willing to jump on dislocations in the market, investing $4 billion during the pandemic-induced swoon a year ago, including buying residential mortgages on the cheap. Soros returned almost 30% in the 12 months through February and manages $27 billion across a range of strategies.“When there’s a dislocation, we’re prepared to not just double down but triple down when the facts and circumstances support that,” Fitzpatrick, 51, said in a “Front Row” interview on Bloomberg TV.Soros also increased its bet on Amazon.com Inc. and homebuilder DR Horton Inc., which is now its second-largest public equity position.The 13F, which money managers overseeing more than $100 million in U.S. equities must file quarterly, revealed that Soros held $4.5 billion of U.S. equities, down $77 million from the prior quarter.The biggest exit in the quarter was Palantir Technologies Inc. Soros sold 18.5 million shares valued at about $435 million. The firm originally revealed it owned a stake in the controversial data-mining company controlled by Peter Thiel in November, but rapidly issued a statement saying the original investment was made in 2012 and it regretted the decision.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Japan's top lender Mitsubishi UFJ Financial Group Inc (MUFG) posted on Monday a better-than-expected 47% rise in full-year net profit, after last year's earnings were hit by an impairment charge on its units in Southeast Asia. Profit for the year ended in March came in at 777 billion yen ($7.11 billion) compared with 528.2 billion yen a year ago, MUFG said in a statement. MUFG's profit in the three months through March was 170 billion yen, compared to a 56.1 billion yen loss in the same period a year earlier, according to Reuters' calculations based on the bank's statement.
An improving economy and rising inflation are likely to pull rates higher before long.
(Bloomberg) -- With bond yields jumping and inflation expectations surging, this would seem like a strange time for optimism to break out among Wall Street’s equities handicappers.But that’s exactly what it has done. And the reasons offer a lens into what kept the stock market’s worst three-day decline since October from spinning further out of control this week.It was hard to notice, but while markets were lurching, stock strategists at securities firms were busy jacking up their earnings estimates for S&P 500 companies. That brought profit projections from these top-down forecasters into alignment with a much bigger set of company analysts, the single-stock researchers who follow individual companies.While nobody believes the published opinions of strategists are particularly meaningful to the day-to-day motion of share prices, the phenomenon illustrates a dynamic that’s been supporting equities for more than a year. Namely, the slow and almost invisible improvement in corporate profits that’s accompanied growing inflation anxiety and spotty data -- and continues to put a floor under selloffs.“It’s going to be challenging to have a deep correction when you have an economy that is very strong and earnings revisions that are still moving up at a brisk pace,” said Keith Lerner, chief market strategist at Truist Advisory Services. “That just provides a cushion for pullbacks, and that’s exactly what we saw this week.”Dennis Debusschere, head of portfolio strategy at Evercore ISI, was one strategist who boosted his earnings estimates in the face of an equity rout triggered by inflation fears. Citing a faster-than-expected recovery in corporate activity, he raised his 2021 forecast for S&P 500 companies by $6 to $182 a share.“Inflation is trending higher and supply chain disruptions are a potential threat to profitability, but management sentiment toward margins continued to climb higher,” he wrote in a note to clients earlier this week. “Until that trend reverses, strong topline growth and strong pricing power support” robust earnings, he said.Slowly but forcefully, Wall Street has come to terms with corporate America’s resilience. Earnings that didn’t fall as much as feared during the initial pandemic lockdowns are now rebounding faster than expected. The net result: A profit recovery that was expected to take years is on track to be done by June, a span of just five quarters.When this reporting season started five weeks ago, analysts’ 2021 earnings estimate for S&P 500 firms stood at $174 a share. After almost every firm crushed expectations, the expected income has increased 5.7% to $183.90 a share, a pace of upgrading that was the second fastest since Bloomberg began tracking the data in 2012, exceeded only by the 2018 cycle in response to President Donald Trump’s tax cuts.The trajectory from top-down strategists showed a similar pattern, with projected profits climbing roughly 4% to $185 a share during the past month.But that’s where the consensus ends. When it comes to where the market goes, the two groups of prognosticators couldn’t be further apart.With the S&P 500 nearly doubling in 14 months, strategists tracked by Bloomberg are telling clients to be careful. Even after a string of upgrades, their 2021 price targets average 4,199, within 0.1% from where the index closed Friday. In other words, they see little room for upside.On the other hand, bottoms-up researchers who focus on single stocks -- the buy/hold/sell crowd that weighs in when results are disclosed -- are substantially more bullish. Based on aggregate price targets, they say the S&P 500 has another 11% to run from here.This divergence is the second-widest at this time of year in Bloomberg data going back to 2004.So who to believe? Neither side has a monopoly on wisdom -- there’s scant record of anyone being consistently right about stocks.Marc Odo, client portfolio manager at Swan Global Investments, is siding with the strategists, noting that the analysts may be too fixated on the micro side of the businesses and failing to see the big picture.Some strategists, including Mike Wilson at Morgan Stanley, have warned against extrapolating the latest robust results into coming quarters because supply constraints and labor shortages will likely hurt profits. Others, like Bank of America’s Savita Subramanian pointed to stretched valuations as well as looming policy headwinds, such as tax hikes and central banks rolling back monetary stimulus, as reasons for caution.“If you get a big cross section of analysts, everyone is going to be bullish on their specific niche and that creates a bullish consensus,” Odo said. “Whereas someone who is approaching it from the top down like the strategists, they’re looking more at the forest and may be able to identify those patches of weakness.”To Truist’s Lerner, strategists may be forced to catch up should the market continue to march higher.“The strategists are much slower because they are looking at macro trends,” he said. “They’ll either sit tight with their view and say it’s priced in already, or you’ll see that more with a lag.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Bond markets are famous for pushing their agenda, and in east Europe right now, they’re pushing for rate increases, never mind what central banks have to say on the matter.Yields on bonds of Hungary and Poland are rising faster than anywhere else in Europe. Hungary’s jumped 32 basis points last week, signaling traders are primed for rate liftoff as inflation roars back to life ahead of widespread economic re-openings this summer.Like peers in Frankfurt, central bankers in Hungary and Poland have signaled they’re in no rush to curb inflation that may turn out to be temporary, preferring to wait and foster still-fragile economic recoveries from the pandemic.Traders are less patient. In Hungary, market-implied pricing shows expectations for 130 basis points of rate hikes in two years, according to Bloomberg data.“The central bank is walking a tightrope here,” said ING economist Peter Virovacz. “If it manages to communicate in a credible way that it believes CPI would return to its 2%-4% tolerance band next year, it can wait out the spike and avoid a hawkish cycle.”The situation brings to mind the quip by political adviser James Carville that when he dies he wanted to come back as the bond market because “you can intimidate everybody.”Carville was talking about traders who pushed up yields in protest against a ballooning budget deficit in the mid-1990s, but there are parallels with the Hungarian and Polish bond selloff on concerns that an economic boom will create an inflation spiral.These latter-day vigilantes may be gaining the upper hand, with strategists at JPMorgan Chase & Co. reiterating their advice to stay underweight bonds in central and Eastern Europe.A premature end of purchase programs is a big risk for Poland, where the central bank has bought the equivalent of 48% of issuance and in Hungary where it accounts for almost a third of purchases, according to JPMorgan.QE ConundrumIf Polish policy makers bring forward their timetable for raising rates, the central bank would also have to wind down its quantitative-easing program, potentially removing the current backstop for the market.One Polish policy maker, Eugeniusz Gatnar, recently called for a rate increase in June. Yet his voice remains in the minority on the 10-person panel. Polish central bank Governor Adam Glapinski has said that rates will stay at their record low until the end of the current policymakers’ term, which ends in early 2022.Still, the inflation threat may be real: in Hungary the pace of annual consumer prices recently accelerated to 5.1%. In Poland it’s running at 4.3%. Both blew past the upper limit of the central banks’ tolerance range, and compare with an inflation reading of 4.2% in the U.S. that sent markets into a tailspin last week.“With inflation surprising to the upside and growth on the mend, we think the market narrative will increasingly focus on the sustainability of QE in CEE,” according to JPMorgan emerging market strategists including Saad Siddiqui.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Taiwan stocks slumped, extending their biggest rout in more than a year, as the government tightened restrictions on people and businesses to control its worst outbreak of the coronavirus.The Taiwan Stock Exchange Weighted Index closed the Monday session 3% lower, having slid as much as 4.2%, as authorities urged companies to allow staff to work from home or split locations after reporting a record 206 new local cases Sunday. The benchmark gauge sank 8.4% last week on concern about the impact on growth, the most since March 2020, turning Taiwan stocks into the world’s worst performers so far this month.Taipei City to Close Schools After Surge in Local CasesForced selling may add volatility to Monday’s trading, with the level of margin debt falling by a net NT$5.8 billion ($207 million) on Friday, according to exchange data compiled by Bloomberg. That took the four-day drop in leverage to NT$39.4 billion, showing traders faced margin calls by brokers to cover losses in their stock accounts.The sharp reversal in Taiwan stocks is a warning to highly leveraged investors around the world. The Taiex was the world’s best performing equity gauge in the three years through April, surging almost 80% in U.S. dollar terms, as a seemingly never-ending rally in tech shares pulled in retail investors.“In light of rising concerns over the pandemic, we expect more volatility ahead, and advise to stick to defensive names with low P/E and high dividend yield,” said Patrick Chen, CLSA’s Head of Taiwan Research. His team’s top picks include Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry Co.Travel and consumption-linked names were among the big losers in the market on Monday. Restaurant operators Gourmet Master Co. and Wowprime Corp. plunged almost 10% each, while shares of Formosa International Hotels Corp. and The Ambassador Hotel slumped at least 4% each.Taipei City will close high schools, elementary schools and kindergartens for two weeks through May 28 to prevent the pandemic from spreading, Mayor Ko Wen-je said at online briefing. Taiwan added 333 local Covid-19 cases on Monday, a fresh record.“Investors are worried as school closures could mean the virus is spreading fast,” said Edward Chen, chairman of First Capital Management. “However, there’s no need to panic as the Taiwanese people are vigilant in Covid prevention. It would be another story though if factory production lines are forced to stop.”Taiwan and Singapore are among the Asian regions that have seen a fresh wave of Covid-19 cases in recent days, and both have tightened virus-related restrictions. Singapore’s stock benchmark slid as much as 0.9% on Monday before erasing the loss.Taiwan’s stock exchange urged investors not to overreact. The latest development in Covid fighting is relatively controllable, and the fall in stock market last week should be already priced in the situation, the bourse said in a statement issued late Sunday night, adding that stabilizing measures will be adopted if the market becomes irrational.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
In the not-so-distant future, a majority of drivers probably won’t even own the cars they drive in, instead they may join the rising phenomenon of car subscription services
The relief bill the president signed in March is giving states money for direct payments.
Chinese state-run automaker Chongqing Changan Automobile plans to list its electric vehicle (EV) unit on Shanghai's Nasdaq-style STAR Market, three sources briefed on the matter said, to fund a rapid expansion of its business. Changan, based in the southwestern city of Chongqing, holds 48.95% of the unit, which makes entry-level and mass-market electric vehicles. The unit aims to sell over 500,000 EVs a year in 2025 and one million in 2030, Changan said during a recent briefing with investors.
The Yen, Aussie and Kiwi whipsawed as investors betting on a rebounding economy squared off against those fearful of inflation.
(Bloomberg) -- Saudi food delivery firm Jahez has hired HSBC Holdings Plc’s local unit to help manage what could be the first listing by a tech startup in the kingdom.Jahez International Company for Information Technology picked HSBC Saudi Arabia as the sole financial adviser and global coordinator for its potential IPO on Nomu, the Saudi stock exchange’s secondary market, which imposes lighter listing requirements to encourage smaller businesses and startups to raise equity.Founded in 2016, the homegrown firm serves around 2 million customers in the kingdom, and processed about 20 million restaurant orders through its app in 2020, it said on Monday, without disclosing details about its potential valuation. It closed a $36.5 million funding round last year.“We will continue to expand our platform to tap into new growth opportunities offered by rapid, technology-enabled changes in consumer behavior, both in Saudi Arabia and in the wider region,” said Ghassab Al Mandeel, chief executive officer at Jahez.Food delivery companies have been flooded with cash from investors betting the pandemic brought a permanent shift in shopper habits.Getir, DeliverooStartups including Turkish retail delivery app Getir and Berlin-based grocery delivery app Gorillas have rapidly hit billion-dollar valuations. In the U.K., Deliveroo raised 1.5 billion pounds ($2.1 billion) in its listing March 31 but then saw its shares plunge more than 30% in their debut.Jahez is the biggest locally owned player in the kingdom, competing with the likes of Uber Technologies Inc.-owned Careem Now and Delivery Hero SE-backed Hunger Station and Talabat. Jahez has also been expanding in other areas such as last-mile logistics and cloud kitchens.The IPO could add to a string of listings in Saudi Arabia, where companies are taking advantage of investors’ demand for new offerings and as state entities look to raise money to bankroll efforts to diversify the economy.Saudi grocery delivery app Nana also raised $18 million last year, tapping investors including venture capital fund STV and Middle East Venture Partners to expand across the Middle East.Saudi Arabia’s consumer spending is on the mend, with its non-oil economy -- the engine of job creation -- rebounding in the first quarter to pre-pandemic levels following a recession.Jahez said “an improving Saudi economy and the resulting rise in employment and disposable income” will fuel further food and e-commerce spending.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Masaru Tange says the strategy that turned his company into one of Japan’s best-performing stocks may be surprising: He buys smaller firms and boosts their workers’ pay.Tange’s Shift Inc., a software tester, acquires other businesses near the bottom of the industry supply chain and raises their engineers’ salaries. He says he’s able to do this and still charge competitive prices by cutting out layers of companies that serve as middlemen in the outsourcing process. And having more workers leads to higher sales.Shift’s shares have risen more than 5,300% since it went public in 2014, the second-best performance on Tokyo’s benchmark stock index. The company’s market capitalization has surged to about $2.3 billion, pushing the value of Tange’s 33% stake to about $745 million.Tange, 46, says his business model is an attempt to remove inefficiencies in Japan’s software industry, where layers of subcontractors take cuts on orders before passing the work to another company below. It’s also, he says, a break from the M&A strategy of buying a business and looking to reduce costs.“I have a strong urge to rescue these young employees,” Tange, Shift’s founder, president and chief executive officer, said in an interview. “I want to create a fair working environment through M&A.”Tange grew up in what he describes as an ordinary family in Hiroshima in southwestern Japan, where both his parents were civil servants. He established Shift in 2005 after majoring in mechanical engineering and spending more than five years working for a consulting firm.Shift started out advising companies on how to improve profits. In 2009, it entered the software testing business.Tange said he wanted to change engineers’ perception that software testing was a second-rate job, including by paying them more money.For example, for a service where the market price was 2 million yen ($18,320), Shift would charge 1.5 million yen. This would enable it to win customers. At the same time, it would raise the amount paid to the engineer to about 800,000 yen from 500,000 yen. It could do so, Tange said, by getting rid of middlemen.Shift acquired Yusuke Sato’s company in 2016. Since then, the software developer says his salary has jumped by more than 70%.“Joining Shift was a huge turning point in my career,” Sato said.Shift has 3,308 engineers as permanent employees as of the end of February, up more than 14-fold from 228 at the end of November 2015. The company acquired at least 14 firms during that period.Increasing engineers leads directly to revenue growth because it enables the company to do more business, according to Go Saito, an analyst at Credit Suisse Group AG who initiated coverage on the stock in February with an outperform rating.“Sales can be derived by multiplying the number of engineers and the unit price for engineers,” Saito wrote in a report that month. “The company has already created a framework for the skills development of engineers, enabling it to cultivate high-quality human resources.”Revenue rose to 28.7 billion yen in the 12 months ended August 2020, more than triple the level three years earlier. Profit increased to 1.6 billion yen, compared to 208 million yen three years before. Shift forecasts that sales will jump to a record 45 billion yen this fiscal year.Software engineers are underpaid in Japan compared to the U.S. and there’s a shortage of them, according to Saito. That’s one reason why Shift’s model of outsourcing software testing works, he said.“We’re the biggest in Japan in this area,” Tange said. “I do see revenue reaching 100 billion yen,” he said, referring to the company’s goal for the fiscal year ending August 2025.Shift’s soaring shares haven’t been immune to pullbacks. They’ve fallen about 22% from a record in October as investors sold high-growth technology stocks. Even after the drop, the company trades at about 87 times estimated earnings.For veteran investor Mitsushige Akino, the stock may see more volatility in coming months and could fall in market downturns. But its “fundamentals are solid and Shift is making progress on the vision it laid out,” the senior executive officer at Ichiyoshi Asset Management Co. said. “It won’t be strange to see more buying of these types of shares if investors focus once more on growth stocks.”Credit Suisse’s Saito says the key will be whether Shift is able to continue to increase its number of engineers.Whether that will happen remains to be seen, but Tange, at least, isn’t short of confidence.“We’re just getting started,” he said.(Updates numbers throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Following is a list of company earnings scheduled for release May 17-21, along with earnings previews for select companies. Next week’s earnings are probably not much significant for major market movements, but it is adequate to gauge investors’ sentiment.
(Bloomberg) -- Gold climbed to the highest in more than three months as bond yields dropped and U.S. retail stalled, while parts of Asia grappled with a spike in coronavirus cases.The yield on 10-year Treasuries extended declines following a report Friday that showed retail sales were essentially unchanged in April, missing expectations for a 1% gain. Federal Reserve Bank of Cleveland President Loretta Mester played down signals from data that she warned will be volatile as the economy reopens and stated that the U.S. central bank’s policy is in a good place right now.After slumping in the first quarter, gold has been on the mend amid uncertainty over the pace of the global recovery from the pandemic, rising inflation expectations and assurances from the Fed that monetary policy will remain accommodative. Investors may be warming up to the precious metal again, with hedge fund managers increasing their net bullish gold bets to the highest in three months, while data compiled by Bloomberg show holdings in bullion-backed exchange traded funds climbed for a sixth straight day.“Poorer economic readings alleviated investors’ concerns about tapering Fed stimulus,” said Margaret Yang, a strategist at DailyFX.Spot gold rose as much as 0.7% to $1,855.47 an ounce, the highest since Feb. 10, and was at $1,854.60 by 7:19 a.m. in London. Silver and platinum both gained, while palladium was steady. The Bloomberg Dollar Spot Index was little changed.On the virus front, Singapore and Taiwan, success stories in containing Covid-19, are both rapidly imposing aggressive restrictions at home and tightening travel between each other. China is facing a flare up, and Thailand is having its worst wave of cases.“Rising demand for safety and inflation-hedges may have provided good support for bullion prices, as several Asia-Pacific economies are facing a new wave of Covid-19 outbreaks,” Yang said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.