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ENR earnings call for the period ending December 31, 2020.
(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.
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 an effort 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 rolling over the maturing funds, the operation is also 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 2.19%, near its daily average level over the past year. It recently hit a four-month low.The benchmark CSI 300 Index rose 1.5%. 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 market moves in third and fourth paragraphs.)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.
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.
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.
The relief bill the president signed in March is giving states money for direct payments.
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.
(Bloomberg) -- Add Morgan Stanley to a growing chorus on Wall Street calling for investor caution amid a superheating global economy.In a mid-year outlook, chief cross-asset strategist Andrew Sheets said investors face a “hotter, shorter” economic cycle for the first time in a decade thanks to outsized fiscal stimulus, monetary easing, ramping vaccinations and the highest consumer savings rates in history. But the potential for higher inflation, tighter policy, margin pressure and increased taxes could weigh on returns, leading the firm to dial back its exposure to risk assets like credit and stocks.“Strong economic winds also bring complications,” Sheets wrote in the report published Sunday. “Just 14 months from the lows, investors face early-cycle timing, increasingly mid-cycle conditions and late-cycle valuations.”Morgan Stanley is the latest investment firm to sound the alarm on the impact of a potentially overheating global economy as concerns mount over rising inflation. Strategists at UniCredit SpA suggested risk-off trades will become more likely in a note Friday, while peers at T. Rowe Price said Monday that equities are vulnerable to potential setbacks amid peaking global economic growth.The global rebound from the pandemic is stretching supply chains to the brink as companies stock up on raw materials to satisfy reviving demand, fueling a debate on whether price pressures will be transitory or longer lasting and more damaging.The bulk of Morgan Stanley’s risk reduction is in credit, which strategists downgraded to neutral. “The asset class has had an outstanding run, but is both expensive and disadvantaged in a hotter cycle,” Sheets said.But the firm also cut U.S. equities to neutral, in favor of non-U.S. shares such as cheaper peers from Europe and Japan, and sees modestly higher yields and a narrowly rising dollar.The S&P 500 Index is up 11% year-to-date, compared to an 8% rise in an MSCI Inc. index of non-U.S. developed market shares.Taiwan WarningElsewhere, UniCredit strategist Christian Stocker cut technology stocks to neutral, as they in particular stand out among growth sectors for their high valuations. Last week’s selloff in Taiwan could be a warning signal for the sector and the broader growth universe, at least in the short term, he said.“We recommend focusing on less-yield-sensitive parts of the equity market such as value or cyclical sectors as intensified discussion about higher inflation pushes risk-off trades,” Stocker wrote.Meanwhile, T. Rowe Price is increasing its underweight in stocks relative to bonds and cash, according to Thomas Poullaouec, head of Asia Pacific multi-asset solutions.“The risk/reward profile looks less compelling for equities after a strong rebound from March 2020 lows,” he wrote in a note. “Equities could be vulnerable to potential setbacks in the recovery, fading policy support, and higher taxes.”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) -- 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.
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
Oil major BP has lobbied for the EU to support natural gas, a move that exposes divergent views among investors and reflects a wider European dispute about the role of the fossil fuel in the transition to a lower-carbon world. The European Commission - aiming to reach net-zero greenhouse gas emissions by 2050 - had planned to omit gas-fuelled power plants from a new list of investments that can be marketed as sustainable, but delayed the decision last month following complaints from some countries and companies. Britain's BP was among those lobbying against the plan.
An improving economy and rising inflation are likely to pull rates higher before long.
(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.
(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) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.China’s recovery remained unbalanced in April, with industrial output and investment buoyed by strong exports and a hot property market, while retail sales missed forecasts.Industrial output rose 9.8% in April from a year earlier versus the median estimate for a 10% increase. Retail sales expanded 17.7% in the period, far slower than a projected 25% rise. Fixed-asset investment grew 19.9% in the first four months of the year, in line with forecasts. The unemployment rate was lower at 5.1%.The data underline that while China remains a global growth driver and source of demand for commodities, the economy’s expansion may have plateaued as policy makers seek to rein in real estate and scale back infrastructure stimulus before new growth drivers of consumer spending and manufacturing investment have recovered.“Economic growth likely peaked in the first quarter” on a quarter-on-quarter basis, said Zhiwei Zhang, chief economist of Pinpoint Asset Management. “We expect growth to gradually slow in the coming months.” Monetary policy tightening is probably on hold for now, he said, with small Covid outbreaks in China in recent days adding to policy maker’s caution.The data was heavily impacted by base effects from April 2020 when China’s industrial economy reopened after the coronavirus was brought under control. On a two-year average basis, which corrects for that distortion, industrial production growth was constant from the first quarter at 6.8%, while fixed-asset investment accelerated slightly to 3.9% from 2.9%.However, retail sales growth softened to 4.3% in April on an average two-year basis from 6.3% in March, with the consumption of goods and catering services both turning weaker, denting expectations that consumer demand was beginning to replace investment as a driver of growth.Households in China have yet to “resume their usual swagger” due to weak income growth, said Frederic Neumann, head of Asian economics at HSBC Holdings Plc. “If households fail to step up their spending in the coming months, the authorities may be forced to loosen the reins on liquidity and investment spending to prevent a sharper deceleration in growth,” he added.Read More: Some Theories on What’s Holding Back China’s ConsumerBeijing has pledged a gradual scaling back of the monetary and fiscal stimulus pumped into the economy last year, with no sharp turn in policy. Recent data shows a notable slowdown in credit in April, suggesting the exit might be materializing at a faster-than-expected pace. The central bank injected medium-term cash into the financial system Monday to match the amount falling due, a move largely expected by analysts.China’s stock benchmark CSI 300 Index extended gains to as much as 1.9%, with the data taming fears over tightening liquidity.Iris Pang, chief economist for Greater China at ING Bank NV, said weaker retail sales data last month, driven by home appliances, cosmetics and jewelery, reflected seasonal factors -- such as consumers saving ahead of discounts offered by retailers during a national holiday in early May. A fall in the unemployment rate to 5.1% in April from 5.3% in March suggests a tighter labor market could continue to boost consumer spending.While China’s economy has stabilized, its still challenged by an uneven pandemic recovery globally as well as a fragile basis for recovery at home, the National Bureau of Statistics said in a statement. A separate report from the NBS suggests the property market remains strong, with home prices rising at the fastest pace in eight months in April.The nation’s top leaders recently described the recovery as “unbalanced and unstable,” pledging further efforts to drive a rebound in domestic demand. Sheng Laiyun, a vice head of the NBS, said earlier this month there’s still a gap between actual and potential growth, suggesting the recovery has still some way to go.What Bloomberg Economics Says...The recovery is expected to continue at least into 3Q, but domestic weakness remains a drag on the overall economy. External demand should remain a support, with rival exporters facing disruptions from virus resurgences. Domestically, China’s recovery is broadening, with demand and small private firms on the mend. Even so, the recovery in consumption is still not on solid ground, and remains vulnerable to another setback caused by sporadic virus outbreaks.Chang Shu, chief Asia economistFor the full report, click here.Industrial production remained robust on the back of a recovery in global demand, with fiscal stimulus and faster vaccine rollouts in developed economies helping to keep export growth strong. China’s steel and aluminum output in April blasted through previous records as Beijing’s efforts to rein in production and emissions foundered in the face of surging prices.Despite a surge in exports and industrial profits, manufacturing investment remained weak in the first four months of the year, dropping 0.4% on a two-year average basis in April, suggesting that firms lack confidence about the future strength of the rebound.Nomura Holdings Inc. sees a number of risks building in the second half of the year: export growth may slow as consumers in developed economies shift spending from goods to services; a resurgence in virus cases in developing nations could cut demand from those countries; surging raw material prices will weigh on spending; and curbs on property and local governments debt will impact investment.(Updates with comments from economists.)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.
The Yen, Aussie and Kiwi whipsawed as investors betting on a rebounding economy squared off against those fearful of inflation.
(Bloomberg) -- The world’s worst coronavirus outbreak is set to stretch the already strained budgets of Indian states, making it more costly to borrow just when they need the money to cushion their economies.India’s 28 states will have to foot about $5 billion or more in vaccination costs after Prime Minister Narendra Modi’s federal government suddenly made them responsible for inoculating most adults from May 1. Since they hadn’t budgeted for the jabs or steps to tackle a second wave, their options to meet the additional expense are limited to cutting capital expenditures, selling public assets and boosting borrowing.A simple calculation shows it will cost states 354 billion rupees ($4.8 billion) to give two vaccine shots to about 590 million Indians in the 18-to-44 age group, at a combined cost of 600 rupees per person. If vaccinations are extended to those under 18 years old, the expense could rise to 0.25% of gross domestic product, or about $7 billion, according to Emkay Global Financial Services Ltd. economist Madhavi Arora.The additional burden couldn’t have come at a worse time for states, which are facing higher yields on market borrowings this year amid the threat of widening fiscal deficits.Failure by India’s provinces to raise and spend enough money risks holding back the recovery from a rare recession last year. That’s because states account for 60% of total government spending on asset creation and infrastructure building, which drive jobs creation and consumption.In addition, provinces are having difficulty attracting foreign investors despite paying yields that are typically higher than those on federal government debt. Global funds have used only 1.2% of the 676-billion rupee investment limit available to them in notes issued by states as of May 10, down from 4.8% two years ago, data from the Clearing Corp. of India Ltd. show.Sell Assets“Finances are bound to be affected,” said T. S. Singh Deo, health and commercial tax minister of the central Indian state of Chhattisgarh. “The axe will certainly fall on capital expenditure.”Modi’s government has encouraged states to sell assets to fund spending plans in the current year. That’s one way to bring down the debt burden, said Palanivel Thiaga Rajan, an ex-Wall Street banker and newly appointed finance minister of the southern state of Tamil Nadu.“Everything is on the table,” he said. “We will cut back on a bunch of spending that we don’t think is essential during this time. We will try to raise new sources of funds. We will try to do some restructuring of the debt. We will look at asset sales.”The pandemic has changed states’ budgets significantly, according to the central bank. The average gross deficit for states that presented their budgets before Covid was 2.4% of output, while after the lockdown it stood at 4.6% in the year ended in March, the Reserve Bank of India said.Uttar Pradesh, India’s most populous state, saw the gap widen to 4.17% of the state’s GDP in the year ended March 31, compared to the prescribed limit of 3%. Bihar, among the nation’s most impoverished provinces, estimated the gap at almost 7%.They may miss their goal of narrowing the budget gap this year. Although there’s no national lockdown this time to stem the deadly second wave of the pandemic, several states have imposed local movement curbs that are hurting economic activity and revenue collection. That’s nudging many economists to cut their double-digit growth forecasts for the current fiscal year. What Bloomberg Economics Says...“Daily activity index for India has steadily declined since the last week of March, which broadly coincides with the rise in the country’s lockdown stringency levels.”-- Abhishek Gupta, India economistFor the full research, click hereThe Nomura India Business Resumption Index fell to levels last seen in June 2020 -- to 61.9 for the week ending May 16 from 66.1 in the seven days prior. The drop continues to be driven by a sharp fall in mobility, Nomura economists Sonal Varma and Aurodeep Nandi wrote in a report to clients.There’s “renewed uncertainty regarding the near-term economic outlook,” said economists led by Aditi Nayar at ICRA Ltd, the local rating arm of Moody’s Investors Service. That “may modestly constrain the indirect tax collections of those particular states.”To bridge the gap, the western Indian state of Rajasthan is planning to sell or lease out unused properties. Telangana, a southern state, is planning to sell land parcels to raise about 145 billion rupees, according to local media reports.Still, there’s no guarantee these deals will come through. Even the federal government has failed to achieve divestment targets for the past two years after failing to sell flag carrier Air India Ltd. and Bharat Petroleum Corp., a state-owned oil refiner. Those sales have been carried forward to the current year.The northern Indian state of Punjab plans to cut capital spending and instead boost health care expenditure, its Finance Minister Manpreet Singh Badal said.“States have to fend for themselves,” he said. “Even though we increased our health budget by 18% this year, I see my health budget going up further on account of this emergency. There is no other way.”(Updates with Nomura activity index reading in the 13th paragraph)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) -- Gold rose to a three-month high as weaker bond yields added to the metal’s allure amid signs bullion investors are turning more positive.Hedge fund managers increased their net-long gold position to the highest in three months, data showed Friday. Meanwhile, data compiled by Bloomberg show exchange-traded fund investors have bought bullion for the past six days, following months of sales.Prices have rebounded from lows set in March as the dollar retreated and the Federal Reserve signaled it will keep interest rates low amid an uneven economic recovery, even with rising inflation expectations. Gold edged higher Monday as Treasury yields extended declines in the wake of Friday’s U.S. retail sales data that missed expectations.“Gold has been out of favor for a while, but the uptrend during the past six weeks combined with rising breakevens and lower real yields have supported renewed demand both from money managers in futures and from investors in general through ETFs,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S.Spot gold rose 0.5% to $1,853.12 an ounce by 10 a.m. in London, after reaching the highest since Feb. 10. Silver, platinum and palladium also gained. The Bloomberg Dollar Spot Index was steady.Gold’s gains have taken it past its 200-day moving average. Prices could climb to $1,878 if it surpasses resistance at $1,858, Hansen 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.
(Bloomberg) -- Adani Green Energy Ltd., majority-owned by Indian billionaire Gautam Adani, is in advanced talks to acquire privately-held SB Energy Holdings Ltd., according to people familiar with the matter.A deal could value SB Energy, owned by SoftBank Group Corp. and Bharti Enterprises Ltd., at more than $650 million, said one of the people, who asked not to be identified as the information is private. Adani Green is exploring a buyout of the renewable energy company through an all-stock deal, another person said.Shares in Adani Green climbed as much as 5% on Monday, touching their highest level in more than a month. They have risen nearly 400% in the past year, giving the company a market value of about $24 billion.The advanced talks come after negotiations with Canada Pension Plan Investment Board to buy SB Energy from SoftBank broke down, one of the people said.An announcement could come in coming weeks, the people said. Discussions could still be delayed or fall apart, they added. A representative for SoftBank declined to comment, while representatives for Adani Green and Bharti Enterprises didn’t immediately respond to requests for comment. A spokesperson for CPPIB said they continue to look for opportunities for new investments in India, including in the renewables sector.A deal could help Adani Green to reach its planned generation capacity of 25 gigawatts by 2025. The company’s existing renewable energy portfolio has 15.4 gigawatts from across 11 states in India, according to its website.SB Energy has 4,855 megawatts of renewable capacity in India, including operational capacity of 1,400 megawatts, as of March 2021, according to a report from Care Energy. (Updates with CPPIB negotiations in fourth paragraph and context in sixth and seventh paragraphs.)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.