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Here are six common mistakes wealthy donors often make during a crisis, be it a pandemic or another kind of disaster, and what to do instead. Mistake #1: Stepping Back During a crisis, we may want to hunker down and hold back. As a donor, you have resources; any action—especially during a crisis—risks exposure to requests and scrutiny.

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  • China Tech Giants Bet $19 Billion on Global Electric Car Frenzy

    (Bloomberg) -- China is shaping up to be the first real test of Big Tech’s ambitions in the world of carmaking, with giants from Huawei Technologies Co. to Baidu Inc. plowing almost $19 billion into electric and self-driving vehicle ventures widely seen as the future of transport.While Apple Inc. has long had plans for its own car and Alphabet Inc. has Waymo, its autonomous driving unit, the size -- and speed -- of the move by China’s tech titans puts them at the vanguard of that broader push. The lure is an industry that’s becoming increasingly high tech as it pivots away from the combustion engine, with sensors and operating systems making cars more like computers, and the prospect of autonomy re-envisioning how people use will them.As the world’s biggest market for new-energy cars, China is a key battlefield. Established automakers like Volkswagen AG and General Motors Co. are already slogging it out with local upstarts such as market darling Nio Inc. and Xpeng Inc. Over the past three months, Huawei, smartphone giant Xiaomi Corp., Baidu -- which runs China’s top search engine and a mapping app -- and even Apple’s Taiwanese manufacturing partner Foxconn have joined the fray, forging tie-ups and unveiling their own carmaking plans.Nowhere was that more on display than at last month’s Shanghai Auto Show, which has become one of the world’s premier events for showcasing the hottest new trends in the automotive sector. Visitors queued for hours to access the pavilions of Huawei and Baidu, thronging their displays and snapping pictures of sensor systems, high-tech dashboards and model vehicles. But despite the intense interest, the era of the new car is a hyper-competitive one in China, and tech giants have a lot to prove.“There’s a big element of faith in the tech companies’ bets,” said Stephen Dyer, managing director of consultancy AlixPartners in Shanghai and a former Ford Motor Co. executive. “This is a matter of creating something new that doesn’t exist now. That’s where the element of faith comes into play.”Huawei has been at the fore, recently announcing plans to invest $1 billion in EVs and its own self-driving technology, which it claims has “already surpassed” electric car pioneer Tesla Inc. in some aspects.The Shenzhen-based company, better known for its mobile-phone networks and being the subject of crippling U.S. sanctions, has unveiled its first car developed with BAIC BluePark Mew Energy Technology Co. The mid-sized Arcfox S sedan uses HI, or Huawei Inside, an intelligent automotive software package that enables it to run on autonomous driving mode in city areas for more than 1,000 kilometers (620 miles) without human intervention. Delivery is slated to start in the fourth quarter.Huawei’s auto show display attracted larger crowds than nearby China Evergrande New Energy Vehicle Group Ltd., an EV upstart that took one of the biggest stands to showcase nine models despite the fact it hasn’t sold a car under its own brand. As well as the Arcfox S sedan, a Seres SF5 coupe equipped with Huawei Inside was on display, along with Huawei’s HiFin Intelligent Antenna Solution, a new generation in-vehicle communication system plus 4D-imaging radar that’s used to monitor roads and traffic.One of the biggest challenges for new entrants to the automotive sector is how capital and resource intensive it is to make cars. How tech companies negotiate that will be key, and potentially provide opportunities for established players in the sector, with Huawei repeatedly saying its plan is not to produce its own vehicles. Rather, it’s partnering with three Chinese automakers -- BAIC Motor Corp., Chongqing Changan Automobile Co., and Guangzhou Automobile Group Co. -- to make self-driving cars that will carry its name as a sub-brand.Guangzhou Auto will jointly build a “truly unmanned car” that will be produced in 2024, President Feng Xingya said last month. The carmaker will also cooperate with Huawei on big data, smart cockpits, and hardware and electronic chips, Feng said.“China adds 30 million cars each year and the number is growing,” Huawei Deputy Chairman Eric Xu said in April. “Even if we don’t tap the market outside of China, if we can earn an average 10,000 yuan ($1,550) from each car sold in China, that’s already a very big business.”Apple appears to be considering a similar route, talking at one point with carmakers including Hyundai Motor Co. before discussions fizzled. Unlike China’s tech giants, Apple is keeping its plans largely secret. The company lost a key manager overseeing its self-driving car program in February and it’s unclear what impact that may have had on Apple’s progress on delivering a commercially viable car.The rise of smart vehicles and autonomous driving throws up a raft of possibilities for tech companies, not least access to data such as real-time insight into popular destinations and the routes taken to get there. On top of that, for some there’s the opportunity to charge for tech add-ons and system improvements, essentially treating the vehicle like a piece of computer hardware that constantly gets its software updated.“They will definitely focus on being intelligent,” said Yale Zhang, managing director of Shanghai-based consultancy Autoforesight Co. “Making a good electrified car is a ‘pass,’ while making a good intelligent car will make an ‘A-grade.’ That’s what these tech giants are good at. Their main revenue will not be from selling the car but finding other ways to earn post-sale, such as over-the-air system upgrades or software subscriptions.”Big Tech in China Is Eyeing EVs for a Reason: Hyperdrive DailyFirst MoversBaidu -- which started investing in robo-taxi technology as early as 2013 and funded Chinese EV startup WM Motors -- now plans to spend $7.7 billion over the next five years developing smart-car technology via its newly established unit Jidu Auto. The division aims to launch its first model in three years, followed by new releases every 12 to 18 months, Chief Executive Officer Xia Yiping said.“The core value of cars in the future will be how intelligent they are,” Xia said, echoing a familiar refrain. “The earlier a company plans, the more control of self-developed technologies it gains, the more advanced technology it has, the more power it will own in the market.”Jidu has a core team of about 100 staff, and will expand to as many as 3,000 personnel by the end of next year, including up to 500 software engineers, he said. The first batch of cars will be based on Zhejiang Geely Holding Group Co.’s pure EV manufacturing structure, while Jidu will collaborate with Baidu’s autonomous-driving unit Apollo, with a special focus on smart cars and the mass production of autonomous driving features. The unit will embark on its next fundraising round soon, with further investment expected from Baidu and external investors.Chinese smartphone maker Xiaomi has also announced plans to invest about $10 billion over the next decade to manufacture electric cars, though hasn’t disclosed much detail or given a timeframe for deliveries. Billionaire co-founder Lei Jun in March announced his intention to lead a new standalone division and spearhead the drive into EVs, in what he called his final major startup endeavor.“We have deep pockets for this project,” Lei, who is also Xiaomi’s chief executive officer, said when unveiling the plan. “I’m fully aware of the risks of the car-making industry. I’m also aware the project will take at least three-to-five years with tens of billions of investment.”While China’s tech giants may be late to the game and entering unfamiliar territory, that could play to their advantage, said Dyer of AlixPartners.“This isn’t an industry where you have to be the first-mover to win,” he said. “In fact, in the auto industry, the first mover typically never wins. It’s always the follower who wins. Because when you are the first mover, you’re the one paying to learn through all the mistakes.”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.

  • Iron Ore Turns ‘Very Hot’ as 10% Surge Adds to Commodities Boom

    (Bloomberg) -- Iron ore futures surged more than 10% and copper jumped to a record amid growing bets they’ll be among the biggest winners from a commodities boom that’s stoking concerns about inflation around the world.While market participants struggled to pinpoint a trigger for Monday’s gains, they cited several ongoing trends including optimism that central banks will retain supportive policies even as the global economy recovers. Expectations China will tighten environmental rules have added to the bull case for copper -- seen as vital to the green energy transition -- and fueled speculation that steelmakers may front-load iron ore purchases before new curbs kick in.The gains add to a more than yearlong surge in raw-materials prices that has shifted into overdrive in recent weeks, with the Bloomberg Commodity Spot Index climbing for 14 of the past 15 days to the highest level in almost a decade.A “Goldilocks scenario” may be forming as strengthening global growth combines with restrained wage pressures and a dovish Federal Reserve, Goldman Sachs Group Inc. commodities analysts said in a May 7 report, the same day weak U.S. jobs figures added to the case for more stimulus. The risk for bulls -- and anyone betting on buoyant returns from stocks and bonds -- is that the surge in raw materials feeds through to broader measures of inflation and eventually forces central banks to tighten.The iron ore sector “is very, very hot,” Vivek Dhar, commodities analyst at Commonwealth Bank of Australia, said in Bloomberg Television interview. “Supply is still not able to meet that strong demand.”Iron ore futures in Singapore jumped to a record above $226 a ton, extending this year’s gain to about 40%. Contracts in Dalian climbed by the daily limit when the market opened. Raw materials producers led gains in the MSCI Asia Pacific Index of regional shares, while Australia’s benchmark equity index was trading near an all-time high. Iron ore is the country’s biggest export earner.Copper, often viewed as a barometer of the global economy’s health, rose as much as 2.1% to a record $10,639 a metric ton on the London Metal Exchange.Copper remains a favorite long wager in the commodities complex, as “massive green demand is set to clash with a completely unprepared supply side,” Goldman Sachs analysts led by Sabine Schels wrote. They said the metal may rise to $11,000 a ton in 12 months and to $14,000 in 2024.“The supply side has been overshadowed somewhat recently with this spike in prices and stimulus projects talking about electric vehicle demand and decarbonization,” Sam Spring, CEO of Kincora Copper Ltd., an exploration company, said in a phone interview. “Before Covid and the spike in the copper price, you already had the industry struggling to keep supply flat. Investment from the last commodity cycle had peaked and not many new projects had been kicked off post 2015-16.”The iron-ore boom comes as China’s steelmakers keep output rates above 1 billion tons a year, despite a swath of production curbs aimed at reducing carbon emissions and reining in supply. Those measures have boosted steel prices and profitability at mills, allowing them to better accommodate higher iron ore costs and potentially front-load production ahead of more environmental restrictions.Steelmakers in the rest of the world, such as ArcelorMittal SA, are also enjoying a boom as demand bounces back from pandemic lows.“There is a chance that ex-China demand can come back to such an extent that we still see steel demand pick up globally and that will see iron ore demand remain at these elevated levels,” CBA’s Dhar said.Traders will be watching closely for how China responds. Shipmakers and household-goods manufacturers will eventually be unable to withstand elevated steel prices, the country’s state-run Xinhua News Agency reported on Sunday, citing an analysis from the China Iron & Steel Association. The report said it would be difficult for steel to continue rallying.The government has scheduled nationwide inspections on steel-capacity cuts, with the National Development and Reform Commission calling on the state asset regulator and provincial level working groups to complete self-checks by May 15. Authorities will conduct on-site inspections in June and July, according to a statement Monday.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.

  • Warren Buffett shares his 8 top takeaways from the COVID pandemic

    The legendary investor says these are the key lessons for investors and consumers.

  • Price of Gold Fundamental Daily Forecast – Last Week’s Rally: Start of New Uptrend or One-and-Done Move?

    After the initial reaction to the report and the surge to $1844.60, gold prices drifted lower then became rangebound into the close as yields firmed.

  • California man fraudulently obtained $5M in COVID relief loans to purchase Ferrari, Bentley and Lamborghini, authorities say

    According to a federal indictment, Mustafa Qadiri, 38, fraudulently obtained millions of dollars to buy luxurious cars and take lavish vacations.

  • Beijing Slaps Fines on Tutoring Apps Backed by Tencent, Alibaba

    (Bloomberg) -- China is expanding its far-reaching tech campaign into online education, issuing the maximum penalties to two of the country’s fastest-growing tutoring apps for violating competition and pricing laws.The State Administration for Market Regulation imposed fines of 2.5 million yuan ($389,000) each on Yuanfudao, backed by Tencent Holdings Ltd., and Zuoyebang, which has received funding from Alibaba Group Holding Ltd., according to a statement Monday. The firms were penalized for making misleading claims about their businesses from falsifying the qualifications of teaching staff to faking user reviews, the antitrust watchdog said.Yuanfudao and Zuoyebang said they accepted the penalties and will rectify the relevant problems.The explosive growth of private education providers during the pandemic has drawn increased scrutiny over the sector. Last month, Beijing’s market regulator fined four private education providers including GSX Techedu Inc. as well as a TAL Education Group unit for pricing violations. China’s education ministry also issued a statement reiterating limits on after-school study programs in order to ensure that students get enough sleep.“The fines are closely related to the recent crackdown on after-school tutoring institutions, focusing on their illegal activities and potential for stirring anxiety in society,” said Ye Le, Shanghai-based analyst with China Securities. “The regulatory pressure will keep building for the rest of the year.”Going forward, the SAMR will intensify its regulatory supervision of after-school educational groups and crack down on illegal activities, according to the statement. The two apps are the latest in a slew of Chinese firms from giants like Alibaba and Tencent to smaller outfits like online grocery provider Nice Tuan that have fallen afoul of the antitrust watchdog in recent months, as Beijing reins in its once-freewheeling internet sector.Both startups are said to be eyeing initial public offerings. Earlier this year, Yuanfudao was seeking at least $1 billion in fresh funding ahead of a possible initial public offering in 2022, people with knowledge of the matter have said. Bloomberg News reported in March Zuoyebang, whose backers also include SoftBank Vision Fund, Goldman Sachs Group Inc. and Sequoia Capital China, was set to recruit former Joyy Inc. chief financial officer Bing Jin to aid in its preparations for a potential listing.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.

  • Mortgage rates fall deeper below 3% and ‘window of opportunity' widens

    Bargain rates are back, at least for now, giving borrowers another chance to strike.

  • Dogecoin Goes on Wild Ride as Musk Calls It a ‘Hustle’

    (Bloomberg) -- Dogecoin investors had a wild ride this weekend.After hitting a record on Saturday ahead of Elon Musk’s appearance on “Saturday Night Live,” the digital currency began to fall hours before the show began and continued to drop as he delivered his opening monologue.A SpaceX deal Sunday gave the digital currency a short-lived boost. It traded at 55.5 cents as of 8:30 p.m. in New York, down 15% over a 24-hour period, according to CoinGecko, with a trading range of 43.2 cents to 66.7 cents in the past one day.In the agreement, Musk’s commercial rocket company will launch a mission to the Moon in 2022 with a so-called cubesat -- a mini satellite used for space research -- from Geometric Energy Corp. that’s been paid for entirely in Dogecoin.The trading swings began on Saturday as Dogecoin traders around the world were organizing watch parties for the broadcast featuring its most prominent supporter. Following an initial slump, the digital currency bounced back briefly toward the end of the show, after the billionaire called it a “hustle” in the “Weekend Update” segment.In the skit, Musk jumped into the character of a bow-tied, bespectacled financial expert and was repeatedly quizzed about Dogecoin. After delivering textbook answers, he was asked whether the currency was just a hoax, to which he responded, “Yeah, it’s a hustle.”He ended the skit howling, “to the moon!” -- a reference he repeated in his tweet about the SpaceX announcement on Sunday.Dogecoin, a cryptocurrency that started as an internet meme in 2013, has surged more than 21,000% in the past year, according to CoinGecko.Musk, 49, has been among its biggest boosters, along with Mark Cuban, Snoop Dogg and Gene Simmons. Still, crypto volatility has prompted urgent warnings from central bankers -- as recently as Thursday -- that people buying in should be prepared to lose all of their money.Musk’s Tesla Inc. announced in February that it had bought $1.5 billion of Bitcoin, and the head of the electric-car giant himself has spoken of the digital asset in favorable terms. He has a $183.9 billion fortune, according to the Bloomberg Billionaires Index.(Updates percentage gain.)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.

  • One Junior Miner May Have Sparked A New Gold Rush In Canada

    An up-and-coming gold exploration company in Quebec may hit the jackpot in what could end up being a story even some of the most seasoned investors only ever dream of

  • Chip shortage in focus as Japan automakers ready to report profit drop

    While Japan's biggest automakers report what analysts expect to be depressed earnings this week, investors looking for trading cues will be tuned into any assessment of the future impact of a global chip shortage that has forced a shake-up in production. Automakers worldwide have had to adjust or suspend production in the past few months as factors including a surge in demand for electronic devices plus U.S. sanctions against Chinese technology firms led to a dearth of semiconductors. Blackouts in Texas where a number of chipmakers have factories and a fire at Renesas Electronics Corp's chip plant in Japan have exacerbated the supply crunch.

  • Abu Dhabi’s ADQ Bets on Recovery With Emirates Steel-Arkan Deal

    (Bloomberg) -- Abu Dhabi is seeking to create the largest steel and building materials company in the United Arab Emirates and cash in on an economic recovery that’s being boosted by government spending on infrastructure projects.ADQ, one of Abu Dhabi’s sovereign wealth funds, plans to combine Emirates Steel Industries PJSC with Arkan Building Materials Co. and form an entity with assets of about 13 billion dirhams ($3.54 billion).“The combined entity will be well positioned to benefit from expected stimulus-led increased activity in the domestic and regional construction sector and an expected economic recovery in the target markets,” said Harshjit Oza and Yawar Saeed at Abu Dhabi-based International Securities. The deal comes amid a boom in the price of steel and other metals as major economies reopen, leading to a manufacturing rebound. Futures in China, by far the biggest producer, have hit record highs -- even outpacing gains in key ingredient iron ore. Arkan shares surged as much as 15%.Arkan will issue a convertible instrument to ADQ-controlled Senaat, which owns Emirates Steel. The deal values Arkan at 1.4 billion dirhams and Senaat will control about 87.5% of the combined group post completion, the companies said on Sunday.The indirect listing of Emirates Steel will give investors “exposure to the domestic steel sector on UAE public markets, amidst rising global steel prices,” Oza and Saeed wrote in a note on Sunday. According to Senaat, Sunday’s deal would mark the first time that stock traders will have access to a steel producer on a UAE public market.Abu Dhabi has been merging some companies as it looks to bolster the economy and diversify from oil and gas production. ADQ has grown quickly since its founding in 2018 and is now the UAE capital’s third-largest SWF after Abu Dhabi Investment Authority and Mubadala Investment Co.Details of the offer:Conversion price is 0.798 dirham per Arkan share, the same as the stock’s close on ThursdayArkan shares have doubled from a July 2020 lowRothschild & Co. is the financial adviser to Senaat and its shareholderIf Arkan board recommends the offer, the transaction could close during the second half of 2021For 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.

  • Dollar Back to Where It Began the Year as Rally Burns Out

    (Bloomberg) -- It’s back to square one for the dollar.Friday’s worse-than-expected U.S. employment data saw the Bloomberg Dollar Spot Index drop decisively below its 2021 uptrend, putting it back to little changed for the year. The biggest one-day slide in five months has also put the greenback at risk of a further decline toward the lowest since February 2018.The data miss is the latest blow to the world’s reserve currency after its first-quarter revival was snuffed out by retreating Treasury yields, improving sentiment toward economies outside the U.S., and a dovish Federal Reserve. The dollar gauge has fallen almost 14% from a record high set last March, and the likes of JPMorgan Asset Management and T. Rowe Price are predicting more losses ahead as the global economy recovers.“We continue to see the ‘peaking U.S. exceptionalism’ narrative playing out through a weaker dollar over time,” Citigroup Inc. strategists including Ebrahim Rahbari in New York wrote in a note. That’s thanks to “views on a dovish Fed, benign risk appetite and a global recovery,” they said.The Swedish krone, Swiss franc and New Zealand dollar are leading gains in Group-of-10 currencies versus the dollar this quarter. In emerging markets, the Brazilian real, Czech koruna and Polish zloty have advanced the most against the greenback.Short BetsThe dollar’s reversal gives some vindication to Wall Street bears who predicted a weaker currency in January, but were left scrambling to cover short positions when better-than-expected U.S. data pushed up Treasury yields. That move has also faded with benchmark yields down about 18 basis points from their 1.77% high in March, denting one of the biggest appeals of the greenback.Betting against the U.S. currency is now back in vogue, with aggregate net short positions versus major peers climbing back to about $10 billion last week from $4 billion in mid-April, according to data from the Commodity Futures Trading Commission. Bearish bets totaled almost $31 billion in January.“We expect the dollar to weaken further, given its diminishing appeal as a safe-haven currency as long as the global economic picture and risk appetite improve further,” UniCredit S.p.A. strategist Roberto Mialich in Milan wrote in a note Friday.(Adds FX performance in fifth 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.

  • Mortgage Rates at sub-3% for a Third Consecutive Week

    Mortgage rates fall again to mark a 3rd consecutive week at sub-3% levels, supporting refinancing.

  • Stock Bull Run Rolls On With JPMorgan Doubling Down on Reflation

    (Bloomberg) -- It’s all very simple. The economy isn’t strong enough for the Federal Reserve to taper stimulus, therefore stay-at-home tech shares will rally. And any efforts to heal the economy are likely to drive up inflation, meaning banks and airlines will benefit.Such is the can’t-lose logic underpinning American stocks in May 2021, almost 14 months since the pandemic crashed the market and left an 8 million-job hole in the U.S. labor market. To strategists at JPMorgan Chase, now is no time to doubt equities -- as long as Fed Chair Jerome Powell and President Joe Biden are in charge of the recovery.Anyone looking for confirmation need only recall Friday’s reaction to one of the largest downside misses on record for a U.S. employment report. Small caps surged, buoyed after President Biden used Friday’s numbers as justification for his multi-trillion fiscal aid package. The Nasdaq 100 also jumped as investors took April’s jobs whiff to mean that the Fed won’t be turning off the taps anytime soon, keeping rates low and helping to sustain sky-high tech valuations.“It doesn’t hurt equities to know the Fed is still the backdrop with lower rates for longer,” Ryan Detrick, chief market strategist at LPL Financial. “The stay-at-home and the tech names are going to get a little bit of a bid here on worries about the reopening but I think it’s more of a near-term blip and the bigger cyclical names will still take the baton over the coming months.”Federal Reserve Bank of Minneapolis President Neel Kashkari said as much, telling Bloomberg Television that Friday’s print validates the central bank’s new outcome-based approach -- the idea that policy makers won’t change anything based on economic forecasts, but actual data.Every sector in the S&P 500 rallied in the aftermath, with tech vying with cyclical energy and industrial shares for the top spot. The Russell 1000 Value Index and its growth counterpart both ended Friday 0.8% higher, after value outperformed every day this week.Meanwhile, JPMorgan strategists led by Marko Kolanovic are doubling down on the reflation trade. Just days after warning that many money managers need to quickly switch gears from their deflationary playbook or risk an “inflation shock,” Kolanovic recommended clients increase their tilt toward cyclical and value assets. He advised investors to cut holdings in cash and credit, using the money to buy commodities and stocks.“We expect a strong pickup in inflation this year, which the market will likely be slow to recognize and is poorly positioned for,” Kolanovic and his colleagues wrote in a note Friday. “A combination of boomy global growth and significant bottleneck price pressures should keep inflation on an upward trajectory while most central banks remain committed to their very accommodative stances and are looking through the inflation pickups.”And even for all the hand-wringing over inflation, the latest batch of quarterly reports suggests it’s already here and helping corporate America. Faced with rising prices for everything from lumber to oil to labor and computer chips, chief executive officers have cut costs and boosted prices for their products.As a result, first-quarter income from S&P 500 companies is jumping five times as fast as sales, data compiled by Bloomberg Intelligence show. Based on actual results and analyst estimates for those yet to report, profits probably surged to an all-time high of $48.21 a share. That’s 13% above the record set in 2018 of $42.79.The next test for the equity market’s cheer comes in Wednesday’s inflation data, which is expected to show that price pressures jumped by the most on an annual basis since 2011. But given that Fed chief Powell has said that the central bank will need to see a “string” of strong data before shifting their stance, it’s likely that April’s payroll miss was a big enough blow to keep them on the sidelines.“It justifies the Fed, it keeps them from having their tapering discussion or thinking about raising rates,” said Ross Mayfield, investment strategy analyst at Robert W. Baird & Co.. “That by and large is supportive for equity markets.”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.

  • Australia's Star eyes Crown in $7 billion play, vies with private equity

    SYDNEY (Reuters) -Australian casino operator Star Entertainment Group on Monday proposed an all-stock buyout of larger rival Crown Resorts Ltd that it valued at A$9 billion ($7 billion), taking on two private equity giants for control of the troubled company. Three months after Crown was declared unfit for a gambling licence at its new Sydney resort tower, Star said the share-swap takeover approach would create "one of the largest and most attractive integrated resort operators in the Asia Pacific region". The move presents Crown shareholders with a third option after buyout giant Blackstone Group earlier upped its all-cash indicative bid to A$8.4 billion, while Oaktree Capital Group has proposed to bankroll a A$3 billion buyback of Crown's founder's stake, removing a regulatory concern.

  • Archegos Rout Helps China Hedge Fund to 120% Gain This Year

    (Bloomberg) -- A China-focused hedge fund led by a 30-year-old who started trading as a teenager returned 120% in the first quarter, thanks in part to the unraveling of Bill Hwang’s Archegos Capital Management.Bullish bets on a pair of Chinese fintech consumer lending platforms accounted for more than half of the quarterly return for Henry Liang’s Seahawk China Dynamic Fund, he said in a telephone interview. Additional gains came from wagers against a “bubble basket” of over-hyped new-economy companies, including GSX Techedu Inc., the Chinese after-school online tutoring firm later caught up in the Archegos-induced selloff.The profits more than doubled the fund’s assets to nearly $700 million. Liang has given back $120 million to investors this year to manage the pace of asset growth and maintain performance. A Bloomberg index tracking hedge funds of all strategies advanced 4.6% in the first quarter. A gauge of hedge funds focused on Greater China rose 1.5%, according to Eurekahedge Pte.Unburdened by the scrutiny of more risk-averse institutional investors, Seahawk was able to make concentrated bets for its ultra-rich mainland Chinese and Hong Kong clients, including Liang’s long-time followers since his university days. His approach highlights how foreign asset managers with lower risk appetites have been struggling to woo wealthy Chinese customers, who are willing to stomach short-term losses for outsized gains.Read more on the struggles of global asset managers in ChinaSeahawk began to buy shares in FinVolution Group in the third quarter of 2019 and 360 DigiTech Inc. in the first quarter of 2020, adding more throughout the year when their stock prices were languishing.Liang is betting that the Shanghai-based duo has an edge in risk management that will help them emerge as winners from the multi-year Chinese crackdown on internet lending.The regulatory tightening has resulted in the demise of online peer-to-peer lending platforms that once numbered 5,000, according to data from the China Banking and Insurance Regulatory Commission. FinVolution and 360 DigiTech operate in a different space, using technology to connect borrowers and financial institutions.Their share prices have at least doubled this year. Seahawk is now among FinVolution’s largest shareholders with a 13.5% stake at the end of February, according to data compiled by Bloomberg.Bubble ‘Stretched’In February, Seahawk dramatically boosted bearish bets against the “bubble basket,” including electric vehicle makers Tesla Inc. and Nio Inc., GSX Techedu, fintech firm OneConnect Financial Technology Co., toymaker Pop Mart International Group Ltd. and short-video platform operator Kuaishou Technology, Liang said.The “new-economy bubble has been stretched to an unprecedented level, where valuation of quite a few internet and consumer stocks can hardly be justified even with the wildest 10-year assumptions,” he wrote in his first-quarter newsletter.The collapse of Archegos led its prime brokers to dump shares including GSX Techedu. That contributed to the stock’s more than 80% tumble from this year’s peak, accelerating gains for Liang.Seahawk has largely covered the new-economy shorts while barely trimming its bullish wagers on FinVolution and 360 DigiTech, even when the two fintech firms have fallen at least 30% from this year’s peaks in mid-March.The Chinese antitrust clampdowns could benefit smaller players, especially fintech giant Ant Group Co.’s strongest second-tier rivals that aren’t part of larger platforms, Liang said.His optimism isn’t shared by everyone. Jefferies Financial Group Inc. analysts expect growth of second-tier fintech platforms to slow now that China’s policy makers are seeking to curb household leverage rather than encourage consumer borrowing. China now also requires platforms to obtain licenses to collect data for personal credit reports that they provide to banks for higher fees, and new rules limit behavioral data collection, the analysts wrote in a note.Pocket MoneyA Guangzhou native who is now based in Hong Kong, Liang began to trade stocks at 13, with pocket money from his parents. In his final year in high school, he began to manage assets for clients who found him through word of mouth. By the time he shut those accounts to join a Goldman Sachs Group Inc. long-short equity hedge fund as an analyst, he was overseeing $9 million with a nearly 25% annualized return over six years, he said.He started Seahawk in October 2017. Marketed as a macro fund, it has the flexibility to invest in all asset classes ranging from stocks and credit to currencies and derivatives. Liang sees the vanishing breed of bold investors including George Soros, Stanley Druckenmiller and Julian Robertson as his role models. When investors dumped the high-yield dollar-denominated bonds of Chinese property companies during the March 2020 market correction, he swooped in to buy, pocketing a gain of almost 20% that month.It hasn’t all been smooth sailing. The fund lost 11% in 2019, according to a newsletter.“We are naturally very contrarian,” Liang said. “We are embracing volatility.”(Updates with performance of China-focused hedge funds in third 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.

  • Rupee Gains Under Siege as Health Crisis Fuels Lockdown Fears

    (Bloomberg) -- The Indian rupee’s recent gains could be short-lived as pressure grows on Prime Minister Narendra Modi’s administration to announce a nationwide lockdown to curb a deadly wave of coronavirus infections.The prospect of stricter curbs is reviving memories of last year when similar measures dragged India’s economy into its worst contraction in four decades. It’s also threatening to weaken the rupee, which is among Asia’s top three performers this month, thanks to heavy foreign inflows for initial public offerings, a dovish Federal Reserve and a glut of dollars at state-run banks.“The recovery in the rupee in recent weeks reflects the softer dollar and weaker import demand as restrictions were imposed,” Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. “If a nationwide lockdown were to be implemented, we could see some near-termweakness in the rupee.”A technical gauge is also signaling that the rupee’s advance maybe losing momentum. The dollar-rupee’s slow stochastics, a momentum indicator, shows that the currency pair is in oversold territory. The rupee rose 0.8% last week to 73.51 per dollar.Goh forecasts the rupee to fall to 76 per dollar in the second quarter but expects further declines to be limited by a reduction in imports.India’s capital extended its lockdown for another week while the nation reported 403,736 new virus cases on Sunday, and more than 4,000 Covid-19 deaths for a second day. Modi’s political allies, top business leaders and even U.S. President Joe Biden’s chief medical adviser have said lockdowns could be the only way to stem the world’s worst virus outbreak.Analysts have already trimmed India’s growth forecasts as individual states tightened restrictions, but a nationwide curb could deal a much larger blow to the economy. The Reserve Bank of India stepped in last week to provide loan relief and pledged to inject 500 billion rupees ($6.8 billion) of liquidity to support growth.Inflation data on Wednesday is expected to provide more economic cues. Consumer prices are forecast to have climbed 4.1% in April from a year earlier, the slowest pace since January, to stay within the RBI’s 2%-6% target range, which would provide room for more support measures. However, signs of more quantitative easing would be bad news for the rupee.The currency could remain supported as expectations of a surge in IPOs this year keeps inflows coming, although its near-term trend points to a downside as virus cases show no sign of slowing.Below are the key Asian economic data and events due this week:Monday, May 10: Australia business confidence and retail salesTuesday, May 11: New Zealand retail card spending, Japan household spending, China CPI and PPI, Philippine 1Q GDP, Malaysia 1Q GDP and BoP current account balanceWednesday, May 12: India CPI and industrial productionThursday, May 13: Japan BoP current account balance, BSP rate decisionFriday, May 14: New Zealand businessNZ manufacturing PMIFor 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.

  • Sony Warns Tight PlayStation 5 Supply to Extend Into Next Year

    (Bloomberg) -- Sony Group Corp. warned a group of analysts the PlayStation 5 will remain in short supply through 2022, suggesting the company will be constrained in its ability to boost sales targets for its latest games console.While reporting financial results in late April, the Japanese conglomerate said it had sold 7.8 million units of the console through March 31, and it is aiming to sell at least 14.8 million units in the current fiscal year. That would keep it on pace to match the trajectory of the popular PlayStation 4, which has sold in excess of 115.9 million units to date.In a briefing after those results, Sony told analysts it is challenging to keep up with strong demand. The PS5 has been difficult to find in stock since its release in November, in part because of shortages in components such as semiconductors, and the company hasn’t given an official estimate for when it expects supply to normalize.“I don’t think demand is calming down this year and even if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn’t be able to catch up with demand,” Chief Financial Officer Hiroki Totoki said at the briefing, according to several people who attended and asked not to be named as it wasn’t public.A Sony spokesman declined to comment.Sony said it would buy back up to 200 billion yen ($1.8 billion) of its own shares after reporting profit for the March quarter that fell short of analyst estimates. It forecast that operating profit would slide about 4% in the current fiscal year, but analysts have been weighing whether the company could exceed the conservative outlook with the help of strong demand for the new console and games.Shares have dropped about 8% since the earnings report on April 28, after rising 75% over the previous year.Read More About Sony’s Plans For The Year AheadTotoki told analysts that Sony needs to ramp up production as soon as possible and make sure there are consoles on store shelves. Demand will remain high regardless of the Covid-19 situation, the CFO assured an analyst wary about Sony’s ability to fully capitalize on the stay-at-home entertainment surge triggered by lockdowns and emergency orders.“We have sold more than 100 million units of the PlayStation 4 and considering our market share and reputation, I can’t imagine demand dropping easily,” he said.Still, the company’s latest earnings report suggests that stay-at-home demand is leveling off. Sony said monthly active users on PlayStation Network fell to 109 million at the end of the January-March period from 114 million a quarter earlier and sales of full games also declined in the period from a year earlier.Rival Nintendo Co. warned last week that component shortages could affect production. It’s officially targeting sales of 25.5 million consoles in the year ending March 2022, down slightly from the previous year. But internally, Nintendo’s management is said to be shooting for production of between 28 and 29 million consoles, Bloomberg News has reported.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.

  • Disney, Airbnb earnings, Retail sales: What to know this week

    Though first-quarter earnings season is winding down, a handful of major companies will still be reporting results this week, including some of the newly public names like Airbnb, Roblox and Bumble. The Commerce Department's retail sales report is also set for release, offering another update on the strength of consumer spending during the economic recovery.

  • Investors Gird for Fallout as Indian States Lock Themselves Down

    (Bloomberg) -- Investors are bracing for market fallout as state after state locks itself down in India to contain the spread of the coronavirus as infections and deaths surge.More than two thirds of states are shut if assessed by their contribution to national output, analysts at Jefferies calculated last week. Tamil Nadu, which houses foreign manufacturers including BMW and Dell, will also close from Monday, while Delhi extended its lockdown for another week. The measures come as pressure builds on Prime Minister Narendra Modi to impose strict nationwide curbs as he did last year.All of that is forcing a reassessment among investors who had hoped that less-severe curbs would soften the blow to economic growth. Earlier in May, India’s central bank assured markets that it expects the dent in aggregate demand to be moderate in comparison with a year ago, with “containment measures being localized and targeted.”The news of strict lockdowns in several states may hurt sentiment ahead, Ajit Mishra, vice president for research at Religare Broking Ltd., wrote in a report. Investors will be watching key macroeconomic data including inflation and factory output this week as well as the vaccine drive, he said.Vaccine shortages have complicated efforts to tame the outbreak, leaving investors assessing Modi’s next moves and guessing how long states will have to remain shut. Amid the uncertainty, foreign investors pulled $1.9 billion from India’s stocks and debt in April, the biggest outflow in a year, according to data compiled by Bloomberg.“While India has refrained from a national lockdown thus far given its huge economic costs, the scales are tipping fast towards humanitarian benefits of curbing mass transmission, as new infections continue to rise with no peak in sight,” said Chang Wei Liang, an analyst at DBS Bank. “Even without a lockdown, mobility data for Indian cities are already showing that less and less people are moving out of their homes. This implies a natural brake to retail spending and business investment, until mass viral transmission ceases.”Here’s how the crisis is impacting markets:Sovereign BondsRecent interventions from the Reserve Bank of India have kept yields on 10-year sovereign bonds in check. But, the lockdowns could make it hard to keep borrowing costs low for much longerAny revenue shortfall would stoke fears of a further rise in government borrowings, already near records, adding upward pressure on yieldsEarlier this month, the central bank announced the second tranche of its Government Securities Acquisition Programme -- India’s version of quantitative easing -- under which it will buy 350 billion rupees ($4.8 billion) of sovereign bonds on May 20. Read about more steps that the RBI can take hereThe lockdowns risk higher prices for everything from essential drugs to cars, due to the disruption of supply chains. Consumer-price inflation was already on course to test the upper limit of the RBI’s 2%-6% target, and recent gains in wholesale prices signal more pressure. If those strains build, the RBI may struggle to sell bonds to investors at current yieldsRupeeRelative progress fighting the pandemic has been an important factor in global currency markets. India and South Africa present a case study in that among the so-called Fragile Five emerging-markets: Turkey, Brazil, South Africa, India and IndonesiaIndia’s rupee is down about 0.5% against the dollar this quarter even after a recent rebound, while South Africa’s rand has gained 5.1%. Read more about the rupee outlookIndia is facing the world’s worst outbreak, contributing to half of the fresh infections in the world, while South Africa has seen new cases fall about 90% from a recent peak in January. India reported 669 infections per 100,000 people over the past month, about 10 times that of South Africa, according to Bloomberg calculations based on data compiled by Johns Hopkins UniversityThe rupee has slipped down the rankings relative to Asian peers after leading the pack in the first quarter. Any national lockdown could deal a further blowStocksJefferies forecasts India’s economy will grow 10.2% in the year through March 2022, down 3 percentage points from its initial outlook. The figure already must be taken with a grain of salt given the contraction in the year-ago period. Any slowdown could weigh on corporate earningsAnalysts have started to cut price targets for stocks of some of the biggest banks and automobile giants“Markets will correct if the government announces a nationwide lockdown,” said Naveen Kulkarni, chief investment officer at Axis Securities Ltd. “However, the critical factor will be the duration. The longer any lockdown is, the greater will be the correction.”Corporate BondsGoldman Sachs turned neutral on Indian credits last month, expecting limited room for outperformanceCiting headwinds due to lockdowns, research firm CreditSights also changed its recommendation last month on local companies including Indian Oil Corp. and Reliance Industries Ltd. to underperformDBS Bank warned that the market is getting complacent after India’s dollar bonds showed some signs of recovery after a sell-off in the first half of AprilInvestors may be too optimistic given the likelihood of a more persistent impact from the pandemic fallout on the finances of companies and households, it saidFor 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.