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Twenty Years of NAFTA

  • Marcos Godoy of Mexico City manufactures car dash mats at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. TECMA currently has 14 maquiladora plants in Ciudad Juarez. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
    1/18

    Legacy of NAFTA

    Marcos Godoy of Mexico City manufactures car dash mats at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. TECMA currently has 14 maquiladora plants in Ciudad Juarez. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
  • Oscar Lira of Zacatecas, Mexico repairs a receipt printer at a maquiladora belonging to the TECMA group of Ciudad Juarez. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost, though a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
    2/18

    Legacy of NAFTA

    Oscar Lira of Zacatecas, Mexico repairs a receipt printer at a maquiladora belonging to the TECMA group of Ciudad Juarez. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost, though a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
  • People walk past Mexican and American stores in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Mart and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago. (AP Photo/Marco Ugarte)
    3/18

    Legacy of NAFTA

    People walk past Mexican and American stores in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Mart and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago. (AP Photo/Marco Ugarte)
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    Stay in the know at a glance with the Top 10 daily stories

  • A family leaves a local Walmart in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Marts and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago.(AP Photo/Marco Ugarte)
    4/18

    Legacy of NAFTA

    A family leaves a local Walmart in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Marts and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago.(AP Photo/Marco Ugarte)
  • A factory worker tries to fix an ATM card reader at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
    5/18

    Legacy of NAFTA

    A factory worker tries to fix an ATM card reader at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
  • Vehicles line to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. Before Nafta, Mexico was a closed, state-dominated economy reeling from debt and the underlying problems of Mexican farms _ low productivity on small plots. That had set up a perfect storm of mass unemployment. (AP Photo/Ivan Pierre Aguirre)
    6/18

    Legacy of NAFTA

    Vehicles line to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. Before Nafta, Mexico was a closed, state-dominated economy reeling from debt and the underlying problems of Mexican farms _ low productivity on small plots. That had set up a perfect storm of mass unemployment. (AP Photo/Ivan Pierre Aguirre)
  • Stay in the know at a glance with the Top 10 daily stories

    Yahoo News is better in the app

    Stay in the know at a glance with the Top 10 daily stories

  • Plumber Ruben Rodriguez, 67 stands next to his house overlooking the high-rises of the upscale Santa Fe neighborhood in Mexico City. It's hard to remember the country before the North American Free Trade Agreement but a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty has grown in recent years. (AP Photo/Marco Ugarte)
    7/18

    Legacy of NAFTA

    Plumber Ruben Rodriguez, 67 stands next to his house overlooking the high-rises of the upscale Santa Fe neighborhood in Mexico City. It's hard to remember the country before the North American Free Trade Agreement but a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty has grown in recent years. (AP Photo/Marco Ugarte)
  • A U.S. truck drives on an overpass in Mexico City. It is hard to remember the country before the North American Free Trade Agreement, which went into effect on Jan. 1, 1994. The three North American countries are pushing to become even more economically integrated.(AP Photo/Marco Ugarte)
    8/18

    Legacy of NAFTA

    A U.S. truck drives on an overpass in Mexico City. It is hard to remember the country before the North American Free Trade Agreement, which went into effect on Jan. 1, 1994. The three North American countries are pushing to become even more economically integrated.(AP Photo/Marco Ugarte)
  • ·People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
    9/18

    Legacy of NAFTA

    ·People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
  • Stay in the know at a glance with the Top 10 daily stories

    Yahoo News is better in the app

    Stay in the know at a glance with the Top 10 daily stories

  • Workers at one of maquiladoras of the TECMA group prepare to raise the U.S. flag along with the Mexican and TECMA flags in Ciudad Juarez, Mexico. TECMA currently has 14 maquiladora plants in Ciudad Juarez. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost and while a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
    10/18

    Legacy of NAFTA

    Workers at one of maquiladoras of the TECMA group prepare to raise the U.S. flag along with the Mexican and TECMA flags in Ciudad Juarez, Mexico. TECMA currently has 14 maquiladora plants in Ciudad Juarez. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost and while a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
  • People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
    11/18

    Legacy of NAFTA

    People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
  • ôPeople with goods from the Unites States in hand cross back into Mexico at The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez. Twenty years ago, the North American Free Trade Agreement went into effect, at supermarkets, shoppers are now familiar with everything from cranberries to chai and lemons (as opposed to the Mexican lime) that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. . (AP Photo/Ivan Pierre Aguirre)
    12/18

    Legacy of NAFTA

    ôPeople with goods from the Unites States in hand cross back into Mexico at The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez. Twenty years ago, the North American Free Trade Agreement went into effect, at supermarkets, shoppers are now familiar with everything from cranberries to chai and lemons (as opposed to the Mexican lime) that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. . (AP Photo/Ivan Pierre Aguirre)
  • Stay in the know at a glance with the Top 10 daily stories

    Yahoo News is better in the app

    Stay in the know at a glance with the Top 10 daily stories

  • Workers manufacture car dash mats at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost and while auto, electronics and agriculture sectors in Mexico has grown, a majority of Mexicans have seen little benefit in income. (AP Photo/Ivan Pierre Aguirre)
    13/18

    Legacy of NAFTA

    Workers manufacture car dash mats at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost and while auto, electronics and agriculture sectors in Mexico has grown, a majority of Mexicans have seen little benefit in income. (AP Photo/Ivan Pierre Aguirre)
  • American companies such as Applebee's, Burger King and Smartmart line the street in Ciudad Juarez. Looking around a Mexico dotted by American outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago. (AP Photo/Ivan Pierre Aguirre)
    14/18

    Legacy of NAFTA

    American companies such as Applebee's, Burger King and Smartmart line the street in Ciudad Juarez. Looking around a Mexico dotted by American outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago. (AP Photo/Ivan Pierre Aguirre)
  • Crowds of shoppers fill a busy business section of downtown Ciudad Juarez, Mexico.Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways such as the availability of consumer goods and clothing that were trendy among Mexicoâs wealthy are now available to everyone, with more products and choice. (AP Photo/Ivan Pierre Aguirre)
    15/18

    Legacy of NAFTA

    Crowds of shoppers fill a busy business section of downtown Ciudad Juarez, Mexico.Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways such as the availability of consumer goods and clothing that were trendy among Mexicoâs wealthy are now available to everyone, with more products and choice. (AP Photo/Ivan Pierre Aguirre)
  • Stay in the know at a glance with the Top 10 daily stories

    Yahoo News is better in the app

    Stay in the know at a glance with the Top 10 daily stories

  • 'A man with goods from the Unites States crosses back into Mexico at The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez, Thursday. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. At supermarkets, shoppers are now familiar with everything from cranberries to chai and lemons (as opposed to the Mexican lime) that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Ivan Pierre Aguirre)
    16/18

    Legacy of NAFTA

    'A man with goods from the Unites States crosses back into Mexico at The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez, Thursday. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. At supermarkets, shoppers are now familiar with everything from cranberries to chai and lemons (as opposed to the Mexican lime) that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Ivan Pierre Aguirre)
  • People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
    17/18

    Legacy of NAFTA

    People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
  • ­Vehicles line to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways but the treaty never met many of its sweeping promises to close Mexico's wage gap with the United States, boost job growth, fight poverty and protect the environment. (AP Photo/Ivan Pierre Aguirre)
    18/18

    Legacy of NAFTA

    ­Vehicles line to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways but the treaty never met many of its sweeping promises to close Mexico's wage gap with the United States, boost job growth, fight poverty and protect the environment. (AP Photo/Ivan Pierre Aguirre)
Marcos Godoy of Mexico City manufactures car dash mats at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. TECMA currently has 14 maquiladora plants in Ciudad Juarez. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
Oscar Lira of Zacatecas, Mexico repairs a receipt printer at a maquiladora belonging to the TECMA group of Ciudad Juarez. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost, though a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
People walk past Mexican and American stores in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Mart and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago. (AP Photo/Marco Ugarte)
A family leaves a local Walmart in Mexico City. Looking around a Mexico dotted by Starbucks, Wal-Marts and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago.(AP Photo/Marco Ugarte)
A factory worker tries to fix an ATM card reader at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
Vehicles line to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. Before Nafta, Mexico was a closed, state-dominated economy reeling from debt and the underlying problems of Mexican farms _ low productivity on small plots. That had set up a perfect storm of mass unemployment. (AP Photo/Ivan Pierre Aguirre)
Plumber Ruben Rodriguez, 67 stands next to his house overlooking the high-rises of the upscale Santa Fe neighborhood in Mexico City. It's hard to remember the country before the North American Free Trade Agreement but a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty has grown in recent years. (AP Photo/Marco Ugarte)
A U.S. truck drives on an overpass in Mexico City. It is hard to remember the country before the North American Free Trade Agreement, which went into effect on Jan. 1, 1994. The three North American countries are pushing to become even more economically integrated.(AP Photo/Marco Ugarte)
·People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
Workers at one of maquiladoras of the TECMA group prepare to raise the U.S. flag along with the Mexican and TECMA flags in Ciudad Juarez, Mexico. TECMA currently has 14 maquiladora plants in Ciudad Juarez. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost and while a majority of Mexicans have seen little benefit in income. While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty also has grown in recent years. (AP Photo/Ivan Pierre Aguirre)
People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
ôPeople with goods from the Unites States in hand cross back into Mexico at The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez. Twenty years ago, the North American Free Trade Agreement went into effect, at supermarkets, shoppers are now familiar with everything from cranberries to chai and lemons (as opposed to the Mexican lime) that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. . (AP Photo/Ivan Pierre Aguirre)
Workers manufacture car dash mats at a maquiladora belonging to the TECMA group in Ciudad Juarez, Mexico. With the implementation of the North American Free Trade Agreement twenty years ago, many North American and international companies have moved their manufacturing to Mexico at a lower cost and while auto, electronics and agriculture sectors in Mexico has grown, a majority of Mexicans have seen little benefit in income. (AP Photo/Ivan Pierre Aguirre)
American companies such as Applebee's, Burger King and Smartmart line the street in Ciudad Juarez. Looking around a Mexico dotted by American outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago. (AP Photo/Ivan Pierre Aguirre)
Crowds of shoppers fill a busy business section of downtown Ciudad Juarez, Mexico.Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways such as the availability of consumer goods and clothing that were trendy among Mexicoâs wealthy are now available to everyone, with more products and choice. (AP Photo/Ivan Pierre Aguirre)
'A man with goods from the Unites States crosses back into Mexico at The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez, Thursday. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. At supermarkets, shoppers are now familiar with everything from cranberries to chai and lemons (as opposed to the Mexican lime) that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Ivan Pierre Aguirre)
People shop at a local Costco in Mexico City. It's hard to remember the country before the North American Free Trade Agreement which went into effect 20 years ago on Jan. 1. Now, At supermarkets, shoppers are now familiar with everything from cranberries to chai to smoked polish sausages that few had tasted before the treaty tore down trade barriers and tariffs between Mexico, Canada and the United States. (AP Photo/Dario Lopez-Mills)
­Vehicles line to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways but the treaty never met many of its sweeping promises to close Mexico's wage gap with the United States, boost job growth, fight poverty and protect the environment. (AP Photo/Ivan Pierre Aguirre)

Looking around a Mexico dotted by Starbucks, Wal-Mart and Krispy Kreme outlets, it's hard to remember the country before the North American Free Trade Agreement, which has dramatically expanded consumer choice and trade since it took effect 20 years ago on Jan. 1.

While it changed the country in some fundamental ways, the treaty never met many of its sweeping promises to close Mexico's wage gap with the United States, boost job growth, fight poverty and protect the environment. Mexico's weak unions and competition from Asia and Central America kept wages down; the tightening of security along the U.S. border closed off Mexico's immigration "escape valve," and environmental provisions in the agreement proved less powerful than those protecting investors.

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  • Record Alibaba Fine Shows China’s Big Tech Can’t Fight Back

    (Bloomberg) -- After China imposed a record antitrust fine on Alibaba Group Holding Ltd., the e-commerce giant did an unusual thing: It thanked regulators.“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said in an open letter. “For this, we are full of gratitude and respect.”It’s a sign of how odd China’s crackdown on the power of big tech has been compared with the rest of the world. Mark Zuckerberg and Tim Cook would likely not express such public gratitude if the U.S. government were to hit Facebook Inc. or Apple Inc. with record antitrust fines.Almost everything about China’s regulatory push is out of the ordinary. Beijing regulators wrapped up their landmark probe in just four months, compared with the years that such investigations take in the U.S. or Europe. They sent a clear message to the country’s largest corporations and their leaders that anti-competitive behavior will have consequences.For Alibaba, the $2.8 billion fine was less severe than many feared and helps lift a cloud of uncertainty hanging over founder Jack Ma’s internet empire. The 18.2 billion yuan penalty was based on just 4% of the internet giant’s 2019 domestic revenue, regulators said. While that’s triple the previous high of almost $1 billion that U.S. chipmaker Qualcomm Inc. handed over in 2015, it’s far less than the maximum 10% allowed under Chinese law. Alibaba’s shares rose more than 8% Monday in Hong Kong.“We’re happy to get the matter behind us,” Joseph Tsai, co-founder and vice chairman, said on an investor call on Monday. “These regulatory actions are undertaken to ensure fair competition.”The fine came with a plethora of “rectifications” that Alibaba will have to put in place -- such as curtailing the practice of forcing merchants to choose between Alibaba or a competing platform -- many of which the company had already pledged to establish. But Tsai said regulators won’t impose radical changes to its e-commerce strategy. Instead, he and other executives pledged to open up Alibaba’s marketplaces more, lower costs for merchants while spending “billions of yuan” to help its clients handle e-commerce.Tsai said the company is unaware of any other antitrust investigations into the company, except for a previously discussed probe into acquisitions and investments by Alibaba and other tech giants.“The required corrective measures will likely limit Alibaba’s revenue growth as a further expansion in market share will be constrained,” Lina Choi, a senior vice president at Moody’s Investors Service, said in a note. “Investments to retain merchants and upgrade products and services will also reduce its profit margins.”Alibaba Chief Executive Officer Daniel Zhang on Saturday declared his company now ready to move on from its ordeal, while China’s Communist Party mouthpiece People’s Daily issued assurances that Beijing wasn’t trying to stifle the sector.The Hangzhou-based firm “has escaped possible outcomes such as a forced breakup or divestment of assets. The penalty will not shake up its business model, either,” said Jet Deng, an antitrust lawyer at the Beijing office of law firm Dentons.Beijing remains intent on reining in its internet and fintech giants, a broad campaign that’s wiped more than $250 billion off Alibaba’s valuation since October. The e-commerce giant’s speedy capitulation underscores its vulnerability to further regulatory action -- a far cry from just six years ago, when Alibaba openly contested one agency’s censure over counterfeit goods on Taobao and eventually forced the State Administration for Industry and Commerce to backtrack on its allegations.On Monday, shares in Alibaba’s fellow internet giants from social media titan Tencent Holdings Ltd. to food delivery leader Meituan and JD.com Inc. fell on fears they could draw similar scrutiny. “It’s exactly what the market is thinking right now: Tencent and Meituan are next in line if the same standards are to be applied, but even the worst won’t be so bad,” said Zhuang Jiapeng, a fund manager at Shenzhen JM Capital Co.Beyond antitrust, government agencies are said to be scrutinizing other parts of Ma’s empire, including Ant Group Co.’s consumer-lending businesses and Alibaba’s extensive media holdings. And the shock of the crackdown will continue to resonate with peers from Tencent and Baidu Inc. to Meituan, forcing them to tread far more carefully on business expansions and acquisitions for some time to come.What Bloomberg Intelligence SaysChina’s record fine on Alibaba may lift the regulatory overhang that has weighed on the company since the start of an anti-monopoly probe in late December. The 18.2 billion yuan ($2.8 billion) fine, to penalize the anti-competitive practice of merchant exclusivity, is equivalent to 4% of Alibaba’s 2019 domestic sales. Still, the company may have to be conservative with acquisitions and its broader business practices.-- Vey-Sern Ling and Tiffany Tam, analystsClick here for the full research.The investigation into Alibaba was one of the opening salvos in a campaign seemingly designed to curb the power of China’s internet leaders, which kicked off after Ma infamously rebuked “pawn shop” Chinese lenders, regulators who don’t get the internet, and the “old men” of the global banking community. Those comments set in motion an unprecedented regulatory offensive, including scuttling Ant’s $35 billion initial public offering.It remains unclear whether the watchdog or other agencies might demand further action. Regulators are said, for instance, to be concerned about Alibaba’s ability to sway public discourse and want the company to sell some of its media assets, including the South China Morning Post, Hong Kong’s leading English-language newspaper.Read more: China Presses Alibaba to Sell Media Assets, Including SCMPChina’s top financial regulators now see Tencent as the next target for increased supervision, Bloomberg News has reported. And the central bank is said to be leading discussions around establishing a joint venture with local technology giants to oversee the lucrative data they collect from hundreds of millions of consumers, which would be a significant escalation in regulators’ attempts to tighten their grip over the country’s internet sector.“The high fine puts the regulator in the media spotlight and sends a strong signal to the tech sector that such types of exclusionary conduct will no longer be tolerated,” said Angela Zhang, author of “Chinese Antitrust Exceptionalism” and director of the Centre for Chinese Law at the University of Hong Kong. “It’s a stone that kills two birds.”For now, it appears investors are just glad it wasn’t worse. In its statement, the State Administration for Market Regulation concluded Alibaba had used data and algorithms “to maintain and strengthen its own market power and obtain improper competitive advantage.” Its practice of imposing a “pick one from two” choice on merchants “shuts out and restricts competition” in the domestic online retail market, according to the statement.The firm will be required to implement “comprehensive rectifications,” including strengthening internal controls, upholding fair competition and protecting businesses on its platform and consumers’ rights, the regulator said. It will need to submit reports on self-regulation to the authority for three consecutive years.The company will have to make adjustments but can now “start over,” Zhang wrote in a memo to Alibaba’s employees Saturday.“We believe market concerns over the anti-monopoly investigation on BABA are addressed by SAMR’s recent decision and penalties,” Jefferies analysts wrote in a research note entitled “A New Starting Point.”Indeed, The People’s Daily said in its commentary Saturday that the punishment was intended merely to “prevent the disorderly expansion of capital.”“It doesn’t mean denying the significant role of platform economy in overall economic and social development, and doesn’t signal a shift of attitude in terms of the country’s support to the platform economy,” the newspaper said. “Regulations are for better development, and ‘reining in’ is also a kind of love.”(Updates with shares and commentary from the 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.

  • Holt to head KPMG's UK arm ahead of Carillion probe outcome

    Global accountants KPMG said on Monday that Jon Holt has been elected by partners to head its 2.3 billion pound ($3.17 billion) UK arm, which faces a potential fine and major industry reform. Holt, head of audit since 2019, takes up the CEO job immediately until September 2025, replacing Bill Michael, who resigned after reports that he told partners to "stop moaning" about the impact of COVID-19 on their lives. "Now is the time to challenge ways of working and use what we’ve learnt during the pandemic to really drive positive action," Holt said in a statement.

  • Mubadala Says It’s Close to IPO of Emirates Global Aluminium

    (Bloomberg) -- Abu Dhabi sovereign wealth fund Mubadala Investment Co. said it’s “close” to an initial public offering of Emirates Global Aluminium PJSC as it studies other major deals including a role in a consortium investing in Saudi Aramco’s oil pipelines.“We’ve been thinking about this for a couple of years and waiting for the right time for that business to be IPO’d,” Chief Executive Officer Khaldoon Al Mubarak said on Monday when asked about a possible IPO of EGA, the Middle East’s biggest producer of aluminum.Coming off its busiest year ever, the $232 billion fund has shown little sign of slowing down in 2021, striking deals ranging from purchasing a Brazilian refinery to investing in convertible bonds of messaging app Telegram.EGA, which is equally owned by Mubadala and Investment Corp. of Dubai, has smelters in Abu Dhabi and Dubai and a bauxite mine in Guinea.The company had planned an IPO in 2018 or 2019 but it was pulled after then-U.S. President Donald Trump imposed tariffs on aluminum imports from the United Arab Emirates. His successor Joe Biden said in February that he would keep the U.S. restrictions in place, reversing Trump’s last-minute move to grant the UAE relief from the duties.“We will decide, obviously, when the appropriate market conditions are there, but the company is certainly in a very strong position and I think is well placed for an IPO,” Al Mubarak said during a virtual conference. “We’re very close now.”Mubadala is meanwhile considering other deals. It hasn’t yet decided whether to join a group led by EIG Global Energy Partners LLC that agreed on a $12.4 billion deal with Aramco.The wealth fund has teams studying the opportunity and looking at possible returns on investing in neighboring Saudi Arabia, according to Al Mubarak. It’s previously said that it was in talks with EIG.According to an announcement last Friday, the investors will buy 49% of Aramco Oil Pipelines Co., a recently-formed entity with rights to 25 years of tariff payments for crude shipped through the Saudi Arabian firm’s network. Aramco will own the rest of the shares and retain full ownership of the pipelines themselves.Read more: Mubadala Discusses GlobalFoundries IPO at $20 Billion Value Mubadala has also made no decision about a share sale of its wholly-owned chipmaker GlobalFoundries, according to Al Mubarak. Earlier this month, Bloomberg reported that the wealth fund had started preparations for a U.S. IPO that could value the business at about $20 billion.“Today GlobalFoundries is a strong, well-run business,” Al Mubarak said. “We have not taken a view or a decision yet.”After an initial pause after the pandemic first hit, the wealth fund doubled down and invested more in 2020 than in any previous year, the CEO said.India emerged as one key destination for Mubadala’s money, with its investments there in 2020 eclipsing the combined total of the preceding 19 years, Al Mubarak said.The wealth fund invested $1.2 billion in Reliance Industries Ltd.’s digital upstart Jio Platforms Ltd. in 2020, a deal that gave Mubadala a 1.85% stake in the venture.“Clearly, we were underweight in terms of India” and “over the last many years we didn’t invest as much as we should,” the CEO said. “That’s changing, and as far as we’re concerned in Mubadala, we’re certainly giving it a very particular focus.”(Updates with CEO’s comments starting in seventh 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.

  • ‘It would be nice to spend money and go on vacations’: I’m 58 and have lived in my home for 40 years. Can I afford a house and semi-retirement?

    ‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage. The costs of homeownership are rising quickly across the country, so you’re not alone in feeling burdened.

  • My husband signed a car loan for a friend — against my wishes. Now we get notices for unpaid tolls and parking tickets. What happens if there’s an accident?

    ‘Every time another ‘past due’ envelope arrives I panic at the thought of the savings I worked so hard to put away might be gone in one accident.’

  • The Dip in These 3 Stocks Is a ‘Buying Opportunity,’ Say Analysts

    The investing game is rarely plain sailing. While no doubt investors would like the choices that make up their portfolio to always go up, the reality is more complicated. There are periods when even shares of the world’s most successful companies have been on a downward trajectory for one reason or another. While it’s no fun watching a stock you own drift to the bottom, any savvy investor knows that if the company’s fundamentals are sound to begin with, the pullback is often a gift in disguise. This is where the chance for strong returns really comes into play. “Buy the Dip” is not a cliché without reason. With this in mind, we scoured the TipRanks database and picked out 3 names which have been heading south recently, specifically ones pinpointed by those in the know as representing a buying opportunity. What’s more, all 3 are rated Strong Buys by the analyst consensus and projected to rake in at least 70% of gains over the next 12 months. Here are the details. Flexion Therapeutics (FLXN) Let’s first take a look at Flexion, a pharma company specializing in the development and commercialization of therapies for the treatment of musculoskeletal pain. The company has two drugs currently in early-stage clinical trials but one which has already been approved by the FDA; Zilretta is an extended-release corticosteroid for the management of osteoarthritis knee pain. The drug was granted regulatory approval in 2017, and Flexion owns the exclusive worldwide rights. FLXN stock has found 2021 hard going and is down by 30% year-to-date. However, the “recent weakness,” says Northland analyst Carl Byrnes has created a “unique buying opportunity.” Like many biopharmas, Flexion’s marketing efforts took a hit during the height of the pandemic last year, as shutdowns and restrictions impacted its operations. However, Byrnes anticipates Zilretta to exhibit “stellar growth in 2021 and beyond.” “We remain highly confident that the demand for ZILRETTA will continue to strengthen, bolstered by product awareness and positive clinical experiences of both patients and HCP, augmented by improvements in HCP interactions and deferral of total knee arthroplasty (TKA) surgical procedures,” the analyst said. Byrnes expects Zilretta’s 2021 sales to surge by 45% year-over-year to $125 million, and then increase by a further 50% to $187.5 million the following year. That revenue growth will go hand in hand with massive share appreciation; Byrne’s price target is $35, suggesting upside of ~339% over the next 12 months. Needless to say Byrne’s rating is an Outperform (i.e. Buy). (To watch Byrnes’ track record, click here) Barring one lone Hold, all of Byrne’s colleagues agree. With 9 Buys, FLXN stock boasts a Strong Buy consensus rating. While not as optimistic as Byrne’s objective, the $20.22 average price target is still set to yield returns of an impressive 153% within the 12-month time frame. (See FLXN stock analysis on TipRanks) Protara Therapeutics (TARA) Staying in the pharma industry, next up we have Protara. Unlike Flexion, the cancer and rare disease-focused biotech has no therapies approved yet. However, the picture should soon become clear regarding the timing of a BLA (biologics license application) for TARA-002, the company’s investigational cell therapy for a rare pediatric indication - lymphatic malformations (LM). TARA-002 is based on the immunopotentiator OK-432, currently approved as Picibanil in Japan and Taiwan for the treatment of multiple cancer indications as well as LM. Currently, Protara is seeking to get the FDA’s acceptance that TARA-002 is comparable to OK-432. If everything goes according to plan, the company anticipates potential BLA filing in H2:2021 and potential approval in H1:2022. Protara shares have tumbled 40% year-to-date. That said, Guggenheim analyst Etzer Darout believes the stock is significantly undervalued. “We estimate risk-adjusted peak sales of ~$170M (75% PoS) in the US alone (biologics exclusivity to 2034-2035),” the 5-star analyst said. “The company has outlined a ‘no additional study scenario’ that estimates a US launch in 2022 and an ‘additional registration study’ scenario that estimates a 2023 launch and we see current levels as a buying opportunity ahead of regulatory clarity on LM.” Furthermore, Tara is expected to submit an IND (investigational new drug) for a Phase 1 trial for TARA-002 in 2H21 for the treatment of non-muscle invasive bladder cancer (NMIBC). Darout notes 80% (~65K) of all newly diagnosed bladder cancer patients suffer from this specific condition including ~45% “that are high grade with high unmet need.” The company also owns IV Choline, a Phase 3-ready asset, for which the FDA has already granted both Orphan Drug Designation and Fast Track Designation for IFALD (intestinal failure-associated liver disease). Based on all of the above, Darout rates TARA a Buy and has a $48 price target for the shares. The implication for investors? Upside of a strong 225%. (To watch Darout’s track record, click here) Overall, with 3 recent Buy ratings under its belt, TARA gets a Strong Buy from the analyst consensus view. The stock is backed by an optimistic average price target, too; at $43.67, the shares are anticipated to appreciate by ~198% in the year ahead. (See TARA stock analysis on TipRanks) Green Thumb Industries (GTBIF) Last but not least is Green Thumb, a leading US cannabis MSO (multi state operator). This Chicago-based company is one of the stalwarts of the rising cannabis sector, boasting the second highest market-cap in the industry and exhibiting impressive growth over the last year. In 2020, revenue increased by 157% from 2019, to reach $556.6 million. That said, despite delivering another excellent quarterly statement in March, and being well-positioned to capitalize on additional states legalizing cannabis, the stock has pulled back recently after the company was hit by a damning Chicago Tribune article. According to Chicago Tribune, the company is being investigated by the fed over "pay to play" payments regarding the procurement of cannabis licenses in Illinois. Countering the claims, GTBIF management said the allegations are unfounded and that there is no factual evidence to support them. Furthermore, the company pointed out it has not even been contacted by the authorities regarding the matter. Who to believe, then? It’s an easy choice, according to Roth Capital’s Scott Fortune. “We believe these tenuous claims create an opportunity to own the best-in-class operator currently off 25% from recent highs,” the 5-atar analyst opined. “In our view, the GTI business and track record of execution is not at risk in terms of the seemingly baseless accusations. We will continue to monitor any new additional incremental evidence potentially surfacing but believe the allegations are unfounded. We believe the upside opportunity remains compelling at these levels.” Going by Fortune’s $45 price target, shares will be changing hands for a 70% premium a year from now. Fortune’s rating remains a Buy. (To watch Fortune’s track record, click here) The negative news has done little to dampen enthusiasm around this stock on Wall Street. The analyst consensus rates GTBIF a Strong Buy, based on a unanimous 12 Buys. The average price target, at $47.71, suggests an upside of 79% over the next 12 months. (See GTBIF stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Rupee Tumbles With Stocks as Virus Cases in India Hit New Record

    (Bloomberg) -- India’s deepening coronavirus crisis slammed the nation’s stocks and currency on concern it will deliver a fresh blow to an economy that’s only just recovering from the worst contraction in nearly seven decades.The Indian rupee dropped past 75 to a dollar for the first time since August 2020, while the benchmark S&P BSE Sensex Index declined 3.4%, the most in almost two months. India reported a record 168,912 new infections for a day, taking the tally to 13.53 million cases, the government said Monday.Many provinces across the nation, from the financial hub Mumbai to capital New Delhi, are bringing back stricter restrictions on movement of people to curb the surge in cases. Reports are emerging of hospital beds running short and immunization centers turning away people as they run out of vaccines.That and a vaccine shortage “are unnerving markets and no one is sure whether lockdowns will help bring cases under control,” said Deepak Jasani, head of retail research at HDFC Securities. Given the uncertainty, “the incentive to try and bottom-fish at this point is limited for traders.”Taking a BeatingThe NSE Nifty 50 Index dropped 3.5%, making India’s key stock indexes the worst performers in Asia on Monday. All 19 sector sub-indexes compiled by BSE Ltd. slipped, led by a gauge of property and industrial shares.India’s virus resurgence has prompted some brokerages to reconsider their preference for stocks, which are most sensitive to the economic recovery. Nomura cut the weight of financials and cement shares in its model portfolio, while Jefferies downgraded Indian banks to underweight from overweight.Not everyone is pessimistic. India’s long-term outlook remains strong and any decline in equities due to infections should be used as an entry point by investors, according to Prabhudas Lilladher Ltd. India’s gross domestic product is forecast to grow by as much as 12.5% this fiscal year, which would make it the world’s fastest-growing major economy.Bonds held on to last week’s gains, with the yield on the benchmark 10-year notes near the lowest since mid-February, amid optimism the central bank may keep its policy accommodative for long to support the economy. The rupee fell 0.4% to close at 75.0550 per dollar on Monday.“We expect the rupee to weaken versus the USD as have other EM currencies,” and given the slow progress of vaccination, the economy “will be slower to recover,” R Venkataraman, managing director at IIFL Securities, wrote in a note.(Updates with closing prices; adds IIFL analyst’s comment in last 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.

  • Maxing Out Your 401(k) and What to Do Next

    Max out your 401(k) each year, and be sure to get your 401(k) employer match, if you have one. And for you super savers, here are other ways to save for retirement.

  • “Er xuan yi”: The business tactic that led to Alibaba’s $2.8 billion antitrust fine

    The regulator's statement offers the most detailed look so far at how companies like Alibaba use a controversial business tactic.

  • Billionaire Saudi Family Breaks Mold on Kingdom’s Secrecy

    (Bloomberg) -- For Ahmad BinDawood, last year’s share offering in the eponymous Saudi grocery business was a chance to shape his legacy at the family firm he’s worked at since the age of eight, while cementing a $3.1 billion fortune built over the decades by his father and uncles.As the October public offering of BinDawood Holding Co. got underway, details emerged of some $76 million in previously undisclosed loans made by the Saudi company to family members. In a departure from the traditional secrecy associated with the kingdom’s family firms, Jeddah-based BinDawood revealed everything, put the IPO on hold and gave buyers the chance to take their money back.As the loans were quickly repaid, the sale resumed and eventually raised about $500 million for the family, attracting $29 billion in bids along the way.“We have to be very transparent with investors,” BinDawood said in an interview in Riyadh last month. “If there is any disclosure at any time that we need to make, we will go ahead and do it. So we took this on the shoulder and decided to announce it.”The success of the IPO has helped establish BinDawood, 37, as one of a new breed of Saudi executives rising within a corporate world that was largely off-limits to foreigners until a few years ago. What’s more, it has made him emblematic of a drive to shake up traditional ways of doing business, dovetailing with Saudi Crown Prince Mohammed bin Salman’s goal of transforming the oil-rich kingdom into a regional business hub.That mold-breaking character can even be seen inside BinDawood stores. The past few months have seen the company doing prominent Valentine’s Day and Easter promotions, a move unthinkable just a few years ago in a country that has historically adhered to a strict Wahhabist interpretation of Islam.Prince Mohammed’s commitment to reshaping the economy isn’t all working in BinDawood’s favor. A sudden decision to triple value added tax last year hit consumer spending. Higher customs duties and fees on expatriates are driving up costs for Saudi firms, too. And all at a time when the Covid-19 pandemic has been stoking unemployment.“We remain cautious of near-to-mid term growth across the consumers space as market size shrinks on potential expat depopulation,” said Mehwish Zafar, a senior equity analyst at Arqaam Capital in Dubai who has a “hold” recommendation on the shares. Like-for-like sales growth will probably be negative until at least 2022, he said, with growth only coming from new store openings or acquisitions.Shares in BinDawood jumped more than 30% in the days immediately after the sale. They have since slipped back, showing as of Monday a gain of about 11.5% from the listing price.It’s a performance that has helped buttress the family’s bid to diversify into other assets while strengthening the core business, a goal identified by Ahmad BinDawood as key to avoiding the kind of strife his father feared might undermine the business as it passed to a new generation.“The majority of family businesses don’t survive the transition to the third generation, and that’s something that concerned my father a lot,” BinDawood said.Pilgrims ProgressThe rise of the BinDawood business has been some 40 years in the making. Once a small-time vendor of Arabian perfumes and groceries to pilgrims visiting the Islamic holy sites of Mecca and Medina, it is now a nationwide concern spanning supermarkets and hypermarkets, hotels and distribution centers. The grocery business alone employs more than 10,000 people across 74 stores.Ahmad BinDawood’s own destiny was sealed as soon as his father, Abdulrazzag BinDawood graduated in the 1980’s from the King Fahd University of Petroleum and Minerals in Dhahran. Instead of following his peers into the oil industry, he decided to join his brothers Ismail and Abdullah in their burgeoning retail trade.Which is why Ahmad found himself on the front line at such a young age. At just eight, he was helping to sell items to the pilgrims during his school holidays, envious of friends who were away avoiding Saudi Arabia’s scorching summers.“Our friends were traveling and off enjoying themselves and sometimes we would would ask: why not us?” BinDawood said. “But that experience built the passion in us to stay in the business that our father and our uncles built.”A decision to push into online shopping and delivery helped prepare the firm for lockdowns during the coronavirus pandemic, but couldn’t outweigh the hit from the absence of religious tourists who were prevented from entering the kingdom for much of the year. While profit climbed almost 7% last year, it had slumped more than 53% in the fourth quarter as Saudi Arabia reimposed travel restrictions.BinDawood is still optimistic that shoppers will return as travel resumes, though how quickly pilgrims come back to Saudi Arabia in anything like their previous numbers remains uncertain.Next up may be the purchase of a rival grocery chain to expand into neighboring countries, BinDawood said. At the same time, the IPO proceeds will help further develop the BinDawood Group family office, which Ahmad’s father is now running. That fortune, which is split across several family members, is estimated at about $3.1 billion, according to the Bloomberg Billionaires Index.“The IPO had two main angles to it -- sustainability and continuity of the business first, and second the diversification for the family,” he said. “We are in the process of building the family office and bringing in the right talent.”More family businesses are likely to follow in BinDawood’s footsteps. The IPO of Saudi Aramco in 2019, which many Saudis never thought they would see, “has been a massive driver in motivating families to take their operating businesses public to help grow their enterprises and generate new wealth,” said Tayyab Mohamed, co-founder of London-based family office staffing firm, Agreus Group.For all the challenges, Ahmad BinDawood is optimistic, citing his life-long involvement in the business as a foundation for success.“Retail is embedded in our DNA now,” he said.(Updates share performance in ninth 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.

  • HSBC and Huawei CFO reach agreement on document publication linked to extradition case

    HSBC and Huawei Technologies' Chief Financial Officer Meng Wanzhou have reached an agreement in a dispute about the publication of documents relating to U.S. fraud allegations against her, their lawyers told a Hong Kong court. The legal dispute reached the Hong Kong court last month after a British judge in February blocked the release of internal HSBC documents relating to the fraud allegations against Meng.

  • Singapore Dealer Prepares Vault for 15,000 Tons of Silver

    (Bloomberg) -- Inside a six-story high warehouse near Singapore’s Changi airport, a vast hangar-like space is waiting to be filled with a precious metal that usually plays second fiddle to its more lustrous sibling.The vault that’s being built by Silver Bullion Pte Ltd. will -- when completed in the first half of next year --- be able to store 15,000 tons of silver. It’s only holding around 400 tons of the metal at the moment, but the vacant space is an indication that silver appears to be on the cusp of a promising few years.Demand for coins and bars is booming, fueled in part by a Reddit-induced buying frenzy in February that drove prices to an eight-year high. While the fervor has abated, retail interest is still elevated, valuations are relatively cheap and measures are being taken to meet the surge in demand. The amount of silver stored in vaults in London rose 11% in March to a record, according to the London Bullion Market Association.As well as the Singapore vault, JM Bullion, one of the biggest precious metals retailers in the U.S., plans to open a 25,000-square-foot-warehouse in Dallas in June that will be used for storing silver and other precious metals.The metal’s crucial role in the energy transition -- it’s a key component in solar panels -- also looks set to buoy consumption over the longer-term. All this has some analysts forecasting that silver will outperform gold this year.“The outlook for demand growth for silver over the next few years looks very positive, especially across a wide range of industrial applications, including solar, 5G and automotive,” said Philip Klapwijk, managing director of Hong Kong-based consultant Precious Metals Insights Ltd. “That, coupled with ongoing high levels of investment is likely to create the need for more dedicated storage space for silver in bullion and also intermediate forms.”Gregor Gregersen, founder of Silver Bullion, said he started searching for a bigger warehouse two or three years ago and that decision was vindicated last year when demand for the metal surged during the coronavirus pandemic. “The idea is to make this into a really iconic building,” he said during a tour of the vault that will be known as The Reserve. “There isn’t really a facility built specifically to store large quantities of silver securely.”Singapore has a reputation as a stable financial center and has taken steps to position itself as a bullion hub, exempting investment-grade gold, silver and platinum from a goods and services tax.Physical investment in silver, which covers bullion coin and bar purchases, is expected to reach a six-year high of 257 million ounces in 2021, according to the Silver Institute.Spot silver, currently trading around $25 an ounce, is forecast by Citigroup Inc. to peak at $28 to $30 in the second half, aided by “still solid” investment demand and an end to physical de-stocking in China and India. The lender sees the price averaging $27.30 this year. Morgan Stanley, meanwhile sees the metal averaging $25 an ounce in 2021, up 22% from last year.Gold, meanwhile, is stabilizing after its first quarterly loss since 2018 amid high bond yields and optimism over the global economic recovery from the pandemic that’s damping demand for the metal. Citi sees gold, currently fetching around $1,740 an ounce, falling to $1,575 in six to 12 months.Sill, there’s no shortage of silver. The Silver Institute expects the global market to remain in a surplus this year, although it sees the lowest excess since 2015. And even against a backdrop of strong electronics and automotive demand as well as growing solar power investment, silver’s failure to break higher suggests the gold price, real yields and the U.S. dollar remain powerful drags, Morgan Stanley said in a note.“Considering the high correlation of silver to gold, and our bearish outlook for the yellow metal over the next 12 months, we expect silver together with gold to continue to struggle amid higher real interest-rate expectations in the U.S.,” said Giovanni Staunovo, a strategist at UBS Group AG.JM Bullion Chief Executive Officer Michael Wittmeyer is more optimistic. The Reddit-fueled buying frenzy caused a spike in demand from existing silver bugs as well as bringing in a lot of first-time investors in the metal, he said. “We’re just trying to expand our capacity so that next time this happens, we’ll be able to get all these orders shipped more quickly.”The accelerating move away from fossil fuels should also provide an enduring tailwind for silver demand as investment in solar power ramps up. China, Japan and South Korea all set carbon zero targets last year, while the U.S. is considering emissions cuts of 50% or more from 2005 levels by 2030.The energy transition demand should give prices an extra boost, said CPM Group analyst Rohit Savant. Silver will average $27 this year and beat gold due to its relatively cheaper valuation and strong investment demand, he said. Spot silver fell 2% to $24.77 an ounce at 10:40 a.m. in New York on Monday after gaining 1% last week.In Singapore, Silver Bullion’s Gregersen is confident all that currently vacant space in his vault won’t go to waste. “Silver is usually a forgotten metal that people don’t really care much about,” he said. “But it’s starting to shine a bit more and that trend will continue.”(Updates with spot silver price in the 16th 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.

  • Student loan forgiveness: What $10,000 in cancellation would look like by U.S. state

    As the president mulls Democrat calls to cancel up to $50,000 in federally-backed student loan debt via executive order, a new analysis shows how $10,000 in forgiveness would affect borrowers in each U.S. state.

  • GameStop stock falls toward 6th straight decline after Ascendiant analyst downgrades to sell

    Shares of GameStop Corp. fell 0.7% in premarket trading Monday, which puts them in danger of a sixth straight loss, after Ascendiant Capital analyst Edward Woo turned bearish on the videogame retailer, citing a "hazy" 2021 outlook despite strong new consoles launches. Woo cut his rating to sell after being at hold since June 2019. He lowered his stock price target to $10, which is 94% below Friday's closing price of $158.36, from $12, which makes him the most bearish of the seven analysts surveyed by FactSet. Woo said he remains "very concerned" about the long-term prospects for its video game business, "especially once hardware sales temper as the installed base matures. He also commented on the frenzied trading surrounding the meme stock. He said the stock's big rally over the past several months -- it's up 740.6% year to date through Friday -- is due to "wild investor optimism" about the company's prospects and valuation and "a humungous short squeeze," helped by the addition of Ryan Cohen to the company's board. "Due to the popularity of GameStop on Reddit chat boards and with Robinhood retail investors, GameStop shares appears to no longer trade on traditional fundamental valuations or metrics, but on retail investors sentiment, hope, momentum, and the powers of crowds," Woo wrote in a note to clients. "This makes short term price movement forecasts nearly impossible...but we believe that over the long run GameStop's current elevated share prices will come back down to match its current weak results and outlook." The stock has lost 17.3% amid a five-day losing streak through Friday, while the S&P 500 gained 2.7% last week.

  • Why this cannabis giant is betting on Europe to build a war chest ahead of the U.S. legalization bonanza

    Cannabis deals in Europe will help pot giant Aphria build up a war chest ahead of an expected frenzy of M&A in the U.S., the company’s chair and chief executive told MarketWatch ahead of the group’s earnings on Monday.

  • Biden Team Eyes Potential Threat From China’s Digital Yuan

    (Bloomberg) -- The Biden administration is stepping up scrutiny of China’s plans for a digital yuan, with some officials concerned the move could kick off a long-term bid to topple the dollar as the world’s dominant reserve currency, according to people familiar with the matter.Now that China’s digital-currency efforts are gathering momentum, officials at the Treasury, State Department, Pentagon and National Security Council are bolstering their efforts to understand the potential implications, the people said.American officials are less worried about an immediate challenge to the current structure of the global financial system, but are eager to understand how the digital yuan will be distributed, and whether it could also be used to work around U.S. sanctions, the people said on the condition of anonymity.A Treasury spokeswoman declined to comment. A National Security Council spokeswoman did not reply to a request for comment.The People’s Bank of China has rolled out trial issuance of a digital yuan in cities across the country, putting it on track to be the first major central bank to issue a virtual currency. A broader roll-out is expected for the Winter Olympics in Beijing next February, giving the effort international exposure.Many key details of the digital yuan are still in flux, including specifics on how it would be distributed. China’s recent establishment of a joint venture with SWIFT, the messaging nexus through which most cross-border settlements pass through today, suggests it is possible a digital yuan could work within the current financial architecture rather than outside of it.U.S. officials are reassured that China’s intentions aren’t to use the digital yuan to evade American sanctions, according to people familiar with the matter. The dollar’s current dominance in cross-border transactions gives the U.S. Treasury the power to cut off much of a business or even a country’s access to the global financial system.China’s officials have said the main intentions of the digital yuan are to replace banknotes and coins, to reduce the incentive to use cryptocurrencies and to complement the current private-sector run electronic payments system -- dominated by Ant Group Co.’s Alipay and Tencent Holdings Ltd.’s WeChat Pay. The PBOC has been working for years on the digital yuan, also called the e-CNY, having set up a specialist research team in 2014.Here’s How a Central Bank Digital Currency Could Work: Chart​​“To provide a backup or redundancy for the retail payment system, the central bank has to step up” and provide digital-currency services, Mu Changchun, the director of the PBOC’s digital-currency research institute, said at an event last month.Beyond seeking a backup to privately run e-payments, Chinese regulators have more broadly been expanding their oversight of the country’s digital champions. Ant Group was told by Beijing to become a financial holding company, which will be regulated more like a bank. China also imposed a $2.8 billion antitrust fine on Ant’s affiliate Alibaba Group Holding Ltd.Read More: Ant to Be Financial Holding Firm in Overhaul Forced by ChinaThe PBOC is also examining the potential for using the digital yuan in cross-border payments, launching a project studying the issue with a unit of the Bank for International Settlements along with the United Arab Emirates, Thailand and Hong Kong’s monetary authority.The Biden administration isn’t currently planning to take any action to counter longer-term threats from China’s digital currency, the people familiar with the discussions said. However, China’s plans have given renewed impetus to efforts to consider the creation of a digital dollar, they said.Members of Congress have also been increasingly interested in a digital dollar, aware of China’s moves, and asked Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen about the issue in hearings earlier this year.Powell: Need for Digital Dollar Is an Issue for Congress, PublicPowell said in February the Fed was looking “very carefully” at a digital dollar. “We don’t need to be the first. We need to get it right.”Yellen has signaled interest in research into the viability of a digital dollar, a shift from a lack of enthusiasm under her predecessor, Steven Mnuchin.“It makes sense for central banks to be looking at” issuing sovereign digital currencies, she said at a virtual conference in February. Yellen said a digital version of the dollar could help address hurdles to financial inclusion in the U.S. among low-income households.A recent report from the U.S. Director of National Intelligence said the extent of the threat of any foreign digital currency to the dollar’s centrality in the global financial system “will depend on the regulatory rules that are established.”China’s currency makes up little more than 2% of global foreign exchange reserves compared with nearly 60% for the U.S. dollar. Policy decisions, rather than technical developments, will also be necessary to push forward yuan internationalization, as China maintains a strict regime of capital controls.China’s financial system is too “fragile and weak” to pose a real threat to the dollar’s status as the world’s reserve currency, according to Mark Sobel, U.S. chairman for the Official Monetary and Financial Institutions Forum.“At the end of the the day the markets have more confidence in the Fed” than China’s central bank, said Sobel, a former senior U.S. Treasury official for international matters.(Adds reference to China’s regulatory measures in 10th 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.

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    (Bloomberg) -- Vingroup JSC is considering a U.S. initial public offering of its car unit VinFast that could raise about $2 billion, according to people familiar with the matter.The biggest carmaker in Vietnam is working with advisers on the potential offering that could take place as soon as this quarter, the people said. An offering could raise as much as $3 billion, said the people, who asked not to be identified as the information is private. The company is seeking a valuation of at least $50 billion after a listing, one of the people said.At $2 billion, VinFast’s IPO would be the biggest ever by a Vietnamese company after Vinhomes JSC’s $1.4 billion first-time share sale in 2018, according to data compiled by Bloomberg. The carmaker could also become the first Vietnamese company to list in the U.S. if successful.Details of VinFast’s IPO including size and timeline could change as deliberations are ongoing, the people said. A representative for Vingroup declined to comment.VinFast, founded by billionaire Pham Nhat Vuong, began delivering gasoline-powered autos to Vietnamese consumers with BMW-licensed engines in 2019. The carmaker plans a Vietnam roll-out of electric cars later this year and said last month it has received 3,692 local orders. The startup aims to deliver its first electric vehicles to the U.S., Canada and Europe next year and is looking to open a factory in the U.S.Shares in Vingroup have risen 22% this year, giving the company a market value of about $19 billion.(Updates to add Vingroup shares in last 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.