Feb.17 -- Erin Browne, multi-asset portfolio manager at Pacific Investment Management Co., discusses the outlook for equity, fixed income and currency markets. She speaks with Haslinda Amin and Rishaad Salamat on "Bloomberg Markets: Asia."
Feb.17 -- Erin Browne, multi-asset portfolio manager at Pacific Investment Management Co., discusses the outlook for equity, fixed income and currency markets. She speaks with Haslinda Amin and Rishaad Salamat on "Bloomberg Markets: Asia."
(Bloomberg) -- In the health-care industry, the coronavirus pandemic led to big fortunes, fast. Now some of them are evaporating just as quickly.Take Seegene Inc., a maker of Covid-19 test kits, and Alteogen Inc., a biotech with subcutaneous-injection technology. Their founders became billionaires as the shares surged last year. Fast forward a few months to the vaccine rollout, and they’ve lost their title after both stocks sank more than 41%, according to the Bloomberg Billionaires Index.It’s a similar story for glovemakers in Malaysia, which counted at least five industry billionaires by August as the worsening health crisis increased demand for the protective gear. Despite a brief rebound amid last month’s frenzy in retail trading, their shares are down at least 40% since hitting highs, wiping more than $9 billion from their founders’ net worths.While the billionaires created by the Pfizer Inc.-BioNTech SE and Moderna Inc. vaccines have maintained much of their wealth, many others have seen a falling off. The moves show how fleeting fortunes can be with a market so wild that some stocks have had days with fluctuations of more than 20%. Some of the founders took advantage of the volatility to book profits, just as others increased their control by buying more shares as prices fell.“It doesn’t look like fortunes made from a sudden boom in demand -- such as for test kits or biotech -- would continue to grow once things get more stable,” said Park Ju-gun, president of Seoul-based corporate watchdog CEOScore. He expects platform-based services that thrived with the pandemic will lead to further wealth creation.The emergence of Covid-19 and its rapid spread across the globe led to an immediate need for test kits, protective gear and treatments for the disease. Companies such as Seegene, Alteogen and Top Glove Corp. stepped up.Seegene developed a coronavirus test kit in late January of last year. Alteogen licensed its injection technology that enabled patients to self-administer medications. The world’s biggest maker of rubber gloves beefed up production and continues to do so -- it’s aiming to produce 110 billion pieces of the protective gear annually by December, up from 91 billion now.Each of the stocks climbed at least 500% last year at their peak, with Seegene up as much as 919% by August as demand for test kits rose. South Korean President Moon Jae-in even visited the company’s headquarters in Seoul after then-U.S. President Donald Trump asked for medical equipment to help fight the virus.“I’ve never felt more pressure in my life,” Seegene founder Chun Jong-yoon said in an interview with a local newspaper last June.But the vaccine rollout has put a brake on the ascent. While Seegene’s revenue for 2020 jumped almost 10-fold and Alteogen’s more than doubled in the third quarter, the shares have slumped on skepticism over their ability to maintain such growth. Chun and his family, who together own 31% of Seegene, are now worth about $840 million, down from $1.6 billion last year. Alteogen’s Park Soon-jae, who controls 25% of the company with his family, is valued at $830 million compared with $1.4 billion at the peak.Glovemakers, which are mostly in Malaysia, became the focus of short sellers soon after the nation lifted a ban to bet against equities at the start of the year. The Reddit-inspired retail trading craze that lifted them in January proved short-lived.Almost $2.2 billion has evaporated from the net worth of Top Glove founder Lim Wee Chai and his family since October. The fortunes of Supermax Corp.’s Thai Kim Sim, Hartalega Holdings Bhd.’s Kuan Kam Hon and Kossan Rubber Industries Bhd.’s Lim Kuang Sia are each down more than $1.2 billion, while Riverstone Holdings Ltd.’s Wong Teek Son is no longer part of the 10-figure club. Some of the Chinese health-care and biotech companies that produced a slew of new billionaires after the pandemic’s outbreak have also tumbled, including Allmed Medical Products Co., a maker of gauze products and surgical masks, and Guangzhou Wondfo Biotech Co.Boosting ControlSome of the newly ultra-rich have taken advantage of the market volatility. The Lims of Top Glove bought almost $23 million of shares since early December as the stock fell, strengthening their control over the company, while Kossan Rubber’s founder purchased about $4.9 million of equity after he and his family made more than $128 million selling some of their holdings through August. Alteogen’s Park family gained about $12 million from offloading shares through September, while the Chuns also sold some of Seegene stock.Others are holding on to their gains. Li Xiting, chairman of Chinese medical-equipment maker Shenzhen Mindray Bio-Medical Electronics Co., became Singapore’s richest person with a fortune of $23.8 billion as the company’s shares hit a record high earlier this month. Moderna and BioNTech, whose Covid-19 vaccines are being administered around the globe, have more than tripled in the past year, boosting the fortunes of at least six billionaires.And of course tech entrepreneurs that benefited from lockdowns and work-from-home arrangements -- such as Amazon.com Inc.’s Jeff Bezos, Zoom Video Communications Inc.’s Eric Yuan and Forrest Li of gaming firm Sea Ltd. -- remain big winners despite recent stock drops.But for many companies, the tide has already started to turn.“The extravagant rise in stock prices is going to be far-fetched, and it’s unlikely they’ll grow at the same rate,” said Nirgunan Tiruchelvam, head of consumer sector equity research at Tellimer. “We’re going to see a rotation from virus stocks to vaccine stocks.”(Updates for stock moves in second and third paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Meatpacking powerhouses like JBS SA and Marfrig Global Foods SA have borne the brunt of watchdog efforts to root out illegal deforestation in Brazil’s beef industry. But a new report is transferring attention further down the supply chain, seeking to tie French supermarket giants Carrefour SA and Casino Guichard-Perrachon SA, plus a company controlled by Advent International Corp., to the destruction of the Amazon.The findings from Reporter Brasil, an independent research group focused on environmental and labor issues, show that some of the Brazil units of all three chains stocked meat originating from slaughterhouses that have at one point or another obtained cattle from deforested farms. The six-month project began with sending researchers to more than two-dozen supermarkets in each of the six biggest cities in the Amazon region, plus Sao Paulo. Reporter Brasil was able to trace samples of beef sold in these stores back to specific slaughterhouses, then reviewed the plants’ network of direct and indirect suppliers.A store in Manaus belonging to Carrefour—which earlier this month pledged 4 million reais per year (about $735,000) to preserve a plot of the Amazon—was found to source beef from a plant owned by Frizam, a midsized meatpacker for the domestic market, according to Reporter Brasil. At least until 2019, the most recent data available, Frizam bought cattle directly from a rancher who’s been fined more than 30 times over the past 25 years for environmental crimes.The samples represent a tiny fraction of Carrefour’s sales, and there’s no way to know if the meat on the shelf came from the offending farm. Even so, Reporter Brasil says, it shows Carrefour has room to step up monitoring if it’s serious about helping to fight Amazon deforestation.“It’s very easy to block these kinds of transactions” by the slaughterhouses, said Marcel Gomes, executive secretary of Reporter Brasil. Supermarkets “need to demand transparency” from their suppliers.Carrefour said that it’s constantly monitoring its suppliers and is initiating a project to analyze indirect suppliers, a key link in the livestock chain. Without addressing this specific case, the company said it has suspended slaughterhouses in the past for irregularities and refused to do business with them again until they proved conformity with best environmental practices. Bloomberg Green was unable to reach Frizam by either phone or email. Read More: Why It’s So Hard to Stop Amazon Deforestation, Starting With the Beef IndustryBrazil’s beef supply chain is one of the most complex in the world, with 2.5 million ranchers, 2,500 slaughterhouses, and about 215 million heads of cattle spread out over 3.3 million square miles. The government has largely left it up to companies purchasing tens of thousands of cattle monthly to police this vast and opaque network. Big meatpackers like JBS already use satellite monitoring to make sure direct suppliers aren’t part of the problem, but so far they haven’t mapped out their indirect suppliers—i.e. the breeders who sell cattle to the feeder farms that supply the slaughterhouses.Unscrupulous ranchers who seek to circumvent environmental regulations will sometimes act as both direct and indirect suppliers, meaning they’ll supply slaughterhouses from their “clean” farms while maintaining nearby ranches cleared of forestland where many of their animals are actually raised. Reporter Brasil said in its report that it found at least six cases of such ranchers selling to slaughterhouses run by Marfrig, Minerva, JBS, and four domestic producers in the Amazon region that in turn supply meat to stores operated by Carrefour, Casino’s Grupo Pao de Acucar, and Advent’s Grupo Big.Five of those companies—Grupo Pao de Acucar, Carrefour, Marfrig, Minerva, and JBS—say they have systems in place to monitor direct suppliers and are working to make the checks even more robust. Minerva said that the government’s practice of keeping animal transport documents hidden hinders transparency efforts across the industry, and that it recently started testing a tool called Visipec to track indirect suppliers, along with Grupo Pao de Acucar and Marfrig.JBS, the world’s biggest meat producer, also pointed to the secrecy of transport documents as a significant challenge, and said it’s trying to overcome this via a new blockchain its suppliers will be required to use by 2025. The company “doesn’t tolerate disrespect for the environment,” it said. It also said that it asked Reporter Brasil for documents showing movement between blacklisted farms and direct suppliers, but that Reporter Brasil declined to disclose its source.Grupo Big said its system “guarantees” the products it buys and sells aren’t related to deforestation. Advent declined to comment.The two French supermarket operators may face additional backlash as a 2017 vigilance law forces companies with more than 10,000 employees globally to monitor their supply chains and create plans to avoid environmental, human-rights and corruption risks. While there are no hard and fast penalties for violating the law, it does put bad corporate practices into the spotlight at a time when investors are increasingly discounting stocks and bonds with unsustainable business models.The European Central Bank, which owns Carrefour debt, is also under pressure to make sure it isn't contributing to climate change. It’s strongly considering disclosing climate risks in its bond programs, people familiar with the plans said last week, and has taken steps to green its own investments.“There is evidence linking Amazon deforestation and meat sold by these retailers,” said Elie Favrichon, a forest footprint officer at Envol Vert, an advocacy group that seeks to protect forests through conservation projects in France and Latin America. The French law “is a new tool, and we will try to use it as much as we can to force change.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Unimaginable just six months ago, investors are piling in to bets that will pay out if the Bank of England raises interest rates for the first time since 2018.The central bank sparked the game-changing moment earlier this month, after policy makers signaled optimism that the U.K.’s vaccine push would see growth rebound from the worst recession in more than 300 years. Officials further emphasized that sub-zero rates weren’t an imminent prospect, even as a report on their feasibility encouraged preparation for such a scenario.This marked a sharp turnaround from September when the BOE first flagged such a report was being undertaken, rubbing salt in to the wounds of traders who joined crowded bets on interest rates falling below 0% for the first time ever.Money markets can double current expectations and price in a 25 basis-point rate hike over two or three years, according to Bob Stoutjesdijk, a Rotterdam-based fund manager at Robeco Institutional Asset Management who cited higher U.K. growth and inflation rates later this year, the nation’s proneness to price increases and the continued global reflation theme.Traders are targeting even more rate hikes for further ahead, buying options on short-sterling futures that will pay off if the central bank raises rates 100 basis points by the end of 2024, compared to 50 basis points now.The Bank Rate was last seen above 1% over a decade ago when the central bank slashed interest rates by more than 400 basis points in response to the global financial crisis.Money markets have almost erased BOE easing bets, pricing two basis points of cuts by early next year, ahead of testimonies later Wednesday by policy makers including Governor Andrew Bailey and Deputy Governor Ben Broadbent.(Adds BOE rate pricing in the final 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.
The U.S. House votes Friday on a bill to give you a third payment. Could there be another?
(Bloomberg) -- Oil surged to the highest in more than a year as the market looks ahead toward an accelerating decline in global inventories and a comeback in demand.Futures in New York climbed 2.5% Wednesday, rising to the highest since January 2020. Energy Information Administration data showed crude output fell to 9.7 million barrels a day last week amid an unprecedented polar blast, tying for the low reached last summer when Hurricane Laura sent production plummeting.Globally, supplies are declining with stockpiles at a major European storage hub falling to their lowest level since September. Key players in the oil market have been talking up the rising prices in the coming months, with some even floating the prospect of $100 crude in the next year or two as the global economy recovers from the pandemic.“All indications are that we’re going to see better demand,” said Rob Thummel, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “Inventories are going to continue to fall, both in the U.S. and globally. Big picture, that’s going to be positive for prices moving higher.”Still, the report showed crude inventories climbed by 1.29 million barrels last week as the cold weather shut most Texas refineries, while stockpiles at a key U.S. storage hub rose for the first time in six weeks. Despite the U.S. build, confidence that a meaningful demand rebound will accompany widening vaccination availability by this summer has supported prices.The underlying market structure for global benchmark Brent futures remains in backwardation, where nearer contracts trade at a premium to following months, indicating tightening supplies as OPEC+ maintains production curbs. Market movements in the coming weeks are likely to be driven by the legacy of the U.S. cold weather, an upcoming OPEC+ meeting and the ongoing reflation trade across global markets.“Stockpiles are going to continue to fall, and everyone has that OPEC meeting circled on their calendar,” said Edward Moya, senior market analyst at Oanda Corp. “That’s going to be the next big thing for crude, there’s not much else besides the short-term trajectory of Covid cases that will really dictate the next path.”U.S. drillers in the Permian Basin have already restored about 80% of crude output after the big freeze, although refiners are finding a return to normal more tricky. Impacts from the cold blast have also hit Asia, where plastic makers are facing surging prices for key feedstocks after American processors were shuttered.The EIA report also showed inventories at nation’s largest storage hub in Cushing, Oklahoma, rose for the first time in six weeks. However, distillate inventories fell by roughly 5 million barrels last week, helping lead a decline in total petroleum stockpiles and U.S. crude imports fell to 4.6 million barrels a day, the lowest since February 1996.(A previous version of the story was corrected to reflect U.S. crude output fell in headline)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.
Here's what still has to happen, including the big vote scheduled for Friday.
(Bloomberg) -- Shares of GameStop Corp. doubled yesterday and jumped another 19% today. Options traders think the stock can do much better than that.The most-active option traded on the stock Thursday was a contract betting that GameStop shares would spike to $800 on Friday. Some 52,000 contracts changed hands during the session betting on this one-day gain of 636%For other options traders, it was a question of when GameStop would hit the $800 mark, not if. The seventh and eighth most-active contracts were call options wagering that the stock would reach $800 by next Friday or in three weeks. It’s hard to say whether the contracts were mainly bought or sold, two traders said.“It’s speculation gone wild, pure and simple,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “It is Exhibit A in the nuttiness that is associated with GameStop.”GameStop’s Reddit-driven roller-coaster ride that roiled markets last month is continuing this week, with shares more than doubling in the final 90 minutes of trading on Wednesday and rising as much as 101% on an intraday level on Tuesday. The rally came as popular tech names from Tesla Inc. to Zoom Video Communications Inc. were battered after U.S. 10-year Treasury yields spiked to 1.6%.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The world’s biggest Bitcoin fund is selling off faster than the cryptocurrency itself.The $32 billion Grayscale Bitcoin Trust (ticker GBTC) has plunged 20% this week, outpacing a 13% decline in the world’s largest cryptocurrency. GBTC’s once-massive premium to its underlying holdings has evaporated as a result, with the price of GBTC closing 0.7% below its underlying holdings on Wednesday -- the first discount since March 2017, according to data compiled by Bloomberg.The vanishing premium suggests that after billions poured into GBTC as investors sought exposure to Bitcoin’s dizzying rally, investors are looking for the exits as the climb stalls, according to Bloomberg Intelligence.“This is panic or profit-taking selling,” said Eric Balchunas, BI’s senior ETF analyst. “It’s almost like the price of GBTC is an amplified version of Bitcoin price.”Bitcoin surged to a record of over $58,000 last weekend, but has stumbled since. The cryptocurrency fell another 1.4% on Thursday, on pace for its worst weekly pullback in a year.Michael Sonnenshein, chief executive officer of Grayscale Investments, acknowledged the risk of GBTC’s premium disappearing while speaking in a panel for the Bloomberg Crypto Summit on Thursday.“It’s certainly a risk, no question about it, but ultimately price discovery in GBTC every day is driven entirely by market forces,” Sonnenshein said.(Updates with comments from Michael Sonnenshein of Grayscale in the sixth 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.
What Happened: The largest crypto exchange in Southeast Asia, Philippines-based PDAX, experienced a technical failure that led to Bitcoin trading at $6,000 – an 88% discount to its current price. Following the incident, PDAX asked its customers to return their Bitcoins, threatening legal action, a local news outlet Bitpinas has reported. According to the exchange’s CEO, the system error was not due to a hack but a technical “glitch” caused by a massive surge in trading activity. Why It Matters: The initial outage is said to have taken place on February 18; however, since then, reports have surfaced on social media of customers being locked out of their exchange accounts and being asked to “return their Bitcoin.” “After almost 24 hours, they sent me a demand letter and SMS, requesting me to transfer back the BTC, or they “may” be compelled to take legal actions against me.” said one trader who believed his purchase was well within his rights without violating any laws or regulations of the trading platform. See also: How to Buy Bitcoin (BTC) Rafael Padilla, an attorney representing the affected users who are currently locked out of their accounts, commented on the issue on Facebook. “Our client’s trade transaction was legitimate under applicable laws, decided cases, and of course according to PDAX’s very own terms and conditions/user agreement.” According to Padilla, PDAX has opted to lock users out of their accounts because it cannot unilaterally reverse the transactions. An official statement from PDAX claims that 95% of accounts have been restored, but according to the report, many users are still locked out of their accounts. “It’s very understandable that a lot of users will feel upset they were able to buy what they thought an order was there for Bitcoin at very low prices. But unfortunately, the underlying Bitcoins were never in the possession of the exchange, so there’s never really anything there to be bought or sold, unfortunately.”, said PDAX CEO Nichel Gaba in a press conference earlier today. Image: vjkombajn via Pixabay See more from BenzingaClick here for options trades from BenzingaElon Musk's Tweet About Dogecoin Sends Price Up 10% In 30 Minutes AgainMicroStrategy Buys Additional .026B Worth Of Bitcoin, Surpasses Tesla's Bitcoin Holdings© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
DoorDash's stock fell after the company said average order values will decline as markets recover from the Covid-19 pandemic.
Munger says the argument for diversification should be called 'diworsification.'
A medical graduate who had about $440,000 in student debt saw 98% of his loans cancelled by a bankruptcy court in California, according to a recent filing.
Class action lawsuits contend insurers are unfairly profiting from emptier roads.
(Bloomberg) -- State Street’s $786 million exchange-traded fund investing in retailers was only just recovering from its last brush with GameStop Corp. Now it’s all happening again.The SPDR S&P Retail ETF (ticker XRT) is being distorted by the bricks-and-mortar seller of video games for a second time, just a few weeks after losing 80% of its assets in January’s meme-stock drama.GameStop is on another tear, surging roughly 50% on Thursday after a 104% gain the previous day. That’s a problem for XRT because it’s supposed to hold an equal amount of each stock, but it doesn’t rebalance swiftly enough to counter GameStop’s jump.The company now makes up about 5.9% of the fund. It should be more like 1%.Last time around, GameStop’s weighting eventually ballooned to 20% of XRT, prompting an exodus from the fund. It took about three weeks for assets to recover -- they hit the highest level since 2018 on Tuesday, just before the latest bout of meme-stock madness.With GameStop’s sudden revival, there could be more pain ahead of the passive fund’s March rebalance, according to CFRA Research’s Todd Rosenbluth.“Investors in XRT have seen this movie before, with GameStop quickly dominating the normally equally weighted portfolio before falling sharply,” said Rosenbluth, CFRA’s director of ETF research. “With no limits on position sizes and the rebalance nearly a month away, the risk is high that the stock will drive performance up and down. Some may not want to stick around to see if the sequel is any better.”Of course, GameStop’s rally in January was on a different scale -- it soared 1,600%, powering XRT to monthly gains of about 37%. That was a record for the normally staid ETF. But when the retailer plunged, the ETF was hit, and XRT remains around 5% lower in February despite a boost from GameStop this week.Such whiplash may dim XRT’s appeal as a portfolio hedging tool, according to Citigroup Inc.’s Scott Chronert.“When you have a stock-specific circumstance like this one, it might mess up how the hedging aspect is working,” Chronert said in an interview earlier this month. “If you’re looking to hedge a long book of retail or consumer names, the weighting impact on the broader sector ETF might not be a very good hedge because it’s dominated by a single name.”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.
Higher bond yields have arrived. Now investors have to consider what, if any, changes to make to their portfolios.
The Purpose Investments Bitcoin ETF is seeing massive inflows after launching last week.
Risk and reward are the yin and yang of stock trading, the two opposite but essential ingredients in every market success. And there are no stocks that better embody both sides – the risk factors and the reward potentials – than penny stocks. These equities, priced below $5 per share, typically offer high upside potentials. Even a small gain in share price – just a few cents – quickly translates into a high yield return. Of course, the risk is real, too; not every penny stock is going to show these sort of gains, some of them are cheap for a reason, and not every reason is a good one. So, how are investors supposed to distinguish between the long-term winners and those set to come up short? Following the activity of the investing titans is one strategy. Hedge fund manager Ken Griffin, chief of the investment firm Citadel, is one of those titans, having turned his college trading – from a PC in his dorm room – into a multi-billion dollar market giant. A look at Griffin’s performance during the coronavirus crisis shows just how successful he can be. In March of last year, when corona knocked the bottom out of the markets, Griffin’s Citadel still brought in a net positive return of 1.7%. And for the year as a whole, Citadel’s revenues totaled $6.7 billion, almost double the previous high in 2018. Turning to Griffin for inspiration, we took a closer look at two penny stocks Griffin’s Citadel made moves on recently. Using TipRanks’ database to find out what the analyst community has to say, we learned that each ticker boasts Buy ratings and massive upside potential. Abeona Therapeutics (ABEO) We will start with Abeona Therapeutics, a clinical-stage biopharma company focused on gene and cell therapy. This is a cutting edge field, using the latest genome technology to treat genetic diseases by inserting corrected copies of the DNA directly into affected cells. Abeona has seven drug candidates in the pipeline, with EB-101 and ABO-102 being the furthest along, and of most interest to investors. EB-101 is set to begin a Phase III trial as a treatment for Recessive Dystrophic Epidermolysis Bullosa (RDEB). This is a disorder of the connective tissue, leaving sufferers prone to serious skin lesions and wounds. The cause is a genetic defect that leaves patients unable to produce the collagen needed to secure the skin layers. If approved, EB-101 would become the first – and only available – treatment for RDEB. Treatment involves using the drug to transplant the affected gene into the patient’s skin cells, which are then themselves transplanted into affected skin areas. In early phase trials, the drug was well tolerated by patients, who showed distinct improvement up to 2 years after treatment. The Phase III trial is now enrolling patients. ABO-102, the next farthest-along drug candidate, is in a Phase I/II study as a treatment for Sanfilippo Syndrome, a fatal disease of early childhood. The syndrome is currently untreatable, except by supportive care, and affected children typically survive to age 15. ABO-102 is a gene therapy drug given through a one-time IV infusion. It delivers working copies of the affected gene to the child’s central nervous system, allowing the body to naturally correct the enzyme deficiency behind the disease. Both of these drug candidates have received Orphan Drug Designation in the US and Europe, making governmental assistance available for their development. In addition, they have also received the FDA’s Rare Pediatric Disease Designation. Abeona’s drug pipeline and $2.22 share price have scored it substantial praise from the pros on Wall Street. This is the stance taken by Griffin. Increasing its stake in the company by a whopping 181%, Citadel snapped up 1.846 million shares in Q4, which are now worth $4.06 million. 5-star analyst Ram Selvaraju, of H.C. Wainwright, also counts himself as a fan. Selvaraju has recently published two notes on ABEO, focusing on the potential of both EB-101 and ABO-102. Regarding the first, the analyst notes that the “Following the successful completion of the FDA meeting, Abeona is continuing with all necessary steps to enroll the next patient in the VIITAL study and expects to complete enrollment in 2021… In our view, FDA meeting and resultant feedback bode well for Abeona, since the agency appears to be on board with the company's study design and statistical analysis plan for the VIITAL [Phase III] trial…” Turning to ABO-102, Selvaraju said, “In our view, this data is highly intriguing and bears watching to see if it can be confirmed in a larger patient cohort. From our vantage point, preservation of neurocognitive development in young children with MPS IIIA is likely to be the principal efficacy measure that resonates with regulators.” In line with his optimistic view, Selvaraju rates ABEO a Buy along with a $8 price target. Should his thesis play out, a potential twelve-month jump of ~264% could be in the cards. (To watch Selvaraju’s track record, click here) Overall, 2 Buys and no Holds or Sells have been assigned in the last three months. Therefore, the analyst consensus is a Moderate Buy. At $6.50, the average price target puts the upside potential at ~188%. (See ABEO stock analysis on TipRanks) Mereo Biopharma (MREO) The second stock we’re looking at, Mereo, is another biopharma company with a focus on rare diseases. Mereo has a large and diverse pipeline, with six drug candidates in various stages of development. The company’s research programs are looking at treatments for solid tumor cancers, ovarian cancer, and chronic obstructive pulmonary disease, among other severe conditions. Griffin is among those that have high hopes for this healthcare name. Griffin’s Citadel picked up 4.097 million shares in Q4, which are now worth $16.3 million. The biggest news for Mereo was the December 17 announcement of a collaboration and license agreement with the California company Ultragenyx for further development of Setrusumab, a candidate undergoing testing as a treatment for osteogenesis imperfecta, or brittle bone disease. This incurable condition is usually treated with lifestyle changes and exercise. Setrusumab, however, has shown in Phase 2b studies that it can cause dose-dependent increase in bone formation in affected adults. Leerink analyst Joseph Schwartz writes of the Mereo/Ultragenyx partnership: “Although the RARE/MREO deal was unexpected, we are not surprised by the news considering MREO has been looking for a partner and RARE has ample experience developing and launching successful bone agents… We view [the] announcement as a win-win for both RARE and MREO since the two could complement each other’s strengths to bring setrusumab to market.” In light of these comments, Schwartz rates MREO shares as a Buy, and his $8 price target suggests it has a one-year upside of 103%. (To watch Schwartz’s track record, click here) Some stocks fly under the radar, and MREO is one of those. MREO’s is the only recent analyst review of this company, and it is decidedly positive. (See MREO stock analysis on TipRanks) To find good ideas for penny 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.
(Bloomberg) -- The second time proved the charm for Saudi Arabia’s foray into electric vehicles.The kingdom’s main sovereign wealth fund is sitting on paper gains of over 30-fold from its investment in Lucid Motors Inc., with the value of its stake set to rise as part of a deal to take the company public.The result is a boost for the $400 billion Public Investment Fund after missing out on an epic rally in Tesla Inc. shares when it sold much of its 5% stake in the industry leader at the end of 2019.The PIF, as the fund is known, will hold a stake of 62% in Lucid once the acquisition of the automaker by special purpose acquisition vehicle Churchill Capital IV is complete. The holding would be valued at about $32 billion, based on the current share price of Church Capital IV.The deal would represent a jackpot for the PIF, which invested $1 billion in Lucid in 2018 and is expected to provide an additional $600 million in funding for the company before the SPAC deal is completed. It also participated in a $2.5 billion private investment in public equity, or PIPE, the largest of its kind on record for a SPAC deal.Under the leadership of Yasir Al-Rumayyan, the PIF has shifted investment priorities from holdings in state-owned companies to building up stakes in companies such as Uber Technologies Inc. and Jio Platforms Ltd., the digital services business controlled by Indian billionaire Mukesh Ambani.The fund’s returns on investment increased from about 3% between 2014 and 2016 to 8% from 2018 to 2020, according to the PIF website. It has more than doubled its assets in the five years since Crown Prince Mohammed bin Salman has been chairman.The investments are part of a strategy that aims to boost returns from the kingdom’s wealth while diversifying the Saudi economy and creating jobs.Bloomberg News reported in January that Lucid was in talks with the PIF to potentially build a factory near the Red Sea city of Jeddah, although the automaker’s CEO, Peter Rawlinson, said on Tuesday there were no imminent plans to build a factory in the kingdom.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.
Borrowers are backing off, mortgage demand is falling — but what if rates go even higher?
(Bloomberg) -- Stephen Jen, known in investing circles for his “dollar smile” approach to evaluating the greenback, has stepped up his bet on the Chinese currency that’s trying to unseat its U.S. rival in global finance.Jen’s London-based asset manager Eurizon SLJ Capital on Tuesday announced a new bond fund focused on yuan-denominated assets, while another product will buy local-currency debt from emerging-market nations. Eurizon SLJ is part of Intesa Sanpaolo SpA’s asset management division, which manages about 350 billion euros ($425 billion) across 25 countries, according to its website.The launch comes at a time when yield-seeking investors turn their attention to China’s outperforming economy. Foreign funds are pumping in record cash, adding to their bond holdings at the fastest pace on record in January. And no wonder -- the yield gap between 10-year China and U.S. sovereign notes in December reached the widest ever in data going back to 2005.Part of the appeal of yuan-denominated assets, Jen said, is that China is increasingly being viewed as a haven in times of turmoil -- a role that has long been filled by the dollar and other assets.“In risk-off episodes in the past 20 years, Chinese bonds have reliably rallied,” Jen wrote in an email. There are “very few safe-haven assets that carry any meaningful yield. If we look around the world, all yields have collapsed, making the 3.0-3.5% annual return on sovereign debt in China that much more interesting.”Jen developed the dollar-smile framework in the early 2000s, based around the idea that the greenback tends to appreciate in two scenarios: when crises fuel demand for havens, and when U.S. growth outperforms the rest of the world. While Jen is by no means now abandoning the U.S. currency, his latest move does reflect the yuan’s growing prominence among investors as the country opens up its markets to foreigners.The yuan was little changed at 6.4616 per dollar around noon in Shanghai Wednesday.Higher YieldsThe rising interest in Chinese bonds are twofold: the 10-year government securities offer yields of 3.25%, compared with U.S. equivalents of 1.35% and German bunds at -0.32%. In addition, the assets add diversification to the portfolios of global investors. Foreigners currently hold about 2 trillion yuan of onshore government bonds, or about 4% of the amount outstanding.Still, investors must surmount obstacles to invest in China’s bonds, including strict capital controls. Curbs were tightened at the end of 2016 as a plunging yuan and stock market triggered outflows. Such restrictions are concerning to some funds as the curbs could make it harder for them to repatriate cash overseas. In recent months, however, there are signs that officials are starting to ease controls.Foreign investors bought more than 1 trillion yuan of Chinese bonds in the interbank market last year, the fastest pace on record. Apart from a strong yuan and economic recovery, the inflows were also driven by global index compilers including yuan debt into their major gauges.The long-only Eurizon SLJ Bond Aggregate RMB Fund will be managed by Jen and Monica Wang, and will invest in a diversified set of renminbi-denominated debt traded on the China Interbank Bond Market or in other regulated markets in China and Hong Kong. The Eurizon SLJ Local Emerging Markets Debt Fund will be managed by Yasmine Ravai and Alan Wilson, and will invest in sovereign, credit and derivative bonds issued in local currencies in the 19 emerging markets that make up the JPMorgan GBI EM Global Diversified Index.Both funds will be registered in the U.K.“Given the demographic trend and the need for European/British savers to earn a meaningful risk-adjusted return on their savings, there will continue to be significant demand from this part of the world for higher-yielding investments elsewhere,” Jen said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.