Former White House chief strategist Steve Bannon, host of the new syndicated radio show and podcast 'War Room: Impeachment,' weighs in on the next phase of the House Democrats impeachment inquiry.
Former White House chief strategist Steve Bannon, host of the new syndicated radio show and podcast 'War Room: Impeachment,' weighs in on the next phase of the House Democrats impeachment inquiry.
Meanwhile, WTI oil moved below the $65 level as Colonial Pipeline restarted operations.
(Bloomberg) -- Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world’s biggest cryptocurrency exchange in U.S. efforts to root out illicit activity that’s thrived in the red-hot but mostly unregulated market.As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business, according to people with knowledge of the matter who asked not to be named because the probe is confidential. Led by Changpeng Zhao, a charismatic tech executive who relishes promoting tokens on Twitter and in media interviews, Binance has leap-frogged rivals since he co-founded it in 2017.The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight. Binance is incorporated in the Cayman Islands and has an office in Singapore but says it lacks a single corporate headquarters. Chainalysis Inc., a blockchain forensics firm whose clients include U.S. federal agencies, concluded last year that among transactions that it examined, more funds tied to criminal activity flowed through Binance than any other crypto exchange.“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” Binance spokeswoman Jessica Jung said in an emailed statement, while adding that the company doesn’t comment on specific matters or inquiries. “We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity.”Spokespeople for the Justice Department and IRS declined to comment.U.S. ConcernsU.S. officials have expressed concerns that cryptocurrencies are being used to conceal illegal transactions, including theft and drug deals, and that Americans who’ve made windfalls betting on the market’s meteoric rise are evading taxes. Such worries have been a hindrance to the industry going mainstream, even as Wall Street increasingly embraces Bitcoin and other tokens amid a global investing frenzy.Read More: How Bitcoin Is Edging Toward Financial MainstreamThis month’s cyber-attack against Colonial Pipeline Co. that’s triggered fuel shortages across the Eastern U.S. is the latest sign of what’s at stake. Colonial paid Eastern European hackers a nearly $5 million ransom in untraceable cryptocurrency within hours of the breach, Bloomberg News reported Thursday, citing two people familiar with the matter.Bitcoin losses accelerated Thursday after Bloomberg reported the investigation into Binance. While the Justice Department and IRS probe potential criminal violations, the specifics of what the agencies are examining couldn’t be determined, and not all inquiries lead to allegations of wrongdoing.The officials involved include prosecutors within the Justice Department’s bank integrity unit, which probes complex cases targeting financial firms, and investigators from the U.S. Attorney’s Office in Seattle. The scrutiny by IRS agents goes back months, with their questions signaling that they’re reviewing both the conduct of Binance’s customers and its employees, another person said.The U.S. Commodity Futures Trading Commission has also been investigating Binance over whether it permitted Americans to make illegal trades, Bloomberg reported in March. In that case, authorities have been examining whether Binance let investors buy derivatives that are linked to digital tokens. U.S. residents are barred from purchasing such products unless the firms offering them are registered with the CFTC.Analyzing TransactionsZhao has said Binance closely follows U.S. rules, blocks Americans from its website, and uses advanced technology to analyze transactions for signs of money laundering and other illicit activity. Last year, the firm warned that U.S. residents would have their accounts frozen if they were found to be trading, crypto trade publications have reported.The inquiries follow a Chainalysis report on criminal transactions involving digital tokens. The firm tracked Bitcoin worth $2.8 billion that it suspects crooks moved on to trading platforms in 2019. Chainalysis determined that roughly 27%, or $756 million, wound up on Binance. Binance responded by saying it adheres to all anti-money laundering regulations in the jurisdictions in which it operates and works with partners like Chainalysis to improve its systems.In the U.S., authorities have been cracking down on exchanges for flouting laws that are meant to prevent financial crimes, with officials citing the platforms use by terrorists and hackers. Tax violations have also been a priority, with the government recently winning a court order as it seeks to unmask U.S. clients of Kraken, a San Francisco-based exchange.Read More: Crypto’s Anonymity Has Regulators Circling After Colonial HackIn October, federal prosecutors in Manhattan announced charges against the founders of Seychelles-based BitMEX, accusing them of violating the Bank Secrecy Act by permitting thousands of U.S. customers to trade while publicly claiming to restrict their access. The claims included failing to register as a futures merchant with the CFTC and not having adequate anti-money laundering controls. Three of the BitMex officials pleaded not guilty and a trial has been scheduled for March 2022. One remains at large.Washington PresenceWith the U.S. circling, Binance has stepped up its presence in Washington and retained a former Treasury Department official and top white-collar defense lawyers to represent it in legal cases and matters being reviewed by regulators. In March, the firm tapped former U.S. Senator Max Baucus, a Montana Democrat, to advise it on policy and government relations.Read More: Crypto Lobby Forms to Shake Reputation as Criminals’ CurrencyIn September 2019, Binance partnered with a firm called BAM Trading Services Inc., which launched Binance.US to cater to American clients. Brian Brooks, who was a top banking regulator when he led the Office of the Comptroller of the Currency during the Trump administration, became chief executive officer of Binance.US this month.Amid the hiring blitz, the company has popped up in U.S. cases tied to criminal activity. In February, two Florida men were charged with running an online fentanyl trafficking operation, with one of them accused of depositing the proceeds in a Binance account. That same month, the Justice Department sought the forfeiture of cryptocurrency worth $450,000 traced from ransomware attacks that hit several U.S. companies to a Binance account held by a 20-year-old Ukrainian national. The government didn’t accuse Binance of wrongdoing in either enforcement action.Disguising LocationsAlong with the CFTC, the Justice Department is likely to examine steps that Binance has taken to keep U.S. residents off its exchange. One person familiar with Binance’s operations said that prior to the establishment of Binance.US, Americans were advised to use a virtual proxy network, or VPN, to disguise their locations when seeking to access the exchange.Jung, the Binance spokeswoman, said the exchange has never encouraged U.S. residents to use VPNs to get around its rules, as doing so would be something “that has always been contrary to our company’s principles.” In January, Zhao tweeted that Binance’s security systems block Americans even if they try to connect through one of the networks.“We have implemented strong access controls that have been tested via external audit and are under continuous review and evaluation by Binance to ensure that the appropriate restrictions are in place and are effective,” Jung said.(Updates with Bitcoin falling in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The Bank of Canada is closely monitoring recent gains in the nation’s currency, to ensure the appreciation doesn’t create headwinds for the nation’s economic outlook, according to the central bank’s head.At a press conference Thursday, Governor Tiff Macklem said the recent appreciation reflects in part higher commodity prices, which are good for the nation’s economy. Still, a continuation of the gains could begin to pose a risk to the central bank’s most recent forecasts released last month, which assumed an exchange rate of $0.8 per Canadian dollar.The Canadian dollar is up 4.9% so far this year, the best performing major currency. It weakened after Macklem’s comments, falling to C$1.2179 per U.S. dollar, or $0.8211 per Canadian dollar at 1:12 p.m. in Toronto trading.“If it moves a lot further that could have a material impact on our outlook and it’s something we’d have to take into account in our setting of monetary policy,” Macklem said Wednesday. “If the dollar were to continue to move -- particularly if its not reflecting good developments for Canada -- that could become more of a headwind on our export projection.”The Canadian dollar has been tracking resource prices higher this year. The Bank of Canada commodity price index -- a gauge that tracks movements of commodities produced in the country -- has hit the highest since 2014 after gaining 30% so far this year. Excluding energy, the index is at an all-time high.But the currency also appears to have gotten a lift from Macklem’s messaging, after the Bank of Canada last month accelerated the timetable for a possible interest-rate increase and pared back its bond purchases.“Macklem only said that if the currency were to appreciate absent fundamental reasons, then they’d be more concerned about competitiveness implications but that so far that’s not the case,” Derek Holt, an economist at Bank of Nova Scotia, said by email.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) -- Chinese corporations are defaulting on local bonds at the fastest pace on record, as authorities ramp up efforts to introduce more financial discipline and transparency in the world’s second-largest debt market.Firms so far this year have failed to make payments on 99.8 billion yuan ($15.5 billion) of onshore bonds, according to Bloomberg-compiled data. While 2021 is set to be the fourth straight year the 100 billion yuan level has been topped, it previously hadn’t happened before September. For all of 2015, when China’s stock market crashed, defaults totaled just 8.9 billion yuan.Missed payments are running at a record pace this year, following the late 2020 defaults of some state-linked firms which affirmed convictions that authorities in China are increasingly willing to not bail out weak firms. The recent tumult surrounding bad debt manager China Huarong Asset Management Co. raised fresh questions about support for central state-owned firms, even as the risk of contagion remains relatively contained. Signs of a maturing credit market have helped Chinese officials’ effort to refocus on financial risks in areas like asset prices and debt levels.Ultimately, more defaults are part of a healthy credit market with a genuine high-yield onshore sector and adequate pricing of risk, according to Jean-Charles Sambor, head of emerging-market debt at BNP Paribas Asset Management.“Policy makers are willing to draw a line in the sand between what is systemic and what is not,” he said. “They want to inject more credit risk in the system and change the mindset of investors, forcing them to look more at stand alone credit risk rather than speculating on the likelihood of support from the central government.”Delinquencies are crucial in helping develop a mature and efficient market that improves transparency, reduces moral hazard and prompts a reassessment of risk. Increased financial discipline for companies and improved credit ratings serves Beijing’s longer-term goal of attracting more foreign cash to the country’s capital markets-- especially from more stable sources like pension funds and insurers instead of hot money flows.Payment failures also help deepen regulation, as well as create a more standardized process and better assumptions in terms of recovery rates, Sambor said. “This short-term pain will translate into medium-term gain.”China’s central bank, in its first-quarter monetary report published Tuesday, urged establishing a mechanism that holds local party and government leaders accountable for major financial risks.Developer DefaultsReal estate firms are leading this year’s surge in onshore bond defaults, as authorities tighten access to funding in the debt-laden sector. Developers have made up about 25% of those missed payments with the government’s “three red lines” policy increasingly weighing on these borrowers. Payment failures at China Fortune Land Development Co. and Tianjin Real Estate Group Co. topped 10 billion yuan in the first quarter, according to Bloomberg-compiled data. They also did for chipmaker Tsinghua Unigroup Co. and Hainan Airlines Holding Co.Defaults on offshore bonds have also ramped up -- logging a combined $3.7 billion in January and February but none since, according to Bloomberg-compiled data. Still, that’s nearly half of 2020’s full-year $8.3 billion.(Adds quote in the 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.
Three asset classes that will help you beat the inflation heat or at best help you hedge the growing risk at a time when global inflationary pressures are looming as major economies recover from the COVID-19 pandemic.
(Bloomberg) -- Brookfield Asset Management Inc. said it plans to raise $100 billion for its next round of flagship funds after it delivered first-quarter earnings buoyed by share sales and asset divestitures.The Toronto-based alternative asset manager sold $13 billion of assets during the quarter, resulting in $6.4 billion in profit for Brookfield and its clients, the company said Thursday. Brookfield’s share amounted to $1.8 billion. Chief Executive Officer Bruce Flatt called it an “exceptional” result.“In the current low interest-rate environment, demand for the type of assets we own is strong,” Flatt said in a letter to shareholders. “Many of our businesses are critical infrastructure assets that are underpinned by long-dated, contracted or regulated cash flows. With the capital markets being highly accommodative, we have been monetizing assets.”During the quarter, Brookfield took public its Shoals Technologies Group Inc. solar products business, sold a life-sciences real estate portfolio and completed two secondary offerings of shares in Graftech International Ltd. It also unloaded a portion of its holdings in Brookfield Renewable Corp. and West Fraser Timber Co., a Canadian firm that’s enjoying the benefit of soaring lumber prices.Flatt said the combination of strong markets and asset sales means there’s enough capital on hand for its planned $6.5 billion privatization of Brookfield Property Partners LP, and the repurchase of its own shares, to soak up some of the new equity being issued in the transaction.Brookfield said it had a record quarter, with its funds from operations reaching $2.8 billion and its distributable earnings hitting $2.5 billion. Total assets under management grew to $609 billion.The company has about $80 billion in capital available, Flatt said in the letter, including $18 billion on its own balance sheet. Brookfield has started raising money for its fourth flagship real estate fund and its new Global Transition Fund, which will focus on environmentally and socially responsible investments.It’s also in the midst of closing a new debt fund and aims to launch new infrastructure and private equity funds in the next 12 months as part of its plan to raise $100 billion across its flagship funds, Flatt said.“The sustained low interest-rate environment combined with institutions’ need to earn returns from alternatives has created a very constructive fundraising environment,” Flatt said.Brookfield remains confident that commercial real estate will rebound as Covid-19 vaccinations take hold. Flatt said he believes many people survived in the short term without an office, but in the long run most companies won’t prosper without the interaction that comes from people working in close proximity to one another.“The tone in the market for commercial property assets is very negative at the moment. Real estate stocks have been trading as though no company will ever occupy an office again, no person will ever set foot in a store and nobody will ever travel again, for either business or leisure,” Flatt wrote. “We do not believe that any of these will be the case, and so we are investing accordingly.”‘Outsized Gains’Andrew Kuske, an analyst with Credit Suisse, said he expects Brookfield’s transactional activity to accelerate in the back half of 2021 and into 2022.“On balance, the quarter is positive on continued growth in the underlying asset management business along with the validation of past investments with outsized gains being realized -- even with some operating weakness,” Kuske said in a note to clients.Flatt said he believes there’s an opportunity to pick up infrastructure assets because governments have borrowed heavily to launch stimulus programs to combat the pandemic. That could open an opportunity for government infrastructure assets to come to market to raise funds.Brookfield shares were up 1.2% to $45.28 at 11:59 a.m. in New York.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) -- Wild stock swings, spikes in Treasury yields, startling economic readings? Interesting, sure. But if you really want to get people’s attention right now, you need to tell them a story about crypto.And there have been a lot of those. Even for a market that’s famous for its wild volatility and gimmicks, the past week’s cryptocurrency news set new records for jaw-droppers.It began with Elon Musk’s highly anticipated appearance as host on “Saturday Night Live.” Dogecoin owners watched hoping that the “Dogefather” would further propel the digital currency that had soared this year from less than a penny to 74 cents before he took the stage.What they got instead was a skit in which he laughed after calling the coin a “hustle.” Since then, the Shiba Inu-branded coin created as a joke has lost almost half of its value.Dogecoin wasn’t the only canine-themed coin to take a tumble.Shiba Inu coin -- yes, a meta joke about the joke that is Dogecoin -- soared earlier in the week as it was added to exchanges like OKEx and Binance. It and other Dogecoin imitators’ popularity reached such heights that transaction fees on the Ethereum network hit an all-time high, according to CoinDesk.The rally faded quickly. The cryptocurrency plunged Wednesday after the Wall Street Journal reported that Ethereum creator Vitalik Buterin donated more than $1 billion of the coin to a charity that is fighting the spread of Covid-19 in India.Then that night, Musk struck again. He announced that Tesla Inc. would no longer accept Bitcoin as a form of payment for its cars. In a tweet, Musk said that the carmaker was “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”While his tweet left Bitcoin holders wondering what spurred the change -- the facts of the coin’s energy profile hadn’t changed since Tesla announced in March that it would accept it as payment -- the market reacted swiftly. Bitcoin plunged from nearly $57,000 before his flip-flop to $46,000 within two hours.Thursday brought some good news for crypto die-hards. Point72, the hedge fund run by billionaire New York Mets owner Steve Cohen, was set to make a sizable move into the market. Bitcoin gained 2.5% following the news.The rally didn’t last long.Tether, the crypto stablecoin that says it’s backed one-for-one by fiat currencies, released a reserves breakdown for the first time that showed a large portion in unspecified commercial paper. The company has faced questions over both its reserves and whether it was used to manipulate cryptocurrency prices. In February, Tether settled a legal dispute with the New York Attorney General’s Office and paid a fine of $18.5 million.After that, reports surfaced that Colonial Pipeline Co. paid nearly $5 million in untraceable cryptocurrency to the hackers that infiltrated the company’s network and forced the shutdown of its infrastructure, setting off widespread gasoline shortages up the U.S. eastern seaboard.At about the same time, Bloomberg reported that Binance Holdings Ltd., the world’s biggest cryptocurrency exchange, was under investigation by the Justice Department and Internal Revenue Service in relation to possible money-laundering and tax offenses.News of the investigation sent Bitcoin and Ethereum, the two largest cryptocurrencies, down by more than 7% each as fears were stoked about the Biden administration taking a tougher approach toward an industry that has largely operated outside of the gaze of regulators.Then at 4:00 p.m. New York time, Coinbase Global, Inc., the biggest U.S. crypto exchange, reported first-quarter earnings. Its revenues fell just short of consensus estimates and the company projected flat user growth. Coinbase also plans to offer Dogecoin trading on its platform. The exchange’s shares fell as much as 6.5% in after-hours trading before recovering.Friday is already bringing further drama, beginning with more comments from Musk. The billionaire in a tweet said he “strongly” believes in crypto but that “it can’t drive a massive increase in fossil fuel use, especially coal.”Not long after, he followed up with another post saying that he’s working with Dogecoin “devs to improve system transaction efficiency,” describing the effort as “potentially promising.” Dogecoin jumped more than 20% after the tweet. (Updates prices 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.
Earlier, the three major indexes rebounded after declining sharply earlier this week.
In breaking news, inflation accelerated at its fastest pace in more than 12 years for April as the U.S. economic recovery kicked into gear.
(Bloomberg) -- Russia’s debt chiefs are working on a mechanism that will allow the government to retire costly ruble bonds sold to raise emergency funds during the coronavirus pandemic.“The goal is to restore the right structure of the portfolio so that in the next crisis, government debt can be used to conduct an active economic policy again,” Deputy Finance Minister Timur Maksimov said in an interview. The ministry is considering possible funding sources for the buybacks, he said, without elaborating on the timing or the amount of money that might be earmarked.Russia doubled its borrowing plan last year to help shield the economy from the pandemic as oil prices collapsed and the U.S. weighed sanctions on ruble debt sales. In a series of blowout auctions dominated by local banks, the Finance Ministry sold floating-rate bonds offering a coupon that climbs with the central bank’s key rate.Now that inflationary pressures are mounting and the Bank of Russia is back on a tightening path, Maksimov wants to shift away from debt whose servicing costs are set to rise. Floating-rate bonds now account for about 35% of the ministry’s outstanding local debt, and Maksimov said he wants that level cut back to 15% or 20%.It’s unlikely the ministry will rush to reduce the share, according to Dmitry Dolgin, chief economist at ING Bank in Moscow. He predicts such a target would cost 1 trillion to 2 trillion rubles ($13.5 billion to $27 billion) over a three-year span.President Joe Biden’s administration imposed long-feared sanctions on Russia’s debt markets earlier this year, punishing the Kremlin for U.S. elections meddling and hacking.But the penalties were ultimately judged to be mild because they only bar U.S. investors from buying ruble bonds, or OFZs, on the primary market. Bonds and the ruble have strengthened since the limits were announced.Read More: Goldman, Hedge Funds Hail Russia as Winner in Covid Recovery“The imposed restrictions don’t cover the secondary OFZ market, so we don’t expect the share of non-residents to move far from the current levels,” Maksimov said. “International investor interest, which can’t be satisfied on the primary market, may show up as demand on the secondary market.”Foreigners held around 19% of Russia’s sovereign ruble debt as of April 21. The ministry sold more than 45 billion rubles of notes at debt auctions Wednesday.‘Smooth Flow’“If the market situation allows us to borrow more in advance, we may do so, but we’d work on making the borrowing flow more smoothly,” Maksimov said. “Our weekly needs, taking into account the amount raised, are now at 45 billion to 50 billion rubles.”Having the Finance Ministry stick to that lower weekly volume of sales partly offsets the risks of rising global rates, said Dmitry Polevoy, an analyst at Locko-Invest. At the same time, the potential buybacks are “a definite positive” for the floating-rate notes, he said.International flows into local bonds have been positive so far this month, VTB Capital analysts led by Maxim Korovin wrote in a note Wednesday. About 57 billion rubles left the ruble debt market in the week following U.S. sanctions in April, according to the central bank.Still, the picture for local debt remains far from clear, and Rosbank analysts said the ruble-bond market is “in limbo.”Stabilizing global rates and support from local banks are an argument against selling, they said. But the prospect of further rate hikes, as well as some possible rebalancing before sanctions take effect on June 14 are weighing on the bonds for now.(Updates with analyst estimates in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
U.S. consumer prices increased by the most in nearly 12 years in April as booming demand amid a reopening economy pushed against supply constraints.
Europe faces the prospect of higher electricity bills and a supply crunch, as utilities struggle to finance new gas-fired power plants unless they meet tougher emissions criteria imposed by banks pressured to stop financing fossil-fuel projects. The region's utilities already anticipate power supply problems as they phase out coal and nuclear generation and ageing infrastructure. But increased urgency to halt climate change and the scaling up of renewable technology have left investors and policymakers hesitating over plans for large new plants in the region.
(Bloomberg) -- Amazon.com Inc. will hire 10,000 more people in Britain, taking its total headcount in the country to 55,000 by the end of 2021.The jobs will be in corporate offices across London, Manchester, Edinburgh and Cambridge, as well as roles in Amazon Web Services and operations, the company said in a statement on Friday. U.K. business secretary Kwasi Kwarteng welcomed the announcement, calling it a “huge vote of confidence in the British economy.”It comes a day after the world’s largest online retailer said it’s hiring 75,000 workers for its sprawling North American logistics operation, a sign that the company expects increased demand to outlast the pandemic. The Seattle-based tech giant hired some 500,000 people last year, putting its total headcount at 1.3 million at the end of March.Read More: Amazon Will Hire 75,000 Logistics Workers in Latest Hiring BingeThe 10,000 new jobs, on par with Amazon’s additions in the U.K. last year, will include roles in fashion, digital marketing, engineering, video production, software development, cloud computing and AI, the company said. The new hires will primarily be in fulfillment and parcel reception centers.The company touted its competitive pay and “systems to ensure the wellbeing and safety of all employees.” Still, Amazon has come under fire for how it’s treated workers, particularly warehouse and delivery staff who became frontline workers during the pandemic. Strikes and protests have become more common since the Covid-19 outbreak began, even in the U.S. where attempts to unionize have been unsuccessful.Amazon said the pay for operations roles will start at 10.80 pounds ($15.20) per hour in London and 9.70 per hour in the rest of the U.K. Employees are also entitled to private medical insurance, life insurance, income protection and an employee discount, worth about 700 pounds a year.Amazon announced last month that it would offer raises to more than 500,000 of its hourly workers, spending $1 billion on pay bumps to increase hiring at its logistics division. The increased wages follow Amazon Chief Executive Officer Jeff Bezos’s comments to shareholders that the company would work “to do a better job for employees.”(Updates with additional details starting in fourth 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.
TAIPEI (Reuters) -Taiwan's Foxconn on Friday forecast a 15% rise in second-quarter revenue as the work-from-home boom spurred by the COVID-19 pandemic extends, boosting demand for consumer devices such as the iPhones that Foxconn assembles for Apple. The upbeat forecast by the world's biggest contract electronics manufacturer reinforces strong growth momentum that saw its first-quarter profit rocket with revenue rising by 45%, even as it is forced to sharply reduce iPhone production in India due to surging coronavirus cases there. It also echoes Apple's own positive outlook.
(Bloomberg) -- Ant Group Co.’s profit rose to $3.4 billion in the December quarter after Chinese regulators thwarted its record initial public offering and told it to scale back its sprawling business.Billionaire Jack Ma’s fintech giant contributed nearly 7.2 billion yuan to Alibaba Group Holding Ltd.’s earnings, a company filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to 21.8 billion yuan ($3.4 billion) in profit, up 50% from 14.5 billion yuan in the previous three months. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.The tally underscores the earnings powers Ant boasted before authorities demanded China’s largest fintech company fold its financial business into a holding company, curtailing its growth prospects. Regulators have issued a battery of proposals that threaten to curb Ant’s dominance in online payments and scale back its expansion into consumer lending and wealth management.While Chairman Eric Jing has promised staff that the company will eventually go public, it’s likely to be worth much less than before the crackdown that saw the IPO halted in November. Fidelity Investments halved its valuation estimate for Ant to about $144 billion in February, compared with $295 billion assigned in August.Ant isn’t alone in facing the clampdown. The government imposed wide-ranging restrictions on the financial divisions of 13 companies including Tencent Holdings Ltd. and ByteDance Ltd. Units of JD.com Inc., Meituan and Didi Chuxing were also among companies summoned to a meeting where regulators handed out stricter compliance requirements in April.The company’s affiliate Alibaba reported its first loss in nine years, vowing to hike spending for expansion next year in technology and community commerce.(Updates with Alibaba profit details 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.
(Bloomberg) -- Fisker Inc.’s existing agreement to develop an electric vehicle with Foxconn Technology Group will now include a factory in the U.S., the companies said in a statement Thursday.The joint project -- codenamed Project PEAR -- is targeting a start of production in the U.S. by the fourth quarter of 2023. The companies said they’re considering multiple sites around the world to support eventual global manufacturing capacity of 250,000 units a year. The partners plan to unveil a prototype of their jointly developed car later this year.Los Angeles-based Fisker’s shares rose as much as 22% to $12.13 in late trading in New York. The stock is down 32% this year through Thursday’s close. Hon Hai Precision Industry Co., the main listed arm of Foxconn, is up 12% for the year in Taipei.Electric vehicles have risen in prominence in recent months, with everyone from established automakers like Geely to smartphone purveyor Xiaomi Corp. making big investments in the category. Foxconn has an EV platform that will be used to launch two light vehicles in the fourth quarter of this year, Chairman Young Liu said in February. The company has also inked a manufacturing deal with Chinese startup Byton Ltd. and been among a coterie of suppliers and assemblers linked with a potential Apple Inc. car.Read more: IPhone Maker Foxconn to Help Launch Electric Cars This YearFisker is one of a wave of startups to go public via a special purpose acquisition company, or SPAC, and seek a fast-track challenge to Tesla Inc. in the EV market. It’s also the second battery-powered-car venture founded by its namesake founder and chief executive officer, Henrik Fisker, a longtime auto designer. Fisker’s first venture, Fisker Automotive, filed for bankruptcy in 2013.China Tech Giants Bet $19 Billion on Global Electric Car FrenzyUnder the agreement, Fisker and Foxconn will jointly invest in Project PEAR -- short for Personal Electric Automotive Revolution -- with each company taking proceeds if the launch is successful. Foxconn has said it will decide between Mexico and Wisconsin for the site of its first electric-car plant this year. The companies didn’t disclose any specifications of the vehicle they’re developing.The companies said the jointly developed vehicle will be priced below $30,000. Taiwan-based Foxconn, best known for assembling iPhones, is the second major manufacturer with which Fisker has announced a partnership since reaching a deal to go public last year. In October, the EV startup said Magna International Inc. would help it build its debut model. The Ocean electric SUV is scheduled to start production in late 2022 at a Magna facility in Graz, Austria.(Updates with other Foxconn EV projects in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China’s most widely-followed stock benchmark tumbled into a bear market after a selloff in some of the nation’s biggest technology firms.The MSCI China Index slid 3% Thursday, extending losses from its mid February high to more than 20%. This is the second time the gauge has fallen into a bear market in a little over a year. Last March, major equity benchmarks slumped following the spread of the Covid-19 pandemic.Meituan Shares Drop for 10th Session on Consumer Group CriticismStock benchmarks in Hong Kong and on the mainland are among the world’s worst performers since February as Beijing cracks down on heavyweight tech firms over monopolistic practices, further worsening investor sentiment already soured by concerns of liquidity tightening in China.“I wouldn’t be at all surprised if we were to see an ongoing 10% correction in the MSCI China over the next quarter or so,” John Woods, Asia Pacific chief investment officer at Credit Suisse Group AG, told Bloomberg TV on May 12, citing increased regulatory intervention as a top concern. “This is weighing on the extremely important tech sector.”Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Meituan have accounted for more than 40% of the index’s decline since the February high, Bloomberg data show. Alibaba tumbled to the lowest in almost a year in New York, after reporting its first quarterly loss since 2012 on Thursday. Investors were disappointed about its results and concerned that its spending outlook could pressure margins.Read: Alibaba Hits Lowest Since June on Spending Plans: Street WrapA Hong Kong gauge tracking Chinese technology stocks has lost more than 30% since a February high. Beijing had pledged to curb the “reckless” push of technology firms into finance and crack down on monopolies online. It has forced Jack Ma’s Ant Group Co. to revamp its businesses and fined giants including Tencent and Meituan for violating anti-trust regulations. This week, Meituan slumped after its CEO posted a poem seen as critical of Beijing.(Updates details in the fifth and 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.
Shares in Prudential fell 5% on Thursday as the life insurer said the spin-off of its U.S. business would not take place until the second half. Analysts were expecting the demerger, announced last year following pressure from activist investor Third Point, to take place this month. Prudential had previously said the demerger would take place in the second quarter.
Singtel, whose biggest shareholder is state investor Temasek Holdings, also said it expects to report full year net exceptional losses of S$1.21 billion ($907 million). Singtel has been trying to diversify for years amid slowing growth in its traditional carrier business. It bought Amobee for $321 million in 2012 and Trustwave for $770 million in 2015.
(Bloomberg) -- Masan Group Corp., a Vietnamese conglomerate, is exploring options for its animal feed unit that could include selling a stake to a strategic partner, according to people familiar with the matter.The company is working with advisers to weigh introducing fresh investment in the business, which is currently held under its listed Masan MeatLife Corp. unit, said the people, who asked not to be named as the information is private. It is seeking to raise as much as $1 billion from a deal, they said.Masan is also mulling a possible initial public offering for the animal feed unit, one of the people said. The company’s management believes Masan MeatLife is under-appreciated by the market, the person said.Deliberations are at an early stage and may not lead to any transaction, said the people. A representative for Masan Group declined to comment.Shares in Masan MeatLife closed up 6.5% on Thursday, their highest level since the end of Jan. 2020, giving the unit a market value of $865 million.A $1 billion deal would be Vietnam’s biggest since 2017, when Vietnam F&B Alliance Investment JSC bought 54% of Saigon Beer Alcohol Beverage for $4.4 billion, according to data compiled by Bloomberg.Masan Group is controlled by Vietnamese tycoon Nguyen Dang Quang. Founded in 1996, the Ho Chi Minh City-based firm is best-known for its fish sauce which it sells under brands including Chin-Su and Nam Ngu, according to its website. It has interests in retailing and mining as well as a stake in Vietnam Technological & Commercial Joint-Stock Bank, commonly known as Techcombank.Masan MeatLife is one of the largest fully-integrated feed-farm-food business platforms in Vietnam, its website shows. In 2015 the company merged its two animal feed businesses, Anco and Proconco, and three years later began selling fresh, chilled meat under the MeatDeli brand.(Updates with Masan MeatLife share price in fourth 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.