Gold is a commodity that has historically been viewed as a good hedge against inflation, which is why the precious metal’s price performance over the last year has been a bit puzzling. The SPDR Gold Shares ETF (NYSEARCA:GLD), which is intended to reflect the performance of the price of gold bullion, is down over 8% year-to-date and has been a major underperformer. Meanwhile, inflationary pressures have persisted throughout the year and interest rates have been held at historic lows, which in theory should have led to a strong year for gold investors.
While this commodity certainly hasn’t been the strongest performer as of late, there are still plenty of narratives that support the possibility of a gold rally in 2022. If we continue seeing alarming signs of inflation and if nominal yields are held lower, stocks that offer exposure to the safe-haven commodity could have room to run. That’s why it’s a good idea to get familiar with some of the best gold stocks in the market as we head into the new year. 1. Newmont Corporation (NYSE:NEM) Gold mining stocks offer an interesting way to gain exposure to the commodity, as they typically will rise and fall with the price of gold, yet can also remain profitable companies even if the price of gold is declining. Newmont Corporation is certainly one of the best options to consider if you are interested in gold miners, as it’s the world’s largest gold producer and a company with a rock-solid balance sheet. It’s also a stock that offers exposure to copper, which is another commodity that has been a strong performer in 2021 and could continue benefitting from high demand as the global economy recovers. Newmont has assets and operations in North America, South America, Australia/New Zealand, and Africa, and generates the majority of its revenue from gold from those locations. It’s the type of investment that market participants love to buy when there is volatility and uncertainty at play in the market, which means it’s a great pick if you think next year could be a bumpy ride for the economy. It’s also a stock that offers a very attractive dividend yield of 3.75%, which is certainly appealing given inflation concerns. This could be one of the first stocks to rally should gold prices head higher in the coming months, which absolutely makes it worth watching as we begin the new year. 2. Royal Gold Inc (NASDAQ:RGLD) Another way to add exposure to gold via equities is with gold streaming and royalty companies like Royal Gold. These are businesses that pay fees to mining companies in exchange for either a percentage of the mine’s revenue or the ability to purchase precious metals in the future at a fixed price. This is an attractive model because it allows Royal Gold to potentially take advantage of gains in the precious metals sector without a lot of the costs and risks that are associated with mining operations. The company has a diverse portfolio with revenue from 44 producing properties, and over $1.1 billion of liquidity provides plenty of room for Royal Gold to seek out new deals. The stock is also worth a look thanks to its long history of dividend growth, as Royal Gold announced its 21st consecutive annual dividend increase back in November. After a 17% dividend increase, the stock is certainly one of the more attractive gold stocks to consider for 2022. Finally, it’s worth noting that many of the company’s operating counterparties have dealt with issues related to COVID-19 that stunted mining production, which means a rebound is likely on the cards next year. 3. Franco-Nevada Corp (NYSE:FNV) Finally, we have another gold-focused royalty and streaming company called Franco-Nevada Corp. The company claims to have the most diverse royalty and streaming portfolio by asset, operator, and country, which includes 324 mining assets and 82 energy assets. It’s also worth mentioning Franco-Nevada’s balance sheet strength, as it's one of the only companies in the mining industry without any debt. The strong balance sheet and efficient business model has allowed the company to reward long-term shareholders with annual dividend increases for 14 consecutive years, which is certainly another positive to consider. In Q3, Franco-Nevada Corp reported revenue growth of 13% to $316.3 million and Adjusted EBITDA growth of 15% to $269.8 million. The company is on its way towards delivering a record-breaking 2021, although the share price is well off highs at this time. It’s certainly one of the best gold stocks to watch in 2022, so keep an eye on how it performs in the coming weeks.
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The Hong Kong Stock Exchange did not say why it has suspended trading in Evergrande shares, but there is speculation that another major developer may buy out the company's property management unit. Shares of the embattled Chinese developer Evergrande were suspended on the Hong Kong stock exchange early Monday amidst heightened speculation about a potential sale. "Due to the suspension of trading in the underlying shares, trading in Futures & Options for China Evergrande Group (EVG) have been suspended until further notice," the Hong Kong Stock Exchange said in a statement, without listing a reason. This is the first time that the shares of the company, once China's top-selling developer, have been suspended. Evergrande is currently the world’s most indebted real estate group with debts surmounting billions. It could face one of China's largest-ever restructurings. The latest development comes as a Chinese financial news service, Cailian, said Evergrande’s property management unit may be taken over by another major developer.
How much does Evergrande owe? According to reports, Chinese regulators requested Evergrande avoid a near-term default on its dollar bonds and the nearly $83.5 million (€71.1 million) in dollar-bond interest payments due last month. At the same time, reports also said the central government had alerted local governments that the property giant could collapse. The payments that were due were on a $2 billion offshore bond and a $47.5 million dollar-bond. Evergrande's bonds would default if the company fails to settle the interest payment it owes within 30 days. In total, the company owes $305 billion (€262.7 billion) in the next two years. Reports said Evergrande had stopped paying staff and factory suppliers in its electrical vehicle unit. In what is an unbelievable and bombshell admission from a US Commodity Futures Markets regulator, the CFTC’s Acting Chairman, Rostin Behnam, was recently caught on record as acknowledging and condoning attempts by Wall Street bullion banks to put a halt to the strong rise in the silver price in early February.
The admission came in an interview of Behman in March, a clip of which can be seen here in the video. This interview was first brought to the world’s attention by Chris Marcus of Arcadia Economics. In the interview, Behman blatantly shows his true allegiance to Wall Street, saying that “the resiliency and the market structure of the futures market was able to tamp down what could have been a much worse situation in the silver market.” Much worse for who? The bullion banks and the US Government of course, none of who want the price of silver to rise. For those who don’t know, ‘tamp down’, means to drive down by succession of blows, to put a check on, to reduce. While its not surprising that Behnam will not be investigated for supporting an attack against the silver price (since the CFTC works hand in glove with protecting the interests of Wall Street banks), it is somewhat surprising that not one reporter in the mainstream financial media sees fit to cover such an important bombshell. The latest vault reporting data from the London Bullion Market Association (LBMA) in London, which is now released on the 5th business day of the month, claims that as of the end of March, there were 1.25 billion ozs (38,859 tonnes) of silver in the LBMA London vaults, which would be an 11% increase on the total claimed to be held in those vaults at the end of February. To put this into perspective, that’s an extra 3,863 tonnes that the LBMA claims has arrived into its vaults in London during March, or an extra 124.2 million ozs. That’s nearly as much silver claimed to be added by the LBMA during March, as the Sprott Physical Silver Trust PSLV holds. (PSLV holds 130.97 million ozs of silver).
Said another way, 3863 tonnes added to the London LBMA vaults during March would be 124,200 wholesale silver bars (each bar weighing about 1000 ozs). These 124,200 bars are stored 30 bars per pallet. This would be 4,140 pallets extra pallets of silver bars. Usually these vaults store pallets of silver 6 pallets high. That would be 690 extra towers of pallets, each 6 pallets high. It would mean that 193 containers (each allowed to carry a maximum of 20 tonnes) arrived at the London vaults during March, or over 8.4 containers on average per day, every business day, and that the vault staff had to move and store 180 pallets each day. All of this in an environment where everyone from refiners to Mints to wholesalers to bullion retailers are reporting availability issues in sourcing physical silver bars right now. Seems plausible, right? And this LBMA vault data does not even break down how much each of the LBMA London vaults of JP Morgan, HSBC, Brinks, Malca-Amit, Loomis, and ICBC Standard, claim to hold. Which is why, if the LBMA vault data on silver (and gold) is to be even remotely trusted (which is a far stretch), then it is now time to independently and physically AUDIT THE LBMA VAULTS. Not that this will ever happen given that the LBMA is run by the bullion banks which run the paper silver and gold markets. But it needs to happen. More info @ https://www.lbma.org.uk/prices-and-data/london-vault-holdings-data
In the days before the pandemic, 20 or 30 people would squeeze together around the long table and, over coffee and Danishes, listen to recordings of the Bible, according to people who were there. First might come the Old Testament, perhaps Isaiah or Lamentations. Then came the New, the Gospels, which called out to the listeners drawn from a path known more for its earthly greed than its godly faith: Wall Street. Hitting the play button and then receding into the background was the host, Bill Hwang, the mysterious billionaire trader now at the center of one of the biggest Wall Street fiascos of all time. The story thus far -- of a mind-boggling fortune made in stealth and then wiped out very publicly in a blink -- has sent shock waves through some of the world's mightiest banks. Estimates of the potential size of his position before it imploded have spiraled toward $100 billion. The Securities and Exchange Commission is looking into the disaster, which has set teeth on edge in trading rooms across the globe. But those accounts tell only part of the story. Interviews with people from inside Hwang's circle, Wall Street players close to him and documents associated with his multimillion-dollar charitable foundation fill in missing puzzle pieces -- ones that haven't been reported previously. The picture that emerges is unlike anything Wall Street might suspect. There are, in a sense, not one but two Bill Hwangs.
Christian Capitalist One of them walks for hours through New York's Central Park listening to recordings of the Bible and embraces a new, 21st-century vision of an age-old ideal: that of a modern Christian capitalist, a financial speculator for Christ, who seeks to make money in God's name and then use it to further the faith. A generous benefactor to a range of unglamorous, mostly conservative Christian causes, this Hwang eschews the trappings of extravagant wealth, rides the bus, flies commercial and lives in what is, by billionaire standards, humble surroundings in suburban New Jersey. Then there's the other Bill Hwang: a former acolyte of hedge fund legend Julian Robertson with a thirst for risk and a stomach for volatile markets -- a daring trader who once lost a fortune betting against German automaker Volkswagen AG while running a hedge fund that was supposedly focused on Asian stocks. This is also the Bill Hwang who then went on to quietly become one of the most successful alumni of Robertson's vaunted Tiger Management. This one masks his dangerous leveraged bets from public view via financial derivatives, was once accused of insider trading and pleaded guilty in 2012 to wire fraud on behalf of his hedge fund, Tiger Asia Management. That same Bill Hwang, it turns out, is also a backer of one of Wall Street's hottest hands of late, Cathie Wood of Ark Investments. Like Hwang, Wood is known to hold Bible study meetings and figures into what some refer to as the "faith in finance" movement. And here, at last, is where the Bill Hwangs collide. The fortune he amassed under the noses of major banks and financial regulators was far bigger and riskier than almost anyone might have thought possible -- and these riches were pulled together with head-snapping speed. In fact, it was perhaps one of the greatest accumulations of private wealth in the history of modern finance. And Hwang lost it all even faster. Archegos -- a Greek word often translated as "author" or "captain," and often considered a reference to Jesus -- was believed by many traders doing business with the firm to be sitting atop $10 billion of assets. That figure, representing Hwang's personal fortune, was actually closer to $20 billion, according to people who did business with Archegos. To put that figure in context: Bill Hwang, a name few even on Wall Street had heard until now, was worth more than well-known industry figures like Ray Dalio, Steve Cohen and David Tepper. Even more remarkable is the breakneck speed at which Hwang's fortune grew. Archegos started out in 2013 with an estimated $200 million. That's a sizable fortune but nowhere near big money in the hedge fund game. Yet within a decade, Hwang's fortune swelled 100 times over, traders and bankers now estimate. Much of those riches accrued in the past 12 to 24 months alone, as Hwang began to employ more and more leverage to goose his returns, and as banks, eager for his lucrative trading business, eagerly obliged by extending him credit. Hwang's success enabled him to endow his own charity, the Grace & Mercy Foundation, which had almost $500 million of assets as of 2018, according to its most recent tax filing. One institution close to Hwang, and a beneficiary of his foundation, is The King's College, a small Christian school in the heart of New York's Financial District. In a statement to Bloomberg, the college said it was grateful for his generosity and that "our prayers are with Mr. Hwang and his staff." McDonald's Job The story of both Bill Hwangs begins in South Korea, where he was born Sung Kook Hwang in 1964. The tale he has told friends and associates is a familiar one of immigrant striving -- followed by financial success that few even on Wall Street can fathom. Hwang grew up in a religious household (like roughly a third of Koreans, his parents were Christian). When he was a teenager, the family moved to Las Vegas, where his father got a job as a pastor at a local church. Hwang has told friends that he arrived in the U.S. unable to speak or write in English and only picked up the language while working nights at McDonald's. Soon after, his father died and his mother moved the family to Los Angeles. Hwang went on to study economics at the University of California, Los Angeles, and then picked up an MBA at Carnegie Mellon University in Pittsburgh. Finance beckoned -- and Hwang, it turned out, was very good at it. While a lowly salesman at Hyundai Securities, part of the sprawling Korean chaebol the Hyundai Group, he caught Julian Robertson's eye. Hwang, not yet 33, was then handed a golden ticket to Wall Street: an offer to join Robertson's Tiger Management, then at the top of its game. Hwang quickly distinguished himself by introducing Robertson to the Korean markets -- at the time headed into the teeth of the Asian financial crisis -- and masterminding what turned into a lucrative stake in SK Telecom Co. Hamptons Lunch Tiger colleagues say Hwang was one of Robertson's most successful proteges -- a quiet, methodical analyst with intense focus. Even today, he keeps his desk free of all clutter, the better to focus his mind. Robertson, these people recall, dubbed him "the Michael Jordan of Asian investing." Robertson, now 88, still considers Hwang a friend, and the two lunched together in the Hamptons a few months ago. "He's not one to be tiny, that's one thing for sure," Robertson told Bloomberg after news of the Archegos losses broke. Hwang would eventually strike out on his own as a so-called Tiger cub. Initially, Hwang shot the lights out, returning an annualized 40% through 2007, when he managed $8 billion. The hot streak didn't last. In late 2008, his Tiger Asia incurred stinging losses on a big bet against Volkswagen. Many other hedge funds were shorting the German automaker, too, and when Porsche Automobil Holding SE abruptly announced that it would raise its stake, all hell broke loose. VW soared 348% within 48 hours, crushing shorts like Hwang. Tiger Asia ended the year down 23%. Many investors pulled their money, angry that a hedge fund that was supposed to be focusing on Asia somehow got caught up in the massive squeeze. GameStop Frenzy It was a painful and instructive lesson for Hwang, people who know him say. In the future, he'd hunt out stocks that many traders were shorting and go long instead. Millions of amateur investors took up that approach this year during the social media-fueled frenzy over GameStop and other stocks. But before the next success, Tiger Asia ran into more trouble -- this time, trouble big enough to bring Hwang's days as a hedge fund manager to an end. When Tiger Asia pleaded guilty to wire fraud in 2012, the SEC said the firm used inside information to trade in shares of two Chinese banks. Hwang and his firm ended up paying $60 million to settle the criminal and civil charges. The SEC banned him from managing outside money and Hong Kong authorities prohibited him from trading there for four years (the ban ended in 2018). Shut out of hedge funds, Hwang opened Archegos, a family office. The firm, which recently employed some 50 people, initially occupied space in the Renzo Piano-designed headquarters of the New York Times. Today it's based further uptown, by Columbus Circle, sharing its address with the Grace & Mercy Foundation. "My journey really began when I was having a lot of problems in our business about five or six years ago," Hwang said in a 2017 video. "And I knew one thing, that this was a situation where money and connections couldn't really help. But somehow I was reminded I had to go to the words of the God." That belief helped Hwang rebuild his financial empire at dizzying speed as banks loaned him billions of dollars to ratchet up his bets that unraveled spectacularly as the financial firms panicked. What ensued was one of the greatest margin calls of all time, pushing his giant portfolio into liquidation. Some of the banks may end up with combined losses of as much as $10 billion, according to analysts at JPMorgan Chase & Co. As a bruised Wall Street points its collective finger at Hwang, his Christian associates have rallied around him. Doug Birdsall, honorary co-chairman of the Lausanne Movement, a global group that seeks to mobilize evangelical leaders, said Hwang always likes to think big. When he met with him to discuss a new 30-story building in New York for the American Bible Society, Hwang said, "Why build 30 stories? Build it 66 stories high. There are 66 books in the bible." Before so much went so wrong so fast, Archegos appeared to be ramping up. A year ago, Hwang petitioned the SEC to let him work or run a broker-dealer; the SEC agreed. It's impossible to say where Bill Hwang, the hard-charging financial speculator, ends, and Bill Hwang, the Christian evangelist and philanthropist, begins. People who know him say the one is inseparable from the other. Despite brushes with regulators, staggering trading losses and the question swirling around his market dealings, they say Hwang often speaks of bridging God and mammon, of bringing Christian teaching to the money-centric world of Wall Street. Less than a week ago in ‘Houston, we have a Problem”: 85% of Silver in London already held by ETFs. We explain how with the emergence of the #SilverSqueeze, the silver-backed ETFs which claim to hold their silver in London, now account for 85% of all the silver claimed to be stored in the London LBMA vaults (over 28,000 tonnes of the LBMA total of 33,609 tonnes). This, for anyone who can out 2 and 2 together, does not leave very much available silver in London for silver ETFs or for anyone else, especially the largest silver ETF in the market the giant iShares Silver Trust (SLV), which let’s not forget has the infamous JP Morgan as custodian.
That SLV has seen massive dollar inflows in late January and early February with corresponding jumps in claimed silver holdings is now widely known, but is worth repeating here, for what’s about to come next. 3,416.11 Tonnes of Silver? The intense market interest in the iShares Silver Trust (SLV) started on 28 January when a huge volume of 152 million shares traded on NYSE Arca. Again on Friday 29 January, SLV traded a massive volume of 113 million shares. This led to an increase in SLV ‘Shares Outstanding’ on Friday 29 January of 37 million shares, and a same day claim by JP Morgan, the SLV custodian, that it had increased the silver held in the SLV by 37.67 million ozs (1,171 tonnes), all claimed to be sourced in the LBMA vaults in London. On Monday 01 February, an even larger 280 million SLV shares traded on NYSE, and by end of day SLV shares outstanding jumped by 20 million. On that day SLV claimed to add another 15.376 million ounces of silver (478.25 tonnes) within the LBMA vaults in London, about three-quarters of the value of the new SLV shares created on that day. On Tuesday 2 February, with SLV trading still elevated on NYSE, the iShares Silver Trust created a massive 61,350,000 new SLV shares, bringing the SLV shares outstanding to 729.1 million. On the same day, JP Morgan and Blackrock claimed to have added a huge 56.783 million ozs of silver (1,766 tonnes) to the SLV (again all in London), an incredible amount by any measure, but still short of reflecting the total of 118.45 million total of new shares that had been created between Friday and Tuesday (which led them to adjust down shares outstanding by 8.6 million on Wednesday 3 February). Over this time, you can see a nearly one for one relationship between the change in number of SLV shares outstanding and the amount of silver ounces claimed to be added to SLV. Between Friday 29 January and Wednesday 3 February inclusive, SLV shares outstanding increased by a net 109.85 million. Over the 3-day period from Friday 29 January to Tuesday 2 February, SLV claimed to have added an incredible 109.83 million ozs of silver (3,416.11 tonnes), with holdings of silver bars rising from 567.52 million ozs of silver to 677.35 million ounces (from 17,651.77 tonnes to 21,067.88 tonnes).According to the SLV daily bar lists, this extra 3,416.11 tonnes of silver added to SLV between 29 January and 2 February was in the form of 113,501 Good Delivery silver bars (the bars weighing approx. 1000 oz each). Again, according to the SLV bar list, these bars were added in five London vaults which SLV uses, namely Brinks vault in Premier Park London (45.5%), Loomis London vault (27.7%), Brinks Unit 7 vault Radius Park London (15.5%), Malca Amit London vault (6.0%) and JP Morgan’s own London vault (a measly 5.3%). In fact, according to the bar lists, SLV only started tapping into silver in the Brinks Premier park vault on Monday 1 February, and only started tapping to silver held in the Loomis London vault on Tuesday 2 February. Which to some people may look like a case of desperation or maybe even panic. Linda Kim HONG KONG, August 26 -- Hong Kong stocks dived more than 3 per cent in the first few minutes of business on Monday. Caused by United States President Donald Trump ramped up his trade row with China and the city was hit by fresh violent protests over the weekend. The Hang Seng Index plummeted 3.27 per cent, or 857.33 points, to 25,322 at the open. The benchmark Shanghai Composite Index sank 1.6 per cent, or 46.41 points, to 2,851.02, and the Shenzhen Composite Index, which tracks stocks on China's second exchange, shed 1.96 per cent, or 30.87 points, to 1,547.83. Linda Kim BEIJING, August 24 -- China said Friday that it will impose further tariffs on U.S. imports worth around $75 billion, in retaliation for planned tariff hikes on Chinese products by Washington. The Commerce Ministry said it will impose additional tariffs of 5 percent or 10 percent on a total of 5,078 products of U.S. goods, some of which would take effect on Sept. 1 and the rest on Dec. 15. China will also resume imposing additional tariffs of 25 percent and 5 percent on U.S.-made vehicles and auto parts starting from Dec. 15, the Customs Tariff Commission of the State Council announced. The announcement comes as U.S. President Donald Trump has pledged that Washington will impose 10 percent tariffs on $300 billion worth of Chinese goods, effective on those two dates, in a move that would see nearly all imports from Asia's biggest economy taxed. The U.S. decision "has greatly hurt interests" of China, the United States and other countries and "has seriously threatened the multilateral trade system and the free trade system," Beijing said, adding, "China is forced to take reciprocal measures." "We hope China and the United States will resolve differences in a manner acceptable to both sides on the premise of mutual respect, equality, good faith, and consistency of words and deeds," the Customs Tariff Commission said in a statement. The Trump administration has so far imposed 25 percent levies on a total of $250 billion of Chinese imports in an effort to reduce the chronic U.S. trade deficit with China, as well as to address alleged intellectual property and technology theft by Chinese companies. On Aug. 13, it delayed imposing a 10 percent tariff on laptop computers, cellphones, video game consoles and other "certain articles" imported from China to Dec. 15 from Sept. 1 as planned. The announcement drew some relief from retailers and other businesses concerned that the new levies, which in combination with current ones would have meant tariffs on nearly all Chinese imports, could have dampened consumption especially around the holiday shopping season. Stocks on the Hang Seng Index face their worst slumps since the 2008 Global Financial Crisis22/8/2019 Linda Kim HONG KONG, August 22 -- Hong Kong stocks are poised for their worst quarter since 2015 and corporate earnings are unlikely to save them. After a sell-off erased more than US$600 billion from the city’s equities, attractive valuations stood as a potential bright spot. But those multiples don’t look so good when analysts keep slashing their profit forecasts for 2019. Their call for an average 19 per cent slump in operating income would be the biggest contraction for Hang Seng Index companies since the global financial crisis, data compiled by Bloomberg show. While a protracted US-China trade war and a weak yuan are to blame for a big chunk of the profit reductions, the latest cuts reveal a deeper issue. With Hong Kong’s slowing economy buckling under the pressure of 11 straight weeks of protests, demand for everything from bank loans to utility gas may be jeopardized. “The third quarter could be even worse given the local political situation and the trade war escalation,” said Jackson Wong, asset management director at Amber Hill Capital. “Potential downside surprises have not been fully reflected in share prices.” Shares of utilities provider Hong Kong and China Gas fell 5.3 per cent on Wednesday after it posted disappointing results and said the local business environment is “full of challenges.” Political unrest in Hong Kong may dampen its sales to the hospitality industry as people opt to cook at home rather than dine out, analysts at Daiwa Securities Group say. The threat from the trade war and weeks of local unrest has been apparent in the property market, as well as hotel occupancy and retail sales. CK Asset Holdings, whose shares fell to lowest since January 2017 last week, postponed a luxury residential project because of the protests. HSBC Holdings and BOC Hong Kong Holdings have lost about 9 per cent this month as investors become increasingly concerned about capital flight. Lora Smith NEW YORK, August 15 -- It was an ugly day for Wall Street as stocks plummeted on Wednesday (Aug 14) after the US bond market sounded a loud warning that the US economy might be headed towards a recession. The Dow Jones dived 800.49 points or 3.05 per cent to 2,5479.42, its worst percentage drop of the year and fourth-largest point drop of all time. The wider S&P 500 benchmark fell 85.72 points or 2.93 per cent to 2,840.6, while the tech-heavy Nasdaq Composite sank 3.02 per cent to 7,773.94. Investors were spooked by a scenario known as the “inverted yield curve,” which occurs when the yields or returns on short-term bonds are higher than those for long-term bonds. What it means is that people are so worried about the near-term state of the economy that they are piling into safer long-term investments, pushing up their prices, which sends yields lower. Briefly on Wednesday, the yield on the benchmark 10-year Treasury bond broke below the 2-year rate, a rare event that has been a reliable indicator in the past of economic recessions. Other parts of the yield curve have been inverted for a few months. For instance, three-month Treasury bonds have been yielding more than 10-year Treasury bonds since late May. But the gap there became more dramatic on Wednesday, with three-month Treasury bond paying nearly 0.4 percentage points more than 10-year Treasury bond, greater than the 0.1 percentage point difference seen in late May. Investors also rushed into the benchmark 30-year Treasury bond, pushing its yield to a new record low. The actions in the US bond market signal that investors are more concerned about the escalating fallout of the trade war between the US and China and worried by signs that economic growth may be slowing around the globe as a result. Before the US market opened on Wednesday, came the latest stream of poor economic data from overseas, notably the weakest Chinese factory output data in 17 years and German data showing the economy contracted in the second quarter. China and Germany both have large trade surpluses with the United States, but they are also important customers for American products. Germany bought goods and services worth US$72 billion from the United States last year. China and Germany have been hit directly by Trump’s tariffs, and more broadly by the disruption to the global economy that the trade conflict has caused. In other recent dismal economic news, the British economy shrank in the second quarter, and growth flat lined in Italy. Singapore and Hong Kong, which are smaller but still serve as vital hubs for finance and trade, are also suffering. Linda Kim TOKYO, August 13 -- Asian shares slumped on Tuesday (Aug 13) as fears about a drawn out US-China trade war, protests in Hong Kong and a crash in Argentina’s peso currency drove investors to safe harbors like bonds, gold, and the Japanese yen. MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1 per cent. Chinese stocks fell 0.8 per cent, while Hong Kong’s main market index tumbled more than 1 per cent to a seven-month low. “The protests in Hong Kong are negative for stocks, which were already in an adjustment phase because there is talk that the trade war will trigger a recession,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co. Hong Kong’s airport, the world’s busiest cargo airport, reopened on Tuesday, which could ease some concern about the immediate economic impact of protests over the past two months. The protests began in opposition to a bill allowing extraditions to mainland China but have quickly morphed into the biggest challenge to China’s authority over the city since it took Hong Kong back from Britain in 1997. Japan’s Nikkei was also hit hard, down a sharp 1.5 per cent and on course for its biggest daily decline in a week. US stock futures were 0.13 per cent higher in Asia, but that did little to ease the mood. Stocks in Singapore shed 1.1 per cent to reach their lowest since June 6 after the government slashed its full-year economic growth forecasts. The city state is often seen as a bellwether for global growth because of its importance as a key trade hub. The selling in regional markets came as Wall Street stocks took a beating on Monday, with the S&P 500 losing 1.23 per cent. Sentiment was already weak due to increasing signs that the United States and China will not quickly resolve their year-long trade war. Markets were hit with further turbulence after protesters managed to close down Hong Kong’s airport on Monday. Traders were also on edge after market-friendly Argentine President Mauricio Macri suffered a mauling in presidential primaries, increasing the risk of a return to interventionist economic policies. Benchmark 10-year Treasury yields were near the lowest in almost three years, gold was pinned close to six-year highs, and the yen was within a whisker of a seven-month peak versus the dollar in a sign of the heightened anxiety in financial markets already battered by global growth woes. “Long-term rates will continue to fall, and stocks will adjust lower, but this is temporary. Major central banks are cutting rates, which will eventually provide economic support,” Mitsubishi UFJ’s Ishigane said. Analysts said that trading could be subdued as many investors are off for summer holidays. Yet, there was no shortage of gloomy news for investors looking to catch their breath from several months of market ructions. The Argentine peso collapsed overnight, falling to 55.85 to the dollar, after voters snubbed Macri by giving the opposition a surprisingly bigger-than-expected victory in Sunday’s primary election. The Merval stock index crashed 30 per cent and declines of between 18-20 cents in Argentina’s benchmark 10-year bonds left them trading at around 60 cents on the dollar or even lower. Refinitive data showed Argentine stocks, bonds and the peso had not recorded this kind of simultaneous fall since the South American country’s 2001 economic crisis and debt default. The grim backdrop was enough to push investors into safe-havens, and US Treasury yields dropped across the board on Monday as trade worries and political tensions supported safe-haven assets. In Asia on Tuesday benchmark 10-year Treasuries yields fell to 1.6471 per cent. On August 7 yields had skidded to 1.5950 per cent, the lowest since October 3, 2016. Spot gold rose 0.33 per cent to US$1.516.42 per ounce, near the highest in six years. The yen last fetched 105.37 per dollar, and was within striking distance of 105.03, its strongest since the January 3 flash crash. The Swiss franc, which along with the yen is considered a safe haven in times of trouble, traded at 0.9697 per dollar , near its highest in a year. Oil prices edged slightly lower in Asian trading as expectations that major producers will continue to reduce supplies ran into worries about sluggish economic growth. US West Texas Intermediate futures fell 0.33 per cent to US$54.75 a barrel. Linda Kim TOKYO, August 6 -- Global stocks extended already substantial losses on Tuesday (Aug 6), after Washington designated Beijing a currency manipulator in a rapid escalation of the United States-China trade war, but losses were pared after China set its daily yuan fixing stronger than expected, tempering fears of a currency war. Safe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk. US Treasury Secretary Steven Mnuchin said on Monday that the government had determined China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing. “Officially labelling China a currency manipulator gives the United States a legitimate reason to take even more steps,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “The markets are now scrambling to factor in the possibility of the United States imposing not only an additional 10 per cent of tariffs on Chinese imports, but the figure being raised to 25 per cent. This is likely to be a protracted trade war without a quick resolution.” US President Donald Trump vowed last week to impose a 10 per cent tariff on US$300 billion (S$414 billion) of Chinese imports from Sept 1, adding that it can be raised beyond 25 per cent. Some economists reckon the global economy could slip into recession in the coming months if the tariff is increased to 25 per cent. The Trump administration’s dramatic move against China hastened the risk aversion seen in global markets this week. On Monday, Beijing let the yuan breach 7-per-dollar on Monday for the first time since late 2008 in response to the latest US tariffs, which are expected to further aggravate trade tensions between the world’s two largest economies. On Tuesday, the offshore yuan fell to as low as 7.1397 per dollar in early Asian trade on Tuesday before pulling back to 7.0785 after China's central bank set its daily currency fixing back above the 7 level to the US dollar. The slightly firmer-than-expected morning benchmark rate of 6.9683 was still the weakest since May 2008. The People's Bank of China (PBOC) also said on Tuesday it was selling yuan-denominated bills in Hong Kong, in a move seen as curtailing short-selling of the currency. US stock-index futures rebounded, erasing earlier declines. S&P 500 Index futures contracts expiring in September rose as much as 0.7 per cent as of 1.06pm in Tokyo as the yuan steadied, after falling as much as 1.9 per cent. Dow Jones Industrial Average contracts ascended 0.6 per cent while those on the Nasdaq 100 added 0.5 per cent. Asia stock markets markets plunged on opening before paring their losses after China's latest yuan fixing. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.85 per cent after brushing its lowest since January. Tokyo opened nearly 3 per cent lower before recovering to end the morning 2 per cent down. Hong Kong fell 2.4 per cent while Shanghai and Sydney shed 2.6 per cent. Manila and Wellington were also down around 2 per cent. In Singapore, the Straits Times Index opened down 1.5 per cent before recovering some ground to trade 19.55 points or 0.6 per cent lower at 3,174.96 by the midday break. Lora Smith AMSTERDAM, July 29 -- Alcohol-free beers drove rising sales at Dutch brewing giant Heineken in the first half of the year, but its shares slumped on Monday as profitability was flat. The world's second-largest brewer said net profit was down by 1.4 percent to 936 million euros ($1.0 billion) while sales jumped to 13.6 billion euros, up 5.9 percent from the same period last year. Operating profit rose mostly due to a positive effect of currency changes, and its operating profit margin -- revenues minus costs -- actually dipped. The company's shares fell by more than 5.0 percent in midday trading in Amsterdam. A key driver of the Heineken brand's 6.9 percent growth was the demand for low or no-alcohol beer, with Heineken 0.0 now available in 51 markets around the world, the brewer said. Heineken said its partnership within China Resources Beer became effective at the end of April, now giving it access to the fast-growing Chinese premium beer market. Under the deal the Dutch brewer took a 40 percent stake in the holding company that controls China Resources Beer, merged its current operations into the firm and licence it to the Heineken brand for use in the Asian giant. The two firms are joining forces at a time when competition is becoming fierce in the Chinese market, with consumers turning towards foreign beers and premium products as middle class incomes rise. Linda Lim SHANGHAI, July 29 -- The much-advertised new Star Market of the Shanghai Stock Exchange opened to a stellar start with all 25 new shares soaring by an average of 140 per cent. The euphoria did not last long. By the second day, all but four of the new listings in China’s latest answer to America’s Nasdaq fell as investors took flight. The volatility looks set to continue for a while. Collectively, the two dozen firms raised 37 billion yuan (US$5.4 billion). The trillion-dollar question on everyone’s minds is: Will the Science and Technology Innovation Board become another casino for China’s predominantly retail investors, or help viable new hi-tech unicorns raise funds and realize their true value? The timing is more auspicious than the launch of its cousin, ChiNext, a decade ago in Shenzhen. That was in the midst of the global financial crisis, and its total valuation is still 60 per cent off its peak in 2015. Policymakers want it to be different this time. The ongoing trade war with the United States means many Chinese start-ups will prefer to raise capital onshore than try to list in a country that has been openly hostile to China’s technological rise. Is China’s tech board just another ‘casino’ for excitable punters? Star Market was effectively created on the order of President Xi Jinping in November. It aims to provide a freer market mechanism to fund technological innovation rather than infrastructure projects. To discourage inexperienced retail investors, trading on the new market is restricted to players with at least two years of experience and 500,000 yuan in available funds. But the thresholds may be too low to make a difference. More than 140 firms in technology and science have applied for listing, which could collectively raise 128.8 billion yuan. If successful, that will certainly give Hong Kong’s stock exchange a run for its money. Since last year, the city has revamped its listing rules in a bid to attract mainland Chinese firms. The loosening of rules includes allowing companies with dual-class share structures and unprofitable biotechnology start-ups to go public. Dual-class structures allow existing owners or founders to retain their control of the company even if they only own a minority of shares after listing. Star Market will be the first exchange in China to allow unprofitable technology companies, not just biotech start-ups, to list. A new IPO system means companies are required to disclose their earnings and operations in their listing applications. But regulators will let the market decide their valuations once their applications have been cleared. Beijing has long wanted to woo back national champions such as Alibaba Group (which owns the South China Morning Post), Tencent and Xiaomi to list onshore. To avoid fizzling out like ChiNext did, Star Market needs to prove that it is truly market-driven and able to attract big-ticket unicorns. PARIS, July 9 -- The number of funds domiciled in France has fallen steadily in recent years despite lobbying to attract more asset management business to the country following the upheaval caused by Brexit. There were 10,804 funds domiciled in France at the end of last year, according to financial regulator the Autorité des Marchés Financiers, which used data from the European Fund and Asset Management Association. This was down from 11,790 at the beginning of 2012. The decline is striking given that Europe's other large fund jurisdictions — Luxembourg, Ireland, Germany and the UK — all registered increases. The news is a blow to France, which had hoped the UK's decision to leave the bloc would open the door to it becoming a larger hub for fund management. Paris's business district launched a quirky campaign shortly after the 2016 EU referendum to try to lure London-based financial workers across the Channel. The AMF attributed the fall to the transfer of funds to other jurisdictions, although it added that the total fund number had remained stable since 2017. "Delegation" rules allow funds to be domiciled in one part of the EU, with investment management activity taking place elsewhere. Large numbers of investment managers have established entities in Luxembourg and Ireland in preparation for Brexit. Luxembourg is the biggest fund domicile in Europe with nearly 15,000 funds. France is the second-largest market while Ireland has overtaken Germany to claim third spot. It is not all bad news for France. A year ago BlackRock, the world's biggest asset manager, chose Paris over London for its new base to provide alternative investment services across Europe and Asia, although London remains its main European office. Part of the French campaign included French president Emmanuel Macron wooing Larry Fink, BlackRock chief executive, at the Elysée Palace. Other financial groups that have beefed up their presence in the French capital include US banks Citigroup and Bank of America. Author: Lora Smith |
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