AFP

Elon Musk said on Friday he was putting a temporary halt on his much-anticipated deal to buy Twitter, sending shares in the social media giant plunging. 

Musk, the world’s richest man and founder of automaker Tesla, had made the eradication of spam accounts and bots one of the centerpieces of his proposed $44 billion takeover of Twitter.

When the deal was announced in late April he said he wanted to make Twitter “better than ever” by “defeating the spam bots and authenticating all humans”.

But on Friday he wrote: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”

Two hours after his first tweet, Musk took to the platform again to say he was “still committed to acquisition”.

Reliable figures for the number of users are seen as vital to judge future revenue streams.

Twitter did not immediately respond to AFP’s request for comment.

– ‘Horror show’ –

In his tweet, Musk linked to an article from May 2 referencing Twitter’s latest filing to US regulators.

The filing said an internal review had concluded Twitter had 229 million “monetizable daily active users” in the first quarter of this year, and just five percent were regarded as false or spam accounts. 

Analyst Dan Ives from Wedbush said the Twitter “circus show” was likely to translate into a “Friday 13th horror show”.

“The nature of Musk creating so much uncertainty in a tweet (and not a filing) is very troubling,” he said.

Wall Street investors were likely to interpret the tweet as an attempt by Musk to pull out of the deal or trying to force a lower price, said Ives.

Market analyst Susannah Streeter of Hargreaves Landsdown said the takeover bid had been bumpy but now “risks hitting the skids”.

Friday’s initial announcement saw Twitter’s shares drop by 20 percent in early electronic trading before Wall Street opened, but Tesla’s stock rose.

– ‘False and misleading’ –

Musk is boss of both Tesla and SpaceX and is estimated to be worth $240 billion, according to Forbes.

But his style of ownership — an in particular his use of Twitter — has frequently landed him in hot water with the authorities.

He has been tangled in legal troubles ever since he tweeted in 2018 that he had enough funds to take Tesla private — a claim that a judge last month decided was “false and misleading”.

His potential stewardship of the social media platform has hit several bumps since the takeover attempt was made public, not least over the future status of Donald Trump.

The former US president was kicked off Twitter and other social networks following the attack on the US Capitol on January 6, 2021.

On Wednesday, Musk said he would be open to lifting a ban on Trump’s account.

Activist groups responded by urging advertisers to boycott the platform if Musk opened the gates to abusive and misinformative posts.

Global stock markets rebounded Friday on easing fears about the pace of interest rate rises in the United States that are aimed at bringing down the country’s highest inflation in decades.

European equities were up around 1.5 percent nearing the half-way stage following solid gains in Asia. 

Stocks have suffered sharp losses this week, particularly on Wall Street, as investors seek safety also amid the Ukraine war and Chinese lockdowns.

“Investors are continuing to wrestle with worries over inflation as the oil price climbs back up again and supply concerns resurface amid ongoing geo-political tensions,” noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Stocks have tumbled for much of this week on fears the Federal Reserve was planning to lift US interest rates by 75 basis points at a single meeting.

However equities on Friday staged “a relief rally” after Fed boss Jerome Powell calmed nerves over the potential hefty increase, said Jeffrey Halley, analyst at OANDA trading group. 

“The rally today looks more like a technical rebound after a torrid week than a structural turn in sentiment,” he added.

Oil prices climbed Friday after much volatility, while the euro recovered from five-year lows against the dollar.

Bitcoin held above $30,000, a day after the cryptocurrency slumped under $27,000, or lowest level since late 2020.

Its crash this week was fuelled by the collapse of two so-called “stablecoin” cryptocurrencies — TerraUSD and Tether — which proved to be anything but stable, leaving investors panicked. 

On the corporate front Friday, Twitter’s share price plunged after Elon Musk said he was putting a temporary halt on his much-anticipated deal to buy the social media giant. 

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” he wrote on the platform.

Musk, the world’s richest man and founder of automaker Tesla, had made the eradication of spam accounts and bots one of the centrepieces of his proposed $44 billion takeover of Twitter.

Friday’s announcement saw shares drop by 20 percent in early electronic trading before Wall Street opened.

– Key figures at around 1100 GMT –

London – FTSE 100: UP 1.7 percent at 7,352.49 points

Frankfurt – DAX: UP 1.4 percent at 13,931.74

Paris – CAC 40: UP 1.7 percent at 6,312.64

EURO STOXX 50: UP 1.6 percent at 3,670.69

Hong Kong – Hang Seng Index: UP 2.7 percent at 19,898.77 (close)

Shanghai – Composite: UP 0.9 percent at 3,084.28 (close)  

New York – Dow: DOWN 0.3 percent at 31,730.30 (close)

Tokyo – Nikkei 225: UP 2.6 percent at 26,427.65 (close)

Brent North Sea crude: UP 1.9 percent at $109.44 per barrel

West Texas Intermediate: UP 2.0 percent at $108.21 per barrel

Euro/dollar: UP at $1.0386 from $1.0382 at 2100 GMT Thursday

Pound/dollar: DOWN at $1.2191 from $1.2199

Euro/pound: UP at 85.18 pence from 85.08 pence

Dollar/yen: DOWN at 128.90 yen from 129.97 yen

The war is not over, but Ukraine’s finance minister says the first signs of economic recovery are emerging after Russian troops retreated away from the capital and northern areas.

“The war continues but we are not seeing the same level of escalation as we saw in the first two months,” Finance Minister Sergiy Marchenko told AFP in an interview in his Kyiv office, decorated with Ukraine’s blue and yellow flag.

“In the first two months we saw attacks and bombings of large cities,” Marchenko said. “Now the military front has been localised to specific territories.”

Already one of Europe’s poorest countries before the Russian invasion beganon February 24, Ukraine’s economy is now in shambles.

Cities have been levelled by fighting, infrastructure is shattered and over six million people have left Ukraine. A Russian blockade has prevented Ukraine to use its ports to ship its key agricultural exports such as wheat and sunflower oil.

The International Monetary Fund and World Bank have forecast that the Ukrainian economy will shrink by between 35 and 45 percent this year.

Marchenko said gross domestic product could contract by as much as 50 percent, with the overall damage from the conflict totalling $600 billion.

Customs duty revenues fell 70 percent compared to pre-war levels and tax collection dropped 25-30 percent. Exports and imports fell by almost half and inflation topped 16 percent in April from a year ago, Marchenko said.

– ‘A way to survive’ –

After fierce Ukrainian resistance forced Russian troops to pull away from areas outside of Kyiv and from northern Ukraine, many residents have returned to the capital and businesses have reopened.

Ukraine’s central bank has seen “first signs of revival” in April and May, Marchenko said.

“Consumer demand is rising,” said Marchenko, who sported jeans and a mustard-coloured hoodie for the interview as — like other Ukrainian officials — the 41-year-old minister has traded his formal suit for more casual wear during the war.

“As of today, 37 embassies have returned to Kyiv and it gives a signal to citizens to return gradually to Kyiv and renew economic activity,” he added.

With heavy fighting continuing in the country’s east and south, many companies have relocated to western Ukraine to keep their businesses running. 

If no default on the payment of the foreign debt or even its rescheduling is envisaged by Kyiv, “we need $5 billion a month to cover the budget deficit,” the minister said. 

His priority is now to ensure the flow of permanent international financial aid. 

“We are asking for a high level of financial support but the price is also high. This for us is a way to survive,” Marchenko said. 

Facing the Kremlin’s advancing forces, the economist said Kyiv is “now an outpost for democracy” and defeat is not an option. 

“We cannot lose this war and we need the arms, finances and sanctions.”

– ‘Banal robbery’ –

Vast amounts of funds are needed not only for the war effort, but also to rebuild Ukraine. 

President Volodymyr Zelensky has already called for a new Marshall Plan — the US economic aid programme for the reconstruction of Europe after World War II — for his country. 

Marchenko said he backed using Russian assets seized abroad to rebuild Ukraine — an idea floated by several Western countries, including the United States.

He also accused Russian forces of mass “robbery” in Ukraine, saying Russian soldiers have stolen from ordinary people’s homes as well as grain and “other mineral, raw, intellectual resources.”

“We are dealing with bandits who entered the house and are taking away everything they like,” he said, calling it the “banal robbery of a country.” 

Marchenko said it is Ukraine’s critical infrastructure — such as roads, bridges and power supplies — that has suffered most and that needs to be rebuilt first. 

He wants people to return to territories retaken by Kyiv and “start a normal life with electricity, water and gas supplies”.

Asian equities were mostly up Friday following a tumultuous trading period on Wall Street, but analysts said the outlook remained bleak as inflation, the Ukraine war and Chinese lockdowns weigh on sentiment.

World markets have been volatile for much of 2022, with investors fretting about supply chain snarls due to China’s Covid curbs and as Europe weighs cutting out Russian oil over Moscow’s invasion.

The Federal Reserve last week announced its largest rate hike since 2000 to slow surging inflation and signalled that similar increases were likely in the coming months — a possibility that sent stocks on a rollercoaster.

But after Fed chief Jerome Powell on Thursday said the United States was not actively considering a steeper 75-basis-point move, markets experienced a bounce in Asia. 

“Asia-Pacific equities are staging a relief rally today after Wall Street stabilised late in the session as Jerome Powell calmed nerves over potential 0.75 percent rate hikes,” said Jeffrey Halley of OANDA. 

However, he warned that the positive showing should be taken with a grain of salt. 

“Nothing has materially changed in the world from yesterday, and if anything, Russia/Europe risks are increasing,” he said.

“The rally today looks more like a technical rebound after a torrid week than a structural turn in sentiment.”

After a bruising day on Wall Street — with the Dow falling for the sixth straight session — Asian equities were higher Friday. Japan and Hong Kong closed with a two percent bump. 

Frankfurt, London and Paris all opened higher as well, while oil remained up, with the US benchmark crude WTI trading at more than $106 a barrel.

“Such intraday volatility and sentiment flip-flopping is indicative of nervous investors and in itself, a bearish signal,” said Lewis Grant of Federated Hermes Limited. 

“As long as the war continues and macro pressures persist, it is likely that both energy names and value stocks will remain relative safe-havens for fully-invested, long-only equity investors.”

– Crypto seesaw –

Cryptocurrencies also saw great volatility this week. Bitcoin on Thursday tumbled below $27,000 — its lowest level since late 2020 — but by Friday its value was holding steady above $30,000.

Its crash was fuelled by the collapse of two so-called “stablecoin” cryptocurrencies — TerraUSD and Tether — which proved to be anything but stable, leaving investors panicked. 

While the digital currency market had stabilised by Friday, Stephen Innes of SPI Asset Management said “the seven-day moves in some of the ‘other crypto experiments’ on monster volume are insane and increasingly difficult to watch”.

– Key figures at around 0830 GMT –

Hong Kong – Hang Seng Index: UP 2.7 percent at 19,898.77 (close)

Shanghai – Composite: UP 0.9 percent at 3,084.28 (close)  

London – FTSE 100: UP 1.3 percent at 7,331.28

Tokyo – Nikkei 225: UP 2.6 percent at 26,427.65 (close)

West Texas Intermediate: UP 0.7 percent at $106.86 per barrel

Brent North Sea crude: UP 0.9 percent at $108.36 per barrel

Euro/dollar: UP at $1.0404 from $1.0382 at 2100 GMT Thursday

Pound/dollar: UP at $1.2205 from $1.2199

Euro/pound: UP at 85.26 pence from 85.08 pence

Dollar/yen: DOWN at 128.82 yen from 129.97 yen

New York – Dow: DOWN 0.3 percent at 31,730.30 (close)

Japanese auto giant Honda said Friday net profit rose 7.6 percent in the financial year to March, benefiting from strong motorbike sales and a weaker yen.

The company also expects net profit to remain steady in the current financial year, even as the global microchip shortage and virus-related supply chain disruption cause headaches for the car industry.

Honda said annual net profit rose 7.6 percent to 707 billion yen ($5.5 billion) in 2021-22 and issued a forecast of 710 billion yen net profit for the year to March 2023.

Sales last year were up 10.5 percent, it said, “due mainly to increased sales revenue in motorcycle business and financial services business operations as well as positive foreign currency translation effects.”

But “despite shifting to a recovery trend, the economic environment surrounding the company, its consolidated subsidiaries and its affiliates… continued to be difficult due to the impact of (the) semiconductor supply shortage, and increases in raw material costs, among other factors.”

Honda said its factories in Japan and overseas had been forced to suspend or reduce output due to supply chain and staffing issues related to Covid-19.

Toyota, the world’s top-selling carmaker, this week also posted a record full-year net profit, helped by strong sales and a cheaper yen.

The currency has touched 20-year lows against the dollar in recent weeks, inflating the value of Japanese automakers’ overseas profits.  Some analysts believe this will help them offset their current challenges.

In April, Honda said it will invest nearly $40 billion into electric vehicle technology over the next decade as it works towards switching all sales away from traditional fuel cars.