AFP

Competition in Spain’s high-speed rail market is heating up with a new operator starting passenger services on Friday, making it Europe’s first nation with three players in the sector.

The new firms have pushed down prices and increased passenger traffic on the high speed network, which at 4,000 kilometres (2,500 miles) is the second longest in the world after China’s.

Spain is the world’s second most popular tourist destination after France.

Private operator Iryo, which is 45 percent owned by Italy’s Trenitalia, made an inaugural symbolic trip on Monday from Madrid to Valencia on Spain’s Mediterranean coast.

It will begin passenger services on Friday with 16 daily return trips between Madrid and Barcelona, Spain’s two largest cities.

Iryo will compete with French railway company SNCF’s firm in the country, Ouigo, which has been operating since May 2021 and Spanish state-owned rail operator Renfe, which opened its first high-speed service in 1992.

The arrival of a third operator is a “historical step” which is “novel” in Europe, said Carlos Lerida, a rail transport expert at the Autonomous University of Madrid.

“Until now no high-speed rail network has operated with three competitors. Spain could serve as a model,” he told AFP.

Iryo, which is kicking off its operations in Spain with 20 trains, will in mid-December expand its services to include a Madrid-Valencia route.

And it March 2023 it will start running trains from Madrid to Seville and Malaga in the southwestern region of Andalusia.

Ouigo already operates trains along the Madrid-Barcelona and Madrid-Valencia routes and plans to start services to the Mediterranean port of Alicante as well as Andalusia next year.

– ‘Democratise high-speed’ –

Spain’s state rail infrastructure operator Adif in 2019 granted contracts allowing the firms to operate on these routes for 10 years.

Socialist Prime Minister Pedro Sanchez’s government is keen to lower ticket prices for bullet train tickets to make greater use of the high-speed rail network.

Greater competition will “democratise high-speed” rail travel, Transport Minister Raquel Sanchez said last month, calling Spain’s model for the sector “revolutionary”.

Renfe responded to the arrival of Ouigo in May 2021 with the launch of a low-cost bullet train service called Avlo.

The company has also renewed its fleet of trains and improved the service it offers passengers on their journeys.

Renfe has a seat sale underway with prices of a 500-kilometre (300-mile) trip between Madrid and Barcelona for as little as seven euros.

“We see the arrival of competition as an opportunity not as a problem,” a Renfe spokesman said.

Average prices for tickets on high-speed trains between Madrid and Barcelona have dropped by 25 percent since Ouigo started operating last year, according to Spain’s competition watchdog CNMC.

– ‘Underused’ network –

Passenger traffic on the route has jumped by 47 percent, and is up by 14 percent along Spain’s entire rail network since May 2021, according to Adif.

“The network was underused,” the director general of Ouigo’s Spanish branch, Helene Valenzuela, told AFP, adding this meant there was a “limited risk” in entering the market.

The company spent 630 million euros ($644 million) to launch its operations in Spain.

“Our main rivals are planes and cars, not other trains,” said Valenzuela.

“On a technical level, it is a challenge, because we have to organise the flow (of trains) in the stations. But on an economic level, it is an opportunity,” she added.

Competition in the high-speed rail sector has its limits.

It works on “very busy lines” but it is “much more complicated” on other routes where it is harder for companies to cover their costs and make a profit,” said rail transport expert Lerida.

Britain’s Compass, the world’s largest caterer, on Monday said annual profits had tripled as companies switched to outsourcing meals in the face of soaring inflation and energy costs.

Profit after tax jumped to £1.1 billion ($1.3 billion) last year also on easing pandemic curbs, Compass said in an earnings statement. That compared with a net profit of £357 million in 2021.

Revenues surged almost 43 percent to £25.5 billion, as more companies decided to outsource their catering needs for the first time.

“The group’s performance surpassed our expectations,” said chief executive Dominic Blakemore, citing “strong” growth in new business.

“Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing.”

Compass has emerged “as a stronger and more resilient business” in the wake of the Covid pandemic, he added.

With global inflation at the highest levels in decades on soaring energy and food bills, companies are attempting to save cash by outsourcing to contractors.

But Blakemore also cautioned over the “uncertain” economic outlook with the UK economy currently mired in a recession, according to the government.

Yet Compass forecast that underlying operating profit would grow by more than 20 percent next year.

Its share price sank by about three percent in morning deals on London’s falling stock market as many investors opted to take profits from recent gains.

Asian markets fell Monday as China’s first Covid death in six months sparked fears officials would reimpose strict, economically painful restrictions to fight outbreaks across the country.

The news threw a spanner in the works for investors who had grown hopeful of a gradual reopening after China eased a number of virus-fighting measures this month.

The death of an 87-year-old man in Beijing on Sunday came as infections across the country spiked, testing authorities’ plans to loosen their grip by lowering quarantine times for foreigners and cancelling mass tests.

Beijing has in recent days moved to confine some residents to their homes and ordered others to quarantine centres.

“It feels like one step forward, two steps back,” said Willer Chen, at Forsyth Barr Asia.  

“It is super hard to reopen in the short term given winter is coming and cases are at a super high level and spreading across the whole country.”

The measures dealt a particular blow to Hong Kong’s Hang Seng Index, which fell nearly two percent, extending a sell-off at the end of last week and eating further into a recent massive rally. Shanghai was also down.

There were also losses in Sydney, Seoul, Singapore, Taipei, Mumbai, Jakarta and Manila.

Kuala Lumpur dropped with the ringgit after the Malaysian elections offered no clear winner, fuelling uncertainty.

Tokyo, Bangkok and Wellington bucked the trend.

European markets opened lower.

Investors brushed off a positive end to last week for US markets, while attention turns to the release later in the week of minutes from the Federal Reserve’s most recent policy meeting.

Global markets have enjoyed a broadly healthy November thanks to signs of China easing and indications of slowing US inflation that fanned optimism the Fed would start to slow its pace of interest rate hikes.

The well-below-forecast readings in the consumer and wholesale indexes suggested months of strict tightening measures were finally working through the economy and having results, allowing for a less hawkish Fed.

But several officials soon lined up to warn that more needed to be done to get inflation back down from four-decade highs to more bearable levels.

– Brighter outlook? –

The sharp rise in interest rates and elevated inflation has this year sent shudders through trading floors as investors fear they will send the US economy into recession.

In the latest comments, Atlanta Fed chief Raphael Bostic said he saw borrowing costs hitting five percent — from their current levels of around four percent — before they are held.

Boston Fed president Susan Collins remained open to options for the next hike — including a fifth straight 75 basis-point lift.

However, National Australia Bank’s Tapas Strickland said: “That comment by itself sounds hawkish, but Collins overall was more cautious and also expressed confidence that policymakers can tame inflation without doing too much damage to employment.

“Instead, it was likely that comment coming after a bevy of Fed Speakers during the week that added a hawkish hue to it.”

While the mood among traders remains less than bright, there appears to be a feeling that there is some light at the end of the tunnel.

“Whether it’s the time of year or recession uncertainty, few seem inclined to chase the risk rally,” said Stephen Innes at SPI Asset Management.

“Still, there is growing recognition that the consensus view of recession and earnings downgrades could face mitigation from declining inflation.

“A lower dollar, lower volatility and the acknowledgement of having to buy early could improve the risk outlook.”

And Bokeh Capital Partners’ Kim Forrest added that 10-year Treasury yields had tumbled since late October, showing “a softening inflationary environment”. 

“The bond market is a little bit smarter about what the Fed needs to do and what it’s going to do. It’s been telling us that the Fed probably won’t be able to get its rates up to five percent nor will it need to,” she told Bloomberg Television.

Demand concerns caused by China’s Covid woes further hit oil prices, with both main contracts in the red, having tumbled last week.

– Key figures around 0820 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 27,944.79 (close)

Hong Kong – Hang Seng Index: DOWN 1.9 percent at 17,655.91 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,085.04 (close)

London – FTSE 100: DOWN 0.4 percent at 7,355.95

Pound/dollar: DOWN at $1.1832 from $1.1883 on Friday

Euro/dollar: DOWN at $1.0268 from $1.0321

Dollar/yen: UP at 140.95 yen from 140.40 yen

Euro/pound: DOWN at 86.78 from 86.83 pence

West Texas Intermediate: DOWN 0.3 percent at $79.91 per barrel

Brent North Sea crude: DOWN 0.3 percent at $87.34 per barrel

New York – Dow: UP 0.6 percent at 33,745.69 (close)

— Bloomberg News contributed to this story —

Christie’s has called off the auction of a Tyrannosaurus rex skeleton, the auction house told AFP on Monday, days before it was due to go under the hammer in Hong Kong.

The cancellation came after an American fossil company raised doubts about parts of the skeleton named “Shen”, The New York Times reported on Sunday.

Christie’s said in a statement to AFP that Shen — a 1,400-kilogramme (3,100-pound) skeleton — was withdrawn from its autumn auctions week that starts in Hong Kong on Friday.

“The consignor has now decided to loan the specimen to a museum for public display,” it said.

Excavated from the US state of Montana, Shen stands 4.6 metres (15 feet) tall and 12 metres long, and is thought to be an adult male that lived about 67 million years ago.

Its auction would have followed the sale of another T-rex skeleton named “Stan” by Christie’s for $31.8 million in 2020.

It is very rare for complete dinosaur skeletons to be found, according to The Field Museum in Chicago, one of the largest natural history museums in the world.

Most frames on display use casts of bones to complete the skeleton. The Field Museum estimates the number of bones in a T-rex at 380.

Christie’s original materials said about 80 of Shen’s bones were original.

The controversy was sparked when Peter Larson, president of the Black Hills Institute of Geological Research in the United States, told The New York Times that parts of Shen looked similar to Stan.

The Black Hills Institute holds the intellectual property rights to Stan, even after its sale in 2020, and it sells replicas of that skeleton

Larson told the newspaper that it seemed to him that Shen’s owner — not identified by Christie’s — used bones from a Stan replica to complete the skeleton.

Its spokesman Edward Lewine told the newspaper that Christie’s believes Shen “would benefit from further study”.

Sales of such skeletons have raked in tens of millions of dollars in recent years, but experts have described the trade as harmful to science as the auctions could put them in private hands and out of the reach of researchers.

The co-creator of classic video game series Sonic the Hedgehog has been arrested for alleged insider trading, according to public prosecutors in Tokyo.

Yuji Naka, a 57-year-old programmer known for making Sonic and other major titles at Japanese game firm Sega, was arrested on Friday, a prosecution document obtained by AFP said.

His alleged misdeed took place nearly three years ago, when Naka was an employee at “Final Fantasy” creator Square Enix, the Tokyo District Prosecutors Office document said.

Naka is accused of buying shares in another game company, Aiming, when he knew they were going to release a new title jointly developed with Square Enix.

He purchased 10,000 shares in Aiming for 2.8 million yen ($20,000) in January 2020, according to the document, and the new game was announced the following month.

Prosecutors on Thursday arrested two other former Square Enix employees, also for alleged insider trading linked to Aiming.

Naka was not immediately reachable for comment, but his fans expressed surprise and disappointment on social media.

“Please tell me this isn’t true. He brought Sonic to life… I’m so sad,” one Twitter user wrote.

“He worked on many great games. So disappointing,” said another.

On the website of the game studio that Naka founded called Prope, the programmer said he wanted to create “games that surprise and entertain children around the world”.