(Bloomberg) — Subtlety has never been Wall Street’s strong suit, and when a dose of sarcasm crept into the high-stakes discourse around tensions between Russia and Ukraine, it briefly proved more than traders could process. Confusion reigned Monday afternoon, when media accounts of what appears to have been a tongue-in-cheek quip by Ukrainian leader Volodymyr …
Sarcasm in Ukraine Roils Markets Swinging Between War, Peace Read More »
(Bloomberg) — Philippine fintech firm Voyager Innovations Inc. is considering raising $150 million to $200 million to help finance its expansion, according to people with knowledge of the matter.
The digital arm of PLDT Inc., the Southeast Asian nation’s biggest telecommunications company by market value, is in talks with potential advisers about the funding round, the people said, asking not to be identified as the process is private.
Discussions are still ongoing and the fundraising size could change or Voyager could decide against proceeding with the plan, the people said. Representatives for Voyager’s unit said there’s no information to share at the moment.
Backed by private equity firm KKR & Co. and Chinese technology giant Tencent Holdings Ltd., Voyager raised $167 million in June to fund the expansion of its online payment unit PayMaya. The company won a digital bank permit in September.
The fintech firm will need additional funding to meet its growth requirements in 2022 and beyond, BusinessWorld reported in November, citing President Shailesh Baidwan.
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(Bloomberg) — Retail investors in Hong Kong will soon be able to buy green bonds for as little as HK$10,000 ($1,281) as the city looks to expand its role as a sustainable finance hub.
The Hong Kong government is selling up to HK$6 billion in green debt directly to investors for the first time, with proceeds used to back nine types of sustainable projects run by the city, Christopher Hui, secretary for financial services and treasury told reporters Tuesday.
Hong Kong joins other issuers including in the U.K. and Japan that are trying to expand the base of sustainable bond holders by reducing the investment thresholds and selling directly to the public. National Savings & Investments, a U.K. lender, launched a green savings bond last year that could be purchased for as little as £100 ($135).
The three-year bonds will pay an interest rate tied to inflation or a fixed rate of 2%, whichever is higher. The debt will be sold between March 1 and 11, and with many bank branches closed due to the pandemic, officials are encouraging online sales.
The city last year raised $1 billion selling traditional 10-year green bonds to institutional investors at 1.75%, and sold five billion yuan ($790 million) in green debt at 2.8% and 3% over three and five years.
Hong Kong has sold $7.2 billion in green bonds in all — including its first sales in euros last year — and aims to sell an additional HK$175.5 billion in sustainable debt over the next five years. Hong Kong has established a yield curve of green bonds of up to 30 years, said Edmond Lau, deputy chief executive of the Hong Kong Monetary Authority.
HSBC Holdings Plc and Bank of China (Hong Kong) Ltd. are leading the retail bond sale. The bond is likely to be eight to 10 times oversubscribed due to strong demand, said Arnold Chow, a deputy general manager at Bank of China (Hong Kong).
The Asian financial hub is trying to boost its presence in sustainable finance as trillions of dollars flow into the sector. The Hong Kong stock exchange is in talks with mainland China about developing a carbon market, and is collaborating on a separate green bond retail market using blockchain.
The central bank and the Bank for International Settlements have developed two prototype platforms intended to give retail investors easier access to this debt, while allowing them to track the environmental impact in real time.
“We have to take it step by step,” Lau said, when asked about the new blockchain program. “There is still some time until we can tokenize green bond issuance and distribution.”
(Updates with details of the terms in fourth paragraph)
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(Bloomberg) — Fund managers haven’t been this bearish on technology stocks in almost 16 years as they brace for aggressive Federal Reserve policy tightening, the latest Bank of America Corp. survey shows.
Net allocation to the tech sector fell to the lowest since August 2006, according to the poll conducted from Feb. 4-10. Most of the participants sent their responses before Thursday’s red-hot U.S. inflation print that prompted investors to price in about seven Fed rate hikes in 2022.
Nervous investors have been rapidly reducing their bets on growth stocks that fueled the S&P 500’s rally over the last decade as central bankers prepare to tackle inflation. Higher interest rates hurt pricier tech stocks that are valued on future growth expectations.
While long U.S. tech remained the most crowded trade in the survey — a trend that’s persisted for more than two years — conviction is on the wane, at 28% in February compared with last month’s 39%.
BofA strategists led by Michael Hartnett said overall equity allocation has dropped sharply, with just under a third of its clients bullish on stocks, down from more than half of them in January. Meanwhile, cash was voted as the most preferred asset class with 38% net allocation.
Hawkish central banks were seen as the biggest tail risk for a third straight month, followed by inflation and asset bubbles. The ongoing Russia-Ukraine conflict came in at fifth.
Risk-Off Isn’t Leading to Panic About War Yet: Taking Stock
Investors now say they expect a “Fed put” — supportive measures from the central bank when markets turn south — only after the S&P 500 Index falls to 3,700. The index closed Monday at 4,400.
A total of 314 fund managers with $1 trillion in assets under management took part in the global survey.
Other highlights include:
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(Bloomberg) — Fund managers are the most underweight on technology stocks in almost 16 years as they brace for aggressive Federal Reserve policy tightening, the latest Bank of America Corp. survey shows.
Net allocation to the tech sector fell to the lowest since August 2006, according to the poll conducted from Feb. 4-10. Most of the participants sent their responses before Thursday’s red-hot U.S. inflation print that prompted investors to price in about seven Fed rate hikes in 2022.
Nervous investors have been rapidly reducing their bets on growth stocks that fueled the S&P 500’s rally over the last decade as central bankers prepare to tackle inflation. Higher interest rates hurt pricier tech stocks that are valued on future growth expectations.
While long U.S. tech remained the most crowded trade in the survey — a trend that’s persisted for more than two years — conviction is on the wane, at 28% in February compared with last month’s 39%.
BofA strategists led by Michael Hartnett said overall equity allocation has dropped sharply, with just under a third of its clients bullish on stocks, down from more than half of them in January. Meanwhile, cash was voted as the most preferred asset class with 38% net allocation.
Hawkish central banks were seen as the biggest tail risk for a third straight month, followed by inflation and asset bubbles. The ongoing Russia-Ukraine conflict came in at fifth.
Risk-Off Isn’t Leading to Panic About War Yet: Taking Stock
Investors now say they expect a “Fed put” — supportive measures from the central bank when markets turn south — only after the S&P 500 Index falls to 3,700. The index closed Monday at 4,400.
A total of 314 fund managers with $1 trillion in assets under management took part in the global survey.
Other highlights include:
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(Bloomberg) — Belgian employees won the right to perform a full work week in four days instead of the usual five without loss of salary, part of an agreement that aims to make Belgium’s notoriously rigid labor market more flexible.
Employers will still have the right to turn down employees’ requests for a condensed work week, on condition they explain their refusal in writing, Deputy Prime Minister and Labor Minister Pierre-Yves Dermagne said Tuesday in Brussels. For companies, it will become easier to introduce evening and night work without prior agreement from all labor unions.
“The goal is to give people and companies more freedom to arrange their work time,” Prime Minister Alexander De Croo said on Tuesday in Brussels. “If you compare our country with others, you’ll often see we’re far less dynamic.”
Only about 71 out of 100 Belgians in the age group from 20 to 64 years have a job, fewer than the euro-area average of about 73 and a full 10 percentage points less than in neighboring countries such as the Netherlands and Germany, according to Eurostat data for the third quarter of 2021. Belgium’s seven-party federal coalition agreement set a goal for an employment rate of 80% by 2030, a panacea that would serve to keep its legal pensions affordable or finance future tax cuts.
The Belgian government also introduced new rules for platform workers, setting out criteria for designating them as employees regardless of what they are called in their contract. According to Minister of Social Affairs Frank Vandenbroucke, the Belgian legislation will be modeled on the European Commission’s proposal from December for gig workers.
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(Bloomberg) —
Top government officials failed to reach an agreement on how to regulate cryptocurrencies at a meeting Tuesday, according to people familiar with the talks, despite President Vladimir Putin’s request for them to find a compromise.
Bank of Russia head Elvira Nabiullina, Finance Minister Anton Siluanov and Deputy Prime Minister Dmitry Grigorenko didn’t get any closer to a deal and decided only to formalize their disagreements, the people said, asking not to be identified because the meeting is not public.
The press service of the central bank and a spokesman for the Finance Ministry declined to comment on the meeting. A spokesman for Grigorenko did not immediately respond to a request for comment.
Little progress has been made in agreeing on how Russia should regulate crypto, despite Putin calling for a quick solution in January. The Finance Ministry and central bank were supposed to prepare a draft law on the matter by Feb. 18, Kommersant newspaper reported last week.
The central bank maintains there are too many risks related to crypto and proposed a ban, according to a letter Friday from Nabiullina to Siluanov that was seen by Bloomberg. The central bank’s press service confirmed the contents of the letter.
The regulator argues crypto resembles a pyramid scheme and poses a threat to people’s financial wellbeing, the financial system and the economy. The government wants to regulate digital currencies in order to bring them out of the shadows and attract investment.
Russia’s existing laws acknowledge crypto assets but do not allow them to be used as payment, a situation that means they are largely unregulated. A recent government paper estimated Russians own about 2 trillion rubles ($26 billion) in crypto.
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(Bloomberg) — Michelin said this year will be just as much of a struggle as 2021 as severe bottlenecks in supply chains and transportation routes drive up costs.
Shares in Michelin dropped as much as 2.9% in early Paris trading Tuesday after the French tire maker published full-year earnings and an outlook for this year based on continuing logistical challenges.
“We anticipate 2022 will be as disrupted as 2021,” Chief Executive Officer Florent Menegaux said Monday during a presentation. The company faced acute transport problems last year, and sometimes had to deal with dozens of supply-chain crises daily, he said.
Michelin “more than offset” 1.2 billion euros ($1.36 billion) in extra costs in 2021 with three price increases, according to the presentation. Another price hike was pushed through at the start of the year and they could be raised again April 1, at least in North America, according to Chief Financial Officer Yves Chapot.
So far there has been “no shift in demand from premium tires to budget brands,” he said in an interview on Bloomberg TV.
Global manufacturers have been facing higher costs and labor shortages in many countries, which has hindered their ability to fill growing demand for goods as economies emerge from the worst of the pandemic. Michelin isn’t alone in raising product prices, with companies like paintmaker Akzo Nobel NV moving ahead with double-digit increases.
Read more: Dutch Paint Maker to Raise Prices Up to 16% on Supply Crunch
Michelin offered a muted outlook for tires for passenger cars and light-trucks, expecting the market to stay stable or grow as much as 4% compared with last year, when shortages in semiconductors crippled vehicle production lines and hurt tire sales to automakers.
Read more: Michelin FY Total Segment Operating Income Meets Estimates
Michelin’s guidance for free cash flow generation this year is below expectations but “could reflect a cautious approach by management,” Citigroup analyst Gabriel Adler said in a note, adding that this caution may also have been applied to the outlook for pricing and cost inflation.
The manufacturer is expecting demand from automakers for tires to equip new vehicles to improve in the second half, and take off in the last quarter, Chapot said. The squeeze on chips has also raised the cost of equipment Michelin needs to upgrade and digitalize its plants, he said.
Acquisitions remain part of Michelin’s longer-term strategy to grow, Menegaux said.
(Adds shares in second paragraph, CFO comments from fourth.)
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(Bloomberg) — U.K. startup Sharegain has raised $64 million to expand its securities lending platform, a digital solution designed to allow more firms to lend out stocks and bonds to generate revenue.
The new funding round — one of the largest to date in the securities lending industry — was led by WestCap, Sharegain said in a statement Tuesday. Citigroup Inc., EJF Capital LLC and Optiver PSI also participated, along with existing investors.
Founded in 2015 and led by Chief Executive Officer Boaz Yaari, Sharegain is targeting the $3 trillion securities lending industry that’s traditionally been the preserve of big financial institutions. The firm says its platform enables users from online brokers to private banks to participate in the market.
“Securities lending can be an important source of additional income for retail investors and financial institutions but today it’s only accessible to the largest players,” Dan Fischer, head of investments for WestCap in EMEA, said in the statement. “Sharegain is helping to bridge this gap and leveling the playing field.”
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(Bloomberg) — Hong Kong’s leader said a growing outbreak of the omicron variant has “overwhelmed” the city’s government, but denied she planned to impose a total lockdown like those in mainland Chinese cities. The city is set to report about 1,510 confirmed cases Tuesday and another 5,400 preliminary cases, local media said, with constrained testing capacity slowing verification of daily numbers.
“We cannot surrender to the virus,” Chief Executive Carrie Lam told a regular news briefing. “This is not an option.”
Microsoft Corp. told many U.S. employees to begin returning to their offices starting Feb. 28 in a fresh attempt to get operations back to normal as Covid cases abate. Demonstrators halted traffic at two major border crossings in Western Canada and some vowed to stay even as Prime Minister Justin Trudeau used a law giving his government emergency powers to end blockades.
Key Developments:
Canada Protesters Defy Trudeau’s Emergency Powers (2 p.m. HK)
Demonstrators against vaccine mandates halted traffic at two major border crossings in Western Canada and some vowed to stay even as Prime Minister Justin Trudeau used a law giving his government emergency powers to end blockades.
The main border posts in Alberta and Manitoba were closed Monday, with commercial traffic to the U.S. blocked by semi-trailers and farm equipment driven there by people opposed to Covid-19 vaccine rules.
Djokovic Will Sacrifice Trophies If Told To Get Vaccine (1:30 p.m. HK)
Tennis star Novak Djokovic told the BBC that he would rather miss out on tennis trophies than be forced to get a Covid vaccine.
Djokovic said in the interview that he was not against vaccinations but supported individuals’ rights to choose, and would rather miss competitions such as Wimbledon and the French Open than alter his stance on the vaccine.
Djokovic was deported from Australia last month after the government canceled the unvaccinated player’s visa.
Hong Kong ‘Overwhelmed’ by Omicron Outbreak (10 a.m. HK)
Hong Kong’s leader said a growing outbreak of the omicron variant has overwhelmed the city’s government, even as she pledged to continue trying to bring Covid cases back down to zero.
“The scale and speed of the spread of the virus has overwhelmed our capacity in the fight against the pandemic,” Chief Executive Carrie Lam said Tuesday at a regular news briefing. “The situation is very serious.” Still, Lam said she had no plans for full lockdown like those imposed on mainland cities.
Lam added city officials “have the will” to maintain a “dynamic zero” strategy of no infections as it struggles to contain a growing outbreak of the omicron variant. Lam said she had asked mainland China for help with testing. “We cannot surrender to the virus,” Lam said. “This is not an option.”
The city is set to report about 1,510 confirmed cases Tuesday and another 5,400 preliminary cases, local media said, with constrained testing capacity slowing verification of daily numbers. Hong Kong Chief Secretary John Lee is among those in self-isolation after his domestic helper tested preliminary positive Tuesday.
One Chinese City Locks Down, Another Lifts (9:45 a.m. HK)
China continues to battle Covid flareups as Manzhouli, a city of 300,000 people in Inner Mongolia bordering Russia, said it would enter lockdown after five people tested positive for Covid.
Suzhou, a city near Shanghai in eastern China, also found 12 Covid infections, mostly at the city’s industrial park. A wafer factory run by Taiwan’s United Microelectronics Corp. had to suspend production in the city after employees tested positive.
Meanwhile, the southwestern border city of Baise started to lift lockdown restrictions Tuesday after its omicron-led cluster outbreak appeared to come under control. The city of 3.6 million residents near Vietnam entered lockdown last week. China reported 47 Covid infections overall on Tuesday, with 28 of them in the northeastern coastal city of Huludao.
Biden’s Global Vaccine Push Falters (9:20 a.m. HK)
U.S. President Joe Biden’s effort to vaccinate the world against Covid-19 is falling short, with the globe not on pace to meet a 2021 goal of vaccinating 70% of the world population by later this year, Secretary of State Antony Blinken acknowledged at a virtual meeting with other countries. Only about 54% of the global population is vaccinated so far.
Singapore Eyes Easing, Commits to Reopening (8:24 a.m. HK)
Singapore will be able to ease virus restrictions more once the current omicron wave has peaked and starts to subside, health minister Ong Ye Kung said Monday in a response to questions in parliament. Hospital bed numbers are probably the biggest constraint now, he said, adding that the healthcare system is able to handle the current wave.
Separately, the South East Asian nation remains committed to reopening its borders and extending its vaccinated travel lane arrangements with other countries, deputy prime minister Heng Swee Keat said Monday at the Singapore Airshow.
Japan to Ease Business Travel Requirements (7:30 a.m. HK)
Japan’s government will ease requirements for business travelers to the country, no longer requiring them to submit a detailed itinerary of their trip prior to arrival, the Nikkei reported. The requirement, which was in place before the current border controls that effectively halted business travel were implemented, won’t be reinstated after the curbs are eased from March. The move was among measures that companies had criticized for adding excessive paperwork.
Most Japanese want to keep strict virus border controls, according to a poll, even as the country prepares to ease one of the most stringent policies in the developed world.
Separately, the government is considering extending Covid-19 measures in Osaka and some other prefectures beyond Feb. 20 when they are set to expire, broadcaster NHK reported. However, it is considering lifting measures for some areas, including Okinawa, where new Covid cases have eased.
Microsoft Returning to Office on Feb. 28 (7:20 a.m. HK)
Microsoft Corp. told many U.S. employees to begin returning to their offices starting Feb. 28, making a fresh attempt to get the software maker’s operations back to normal as Covid-19 cases abate.
In September, Microsoft scrapped a goal of reopening on Oct. 4 because Covid-19’s delta variant was raging. That was followed by the even-more-contagious omicron variant.
The Redmond, Washington-based company, which has said it will remain a flexible workplace, has told employees that they’ll be able to work from home up to half the week without discussing it with managers.
California to Keep School Mask Mandate For Now (6 a.m. HK)
California plans to keep its mask mandate for schools in place for now, but officials said they may soon announce a timeline for ending the requirement. The most-populous state will reassess the mandate on Feb. 28 and could announce then when it will be lifted.
“Masking requirements were never put in place to be there forever,” Mark Ghaly, California’s secretary of health and human services, said at a briefing. “It’s not a question of if — it’s a question of when.”
Pernod Ricard Asks H.K. Execs to Relocate (5:45 a.m. HK)
Pernod Ricard has asked top executives from its Hong Kong office to relocate temporarily to avoid strict Covid-19 curbs, as China prepares to take a greater role in the city’s response to the Omicron wave, the Financial Times reported. Dubai is being considered as one temporary solution.
Indonesia May Lift All Quarantine Requirements (4:30 a.m. HK)
Indonesia is considering lifting all quarantine requirements for inbound travelers in April, as Covid-19 hospitalizations and fatality rates remain under control despite a resurgence in cases.
In the mean time, the required quarantine period is reduced to three days from five for incoming travelers who have received a third dose of vaccines starting next week, Luhut Panjaitan, the cabinet minister in charge of the pandemic response in Java and Bali, said in his weekly briefing on Monday. PCR testing requirement will remain in place for those arriving travelers.
CDC Raises Travel Alert for South Korea (3:20 p.m. NY)
The U.S. Centers for Disease Control and Prevention raised its travel health advisory on South Korea to “very high.”
“If you must travel to South Korea, make sure you are vaccinated and up to date with your COVID-19 vaccines before travel,” the agency said on its website,
Washington to Lift Mask Mandate, Mayor Says (12:01 p.m. NY)
Washington will lift its mask mandate in certain settings beginning March 1, Mayor Muriel Bowser said. The nation’s capital will no longer require face coverings in restaurants, bars, gyms and similar indoor venues. However, masks still will be required in schools, health-care facilities and on public transit.
Italy’s Mandatory Vaccination Starts Tuesday (11:50 a.m. NY)
Italy’s vaccination mandate for about 8.8 million workers over 50 will kick off on Tuesday. Workers in the private and public sector will be required to show their so-called super green pass to prove their vaccination, or face fines for up to 1,500 euros ($1,695). Until Monday, proof of a negative test was enough to enter workplaces. More than 91% of people over 50 are partly vaccinated, leaving more than 1 million of the 50-59 age group without any vaccination.
Ontario Plans to Drop Restrictions Next Month (9:50 a.m. NY)
Ontario Premier Doug Ford said Canada’s largest province will drop many of its pandemic-fighting measures next month as cases and hospitalizations decline.
Proof-of-vaccination requirements and capacity limits in indoor public settings are among the measures that will be dropped as of March 1 if the health-system continues to improve, Ford said Monday. Masking requirements will remain in place, the province said.
The move to end the measures comes against a backdrop of protests, initially against Covid-19 vaccine mandates, that have spread across Canada and hit Ontario especially hard. Demonstrations have shut down parts of Canada’s capital city of Ottawa for more than two weeks, and protesters had blockaded a bridge that serves as the country’s largest trade artery with the U.S. for about a week through yesterday.
U.K. to Give Details on Vaccinations for Kids (7:05 a.m. NY)
The U.K. will set out “more details” on its vaccination strategy for 5-to-11 year-olds next week, as part of its planned “Living with Covid” strategy, Prime Minister Boris Johnson’s spokesman, Max Blain, told reporters on Monday.
At present, only children in clinical risk groups in that age bracket are entitled to vaccination, following advice in December from the government’s Joint Committee on Vaccination and Immunisation. The JCVI has since provided the government with advice for those not at risk, which ministers are now considering, Blain said.
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