All the UK-based tech, media and telecoms analysts at Berenberg have joined rival Cantor Fitzgerald amid a difficult period for Berenberg, which has already lost its UK investment banking chief. The move leaves Berenberg with only a handful of equity research analysts in London, down from more than 20 less than two years ago. Last year the bank cut its UK and US headcount by 25% and 50% respectively due to a dearth of stock market listings and equity raises caused, in part, by Russia’s invasion of Ukraine.
The chairman of the UK's Treasury Select Committee, Harriet Baldwin, has urged Chancellor Rishi Sunak to reform the tax system, which she claimed was riddled with punishing levies and "perverse incentives". She said "horrible cliff edges" in the present tax framework had left many people questioning the value of working an extra hour. Baldwin also said it was only individuals who earned over £250,000 who could escape the current system's web of thresholds and levies, with some middle-class families facing marginal tax rates of above 100%. She added that there needed to be a focus on eliminating "quirks" in the system so that work pays. Baldwin also argued that high street banks were failing to deliver the returns to savers they deserve.
Market concerns over the debt ceiling standoff in the US are fading amid signs of progress in resolving the issue; analysts say that high inflation is a greater risk to investors than the remote risk of a US default; however, they add that high public debt remains a challenge for the largest economy in the world. US President Joe Biden plans to visit Australia instead of involving himself in addressing the debt crisis. Economists estimate default odds at around 1-10%, with catastrophic implications if it occurs, while markets would freak out, causing US bond yields to rise markedly.
The Export-Import Bank of China and “several other Chinese banks” will fund the $3bn debt to build the controversial East African Crude Oil Pipeline. The announcement ended speculation that the project would stall after dozens of lenders and insurance companies refused to take part in financing. Uganda and Tanzania plan to build the 1,445 km conduit to transport crude oil from two oilfields at Lake Albert in northwestern Uganda to the port of Tanga in Tanzania on the Indian Ocean. The pipeline is expected to transport 216,000 bpd of oil to international markets. Financing for the pipeline is set at a 60:40 debt-to-equity ratio; the US$3bn will be secured as debt, and the remaining $2bn will be financed by shareholders through equity contributions. French oil major TotalEnergies owns the biggest stake in the project at 62%, and China National Offshore Oil Corporation owns the remaining 8% of the project.
The UK government's lack of understanding of housing market economics and cynical attempts to gain voters has led to policy failures and continued crisis. Help to Buy pushed up house prices and ownership is not a viable option for everyone. Doing nothing to increase housing supply and continued high demand will see real rents and house prices continue to rise. Labour has backed building on green belt land and last-time buyers could be offered stamp duty waivers to incentivise downsizing instead of trying to search for last-time accommodation in the current market.
US companies are rushing to sell debt in case the country’s debt-ceiling stand-off causes turmoil during the summer. Highly rated US companies have issued bonds worth $112bn so far this month, up from $46bn in May and over triple the amount sold in April. Fears have intensified over the US economy entering a downturn and now broader concerns around the US government running out of cash. The x-date, the moment at which the government runs out of money and risks defaulting on its debt, could come as soon as 1 June.
Winnipeg made skyscraper history 120 years ago with tower once tallest in Canada
CBC
23-05-21 18:06
The Union Bank Building, western Canada's first skyscraper, has survived for over a century on the corner of Main and William Avenues, Winnipeg, as the skyline of the city has grown and changed around it. Completed in 1904, the building stands 11 storeys tall, with a steel skeleton and terracotta facade unique to Western Canada. Heritage Winnipeg fought to save the building from demolition when it became vacant but finally succeeded when Red River College Polytech took up residence, restoring the tower as a gastronomy school and residence.
All the UK-based tech, media and telecoms analysts at Berenberg have joined rival Cantor Fitzgerald amid a difficult period for Berenberg, which has already lost its UK investment banking chief. The move leaves Berenberg with only a handful of equity research analysts in London, down from more than 20 less than two years ago. Last year the bank cut its UK and US headcount by 25% and 50% respectively due to a dearth of stock market listings and equity raises caused, in part, by Russia’s invasion of Ukraine.
Jeremy Hunt's recent article condemning the "insidious declinism" of former optimists has been met with criticism from some readers. They argue that the government itself is responsible for the shift in national pessimism, pointing to issues such as housing, immigration, energy, and taxes. Hunt's statement that Conservative governments always make the "tough decisions necessary to put the economy back on track" is challenged by some, who feel that the current socialist government in power has failed in this regard. Readers also suggest that Hunt's own involvement in the NHS during the Covid-19 pandemic and his role in the Treasury have contributed to declining optimism, with high taxation and regulatory red tape stifling economic growth. Similarly, Rishi Sunak's comments that people no longer judge others by their bank account to some ring hollow; one reader argues this emphasises how little he understands about poverty in the country. Meanwhile, a group of current students at the University of Oxford declared their support of the invitation to Professor Kathleen Stock, a gender-critical feminist philosopher, to a university event, arguing that free speech is key to the institution's heritage.
The People's Bank of China is expected to keep key lending rates unchanged on Monday as Asian traders digest the implications of the G7's stance on China and the tense situation in Washington regarding the US debt ceiling. The main regional drivers for Asian markets this week will be policy decisions in New Zealand, South Korea and Indonesia, inflation figures from Singapore and Malaysia, and Japanese unemployment and retail sales. Later in the week, the Reserve Bank of New Zealand is expected to raise its cash rate one last time by 25 basis points to 5.50%, while Bank of Korea and Bank Indonesia are seen keeping their benchmark rates on hold at 3.50% and 5.75%, respectively.
Foreign buying of Japanese stocks has surged over the past month, with investors buying a net $44bn worth of securities since the beginning of April. Investors are now questioning whether this is the start of a new bull market. Goldman Sachs recently suggested that Japan is nearing a once-in-a-decade bull market. Warren Buffet, who recently increased his investment in Japan’s five largest trading houses, is also proceeding with caution as he considers adding to his investments. Although he views Japan as a safe place to put money, it might not necessarily mean a sustained bull market. The current froth in the market could fall if the Bank of Japan (BoJ) ever undertakes normalization, as Japan’s demographic problems and rapidly shrinking workforce will cause multiple challenges, particularly to tech and auto giants.
China's benchmark lending rates were left unchanged for the ninth consecutive month. Despite data indicating that economic momentum is subsiding following post-Covid growth, the People's Bank of China (PBOC)'s next policy move is expected to involve lowering bank cash reserves rather than cutting rates as a weakening yuan and yield differentials with the US leave little room for monetary easing. Analysts believe symbolic measures such as reserve requirement ratio cuts are more likely in 2021 given the pressure of RMB depreciation and a wide US-China interest rate differential. Easing bank cash reserves is expected to guide funding costs lower.
The US dollar fell against the yen and euro on Monday after US debt negotiations broke down and the Federal Reserve's Jerome Powell indicated a preference for slowing down rate hikes. The dollar slid 0.15% to 137.715 yen, and the euro rose 0.14% to $1.0822. Investors are waiting for US President Joe Biden and House Republican Speaker Kevin McCarthy to meet on 24 May to discuss the debt ceiling. Many analysts believe this type of brinksmanship is to be expected before the Treasury runs out of money around 1 June.
India’s central bank has decided to withdraw its highest-value banknote from circulation, which could lead to improved liquidity and falling short-term interest rates, according to analysts and bankers. The Reserve Bank of India has said that it will withdraw 2,000 rupee ($30) notes but will retain the denomination as legal tender. An estimated 3.6tn rupees of the notes are in circulation, with experts predicting that up to 1tn rupees could be returned to banks as a result of the move. Banking system liquidity surplus in India has been more than 600bn rupees during May.
China's central bank, the People's Bank of China (PBOC), has kept its benchmark lending rates unchanged for the ninth consecutive month in May, as analysts suggest that net capital outflows risk any large-scale monetary easing measures that may hurt a sliding yuan. The hesitation comes despite a raft of data in recent weeks indicating that China’s post-coronavirus recovery has slowed. Despite financial doubts the PBOC is expected to lower the amount of cash banks must set aside to avoid additional outflows, many expect the use of other tools such as deposit rate window guidance and liquidity injections to guide funding costs lower.
The US has reprimanded Israel over an order allowing Jewish settlers to create permanent dwellings at an outpost north of the West Bank. The Israeli military’s Central Command chief signed an order last week enabling Israelis to enter the Homesh area near Nablus, paving the way for a formal settlement to be constructed. The decision follows an amendment earlier this year that permitted the resettlement of four illegal northern West Bank settlements, including Homesh. Washington has warned Israel off formalising such settler outposts, calling the Homesh order inconsistent with government commitments.
Palestinian health officials report that three Palestinians have been killed in an Israeli army raid in a West Bank refugee camp. Meanwhile, the Biden Administration strongly criticised Israel for its latest act of settlement expansion. Israel’s latest crackdown, which led to the deaths of the three Palestinians, was carried out in response to an increase in Palestinian attacks. The US State Department spokesman was also critical of ultranationalist National Security Minister Itmar Ben-Gvir’s visit to the Temple Mount in Jerusalem. Ben-Gvir was convicted of incitement and supporting a Jewish terror group years ago, but now serves as Israel’s national security minister.
A man in his 70s from Oxfordshire is worried about losing money as the Bank of England raises rates. David Peddy holds a £396,237 St James's Place pension, £139,981 in a tax-free ISA and £42,000 in cash savings. He is thinking about paying off his £103,895 mortgage using the ISA and pension, waiting for capital gains from a small Lithium mining company in which he has invested, or waiting for mortgage rates to decrease. Despite reaching the "SVR" - the standard variable rate - which has more than doubled his repayments to £323 ($416) a month, economists suggest Peddy should wait another two years until the overpayment charges end.
Ex-China Development Bank executive investigated for graft
Nikkei Asia
23-05-22 05:48
Zhou Qingyu, the former vice president of China Development Bank, is being investigated on suspicion of serious violations of law in his position, according to China's top anti-corruption body. Zhou was detained after being summoned by officials from the Central Commission for Discipline Inspection last week, and his case is one of a number of investigations into alleged corruption at the bank.
Billionaire investor Carl Icahn has reportedly lost $9bn since the financial crisis due to short positions that relied on market collapse. The failed trades led investor advisory service Hindenburg Research to suggest that Icahn Enterprises was overvalued. Shares in the company fell by 30% as a result of the accusations. Icahn, who was one of the earliest investors to push for activist strategies, has admitted to error, telling reporters that the strategies he previously recommended did not reflect today's circumstances. Hedge funds are also betting against Greek bonds before this weekend's election, while Amundi asset managers is shifting toward Chinese investments in anticipation of a subdued US economy.
