Global In-Vitro Diagnostic Reagents (Antibodies, Oligonucleotide, Nucleic Acid Probe) Markets, 2020-2027

Bloomberg
Canaccord Prepared to Raise Offer for Rival RF Capital, CEO Says
(Bloomberg) -- Canaccord Genuity Group Inc. is willing to raise its takeover price for RF Capital Group Inc. “substantially” but can’t get its rival to discuss a deal, Chief Executive Officer Dan Daviau said.A merger would unite two of Canada’s largest independent firms in wealth management, which together have more than C$110 billion ($87.7 billion) in client assets. Canaccord said last month it offered C$2.30 a share for RF and was rejected by the board.“We’re prepared to increase our price substantially, but we don’t know what price they’re looking for because they won’t talk to us,” Daviau said in an interview.The updated proposal would include improved terms for RF Capital’s investment advisers, Daviau said in an interview. He declined to say what price Canaccord would be willing to pay for RF Capital. The current proposal values the firm at C$367 million.RF Capital shares are up 22% since Canaccord’s interest became public and closed at C$2.14 in Toronto on Tuesday.Richardson ControlCanaccord has little prospect of taking control of RF without winning the support of the Richardson family, whose closely-held conglomerate, James Richardson & Sons Ltd., owns 44% of RF Capital, according to data compiled by Bloomberg.Canaccord has said that combining the firms would provide RF Capital’s investors with better value for their shares and open opportunities for RF’s wealth advisers. By publicly disclosing the proposal, Daviau is making an open appeal to those advisers, who form an influential bloc within RF because they collectively own 31% of the shares, according to numbers disclosed by RF last month.Until last year, RF Capital operated under the name GMP Capital. It used to be a major player in investment banking and trading in Canada’s junior energy and mining markets, but sold its capital markets business to Stifel Financial Corp. in 2019 to focus on wealth management and investment advice.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1h ago
Reuters
Taiwan says its chip firms will adhere to new U.S. rules blacklisting China supercomputing entities
Taiwan said on Wednesday its chip companies will adhere to U.S. rules after Washington added seven Chinese supercomputing entities last week to an economic blacklist and after a Taipei-based chipmaker halted orders from one of the entities named. The U.S. Commerce Department said the seven Chinese entities were "involved with building supercomputers used by China's military actors, its destabilizing military modernisation efforts, and/or weapons of mass destruction programs." Companies or others listed on the U.S. Entity List are required to apply for licenses from the Commerce Department that face tough scrutiny when they seek permission to receive items from U.S. suppliers.
8h ago
Reuters
Gold prices ease as equities rally outweighs softer dollar
Gold prices inched lower on Wednesday as a record rally in global equity markets offset support for bullion from a softer dollar and data showing a jump in U.S. inflation. Spot gold was down 0.1% at $1,743 per ounce, as of 1013 GMT. "Gold reacted positively to the U.S. inflation data, because bond yields were down and the dollar was also weaker, and so that certainly lend support to gold," said Commerzbank analyst Daniel Briesemann.
8h ago
FX Empire
S&P 500 Price Forecast – Stock Markets Continue Drive Higher
The S&P 500 initially pulled back during the course of the early hours, but then showed signs of strength again at the 4100 level.
20h ago
Reuters
World stocks post record highs as bond yields ease
Global stock markets pushed to record highs on Wednesday as bond yields eased, after data showed U.S. inflation was not rising too fast as the economy re-opens. With fears receding for now that a strong inflation reading might endanger the Federal Reserve's accommodative stance, European shares were 0.2% higher. Gains were capped after Johnson & Johnson said it would delay rolling out its COVID-19 vaccine to Europe, after U.S. health agencies recommended pausing its use as six women developed rare blood clots.
9h ago
Reuters
Russian watchdog opens case against Yandex over alleged competition law breach
Russia's Federal Antimonopoly Service (FAS) on Tuesday said it had initiated proceedings against internet giant Yandex over alleged competition law violations on the company's search engine. The state agency told Yandex in February it had created unequal market conditions for general online search services, that it was preferentially promoting its own products and asked it to stop. Yandex asked for extra time to respond to the accusations earlier this month.
20h ago
Coin Rivet
Bitcoin rally fueled by institutional investment, says Bitfinex CTO
Bitcoin has impressively surged to a new record high of $63,500 this morning following a two-month period of consolidation beneath the $60,000 level of resistance.
23h ago
Benzinga
J&J Covid Vaccine Pause Appears To Weigh On Airline, Casino, Hotel Stocks Early
After a dull Monday, investors awake this morning to a couple of big news items. That being said, both the consumer price index (CPI) and a pause in the use of Johnson & Johnson’s (NYSE: JNJ) Covid vaccine seem to be having a muted impact on the market. We’ll get to the JNJ vaccine withdrawal, but first a look at CPI: It came in at 0.6% for March, up from 0.4% in February and just a bit above analysts’ average estimate of 0.5%. The fact that it’s up isn’t too surprising considering all the inflation warnings from the Fed lately, but it’s good to see it’s only a little above expectations. That’s in contrast to last Friday’s producer price index, which came in way, way, above expectations. Maybe this will settle inflation fears a bit. The other big news is the U.S. Food and Drug Administration’s (FDA) decision to temporarily pause use of JNJ’s Covid vaccine due to a handful of blood clots. This isn’t great news, obviously, but it’s nothing people need to go crazy over. We had good momentum with vaccinations heading into summer, and this might slow the momentum, but the other two vaccines are still working well. Vaccine Pause Hits Reopening Shares Also, people shouldn’t think of vaccines as a simple product without potential problems. No one knows yet if these blood clots are a game changer for the JNJ vaccine, but it isn’t surprising that a complication got reported, simply because vaccines aren’t widgets. Like any medical product, they’re complex and can have different effects on different people. Hopefully this gets resolved quickly and the JNJ vaccine comes back. It’s a handful of cases (six cases after 6.8 million vaccinations) and the FDA said it acted “out of an abundance of caution.” It’s unclear how long it might take to get to the bottom of this, but the other vaccines were already being used millions of times a day in the U.S., and that continues. The FDA may want to examine more data before allowing JNJ to come back, but in a worst-case scenario it’s off the market for an extended period, putting more pressure on supplies of the other vaccines. The JNJ pause could put some pressure on some of the “reopening” stocks and sectors until things get sorted out. Already this morning we’re seeing shares of airlines, casinos, and cruise lines turning lower in pre-market trading. An FDA press conference scheduled for 10 a.m. ET today might grab Wall Street’s attention. Though reopening shares start the day under pressure, a new JP Morgan Chase & Co. (NYSE: JPM) note suggests the economy could fully reopen by July 4. Whether this JNJ development affects that timeline is unclear, but it’s nice to think JPM might be right. Meanwhile, volatility remains light and Bitcoin is now above $62,000. The Cboe Volatility Index (VIX) is up, but still below 17.5, which is amazing when you remember how long it spent above 50 last year. Unless there’s big news out of the FDA press conference, trading could be pretty slow today as investors await tomorrow’s onslaught of big bank earnings. Summer Of 2020 Revisited? Nope, you’re not on a time machine back to last summer. Those really were NVIDIA Corporation (NASDAQ: NVDA) and Tesla Inc (NASDAQ: TSLA) rolling up big gains yesterday while this year’s “reopening” darlings like airlines, energy companies, and entertainment firms took a back seat. This was before today’s JNJ vaccine news, remember. Both NVDA and TSLA rallied on specific news, with TSLA benefiting from an analyst upgrade while NVDA raised its Q1 revenue guidance and introduced several new products, which actually might have weighed on shares of some of its competitors including Intel Corporation (NASDAQ: INTC) and Advanced Micro Devices, Inc. (NASDAQ: AMD). NVDA and TSLA formed the vanguard Monday, but for the most part stocks marched in place as investors seemed to stay on the sidelines waiting for earnings. It all starts tomorrow when we hear from JPMorgan Chase & Co. (NYSE: JPM), Goldman Sachs Group Inc (NYSE: GS), and Wells Fargo & Co (NYSE: WFC). For the first time in a while, the big banks have a tailwind and investors can focus more on traditional bank functions and less on the industry’s efforts to bail out the floodwaters. The 10-year yield is much higher than it was six months ago, so they can make more on the spread and that should go right to the bottom line. Beyond that, trading is an important part of many bank businesses (especially some of the big Wall Street sluggers like JPM and GS), and they possibly saw benefits in their bond trading during Q1 thanks to opportunities there. As always, investors should consider focusing on the separate fortunes of equities and fixed income trading, where there’s often bifurcation. Heading into earnings season, FactSet projected overall S&P 500 Financial Sector (IXM) earnings to rise 78.7% year-over-year in Q1, so things are definitely looking up. In fact, the average Wall Street Financial earnings forecast has risen pretty substantially even from just a month ago. The banking sector has sputtered a bit lately after a great start to the year. Energy also slowed its pace a bit. Some analysts see this as a temporary slowdown while the Treasury market continues to consolidate. If Q1 earnings and coming economic data shape up as strong as many Wall Street watchers are starting to think they will, 10-year yields could start to rise again and lift the so-called “cyclicals” like Financials and Energy that tend to do better in a recovering economy. Pandemic Provides The Backdrop There’s always a caveat, and here’s one: The Covid situation isn’t really retreating much. Average caseloads are still rising despite the great vaccine progress. Even Fed Chairman Jerome Powell expressed caution over the weekend, telling “60 Minutes” that he’s concerned about the recent case spike and its possible impact on the economy. And of course, there was today’s bad news about the JNJ vaccine being paused due to blood clots. If cases keep climbing, watch the other data like hospitalizations and deaths carefully. They tend to be lagging indicators, and if they stay relatively tame it could mean the vaccinations are protecting some of the most vulnerable people. Leaving Covid behind for the moment, FactSet pegs overall S&P 500 earnings to rise 24.5% in Q1, led by Consumer Discretionary, Financials, Materials, and Info Tech. Energy and Industrials are the only sectors analysts see in the red with their Q1 earnings results, and those are also two of the three S&P sectors expected to have falling revenue, too. Typically, analysts get too conservative with their estimates ahead of earnings season, so FactSet factors that in and says it’s more likely actual earnings will rise 28% when all is said and done. That would be the highest earnings growth in more than 10 years. At the high end, FactSet estimated earnings could grow as much as 37.6% in Q1. Margin Call? Not Yet Some people wonder if margins might start eroding, possibly due to rising costs like we saw in the producer price index (PPI) last week. So far, no sign of that. S&P Global expects margins to rise this year and next. Of course, the Fed keeps telling everyone that any price growth we see here is probably temporary, and easy comparisons with soft year-ago inflation could over-dramatize how much things are actually going up. By later in 2021, it might be easier to get a sense not only of how transient or non-transient this inflationary pressure is, but also whether the Biden administration has the ability to push through a corporate tax increase, which is another thing that could potentially hurt margins. CHART OF THE DAY: CAN THE U.S. DOLLAR HANG ON? The U.S. Dollar Index ($DXY—candlestick) has generally remained within its upward channel (yellow lines) since the beginning of the year. Can it maintain this move as it skirts its support level once again? Although $DXY is moving up today, it doesn’t mean it can’t break below the lower channel. It could still go either way—retest the 90 level (blue line), which was the Feb low or break above 92.5 (purple line), the early March high, and resume its move within the channel. Data source: ICE Data Services. Chart source: The thinkorswim® platform. For illustrative purposes only. Past performance does not guarantee future results. The Dollar’s Dilemma: While the U.S. Dollar Index ($DXY) is still trading within its uptrend channel (see chart above) since Jan. of this year, it’s hard to ignore that it is trading close to a critical support level. If it does break below the lower channel, which at the moment sits at around 92.10, we could see $DXY test the 90 level, the low it hit at the end of Feb, or it could continue moving within its upward channel. When it comes to the U.S. dollar, a lot also depends on economic fundamentals such as actions taken by the Fed and other central banks. Are they going to be more dovish or hawkish, relatively speaking? Since the U.S. dollar trades against other currencies, it’s a good idea to know where other central banks stand with respect to interest rate decisions. It can shed some light on global economic growth outlook. Another piece of economic data to keep an eye on this week: retail sales and inflation. Both could have an impact on the U.S. dollar. Bank Earnings, Net Margin, and the Rate Watch: As big banks prepare to open their Q1 books this week, it’s important to focus on recent moves in interest rates. On the face of it, the rise in long rates—particularly when accompanied by dovish talk from the Fed about leaving short rates at the zero bound—is the optimal setup for the banks. And sure enough, over the past three months the yield spread between the 3-month Treasury and the 10-year Treasury widened by over 80 basis points to its highest level in four years—a positive development for an industry that’s business model is centered on borrowing (and paying deposits on) the short end and lending on the long end. But like most things economic, there’s always “the other hand.” A nominal rise in mortgage rates, all else equal, should pad the bottom line of lenders. But when you consider the amount of exuberance in the housing market—think Lennar Corporation (NYSE: LEN), KB Home (NYSE: KBH) and other home builders that have seen shares blow through all-time highs in the middle of a pandemic—it’s possible that rising mortgage rates could eventually eat into the balance sheets of homeowners and small businesses, and to the housing market in general. Anyone who was around for the last recession knows what can happen to banks when a frothy housing market turns south. It’s another reminder to keep a close eye on bank earnings, as banks tend to be tied into the rest of the economy. For now, however, banks head into earnings season with the sun shining brightly. When Things Look Good, People Worry: A couple things to consider here as the market finishes up its “breather” ahead of earnings: First, there’s concern among some analysts that a couple of economic indicators like manufacturing growth and consumer confidence may be at “toppy” levels. Manufacturing, for instance, is at multi-decade highs. While that may be true, you can’t say for sure that there’s anything magical about current numbers just because they match, say, a level not seen since 1984. The numbers don’t know or care what happened back in the first Reagan term. They just do what they do. A fresh University of Michigan sentiment report Friday could give more insight into any perceived “toppiness.” Also, volatility has gotten so low recently, with the VIX finishing below 17 again yesterday, that people are starting to worry it might go up again. This sounds like traditional “wall of worry” talk and another sign that this rally just doesn’t get much respect. TD Ameritrade® commentary for educational purposes only. Member SIPC. Photo by Lukas Krasa on Unsplash See more from BenzingaClick here for options trades from BenzingaBeyond The Banks: Other Major Firms Reporting This Week Include PepsiCo, DeltaInvestors Appear To Be Treading Lightly Ahead Of Bank Earnings Next Week© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
22h ago
CoinDesk
Bitcoin Analysts Set Sights on $70K (Even $80K) After All-Time High
Bitcoin is seen rising towards $70K by May according to several analysts interviewed by CoinDesk.
14h ago
Reuters
Bitcoin hits record before landmark Coinbase listing on Nasdaq
LONDON (Reuters) -Bitcoin hit a record of $62,741 on Tuesday, extending its 2021 rally to new heights a day before the listing of Coinbase shares in the United States. The largest U.S. cryptocurrency exchange's listing on the Nasdaq on Wednesday is considered a landmark victory for cryptocurrency advocates. Bitcoin is the world's biggest cryptocurrency, with growing mainstream acceptance as an investment and a means of payment.
1d ago
Reuters
Learn from Alibaba penalty, China warns internet firms
China's market regulator, fresh from fining e-commerce giant Alibaba $2.75 billion, said on Tuesday it warned nearly three dozen internet companies to stop using any banned practices such as forcing vendors to use their platform exclusively. The State Administration for Market Regulation (SAMR) said it summoned 34 companies including Tencent, ByteDance and JD.com for a meeting, where it ordered them to conduct self-inspections within one month, warning of "severe punishment" for any that still violated the rules. In February, China issued new anti-monopoly guidelines targeting internet platforms.
1d ago
FX Empire
Gold Price Prediction – Gold Rebounds as Yields Fall and Dollar Drops
The decline in the 10-year yield came despite a larger than the expected headline and core CPI report announced on Tuesday by the Department of Labor. Treasury yields appear to be topping out which could lead to a rally in the yellow metal. Gold prices moved higher but failed to capture resistance near the 50-day moving average at 1,756.
17h ago
Reuters
Credit Suisse identifies $2.3 billion of exposed assets in Greensill-linked funds
Credit Suisse has identified $2.3 billion worth of loans exposed to financial and litigation uncertainties in its Greensill-linked supply chain finance funds, it told investors on Tuesday. Switzerland's second-biggest bank has been reeling from its exposure to the collapse first of Greensill Capital and then Archegos Capital Management within a month. Its asset management unit was forced last month to shut $10 billion of supply chain finance funds that invested in bonds issued by Greensill after the UK firm lost credit insurance coverage shortly before filing for insolvency.
1d ago
Reuters
Biden's chip dreams face reality check of supply chain complexity
To understand President Joe Biden's challenge in taming a semiconductor shortage bedeviling automakers and other industries, consider a chip supplied by a U.S. firm for Hyundai Motor Co's new electric vehicle, the IONIQ 5. Production of the chip, a camera image sensor designed by On Semiconductor, begins at a factory in Italy, where raw silicon wafers are imprinted with complex circuitry. The wafers are then sent first to Taiwan for packaging and testing, then to Singapore for storage, then on to China for assembly into a camera unit, and finally to a Hyundai component supplier in Korea before reaching Hyundai's auto factories.
1d ago
Reuters
World stocks post record highs as bond yields ease
Global stock markets pushed to record highs on Wednesday as bond yields eased, after data showed U.S. inflation was not rising too fast as the economy re-opens. With fears receding for now that a strong inflation reading might endanger the Federal Reserve's accommodative stance, European shares were 0.2% higher. Gains were capped after Johnson & Johnson said it would delay rolling out its COVID-19 vaccine to Europe, after U.S. health agencies recommended pausing its use as six women developed rare blood clots.
18m ago
Bloomberg
Investors Dump Commodities as Supercycle Call Meets Skepticism
(Bloomberg) -- Net bullish wagers on rising commodity prices fell to the lowest since December last week, raising questions about the commodity supercycle.Money managers are trimming what had been the largest wager for rising commodity prices in at least a decade as stumbling economic reopening efforts force a reconsideration of the popular recovery trade. A recent bond rout raised worries over inflation and surging bulk shipping rates are seen capping any further upswing.There’s a sense that “we have yet to get rid of the coronavirus, with rising cases and extended lockdowns delaying the expected growth sprint,” said Ole Hansen, head of commodities research at Saxo Bank. “The surge in Treasury yields, a stronger dollar and worries that China may tighten liquidity in order to curb inflation are also contributing factors.”Hedge funds’ net bullish positions on a basket of 20 commodities have decreased for six weeks in a row, according to the latest Commodities Futures Trade Commission and ICE data compiled by Bloomberg. That comes after money managers boosted the figure to the highest in data going back to 2011, while prices in the Bloomberg Commodity Spot Index rose to nearly the highest in eight years in February.Commodities had seen a resurgence in interest early this year as major investment banks flagged the start of a new structural bull cycle -- with some even calling for a supercycle comparable to ones that peaked in the 1970s and early 2000s.The idea was that raw materials would benefit as the world emerged from the pandemic and fiscal stimulus programs would sustain a downtrend in the U.S. dollar, thereby making commodities priced in the greenback more attractive. While a return to normal is anticipated, hiccups in recent months surrounding economic reopening plans are clouding the near-term outlook. Meanwhile, the dollar came back from its lows this year alongside rising bond yields.In the last week, investor outflows were most pronounced for oil, with funds weighing whether demand will be strong enough to absorb returning supply in coming months. OPEC and its allies decided earlier this month to gradually ease unprecedented output curbs from May to July, while further out, the market may see more Iranian supply come back if it returns to a nuclear deal.Adding further pressure, volatility-targeted funds like commodity trading advisers underwent “widespread deleveraging” after global benchmark Brent futures’ briefly jumped above $71 a barrel following an attack on Saudi oil facilities in March, Ryan Fitzmaurice, commodities strategist at Rabobank, said in a note Friday.Now, a squeeze on vessels to carry some commodities around the world is adding another risk for investors to consider. The cost of shipping unpacked commodities like grains and iron ore, known as dry bulk, is up more than 50% this year.The move up in shipping costs “makes it more expensive to move things around, which goes contrary to the idea of a supercycle,” Eddie Tofpik, head of technical analysis and senior markets analyst at ADM Investor Services International Ltd., said at an online event last month.Still, calls remain for commodities to continue their price rebound this year after this period of consolidation.“Commodities remain the best performing asset class of 2021,” Goldman Sachs Group Inc. analysts wrote in a report Friday. “We view this consolidation as nothing more than a fleeting speed bump created by logistical bottlenecks in vaccine roll-outs.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
2d ago
Bloomberg
Chinese Hedge Fund Jumps 258% After Dumping Ray Dalio’s Strategy
(Bloomberg) -- Shanghai hedge fund manager Li Bei says she learned quickly that the low-volatility approach to investing behind the rise of Bridgewater Associates was doomed in China for a startup like hers.Steady returns did little to draw investors used to short-term rewards, so she put in her own money, cranked up leverage and produced an industry-leading 258% gain last year.Li is a pioneer in macro hedge fund management in China, where homegrown firms are taking on foreign giants that are struggling to adapt in an industry where even low-fee mutual funds generate sizable returns. While her Shanghai Banxia Investment Management Center only manages about 500 million yuan ($76 million), she says firms like hers are best placed to assess how China is driving the global economy.“We truly feel that Chinese funds have an obvious advantage judging corporate profits and commodity prices,” Li, 37, said in a phone interview from Shanghai. “For us, these are good times to make money.”Chinese macro hedge funds made an average 41% return in 2020, four times the global level, according to data from Shenzhen PaiPaiWang Investment & Management Co. and Eurekahedge. The more than triple gain of Li’s Banxia Stable Fund put her firm at the top of rankings for such funds in China.The stellar year promises to save Li from wounds inflicted by an exodus of investors in 2019 when her 9% return -- still beating an 8.9% global average of peers, according to Eurekahedge -- was dwarfed by local mutual funds during a bull market. The setback forced her to rethink her initial strategy of emulating Ray Dalio’s Bridgewater, an approach that she says included diversifying to limit volatility and providing free research to attract institutional clients.‘Doesn’t Work’“The Bridgewater route doesn’t work in China,” Li said. Offering two complimentary research reports a month didn’t help bring new money, and big institutions also balked at her fund’s small size.When clients were pulling cash from Banxia Stable, Li put in some of her own, and added leverage of between 250% and 300%. The product, managing less than 200 million yuan, replicates asset allocations in her larger Banxia Macro Fund but increases exposure through margin-financed trades in instruments such as stock index and commodities futures.Last year’s success didn’t come easily for Li. After managing money at Bocom Schroder Fund Management early in her career, she won multiple industry awards for her 25% annualized returns running China’s first macro hedge fund at Honghu Investment Management Co. Yet losses in 2016 caused differences with her then-husband Liang Wentao, the firm’s founder. After they parted ways, the mother of two set up Banxia at the end of 2017 and started building client relations from scratch.“She is a very unique China macro manager with the ability to do focused and very deep macro research in specific areas, such as steel,” said William Ma, who was until recently chief investment officer of wealth manager Noah Holdings, which invested in Banxia in January 2018.The level of leverage in the revamped Banxia Stable is closer to what legendary investor George Soros outlined in his autobiography, Li said. If the shift sounds bold and simple, making the right moves during last year’s turbulence to achieve a 63% gain in the underlying strategy required sharp judgment.In January 2020, Li was among the earliest to turn short on stocks and commodities, taking note of not only emerging reports on the new coronavirus but also signs of a weakening economy. “Super-cheap” put options allowed her to add leverage that helped bring a 61% jump in the leveraged Banxia Stable in the first quarter as markets tumbled, she said.Among BestLi’s use of options to construct contrarian macro trades means “her return profile is negatively correlated” to global and local peers, said Ma, who has followed her performance since she worked at Honghu. “She is really one of the best macro hedge fund managers I have ever met,” he said.Along with almost 9,000 local players, Li is competing with more than 30 global firms that are making inroads into China’s 4.5 trillion yuan hedge fund market. Dalio has said he saw the need to invest “a significant portion” of his portfolio in Chinese assets, and Bridgewater raised 900 million yuan in its second China private fund in September, doubling assets.Bridgewater’s All Weather China strategy has posted annualized returns of 22% through July since its 2018 inception. That’s less than Banxia Stable’s 85% in the same period, Li said, while noting the strategies aren’t directly comparable.In a reminder of risks macro hedge funds face when they bet in the wrong direction, Bridgewater’s flagship Pure Alpha II fell 12.6% last year.More than other strategies, the performance of macro funds “depends a lot on the manager’s own judgment,” said Li Minghong, head of fund-of-funds investments at Panyao Capital in Shanghai.Rocky QuarterBanxia Stable fell 13% in the first three months of this year, in part because of an increase in steel prices. Its short positions in ferrous metals were hurt by China’s unexpected move to lower crude steel output and cut capacity, according to its quarterly investor letter. The fund broke even on bonds, and made a small profit on stocks even as the Shanghai Shenzhen CSI 300 Index declined 3%.Banxia wasn’t alone. More than 40% of Chinese hedge funds made a loss in the first quarter, although macro funds managed an average 1% gain, according to PaiPaiWang.Li and her peers face a challenge attracting investors in a nation where macro funds account for just 2% of the 65,129 local private securities funds tracked by PaiPaiWang. She said she’s now meeting more potential customers following last year’s performance, but fund raising remains tough, in part because of Banxia’s short track record. She hasn’t felt any impact from the collapse of U.S. family office Archegos Capital Management, saying her leverage is much lower and portfolio more diversified.The difficulties aren’t shaking her confidence in outperforming the likes of Bridgewater.“They should just hire people like me,” she said. “But I won’t work for them.”(Updates with first-quarter performance of Chinese hedge funds in the fourth-to-last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
8h ago
Bloomberg
China Huarong’s Worsening Bond Rout Stokes Market Contagion
(Bloomberg) -- Growing panic over the financial health of one of China’s largest bad-debt managers spilled into the broader market, as traders circulated a Caixin report that openly considered the worst-case scenario for the company.China Huarong Asset Management Co.’s $300 million 3.375% bond due May 2022 tumbled 13.1 cents on the dollar to 76.1 cents, while a 5% bond maturing in 2025 fell 12.1 cents to 77.3 cents, Bloomberg-compiled prices show. In a commentary dated Monday, Ling Huawei, managing editor of Caixin Media and Caixin Weekly, discussed the possibility of a China Huarong bankruptcy.The firm’s dollar bonds edged up from session lows after Bloomberg reported China’s finance ministry is mulling transferring its stake in China Huarong to a unit of the nation’s sovereign wealth fund that invests in financial companies. Some notes rose as much as 2 cents, though are still set for record closing lows.Moody’s Investors Service and Fitch Ratings said Tuesday they will review their ratings of China Huarong for a potential downgrade, following a similar announcement from rival S&P Global Ratings last week. The company is considered an investment-grade issuer by all three agencies.The selloff spread to other high-yield Chinese dollar notes on Tuesday, with some property bonds falling by a record. Asia’s investment-grade dollar debt spreads widened as much as 3 basis points, while a gauge of Asia credit risk widened for a seventh straight day, set for the longest rising streak since 2018.Chinese investment-grade dollar bond spreads widened by as much as 8 basis points, while prices on the nation’s high-yield notes fell as much as 3 cents on the dollar, according to credit traders. The CSI 300 Index of stocks fell 0.2%.“Huarong is a $22 billion curve and as a distressed situation it dwarfs anything that we have seen in the Asia credit market before,” said Owen Gallimore, head of trading strategy at Australia & New Zealand Banking Group. “This is a fatal event for a few trading desks and small funds.”Bonds linked to the company have plunged this month after China Huarong failed to publish its 2020 preliminary results by the March 31 deadline, with Caixin attributing the delay to plans for a significant financial restructuring. The stock has been suspended in Hong Kong since April 1. The company has until the end of the month to release its final earnings report. China Huarong’s biggest shareholder is the country’s Ministry of Finance.“Market speculation of a restructuring with haircuts for Huarong International bondholders is heavily damaging investor sentiment,” said Chang Wei Liang, a macro strategist at DBS Bank Ltd. in Singapore. “The continued silence of Chinese authorities on the predicament of a strategic state-owned institution as large as Huarong is also worrisome, as investors had anticipated at least a modicum of reassurance.”It’s unclear whether Chinese leaders have discussed the fate of China Huarong’s bondholders or outlined specific measures that the fund would take if it assumes control of the China Huarong stake.China Huarong has been under a shadow since its then-chairman Lai Xiaomin came under investigation in 2018. Under his watch, the company expanded into areas including securities trading, trusts and other investments, deviating from the original mandate of disposing bad debt. Lai was put to death earlier this year for bribery after a brief trial, an unusually harsh sentence for such a crime.The company is one of the four state-owned entities set up by China’s government in 1999 to help clean up a banking system riddled with bad debt. It listed in Hong Kong after a $2.5 billion initial public offering in 2015.China Huarong and its subsidiaries have some $42 billion worth of offshore and local bonds outstanding and 41% of that will come due by the end of next year, according to Bloomberg-compiled data. Dollar bonds make up about $22 billion of its outstanding notes.Because the debt load is so large and the company was previously seen as a safe bet, the securities are widely held by both local and international investors. Institutional investors such as BlackRock Inc. and Goldman Sachs Group Inc. previously disclosed they held Huarong bonds, had exposure to them via fund products or both, according to data compiled by Bloomberg.China Huarong has started trimming non-core assets amid regulatory pressure to return to its roots. Net income slumped 92% in the first half of 2020 from a year earlier as the value of some assets dropped in the wake of the Covid-19 pandemic. The company’s stock market value has tumbled to about $5 billion from $15 billion when it listed.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1d ago
Reuters
Biden's chip dreams face reality check of supply chain complexity
To understand President Joe Biden's challenge in taming a semiconductor shortage bedeviling automakers and other industries, consider a chip supplied by a U.S. firm for Hyundai Motor Co's new electric vehicle, the IONIQ 5. Production of the chip, a camera image sensor designed by On Semiconductor, begins at a factory in Italy, where raw silicon wafers are imprinted with complex circuitry. The wafers are then sent first to Taiwan for packaging and testing, then to Singapore for storage, then on to China for assembly into a camera unit, and finally to a Hyundai component supplier in Korea before reaching Hyundai's auto factories.
1d ago
Reuters
Coinbase reference price set at $250 per share ahead of Nasdaq debut
Nasdaq on Tuesday set a reference price of $250 per share for Coinbase Global Inc, projecting a value for the largest U.S. cryptocurrency exchange at $49.19 billion ahead of its landmark stock market debut on Wednesday. The reference price is not an offering price for investors to purchase shares, but rather a benchmark for performance when the stock starts trading the exchange on Wednesday. Coinbase shares are set to start trading under the "COIN" symbol.
15h ago

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