WORLDWIDE : HEADLINES
China’s securities regulator hopes Sino-U.S. ties better with Biden administration
BEIJING – China Securities Regulatory Commission Vice Chairman Fang Xinghai said he hopes Sino-U.S. relations will be in a much better state after four years of a U.S. President-elect Joe Biden administration than what it is now.
Under U.S. President Donald Trump’s administration, relations between China and the United States are at their worst in decades over disputes ranging from technology and trade to Hong Kong and the coronavirus.
Beijing has said it expects the incoming Biden administration to meet China halfway, manage differences and push for the advancement of Sino-U.S. ties on the right track.
Biden has not laid out a detailed China strategy, but all the indications are that he will continue a tough approach to Beijing.
Meanwhile, Beijing should be able to resolve accounting issues with Chinese firms under a Biden administration, said Fang, who was speaking during a session of the Bloomberg New Economy Forum.
In August, U.S. Securities and Exchange Commission and Treasury officials urged Trump to delist Chinese companies that trade on U.S. exchanges and fail to meet its auditing requirements by January 2022.
Full coverage: REUTERS
Tesla to join S&P 500, spark epic index fund trade
Tesla Inc is set to join the S&P 500 in December, a major win for Chief Executive Elon Musk that boosted the electric car maker’s shares 14% on Monday in anticipation of a $51 billion trade by index funds adjusting their holdings.
S&P Dow Jones Indices announced that the company would join the S&P 500 index prior to the opening of trading on Dec. 21, potentially in two tranches making it easier for investment funds to digest.
“(Tesla) will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history,” S&P Dow Jones Indices said.
With a stock market value over $400 billion, Tesla will be among the most valuable companies ever added to the widely followed stock market index, larger than 95% of the S&P 500’s existing components.
Its inclusion means investment funds indexed to the S&P 500 will have to sell about $51 billion worth of shares of companies already in the S&P 500 and use that money to buy shares of Tesla, so that their portfolios correctly reflect the index, according to S&P Dow Jones Indices. Tesla will account for about 1% of the index.
Full coverage: REUTERS
Airbnb IPO filing shows third-quarter earnings beating virus with cost cuts, new focus
Airbnb Inc’s initial public offering (IPO) registration showed on Monday that the home rental startup turned a profit in the third quarter despite the COVID-19 pandemic, as it gears up for one of the most anticipated stock market debuts in recent years.
The filing, published ahead of Airbnb’s anticipated stock market debut in December, showed a dramatic recovery in its fortunes, after the coronavirus outbreak dragged down its core home rental business during the first half of the year.
The slump forced it to lay off 25% of its workforce in May, suspend marketing activities for the year and seek $2 billion emergency funding from investors, including Silver Lake and Sixth Street Partners, at a valuation of $18 billion. It has recovered by focusing on listing homes away from cities that people want to rent during the pandemic.
Airbnb’s revenue fell 18% in the third quarter to $1.34 billion from a year earlier, but it reported net profit of about $219 million, helped mainly by a clamp-down on costs. Its business took a bigger hit internationally than in the United States, reflecting the financial fallout of extensive lockdowns in Europe to contain the spread of the virus.
“The recovery in the second and third quarters of 2020 is attributable to the renewed ability and willingness for guests to travel, the resilience of our hosts, and relative strength of our business model,” Airbnb said.
The listing would cap a blockbuster year for IPOs, as companies capitalize on a stock market rally in the second half of the year, fueled by monetary as well as fiscal stimulus in a bid to blunt the fallout of the pandemic.
Full coverage: REUTERS
WORLDWIDE : FINANCE / MARKETS
Asia stocks edge higher after vaccine hopes push Wall Street to record highs
HONG KONG/NEW YORK – Asian stocks cautiously pushed further into record territory on Tuesday, and oil edged higher after U.S. benchmarks were pepped up by news of another promising coronavirus vaccine.
Investor sentiment was given a boost when Moderna Inc said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-state data.
The Cambridge, Massachusetts-based firm became the second drugmaker, after Pfizer Inc, to announce promising trial data in the development of a vaccine to defeat the pandemic. Its shares gained 9.6% on the day.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.11% on Tuesday morning, a day after hitting its highest level since launching in 1987.
The MSCI World Index of global shares which also hit a record high on Monday, ticked higher still in Asia’s morning trading.
“Investors are looking further ahead in the pandemic development into 2021, instead of focusing on the very challenging outbreak that’s taking place in the U.S. and Europe now,” said Tai Hui, chief Asia market strategist, J.P. Morgan Asset Management, in emailed comments.
Hong Kong benchmark rose 0.1% and Australia’s S&P/ASX 200 rose 0.23%, after Monday’s trading had been severely curtailed by a software glitch.
Japan’s Nikkei 225 fell 0.2% after hitting a 29 year high the day before.
Full coverage: REUTERS
Oil prices edge higher ahead of OPEC+ meeting, vaccine hopes
SINGAPORE – Oil prices edged higher on Tuesday on expectations OPEC and its allies will extend oil production cuts for at least three months, while sentiment was bolstered by news of another promising coronavirus vaccine.
Brent crude futures for January LCOc1 rose 16 cents, or 0.4%, to $43.98 a barrel by 0104 GMT and U.S. West Texas Intermediate crude for December CLc1 added 13 cents, or 0.3%, to $41.47 a barrel.
Equity markets rose on hopes of a quicker economic recovery after Moderna Inc MRNA.O said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-state data. [nL1N2I2385] [nL1N2I20XR]
This comes after Pfizer Inc PFE.N reported last week that its vaccine was more than 90% effective.
Full coverage: REUTERS
Dollar nurses losses amid worries about second coronavirus wave, Biden transition
TOKYO – The dollar nursed losses on Tuesday as a return of coronavirus restrictions in some U.S. states and worries about a smooth transition for President-elect Joe Biden offset optimism about a coronavirus vaccine.
The British pound edged higher on media reports the UK could reach a post-Brexit trade agreement with the European Union by early next week.
Moderna MRNA.O became the second U.S. pharmaceutical company in a week to report positive results from trials of a COVID-19 vaccine, considered necessary to eradicate the pandemic.
Last week, encouraging progress in coronavirus vaccine testing helped the dollar rise against the safe-harbour yen and the Swiss franc.
However, reaction in the currency market to subsequent developments has been subdued as the United States struggles to contain a second wave of infections, and with vaccine distribution not expected any time soon.
There is also some uncertainty about Biden’s plans to tackle the coronavirus and stimulate the economy as the Trump administration resists cooperation with Biden’s transition team.
Full coverage: REUTERS
