Offshore Loans – Island Crisis http://islandcrisis.net/ Mon, 03 May 2021 12:52:15 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 https://islandcrisis.net/wp-content/uploads/2021/04/default1-150x150.png Offshore Loans – Island Crisis http://islandcrisis.net/ 32 32 Innospec says no offer for UK rival Elementis after takeover approach rejection https://islandcrisis.net/innospec-says-no-offer-for-uk-rival-elementis-after-takeover-approach-rejection/ https://islandcrisis.net/innospec-says-no-offer-for-uk-rival-elementis-after-takeover-approach-rejection/#respond Wed, 21 Apr 2021 02:52:12 +0000 https://islandcrisis.net/?p=1025 Bloomberg Central Banks to Pour Money Into Economy Despite Sharp Rebound (Bloomberg) — The aggressive rebound in global economic growth still isn’t enough for most of the world’s central banks to pull back on their emergency stimulus.In Bloomberg’s quarterly review of monetary policy covering 90% of the world economy, the Federal Reserve, European Central Bank […]]]>

Bloomberg

Central Banks to Pour Money Into Economy Despite Sharp Rebound

(Bloomberg) — The aggressive rebound in global economic growth still isn’t enough for most of the world’s central banks to pull back on their emergency stimulus.In Bloomberg’s quarterly review of monetary policy covering 90% of the world economy, the Federal Reserve, European Central Bank and Bank of Japan are among the 16 institutions set to hold interest rates this year.The outlook suggests officials still want to guarantee the recovery from last year’s coronavirus recession by maintaining ultra-low borrowing costs and asset-buying programs. That may require them to accept any accompanying bounce in inflation.Six central banks, most of them in emerging markets, are still predicted to hike, including Brazil, Russia and Nigeria. Turkey is the only one of those monitored which is forecast to cut borrowing costs this year.What Bloomberg Economics Says:“For advanced economies, continued virus uncertainty, deep labor market scars, and a recognition that past decisions erred on the side of deflationary preemption will conspire to keep policy looser for longer. In many emerging markets, currency stress means central banks don’t have that luxury.”–Tom Orlik, chief economistHere is Bloomberg’ quarterly guide to 23 of the world’s top central banks:GROUP OF SEVENU.S. Federal ReserveCurrent federal funds rate (upper bound): 0.25%Bloomberg Economics forecast for end of 2021: 0.25%A key question for Fed Chair Jerome Powell and his colleagues is when to start talking about scaling back their massive bond purchases if the economy continues to recover as they expect.Officials have vowed to keep buying $120 billion of Treasuries and mortgage-backed bonds every month until they see “substantial further progress” on inflation and employment. That test could be met sooner than anticipated if the U.S. labor market continues to perform as it did in March, when a better-than-expected 916,000 new jobs were added.Powell has so far avoided putting any time frame around when he thinks it’ll be appropriate to slow bond buying, but promises to give investors plenty of advance warning. The Fed has also signaled it expects to keep rates near zero through 2023.Officials at their meeting in March maintained that dovish message, according to a record of their discussion released on April 7, while Powell continues to stress the recovery remains incomplete and uneven.Part of its hesitancy to talk publicly about bond purchases stems from harsh experience: The Fed wants to avoid a repeat of the 2013 taper tantrum, when unexpected news that it was thinking about slowing bond buying roiled financial markets and hurt the economy.What Bloomberg Economics Says:“The U.S. economy may be launching into the fastest growth since 1983, but the Fed is firmly resolved to not only maintain the current stance of policy accommodation deeper into the recovery, but also to retract it more gradually under their new outcome-based framework for achieving its dual mandate. While Fed officials previously talked of seeing the ‘whites of the eyes’ of inflation before responding through policy tightening, the new framework is more akin to waiting to see inflation’s coattails — as the central bank is prepared to endure a ‘transitory’ overshoot of their 2% inflation target.”–Carl RiccadonnaEuropean Central BankCurrent deposit rate: -0.5%Bloomberg Economics forecast for end of 2021: -0.5%The ECB has pledged to keep financing conditions for governments, companies and households “favorable” until the coronavirus crisis phase is over, using its 1.85 trillion-euro ($2.2 trillion) Pandemic Emergency Purchase Program to keep bond yields low, and dishing out ultra-cheap loans to banks.PEPP is due to run until at least the end of March 2022 and while policy makers say they won’t spend the full amount unless needed, most economists expect them to do so. The euro-area recovery has been delayed by a slow vaccination rollout, and ECB President Christine Lagarde has repeatedly warned of the dangers of ending support too early.The scene is set for a vibrant debate toward the end of the year on when and how to scale back emergency aid and what should replace it. In the meantime, the ECB is urging governments to hurry up with their 800 billion-euro joint recovery fund.What Bloomberg Economics Says:“The ECB will continue buying bonds through its Pandemic Emergency Purchase Program throughout 2021. We expect acquisitions to be front-loaded in 2Q to tackle the rise in government borrowing costs before reverting to a slower pace for the remainder of the year.”–David PowellBank of JapanCurrent policy-rate balance: -0.1%Bloomberg Economics forecast for end of 2021: -0.1%The Bank of Japan is likely to be keep its main policy settings on cruise control after its biggest policy review since 2016 in March. The review gave the BOJ more scope to reduce its asset buying after a fine-tuning it characterized as a shoring up of its stimulus framework for the longer term.Despite fears of inflation elsewhere in the world, a quarterly outlook report in April is expected to show that the BOJ doesn’t see price growth reaching a stable 2% before Governor Haruhiko Kuroda steps down in April 2023. That will help back up the institution’s argument that it had to take a more flexible approach to policy.Investors and economists will closely scrutinize how the changes will affect the BOJ’s market operations including its pace of bond and ETF buying, and how quickly it will step in to stop any jumps in 10-year yields after clarifying that its target range reaches up to around 0.25%.BOJ watchers will also be looking to see if the bank extends its special pandemic funding measures from the current September expiry date. With bankruptcies falling and bank lending growing, there appears little reason to add to the measures supporting businesses. Still, with only about 1% of the population vaccinated in early April, uncertainties for the economy remain with virus cases ticking up again in some major cities.What Bloomberg Economics Says:“The BOJ is preparing to shift from emergency pandemic support back to its long-elusive goal of 2% inflation. Adjustments to its yield curve control and ETF purchases add flexibility and endurance. It will be a protracted fight — even the BOJ sees inflation falling short of target over its three-year forecast horizon. It’s set to stay on hold for the time being — though it may need to accommodate more JGB issuance if the government steps up fiscal stimulus this summer.”–Yuki MasujimaBank of EnglandCurrent bank rate: 0.1%Bloomberg Economics forecast for end of 2021: 0.1%Bank of England Governor Andrew Bailey is firmly on the fence about whether his next move is to administer another dose of stimulus or monetary tightening to the U.K. economy. Financial markets already have priced out the prospect of negative rates, moving gilt yields and the pound higher than they were a year ago.After the worst recession in three centuries, the U.K. is headed for a sharp rebound after one of the world’s most successful coronavirus vaccination programs. Debate at the central bank is about whether the recovery will absorb all the workers left out of a job during the crisis and push up inflation, or leave scars that require further care.While the latest data including a boom in house prices suggest upside risks, companies are increasingly concerned that Britain’s exit from the European Union has choked back trade, leaving the prospect of a painful restructuring of the economy after the pandemic clears. At the institution’s next decision on May 6, policy makers will weigh whether to ease the pace of bond-buying, which at 4.4 billion pounds ($6 billion) a week would, unless adjusted, deliver more than the target for 150 billion pounds of stimulus this year.What Bloomberg Economics Says:“The year started with speculation rife that the BOE could take the historic step of reducing rates below zero. While the central bank looks like it will formally adopt negative rates as a tool in 3Q, a rapid rollout of the vaccine and a fiscal boost in the budget have greatly reduced the chances of them being used. We expect the BOE to stay on hold for the remainder of the year, emphasizing its higher-than-usual bar for tightening policy.”–Dan HansonBank of CanadaCurrent overnight lending rate: 0.25%Bloomberg Economics forecast for end of 2021: 0.25%The Bank of Canada is signaling it will be one of the first Group of Seven central banks to start paring back monetary policy support as the nation’s economic recovery from the Covid-19 crisis accelerates.Analysts anticipate next steps to pare bond purchases will come as early as a policy decision on April 21, while a so-called taper in the U.S. isn’t expected until next year.Canada’s central bank has been buying a minimum of C$4 billion ($3.2 billion) in government bonds each week, accumulating more than C$250 billion of the securities over the past year. That pace is likely no longer warranted with an outlook that appears to improving dramatically by the week, helped by a recovery in commodity prices and a robust housing market.The central bank, however, has sought to ease any worries of an imminent change to its benchmark overnight rate — currently at 0.25%. Officials have pledged to keep it there until economic slack has been fully absorbed — expected well after the quantitative easing program ends.What Bloomberg Economics Says:“A positive reassessment of the growth outlook will drive only a limited shift in BoC communications in April. The labor market is still a long way from full recovery, a factor that will increasingly dominate thinking about the inflation mandate. In turn, a near-term pickup in prices will be treated as transitory. Nonetheless, an announcement to reduce QE purchases at the April meeting would be consistent with prior communications, even if a rate hike is still more likely to be an early-2023 event, in our view.”–Andrew HusbyBank of Canada DashboardBRICS CENTRAL BANKSPeople’s Bank of ChinaCurrent 1-year best lending rate: 3.85%Bloomberg Economics forecast for end of 2021: 3.85%The PBOC cut lending rates and deployed various quantitative tools to inject liquidity into the pandemic-hit economy last year, on top of asking banks to increase loans. That helped to shore up growth but also pushed debt levels to a record high, fueling concerns of property bubbles and financial risks. With the economy’s recovery now well on track, the central bank is seeking to rein in its stimulus without derailing that rebound.The PBOC is likely to normalize policy by moderating credit expansion rather than hiking rates, economists say. Officials have said they want to match the growth in money supply and credit with the expansion in nominal GDP this year, and stabilize the debt-to-GDP ratio. The PBOC recently asked banks to curtail loan growth for the rest of 2021 to keep new advances at roughly the same level as last year.What Bloomberg Economics Says:“Robust growth, yet with pockets of weakness, suggest little need to the central bank to move the rate either way in 2021. In the meantime, the central bank will continue to tamp down on credit growth in a gradual taper to head off financial risks. It’s also likely to keep up targeted support for small private companies — an area of persistent weakness in the recovery.”–Chang Shu and David QuReserve Bank of IndiaCurrent RBI repurchase rate: 4%Bloomberg Economics forecast for end of 2021: 4%India’s central bank formally embarked on the path of QE in early April, pledging to buy an assured amount of sovereign bonds this quarter as it fights to keep borrowing costs low and support a recovery in Asia’s third-largest economy. While the RBI already had been buying government securities in the secondary market, April’s meeting marked the first time the central bank committed upfront to buy a specified amount.Hamstrung by underlying price pressures that could gather pace in coming months, Governor Shaktikanta Das and five other members of the monetary policy committee voted to keep the repo rate unchanged at 4%. However, Das pledged to maintain a dovish stance if economic conditions deteriorate as a number of provinces including Maharashtra, home to the financial capital of Mumbai, grapple with lockdowns amid a fresh wave of Covid-19 cases.What Bloomberg Economics Says:“The RBI is likely to look through above-target inflation in the near term, with its primary focus on securing a durable recovery in growth. We see it holding the repo rate at 4% through the fiscal year ending March 2022. Sovereign bond purchases in its new QE program will be its main easing tool in the quarters ahead and should help tamp down longer-term yields to keep borrowing costs low to support the economy.”–Abhishek GuptaCentral Bank of BrazilCurrent Selic target rate: 2.75%Bloomberg Economics forecast for end of 2021: 5.5%Brazil’s central bank has begun paring back monetary stimulus as inflation surges despite a new wave of the pandemic that threatens the economic recovery. Policy makers raised the benchmark Selic rate by 75 basis points in March, the most in a decade, and signaled that a second move of the same magnitude is on the way at their next decision in May.Despite the institution’s assurances that price shocks are temporary, futures traders are betting even bigger hikes are in the pipeline. Driven by higher fuel costs, annual inflation blew past the upper limit of the central bank’s target range in March, hitting a four-year high.What Bloomberg Economics Says:“Recent actions and communications suggest the BCB will try to right the fiscal wrong with monetary policy. Fiscal uncertainties were an important driver of the currency meltdown in the first quarter; their likely persistence suggests that the real may remain misaligned with Brazil’s robust external fundamentals. In the meantime, the BCB is set to continue to raise the policy rate, fearful of the inflationary impacts of the weaker currency, and regardless of economic slack. The real may close the year at 5.30 per U.S. dollar, and the Selic at 5.5% — still below the neutral rate (estimated to be 6% to 7%).”–Adriana DupitaBank of RussiaCurrent key rate: 4.5%Bloomberg Economics forecast for end of 2021: 5.5%The Bank of Russia surprised markets by starting its rate-hiking cycle earlier than expected. The inflation spike proved to be more prominent than policy makers thought before, Governor Elvira Nabiullina said after the board raised the key rate by 25 basis points in March and signaled more increases. The central bank will start publishing forecasts for the key-rate range starting their next meeting on April 23.The ruble dropped in value after the U.S. imposed sanctions on Russian sovereign ruble bonds at the primary market. It recovered some of the losses but the risk of additional steps is weighing on the currency. The U.S. has also warned of “consequences” if jailed opposition leader Alexey Navalny dies. These heightened geopolitical tensions are providing another argument for a bigger rate hike this week.Inflation peaked in March at the level last seen in late 2016, fueled by food prices and the weaker ruble. President Vladimir Putin made the cost of living a political issue when he told the government in December to put caps on prices of certain goods. Since then, Russia increased export duty on grain and negotiated with producers to set limits on some food staples. All administrative steps to curb prices are distorting the market signals and Russia needs to move away from that, Nabiullina said recently.What Bloomberg Economics Says:“Spiking inflation and a swift rebound in demand caught the Bank of Russia by surprise. Higher yields and fresh sanctions are layering on risk. Policy makers have turned hawkish, signaling significant tightening in 2021. We expect a steady pace of quarter-point hikes in the near term, which will give the central bank some room to maneuver in the second half of the year.”–Scott JohnsonSouth African Reserve BankCurrent repo average rate: 3.5%Bloomberg Economics forecast for end of 2021: 3.5%The South African central bank’s next move will be to tighten as it projects inflation will tick up to around the 4.5% mid-point of its target range. Still, the timing of the first hike is uncertain.The implied policy rate path of the MPC’s quarterly projection model in March indicated two increases of 25 basis points in the second and fourth quarters of 2021. Last week, Governor Lesetja Kganyago said the central bank is in no rush to take the benchmark back to where it was before the pandemic and that it would likely maintain an accommodative monetary policy stance to support the economy as long as the inflation outlook gives it room to do so.Forward-rate agreements, used to speculate borrowing costs are pricing in only one 25 basis point increase by year-end. Most economists are less hawkish and see the rate remaining at its record low until the end of 2021.What Bloomberg Economics Says:“The coronavirus is likely to keep spreading until there’s a significant ramp up in the governments vaccination program. As such, the economy is will remain fragile and highly unpredictable this year. This, together with the benign inflation outlook should keep rates on hold this year.”–Boingotlo GasealahweMINT CENTRAL BANKSBanco de MexicoCurrent overnight rate: 4%Bloomberg Economics forecast for end of 2021: 4%Mexico’s central bank held its benchmark rate at 4% in March, amid an inflation surge that is leading many economists to predict its monetary easing cycle has drawn to a close. Led by rising fuel costs, consumer prices rose 4.67% last month from a year earlier, jumping above the ceiling of the institution’s target.Governor Alejandro Diaz de Leon still didn’t close the door to additional rate cuts, saying that officials will continue taking a data-dependent approach to monetary policy. Consumer prices, he said, have been pressured by supply shocks, a weaker peso, and a shift in demand for goods instead of services, but the Mexican economy is likely to have a negative output gap “for some time.”Banxico, as the bank is known, expects annual inflation to peak during the second quarter, before slowing toward the end of the year.What Bloomberg Economics Says:“We expect Banxico to hold its benchmark rate at 4% in 2021. The rate remains high relative to peers and previous economic downturns, but resilient high inflation due to lingering shocks offset disinflationary pressure from ample economic slack and limit room for more accommodation.”–Felipe HernandezBank IndonesiaCurrent 7-day reverse repo rate: 3.5%Bloomberg Economics forecast for end of 2021: 3.75%Rising global bond yields have all but shut Bank Indonesia’s window for further easing this year. Governor Perry Warjiyo is turning his attention to preserving the country’s interest-rate differential from the U.S. to stem foreign outflows and protect the battered rupiah, which he considers “very undervalued.” Targeted macroprudential measures, such as the recent relaxation of home and auto loan rules, will likely be Warjiyo’s main lever to revive bank lending and aid growth.The central bank insists it won’t unwind monetary support for the economy anytime soon, with demand and inflation still weak. The institution also has signaled that when it is time to tighten, it could focus on restricting liquidity before raising rates.That will be one less thing for investors to worry about as they keep an eye on growing political pressure for BI to work more closely with the government. President Joko Widodo has called for the central bank’s mandate to be expanded to include employment and economic growth, even as he pledged to respect BI’s autonomy.What Bloomberg Economics Says:“Bank Indonesia appears limited in its ability to cut rates further this year, even though still-sluggish domestic demand is likely to justify more easing. Instead, heavy capital outflows — linked to U.S. reflation and concerns about new constraints put on BI’s independence — may require rate hikes to support the rupiah, instead of more concerted FX intervention that depletes reserves. Other measures would likely be deployed to counter the drag on domestic demand.”–Tamara HendersonCentral Bank of TurkeyCurrent 1-week repo rate: 19%Forecast for end of 2021: 16%Installed after President Recep Tayyip Erdogan abruptly fired his market-friendly predecessor following a bigger-than-expected rate increase, new Governor Sahap Kavcioglu is under pressure to reduce borrowing costs to boost growth.Turkey’s central bank left its benchmark rate unchanged in Kavcioglu’s first monetary policy meeting. While the decision matched market expectations, the institution omitted an earlier pledge to keep monetary policy tight and even deliver additional hikes if needed. Although Kavcigolu has said he would not rush to loosen the stance he inherited, the changes in the rates statement prompted further speculation that cuts might be imminent.Meantime, Erdogan, who holds the unorthodox view that high rates cause inflation, continues to express his determination to both reduce price growth and reduce borrowing costs to single digits.What Bloomberg Economics Says:“The recent firing of the central bank governor sends a clear message about the direction of policy: growth at all costs will be pursued. But rising U.S. yields, higher oil prices and lira depreciation will prevent rate cuts in the short term. If global conditions warrant tightening, it’ll be delivered through the backdoor.”–Ziad DaoudCentral Bank of NigeriaCurrent central bank rate: 11.5%Bloomberg Economics forecast for end of 2021: 13%The Nigerian central bank is inching closer to hiking its benchmark rate for the first time since July 2016. In March, three of nine MPC members who attended the policy-setting meeting voted to tighten by at least 50 basis points, a shift from January when the panel was unanimous in its decision to hold.Governor Godwin Emefiele said at the time the central bank can only effectively shift to taming inflation that’s at a four-year high once the recovery of Africa’s largest economy from last year’s recession has reached a comfortable level. Since then the International Monetary Fund has increased its projection for the country’s 2021 output growth to 2.5% from 1.5%. That would be the fastest expansion since 2015.A rebound in oil prices could improve the prospects for growth further, giving the central bank room to focus on taming inflation, even if it’s only from the second half of the year. Higher rates will also help support the naira, which was devalued twice in 2020.What Bloomberg Economics Says:“Nigeria’s inflation rate continues to surge, and has been stuck above the central bank target range for the past five years. However, the Central Bank of Nigeria has overlooked the recent uptick, choosing instead to support the economy with a 200 basis point rate cut. We expect it to hike rates again this year, when the recovery has gathered pace and the policy focus shifts back to inflation.”–Boingotlo GasealahweOTHER G-20 CENTRAL BANKSBank of KoreaCurrent base rate: 0.5%Bloomberg Economics forecast for end of 2021: 0.5%The Bank of Korea is expected to maintain a long hold as its optimism over the economy is tempered by continued uncertainty over the outlook and a slow vaccine rollout. The central bank sees faster-than-previously expected growth in the mid-3% range as exports surge on global tech demand and recoveries in China and the U.S. But Governor Lee Ju-yeol has played down talk that a tightening of policy is anywhere near the horizon.Keeping the BOK cautious is a renewed uptick in domestic virus cases. The resurgence is pushing the government to consider ramping up public restrictions on activity. A shortage of vaccines is also making it increasingly unlikely that the country will achieve its goal of herd immunity by year-end. If things take a turn for the worse, the central bank doesn’t have much room to go the other way and reduce its benchmark rate further after 75 basis points of cuts last year. Rising household debt poses a risk to the country’s financial stability and Lee has said the rate is already near its lower bound.For the time being, standing pat appears the institution’s best option for safeguarding the recovery while ensuring financial imbalances don’t accumulate further. The majority of economists surveyed by Bloomberg see the BOK holding its policy rate at the current level until the third quarter of next year.What Bloomberg Economics Says:“The Bank of Korea has likely reached the end of its easing cycle. While uncertainties surrounding the pandemic remain high, South Korea’s economy is poised to rebound in 2021 and the central bank remains concerned about growing financial risks. The BOK has cautioned that the government’s large borrowing plans could lead to bond market imbalances, but it will continue using ad-hoc bond purchases to contain yields rather than shift to QE.”–Justin JimenezReserve Bank of AustraliaCurrent cash rate target: 0.1%Bloomberg Economics forecast for end of 2021: 0.1%With the RBA targeting unemployment in the low 4% range and pledging rates won’t rise until inflation has sustainably returned to the 2-3% target, monetary stimulus will be in play for some time.The central bank has reinforced the economy’s rapid recovery by holding down borrowing costs through a firm defense of three-year debt — its variant of yield curve control. That has also helped weaken the currency a touch in combination with QE that targets 5-10 year securities outside the YCC framework.Key decisions over whether to roll over the yield target to the November 2024 maturity, and whether to extend QE when the current round expires in September/October will likely be influenced by the economy’s resilience to a withdrawal of government stimulus.While the RBA has also said it will “carefully” monitor surging home prices, any action to stem gains is likely to come from tighter bank lending rules, not monetary tightening.The RBA has learned from its experience in 2009, when it led the world in raising rates. This time round it will wait for other major economies to move first to avoid renewed currency strength choking off the expansion.What Bloomberg Economics Says:“Last year was a consequential one for the RBA — it ventured into yield curve control and QE. This year it will be less active, focused more on fine tuning. A pressing task will be to curb appreciation in the local currency. Another, working with other regulators to reinstate macro prudential policy restraints to restrain a resurgent housing market. Labor market slack is set to damp inflation, and keep the cash rate unchanged, for several years yet.”–James McIntyreCentral Bank of ArgentinaCurrent rate floor: 38%Bloomberg Economics forecast for end of 2021: 38%Argentina has relied on a mix of orthodox and unconventional policies to maintain its currency market relatively calm. While largely refraining so far this year from the mass money printing of 2020, policy makers have amplified price controls and slowed a crawling peg depreciation in a bid to cool inflation, currently around 40% a year. In order to absorb liquidity, the central bank has allowed financial institutions to pile into its short-term debt, with the amount of outstanding repo notes rising to over 1.5 trillion pesos ($16.2 billion) from 125 billion pesos a year ago.Monetary policy in the medium term remains clouded by the uncertainty surrounding negotiations with the IMF. The government has indicated a deal is unlikely to happen before mid-term elections in October, and Central Bank President Miguel Pesce has stayed on the sidelines of talks. While foreign reserves have slightly rebounded this year, they hover near a four-year low. The government’s strict currency controls, once labeled temporary measures, have no expiration date in sight.What Bloomberg Economics Says:“The IMF will probably require Argentina to adjust its policies in exchange for an Extended Fund Facility deal. Until then, however, we expect the BCRA to stay put. The policy rate will likely be on hold at 38% even as inflation accelerates, and the peso will likely depreciate at a pace slightly below inflation. Once a deal is struck — likely after the October mid-term legislative elections — the BCRA will probably bring real rates to positive territory and to reduce the currency misalignment.”–Adriana DupitaG-10 CURRENCIES AND EAST EUROPE ECONOMIESSwiss National BankCurrent policy rate: -0.75%Median economist forecast for end of 2021: -0.75%The SNB’s monetary policy consists of negative rates and currency-market interventions.In light of the small local bond market, the strategy is the most effective, SNB President Thomas Jordan has said. Data also indicate the intensity of interventions has diminished in recent months, as the franc dropped versus the euro.Having slumped the most in decades due to the pandemic, the Swiss economy is due to return to its pre-crisis level in the latter half of this year. Still, inflation also remains weak.Sveriges RiksbankCurrent repo rate: 0%Bloomberg Economics forecast for end of 2021: 0%Sweden’s central bank remains focused on bond purchases to keep rates low and stabilize markets. Still, Some policy makers are highlighting the option of a rate cut to stimulate demand and restore confidence in the Riksbank’s 2% inflation target.The central bank kept rates unchanged at its last meeting, and maintained its QE program at 700 billion kronor ($82 billion). Policy makers agreed that it was too soon to discuss withdrawing monetary support despite signs of economic stabilization and an uptick in consumer prices.Governor Stefan Ingves has signaled he prefers QE to rate cuts, and said last month he sees no risk of above-target inflation “in the foreseeable future.” Meanwhile, the property market soaring to record price levels is an increasing worry for Ingves, who said Sweden’s high level of household debt “will become problematic sooner or later.”What Bloomberg Economics Says:“A rebound in global trade is benefiting export-oriented Sweden and the economy has recouped more of the pandemic loss than expected by Riksbank. Short-term risks from new virus measures and a weak outlook for inflation due to modest wage growth still means policy makers won’t be in any hurry to withdraw support. The Riksbank has extended its bond-buying scheme until end-2021. We expect Ingves to stay on hold as the recovery takes shape.”–Johanna JeanssonNorges BankCurrent deposit rate: 0%Bloomberg Economics forecast for end of 2021: 0.25%Norway’s central bank is expected to be the first among wealthy western nations to tighten policy after its economy took a smaller hit than most in 2020. Its March forecast implies that the likelihood of a rate increase is split 50/50 between September and December.While soaring house prices signal financial imbalances are building up, Governor Oystein Olsen has said substantial uncertainty still remains regarding the recovery.Norway’s economic resilience has been boosted in part by an effective lockdown strategy and billions of dollars in government support backed by the country’s $1.3 trillion sovereign wealth fund. Still, restrictions to fight the spread of the more contagious strains of Covid-19 this year have hampered the recovery, with a deeper contraction in the first two months than the central bank had forecast.What Bloomberg Economics Says:“A quick rebound from the pandemic slump, sharply rising house prices and above target inflation during the past year give the central bank reason to think about leaving zero rates behind. But not yet. We expect extended virus restrictions to weigh on domestic demand until late in the second quarter. Norges Bank will likely wait until 4Q before lifting off.”–Johanna JeanssonReserve Bank of New ZealandCurrent cash rate: 0.25%Bloomberg Economics forecast for end of 2021: 0.25%New Zealand’s red-hot housing market has been driving the outlook for monetary policy this year after the government changed the RBNZ’s remit, forcing it to take house prices into account. After an initial flurry of bets that the central bank could start raising rates in 2022, the emerging consensus is that the cash rate will stay at its record low for longer. That’s partly because a raft of new government measures to cool the property market have taken the pressure off the RBNZ to act.While New Zealand’s successful handling of the pandemic initially enabled its economy to stage a V-shaped recovery, it now faces the possibility of a double-dip recession as its closed border hurts its tourism sector. The opening of a long-awaited travel bubble with Australia in April may help alleviate the pain, but support for the economy is still needed to ensure the recovery stays on track this time. Governor Adrian Orr has also made clear he wants to see a sustained inflation pickup before he considers removing stimulus.What Bloomberg Economics Says:“The RBNZ looks set to keep rates on hold this year. It’s likely to use other tools — the Funding for Lending program and asset purchases — if needed to add more support or to sustain maximum downward pressure on the currency. Its immediate attention is likely to remain on surging house prices, which have elevated financial stability risks. It’s already taken macro prudential policy steps, alongside government measures to rein in investor demand. The risks lie with further macro prudential tightening over 2021.”–James McIntyreNational Bank of PolandCurrent cash rate: 0.1%Median economist forecast for end of 2021: 0.1%Poland’s central bank intends to keep its benchmark rate at a record low until at least early next year, when the term of the Monetary Policy Council ends.The economy shrank for the first time in nearly three decades in 2020, and offficials responded by introducing a QE program and reducing the key rate from 1.5% in three steps between March and May.The EU’s biggest eastern economy is set to rebound this year, though the outlook has recently become more uncertain on the third wave of the pandemic.Even as neighboring central banks in the Czech Republic and Hungary are seen taking a less accommodative approach, their policies “play no role whatsoever” in monetary policy in Poland, according to Governor Adam Glapinski.Czech National BankCurrent cash rate: 0.25%Median economist forecast for end of 2021: 0.5%The Czech central bank has been telegraphing monetary tightening for over half a year but the prolonged coronavirus crisis is set to delay the first rate increase until the third quarter.Government programs to protect jobs are driving wages up and deferred consumption is set to fuel inflation once shops and services reopen after one of the world’s deadliest Covid-19 outbreaks. Still, policy makers agreed in March that a “longer-lasting pandemic-induced downturn” will probably mean a slower pace of monetary tightening than outlined in the institution’s forecast, which assumed three rate hikes for this year.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.

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Manitoba to add new lockdowns to fight COVID-19 https://islandcrisis.net/manitoba-to-add-new-lockdowns-to-fight-covid-19/ https://islandcrisis.net/manitoba-to-add-new-lockdowns-to-fight-covid-19/#respond Tue, 20 Apr 2021 19:30:00 +0000 https://islandcrisis.net/manitoba-to-add-new-lockdowns-to-fight-covid-19/ The father of a teenage girl who unwittingly received male hormones in British Columbia will appeal his conviction and criminal contempt fine. CD, as he was known from court documents, pleaded guilty to the charges last week and was sentenced on Friday. He defied orders not to disclose details that would reveal the identity of […]]]>


The father of a teenage girl who unwittingly received male hormones in British Columbia will appeal his conviction and criminal contempt fine.

CD, as he was known from court documents, pleaded guilty to the charges last week and was sentenced on Friday. He defied orders not to disclose details that would reveal the identity of his child or that of the doctors responsible for transgender treatment.

The father reached a plea deal with prosecutors who recommended a sentence of 45 days and 18 months of probation. However, Justice Michael Tammen of the British Columbia Supreme Court decided to sentence CD to six months in prison instead.

CD lawyer Carey Linde told the Western standard he hopes to get his client out on bail while he appeals the sentence.

“We’re doing the bureaucratic legwork to try to get it out,” Linde said.

“It depends on the position of the Crown. And they won’t take a stand until they read the judgment. And the judgment has yet to be released.

Linde thinks the punishment is excessive, especially given the plea deal.

“The responses I get from criminal lawyers say… it’s absurd,” Linde said.

In his ruling, Tammen said: “I do not accept that (the father’s) intention was other than to attempt to undermine the authority of the courts and the general administration of justice … Further, I reject expressly affirmation under oath (of the father) … no desire to share information that would harm (the child). “

Linde said: “The judge went to the depths of law and order. Why? He gave a very reasoned argument, if you agree with him … justifying drastic measures.

In her ruling, Tammen said, “No member of the public can decide when, under what circumstances and what court orders to follow … Unless and until the appeal is successful, court orders must be followed. They are part of the legal fabric of society and, therefore, of the law. Without the ability to enforce court orders, and if citizens were free to ignore them at will, there would be no democracy but anarchy. “

Linde thinks Tammen never understood what her client was trying to do.

“He never understood it. He kept coming back and saying you can’t avoid the punishment, people are not free to go out and break the law because they think it is against their conscience. But that’s not what civil disobedience is, civil disobedience says, “I do this knowing and accepting to be punished.” So my client always knew he would get something.

In court, CD said: “I never went after my child for the choice she made to want to be a man … I only tried to prevent her from making a medical choice that she could. regret later. “

When asked if he plans to continue his campaign in the future, the father replied that he had already done his part, adding: “I’m passing the torch”.

Tammen granted CD 46 days in remand in custody to count towards the 180-day sentence. CD’s crowdfunding website, which contained materials in violation of court orders, had raised more than $ 50,000. Tammen ordered the father to donate $ 30,000 to a children’s charity within six months of his release from prison. Linde also plans to appeal the fine.

Linde said her client’s goal was to educate the public about “school programs [that teach gender fluidity and transgender concepts]; the Infant Act, which allows doctors to do what they do legally; and quick onset gender dysphoria… You and I are talking, where we wouldn’t have been two years ago. These things are moving. “

Asked about his client’s mood after the long sentence, Linde said:

“Obviously he’s not happy, he prefers it not to happen… He doesn’t object to being sentenced…”[but feels] he was singled out in one way or another, misunderstood …

“He pleaded guilty. And his testimony was that he had accomplished what he intended to accomplish. He never asked for any of that. He was an accused … And he just wants to go back and live as much as he can the life he had before all of this happened to him.

Harding is a Western standard Saskatchewan-based journalist



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Financial giant Fitch partners with SIDF Academy for Saudi talent program https://islandcrisis.net/financial-giant-fitch-partners-with-sidf-academy-for-saudi-talent-program/ https://islandcrisis.net/financial-giant-fitch-partners-with-sidf-academy-for-saudi-talent-program/#respond Tue, 20 Apr 2021 17:19:40 +0000 https://islandcrisis.net/financial-giant-fitch-partners-with-sidf-academy-for-saudi-talent-program/ RIYADH: Sovereign AEI, a company specializing in helping businesses set up in the Kingdom, experienced a peak in activity. “The start of this year has been very encouraging as we have seen a 40-50% increase in Saudi Arabia’s market entry activity, compared to pre-pandemic levels,” Stuart D ‘Souza, co-founder and CEO of Arabian Enterprise Incubators […]]]>


RIYADH: Sovereign AEI, a company specializing in helping businesses set up in the Kingdom, experienced a peak in activity.

“The start of this year has been very encouraging as we have seen a 40-50% increase in Saudi Arabia’s market entry activity, compared to pre-pandemic levels,” Stuart D ‘Souza, co-founder and CEO of Arabian Enterprise Incubators (AEI), one of the partner companies that make up Sovereign AEI, told Arab News.

As part of the ambitious Riyadh 2030 strategy announced by Crown Prince Mohammed bin Salman earlier this year, the government wants to attract up to 500 international companies to set up their regional bases in the city, creating around 35,000 new jobs for them. Saudi residents and double the population of the capital.

The strategy aims to invest up to SR 70 billion ($ 18.67 billion) in the national economy by the end of the decade. The strategy is already bearing fruit.

“Sovereign AEI is helping to facilitate this new strategy. Our products and services support the Riyadh 2030 strategy by helping new and existing businesses capitalize on the significant growth forecasts expected for the Kingdom, ”Paul Arnold, Managing Director of Sovereign Saudi Arabia, told Arab News.

CONTEXT

• The government wants to attract up to 500 international companies to set up their regional bases in the city, create around 35,000 new jobs for Saudi residents and double the capital’s population.

• The strategy aims to invest up to SR 70 billion ($ 18.67 billion) in the national economy by the end of the decade. The strategy is already bearing fruit.

“We also encourage companies to look to the future and establish a physical presence in the Kingdom, while taking into account the new criteria which will come into effect by 2024, the details of which have yet to be officially announced”, a- he added.

Sovereign has been operating in Saudi Arabia for about 20 years and AEI since 2012. They formed their joint partnership in 2019.

In 2019, the company helped 600 companies travel to Saudi Arabia to investigate potential opportunities. Half of them were first-time visitors and over 70% established new business connections in the Kingdom. On its own, AEI has helped more than 1,500 foreign companies enter, establish or expand in Saudi Arabia since 2012.

Last year, despite restrictions resulting from the pandemic, Sovereign AEI reported a 300% increase in business services in Saudi Arabia. The team expects this positive growth to continue in 2021.

“The Saudi market presents enormous opportunities. Most companies are now aware of the market potential, the main pillars of Vision 2030 and the significant number of economic reforms carried out over the past 18 months. However, charting a roadmap to success can be a challenge, ”said Arnold.

“Our principles are to educate, reduce risk, and enable the client to enter, settle or expand into the Kingdom. Our strong performance in the first quarter is a testament to the attractive nature of the Saudi market and we continue to see growing interest and a growing shift from customer focus to the Kingdom, as the country continues to unveil new strategic initiatives, ”a- he added.



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Bank of America investors support executive pay https://islandcrisis.net/bank-of-america-investors-support-executive-pay/ https://islandcrisis.net/bank-of-america-investors-support-executive-pay/#respond Tue, 20 Apr 2021 14:49:36 +0000 https://islandcrisis.net/bank-of-america-investors-support-executive-pay/ Benzinga Cathie Wood is responsible for these four technological actions in 2021 Cathie Wood, the founder of ARK Invest, is taking Wall Street by storm with her unconventional thematic investing. Namely, she follows an innovative fund style to find hyper-growth stocks with breakthrough technology. Certainly, his unique method works. To be sure, five of the […]]]>


Benzinga

Cathie Wood is responsible for these four technological actions in 2021

Cathie Wood, the founder of ARK Invest, is taking Wall Street by storm with her unconventional thematic investing. Namely, she follows an innovative fund style to find hyper-growth stocks with breakthrough technology. Certainly, his unique method works. To be sure, five of the six ARK ETFs posted returns of over 100% last year alone. Result? Its funds saw a massive inflow of $ 20.6 billion, according to data from Morningstar, Portfolio Insider and Nasdaq. Recently, Wall Street has seen a strong turnover in value stocks. But don’t count Cathie Wood among them. Instead, it is doubling down on its bets on these innovative companies. “Benchmarks are filling up with value traps” because of the pace of innovation in areas such as artificial intelligence and robotics, Wood said. “We think the big risk is in benchmarks, not in what we do.” Billionaire Cathie Wood’s predictions are inescapable due to her historic returns over the past three years – with her picks many times above their initial stock price. Case in point: Last year Ms Wood’s ARK Genomic Revolution ETF, ARK Innovation ETF and ARK Next Generation Internet ETF posted returns of 159%, 203% and 157%, respectively. Now here are four tech stocks with huge potential that Cathie Wood bought for her funds: 1. Coinbase (NASDAQ: COIN) Surely Cathie Wood is bullish on cryptocurrency. She bought hand in hand in the largest cryptocurrency exchange and digital wallet service provider Coinbase. On the day Coinbase made its public debut, ARK Invest took in 749,205 shares. A few days later, he added an additional 340,273 shares (worth nearly $ 112,970,000 million) to his position. Never afraid to make bold predictions, Wood believes that digital wallets may become the most valuable technology of this era, underscoring its unprecedented rate of organic growth. “Digital wallets could become the most valuable technological developments per user of almost anything. We’re very excited about it. If you were to draw a graph like we did in our Big Ideas showing how JPMorgan Chase & Co. ( NYSE: JPM) got to those levels, it was acquisition after acquisition, as Cash App and Venmo, because they’re viral in nature, got there organically, ”said Cathie Wood. Recent events supported Wood’s prediction. Digital wallet payments overtook the physical card for use in in-store and point-of-sale (POS) contactless payments in 2020, according to the Global Payments Report. in-store cash fell at least 50% in advanced economies in 2020. 2. Unity Software (NYSE: U) Real-time 3D development platform Unity Software is trading cheaply, according to Ca thie Wood. It has increased its stake in Unity Software over the past two months, as the stock has fallen 34% since the start of the year. Despite the recent sell-off, the company’s future fundamentals look strong based on revenue growth projections. Unity Software predicts 2021 revenue of between $ 950 and $ 970 million, in line with the company’s plan to maintain 30% revenue growth over the long term. Unity CEO John Riccitiello said: “As a leader in creating and operating tools for the world of real-time 3D content, we continue to invest with the intention of seizing this which we believe to be a substantial opportunity to come in 2021 and the years beyond. ” 3. Shopify (NYSE: SHOP) Wood believes that Shopify may one day be as big as online retail giant Amazon (NASDAQ: AMZN). As a result, Cathie Wood saw the drop in Shopify stock as a buying opportunity. His company added to its existing stake in the e-commerce platform last week, according to Portfolio Insider. “We’re trying to figure out how Amazon is going to handle this notion of people seeing something on Instagram or somewhere else on Facebook or Twitter, or on Snap and just buying there,” Wood said. “This is a Shopify enabled business opportunity and we think it’s going to be important.” Recently, Shopify’s stock price fell slightly from its recent all-time high of $ 1,500 which it reached in early February. Regardless of short-term price movements, the rise in SHOP’s share price will likely be closely tied to its growth trends. So far, everything is fine: Shopify’s fourth quarter revenue has jumped 94% while 2020 revenue has jumped 86%. 4. Sea Limited (NYSE: SE) Cathie Wood also shopped with Sea Limited this year. The biggest appeal of Sea Limited is how they can integrate dozens of their businesses with each other. Sea Limited has tentacles in e-sports, mobile games, e-commerce, digital payments, and food delivery services. And the company is aggressively expanding its market penetration outside of its home country into China, particularly Latin America and Southeast Asia. These segments generated triple-digit revenue growth for Sea Limited. As a result, its consolidated revenue grew by over 100% in 2020, and it plans to continue this momentum through 2021. Cathie Wood first initiated a position in Sea Limited in the last quarter of 2019 , and she just kept adding her overtime participation. See more from BenzingaClick here for Benzinga options trading 84% of Warren Buffett’s portfolio in 2021 is in these 3 categories © 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



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Investors reassess China’s Huarong risk as contagion fears subside https://islandcrisis.net/investors-reassess-chinas-huarong-risk-as-contagion-fears-subside/ https://islandcrisis.net/investors-reassess-chinas-huarong-risk-as-contagion-fears-subside/#respond Tue, 20 Apr 2021 11:29:26 +0000 https://islandcrisis.net/investors-reassess-chinas-huarong-risk-as-contagion-fears-subside/ Investors sold off Huarong’s offshore bonds last week, pushing up yields as they worried about the company’s 2020 earnings delay due to unspecified “relevant transactions”. Some feared that the debt restructuring of one of China’s four largest bad-loan state companies would affect its ability to make payments on offshore bonds worth more than $ 22 […]]]>


Investors sold off Huarong’s offshore bonds last week, pushing up yields as they worried about the company’s 2020 earnings delay due to unspecified “relevant transactions”.

Some feared that the debt restructuring of one of China’s four largest bad-loan state companies would affect its ability to make payments on offshore bonds worth more than $ 22 billion.

“There is fear because in China the odds are very often binary,” said Michel Lowy, CEO of SC Lowy, an asset manager focused on high yield to troubled credit, special situations and turnarounds. ‘regulated financial institutions.

“In other more sophisticated markets, your recovery range may be 50 to 80 cents. In China, it’s the parity or 20 cents.”

China’s banking and insurance regulator on Friday said Huarong was operating normally and had sufficient liquidity. Subsidiary Huarong Securities Co Ltd then repaid a 2.5 billion yuan ($ 384.83 million) maturing bond, she said in a post on her official WeChat account.

On Tuesday, the yield on an $ 850 million bond in April 2027 issued by Huarong Finance 2017 Co Ltd was listed at 8.17% after peaking at nearly 17% on Thursday, as fears dissipated.

As few investors question Huarong’s ability to repay its onshore debt, regulators have asked banks not to refuse to lend to the company as part of measures to stabilize its cash position.

Concerns around Huarong have focused not only on possible losses for bondholders, but what a default would mean for the risk assessment and pricing of debt issued by SOEs. . Some investors are now saying those concerns were overblown.

“I think we need to take a more measured approach to stocks like this,” said Mervyn Koh, portfolio manager at Janus Henderson Investors. “Overall, we tend to give the central government the benefit of the doubt” in handling SOE defaults, he said.

Investors are nevertheless watching closely Huarong ahead of the April 27 maturity of a S $ 600 million ($ 452.18 million) bond issued by subsidiary Huarong Finance 2017 Co Ltd.

The average price of this bond was last listed at 97.5 cents, down from 92 cents last week. A portfolio manager in Hong Kong said investors demanded a slight haircut amid the lingering uncertainty.

“It will be essential that the events around Huarong be treated credibly as foreign capital and the treatment of investors will be followed with great interest by all,” said Brian Kloss, portfolio manager at Brandywine Global.

Larry Hu, chief China economist at Macquarie, said in a note that investors don’t have to worry much about the systemic risks posed by Huarong, but that it could signal future market turmoil.

“The stress caused by Huarong is likely to be the start of a series of credit events,” he said.

(1 USD = 1.3269 Singapore dollars)

($ 1 = 6.4963 Chinese yuan)

(Reporting by Andrew Galbraith in Shanghai; additional reporting by Kate Duguid in New York; editing by Ed Osmond, Larry King)

By Andrew Galbraith



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Chevron awards Worley contract to modify asset in Gulf of Mexico https://islandcrisis.net/chevron-awards-worley-contract-to-modify-asset-in-gulf-of-mexico/ https://islandcrisis.net/chevron-awards-worley-contract-to-modify-asset-in-gulf-of-mexico/#respond Tue, 20 Apr 2021 09:20:29 +0000 https://islandcrisis.net/chevron-awards-worley-contract-to-modify-asset-in-gulf-of-mexico/ US oil giant Chevron has awarded Worley a contract to provide brownfield modification services for the Ballymore oil and gas field in the Gulf of Mexico. Worley will provide engineering and design services for subsea connection and integration on the Ballymore field. Chris Ashton, CEO of Worley, said: “As an Australia-based global professional services company, […]]]>


US oil giant Chevron has awarded Worley a contract to provide brownfield modification services for the Ballymore oil and gas field in the Gulf of Mexico.

Worley will provide engineering and design services for subsea connection and integration on the Ballymore field.

Chris Ashton, CEO of Worley, said: “As an Australia-based global professional services company, we look forward to helping Chevron meet the world’s changing energy needs and continue Worley’s long-standing global relationship with Chevron.

Worley’s team on the US Gulf Coast will implement surface services and project management, while Worley’s global integrated delivery office in India will provide support for the project.

In addition, Intecsea, which is part of the consultancy business of Worley’s Advisian, will undertake the underwater portion of the project.

Located in a water depth of approximately 2,000 m, the Ballymore prospect is 40% owned by Total while Chevron holds the remaining 60% as operator. The perspective covers four blocks in the Norphlet piece, including the MC 607 block.

The field is located in the Mississippi Canyon area, approximately 120 km offshore Louisiana, United States.

Chevron completed the first appraisal well in January 2019, followed by the second appraisal well in August 2019.

In 2020, Wood Group was selected by Chevron to deliver an engineering design project for the deepwater Anchor development in the Gulf of Mexico in the United States.

Last year, the Australian engineering services provider said it had cut 3,000 jobs and secured an additional $ 465 million in loans due to the collapse in oil prices following the coronavirus pandemic.

Worley has reduced its workforce by 5%, reducing its workforce to 56,000 as of March 31, 2020.



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Yuan crosses key threshold and hits one-month high https://islandcrisis.net/yuan-crosses-key-threshold-and-hits-one-month-high/ https://islandcrisis.net/yuan-crosses-key-threshold-and-hits-one-month-high/#respond Tue, 20 Apr 2021 05:30:00 +0000 https://islandcrisis.net/yuan-crosses-key-threshold-and-hits-one-month-high/ SHANGHAI, April 20 (Reuters) - China's yuan strengthened past a key threshold to the firmest in a month on Tuesday, underpinned by broad dollar weakness following a dip in U.S. bond yields. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at a near one-month high of 6.5103 per dollar, […]]]>


    SHANGHAI, April 20 (Reuters) - China's yuan strengthened
past a key threshold to the firmest in a month on Tuesday,
underpinned by broad dollar weakness following a dip in U.S.
bond yields.    
    Prior to market opening, the People's Bank of China (PBOC)
set the midpoint rate at a near one-month high of
6.5103 per dollar, 130 pips or 0.2% firmer than the previous fix
of 6.5233. 
    In the spot market, onshore yuan opened at 6.5020
per dollar, rose past the psychologically important 6.5 per
dollar level to a high of 6.4918, the strongest since March 18.
By midday, it was changing hands at 6.4959, 151 pips firmer than
the previous late session close.
    Its offshore counterpart also strengthened past the
key level to trade at 6.491 per dollar at midday.
    Traders said the yuan's strength was reflecting broad dollar
weakness, and was likely to consolidate around 6.5 per dollar.
    "We expect USD/CNY to enter a period of consolidation
following the stabilisation of U.S. Treasury bond yields and the
USD," Becky Liu, head of China macro strategy at Standard
Chartered, said in a note.
    Liu added the yuan's fundamentals remained strong but its
advantage over other developed economy currencies had narrowed.
More channels for capital outflows and a pick-up in dividend
payments could reduce inflows into China and limit upside
potential for the Chinese currency in the near term.
    The bank revised down its yuan forecasts to 6.5/dollar at
the end of Q2, 6.6 at end of Q3 and 6.58 at the year-end,
compared with 6.3, 6.4, 6.45, respectively, in previous
estimates.
    Investors continue to gauge U.S.-China policy divergence,
pace of domestic vaccine rollouts, global economic trends and
the yield gap between China and other major countries, for clues
on the yuan's outlook.
    On Tuesday, the market took in stride no change to the
benchmark lending rate for corporate and household loans. China
kept the loan prime rate steady for the 12th straight month at
its April fixing, matching market expectations.
    "With the economy doing well, policymakers are now focused
on tackling financial risks. But political constraints mean that
these efforts are unlikely to include policy rate hikes," said
Julian Evans-Pritchard, senior China economist at Capital
Economics, who does not expect any change to policy rates in the
coming months.
    As of midday, the global dollar index fell to 90.904
from the previous close of 91.049. 
    
    The yuan market at 0400 GMT: 
    
    ONSHORE SPOT:
 Item               Current  Previous  Change
 PBOC midpoint      6.5103   6.5233    0.20%
                                       
 Spot yuan          6.4959   6.511     0.23%
                                       
 Divergence from    -0.22%             
 midpoint*                             
 Spot change YTD                       0.50%
 Spot change since 2005                27.41%
 revaluation                           
 
    Key indexes:
     
 Item            Current     Previous  Change
                                       
 Thomson         96.51       96.53     0.0
 Reuters/HKEX                          
 CNH index                             
 Dollar index    90.904      91.049    -0.2
 
*Divergence of the dollar/yuan exchange rate. Negative number
indicates that spot yuan is trading stronger than the midpoint.
The People's Bank of China (PBOC) allows the exchange rate to
rise or fall 2% from official midpoint rate it sets each
morning.

    OFFSHORE CNH MARKET   
  
 Instrument            Current   Difference
                                 from onshore
 Offshore spot yuan    6.491     0.08%
        *                        
 Offshore              6.6705    -2.40%
 non-deliverable                 
 forwards                        
               **                
 
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint,
since non-deliverable forwards are settled against the midpoint.
. 

 (Reporting by Winni Zhou and Andrew Galbraith; Editing by
Jacqueline Wong)
  



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Huarong’s woes pose dilemmas for Beijing https://islandcrisis.net/huarongs-woes-pose-dilemmas-for-beijing/ https://islandcrisis.net/huarongs-woes-pose-dilemmas-for-beijing/#respond Tue, 20 Apr 2021 00:00:00 +0000 https://islandcrisis.net/huarongs-woes-pose-dilemmas-for-beijing/ Will China bail out a giant financial octopus or teach reckless actors a lesson? The executives of Huarong Asset Management could not hide from the Chinese authorities. A public financier corruption investigation in April 2018 sent senior executives and business partners overseas, to be rounded up in an international pickup. A casino mogul with close […]]]>


Will China bail out a giant financial octopus or teach reckless actors a lesson?




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Huarong in China eases debt fears with bond payments https://islandcrisis.net/huarong-in-china-eases-debt-fears-with-bond-payments/ https://islandcrisis.net/huarong-in-china-eases-debt-fears-with-bond-payments/#respond Mon, 19 Apr 2021 10:24:00 +0000 https://islandcrisis.net/huarong-in-china-eases-debt-fears-with-bond-payments/ HONG KONG – Bonds of China’s largest troubled debt manager rebounded on Monday, after the company paid off a local bond on time over the weekend and sought to meet a bond’s payment deadline listed in Hong Kong next week. Investors were also reassured about the outlook for China Huarong Asset Management after the China […]]]>


HONG KONG – Bonds of China’s largest troubled debt manager rebounded on Monday, after the company paid off a local bond on time over the weekend and sought to meet a bond’s payment deadline listed in Hong Kong next week.

Investors were also reassured about the outlook for China Huarong Asset Management after the China Banking and Insurance Regulatory Commission said on Friday that the company, majority owned by the Ministry of Finance, has sufficient liquidity and its operations remain normal.

The redemption and words of support helped stem a massive sale of Huarong bonds that began when the company failed to file its annual results on the Hong Kong Stock Exchange by the March 31 deadline, raising fears of a default on offshore debts.

The company’s offshore bonds were trading as low as 65 cents on the dollar late last week ahead of the CBIRC announcement. As the hardest hit issues returned to more than 80 cents on Monday, the continuation of discounts reflects continued doubt over a timely repayment, market participants said.

“Huarong is not out of the woods yet and will have to undergo government-backed restructuring,” said Hao Hong, head of research at Bocom International in Hong Kong.

As the company is a “systemically important entity” involved in cleaning up the degraded loans of the country’s major state-owned banks, Hao ruled out the possibility of complete default, but added, “There is a possibility of defaults. techniques through delays and bond haircuts, just like other companies that have gone through the restructuring process. “

Huarong repaid a 2.5 billion yuan ($ 383.3 million) onshore note that matured on April 18, a person familiar with the transaction said. The company also organized funds to repay a S $ 600 million ($ 449.5 million) bond owed on April 27, two other people said.

Huarong said on Friday that he had focused on his core business of managing nonperforming loans while exiting “risks,” and that he would meet upcoming bond repayments on time.

Lai Xiaomin, former chairman of Huarong, was executed in January after being convicted of bribery and bigamy, although the company’s bonds were trading until just a few days ago. Under Lai, Huarong used his access to cheap finance to expand into businesses such as securities trading, trusts and other types of investment management.

The company now has over $ 43 billion in bonds outstanding. More than half are expected to mature by the end of 2022, according to data compiled by Refinitiv.

Offshore issues represent around half of the bonds in circulation. International fund managers, including Goldman Sachs Asset Management, BlackRock, Aberdeen Asset Management, GAM Investment and Credit Suisse Asset Management, are among the institutional investors exposed to bonds, according to data from Refinitiv. It is not known if these investors have recently reduced their positions.

Traders say domestic banks, cash-rich companies, insurers and fund houses hold the bulk of Huarong’s domestic bonds.

Huarong has “close ties” to Chinese financial institutions as a troubled debt buyer and through its borrowing, said Shujin Chen, analyst at Jefferies, who added she did not expect default. of a state-backed organization that is “too big to fail.”

Additional reporting by Michelle Chan.



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Exclusive: China asks banks not to deny loans to asset manager Huarong – sources https://islandcrisis.net/exclusive-china-asks-banks-not-to-deny-loans-to-asset-manager-huarong-sources/ https://islandcrisis.net/exclusive-china-asks-banks-not-to-deny-loans-to-asset-manager-huarong-sources/#respond Fri, 16 Apr 2021 08:17:00 +0000 https://islandcrisis.net/exclusive-china-asks-banks-not-to-deny-loans-to-asset-manager-huarong-sources/ BEIJING (Reuters) – Chinese regulators have asked some banks not to deny loans to distressed asset management giant China Huarong Asset Management Co, as part of support measures to stabilize its cash flow and to reduce the risk of market contagion, sources told Reuters. Huarong is one of China’s four largest distressed asset management companies, […]]]>


BEIJING (Reuters) – Chinese regulators have asked some banks not to deny loans to distressed asset management giant China Huarong Asset Management Co, as part of support measures to stabilize its cash flow and to reduce the risk of market contagion, sources told Reuters.

Huarong is one of China’s four largest distressed asset management companies, which counts the Ministry of Finance as its largest shareholder. It has been hit by an offshore bond sale and a suspension of its shares since March 31, after announcing a delay in its earnings report due to a “relevant transaction” yet to be finalized.

It is the latest in ailing debt manager’s troubles whose failed investments and business expansion have forced him into restructuring talks since 2018 and whose President Lai Xiaomin was executed in January after an investigation into the transplant.

Huarong and its subsidiaries currently have offshore bonds outstanding worth $ 22.39 billion, according to data from Refinitiv, of which $ 3.57 billion is due in 2021.

The latest measures advocated by financial regulators aim to contain contagion and ensure that Huarong’s onshore cash position is stable, according to four sources which include Huarong creditors and who have direct knowledge of the restructuring plan of Huarong. company assets.

Some state-owned banks have also been told to be ready to back Huarong, one of the four sources said, without giving further details.

The Ministry of Finance, the People’s Bank of China, and banking and currency regulators did not respond to requests for comment. There was also no immediate response from Huarong.

Huarong is operating normally and has sufficient liquidity, the Shanghai Securities News reported on Friday, citing China’s banking and insurance regulator.

The China Banking and Insurance Regulatory Commission (CBIRC) said Huarong is working with auditors to complete the audit of its 2020 annual report as soon as possible. The company will release information after the audit is completed, the report said.

Investors fear that any restructuring of the company’s debt could leave holders of its US dollar bonds unprotected and force a costly reassessment of the government’s long-standing support for Chinese public issuers.

Firms on the continent have over $ 600 billion in bonds outstanding. Most mature over the next two years, according to Refinitiv data. Prolonged uncertainty over Huarong’s fate could increase financing costs, posing risks to the country’s strong economic recovery.

Market concerns spilled over to other issuers and pushed the cost of insuring against China’s dollar debt default to its highest since October.

The support comes as Huarong prepares to repay a 2.5 billion yuan ($ 382.84 million) onshore exchange-traded bond due April 18, although investors do not expect the backing. the company is having difficulty with this obligation.

The yield on this instrument stood at 4.293% on Friday, according to Refinitiv data, down from 4.365% on March 31.

Huarong redeemed two maturing onshore corporate bonds with a combined value of 3.1 billion yuan on March 15.

The company is also exploring the possibility of repaying its maturing offshore debt with onshore funds, a move that requires coordination and final approvals from the country’s finance ministry and foreign exchange regulator, one of the sources said.

The sources could not be identified because the information has not yet been made public and they are not authorized to speak to the media.

Huarong’s unrest began in 2018 after then-president Lai was targeted in an anti-corruption investigation and found guilty by local courts in the country’s largest financial corruption case since the founding of the People’s Republic of China in 1949.

Since his fall, Huarong has been the subject of an asset restructuring plan to clean up the massive pile of distressed debt accumulated through investments under Lai’s tenure.

As of mid-2020, Huarong had 160 billion yuan in net assets and more than 30 billion yuan in loan loss provisions.

($ 1 = 6.5301 Chinese renminbi yuan)

Reporting by Cheng Leng, Kevin Huang, Rong Ma, Ryan Woo in Beijing and Andrew Galbraith in Shanghai; Edited by Vidya Ranganathan and Kim Coghill



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