Citi Sets Sights on 1000 Wealth Hirings in Hong Kong

By Scott Murdoch

The recruitment campaign has already started, with 75 private bankers and relationship managers hired so far in 2021 to build on the $310 billion Asian assets under management to date.

The headcount target will include 550 new private bankers and relationship managers by 2025, the statement said.

Citi in the region recorded over $20 billion in net money inflows marking a record year for the bank in 2020, it said.

In the first quarter of 2021, Citi added more than $5 billion more in net new money.

Citi Hong Kong Chief Executive Angel Ng said the bank would target the “traditional retail wealth but also growing entrepreneurial wealth” emerging in Hong Kong.

(Reporting by Scott Murdoch; editing by Barbara Lewis)

Burberry, Commodity Stocks Drag FTSE 100 Lower; Inflation Woes Linger

The blue-chip index slipped 1.3%, giving up the previous session’s gains. Luxury brand Burberry tumbled 8.1% to the bottom of the index after it reported a 10% drop in annual sales, impacted by store closures and reduced tourism due to COVID-19.

Oil majors BP and Royal Dutch Shell, and miners were among the biggest drag to the index on lower oil and commodity prices. [O/R][MET/L]

The domestically focussed mid-cap FTSE 250 index declined 0.8%.

Globally, stocks slipped after a shocking rise in U.S. inflation bludgeoned Wall Street and sent bond yields surging on worries the Federal Reserve might have to move early on tightening. [MKTS/GLOB]

BT Group, Britain’s biggest broadband and mobile provider, slid 4.2% after it reported a 7% fall in revenue and a 6% drop in adjusted earnings for the year to end-March, and forecast adjusted revenue to be broadly flat this year.

(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu)

Universal Valued at $40 Billion, More than Parent Vivendi

(This May 12 story corrects to read 1.1 billion in paragraph 8)

By Mathieu Rosemain

In documents released ahead of Vivendi’s general meeting scheduled in June, the group went into the details of the prepared listing of Universal, which will see the group controlled by billionaire Vincent Bollore distribute 60% of Universal’s capital to its current shareholders.

The transaction is aimed at extracting the most value from Universal, the world’s biggest music label and home to singers such as Lady Gaga and Taylor Swift, as the music industry rebounds from a long downturn thanks to streaming revenues, driven by music platforms Spotify and the like.

Universal’s 33 billion-euro valuation was determined by accounting firms PwC and EY. This means the 60% stake distributed to Vivendi’s shareholders is worth 19.8 billion euros.

Universal’s parent company has a market value of 32 billion euros, according to Refinitiv data.

At the end of the IPO process, Universal’s three biggest shareholders would be Vivendi (20%), the Tencent-led consortium (20%) and Bollore (16%).

In its documents, Vivendi said that Universal was drawing interest from potential investors and that it could sell some of its 20% stake to a “strategic partner” ahead of the distribution of Universal’s shares. It added that its intention was to keep at least a 10% stake in the company for a long period of time.

There will be about 1.1 billion Universal shares distributed to Vivendi’s shareholders, according to the documents. Dividing the valuation corresponding to 60% of Universal by the exact number of shares gives a price per Universal share of 18.2 euros.

The French conglomerate outlined plans in February to distribute 60% of Universal’s capital to its current shareholders via a listing in Amsterdam, ending years of questions about Bollore’s will to list the asset, whose operational earnings represent more than half of the all group.

Vivendi also outlined the calendar of Universal’s initial public offering (IPO), setting a Sept. 27 deadline for the listing of the shares in Amsterdam.

The Paris-based group also disclosed the first-quarter financial earnings of Universal. Universal generated earnings before interest and income taxes (EBIT) of 322 million euros over the first three months of the year, up from 248 million euros the year before.

(Reporting by Mathieu Rosemain; Editing by Hugh Lawson)

European Stocks Resume Slide on Rising Inflation Worries

The pan-European STOXX 600 index fell 1.0%, heading further away from all-time highs.

Basic resources and oil and gas sectors, among the recent top gainers on the back of a surge in commodity prices, fell over 2% as a strong dollar put a dent in metal and oil prices. [MET/L]

British luxury brand Burberry tumbled 8.8% on reporting a 10% drop in annual sales, weighed down by the COVID-19 pandemic.

UK’s biggest broadband and mobile provider, BT Group, fell 5.4% as it reported a 7% fall in revenue and a 6% fall in adjusted earnings for the full year.

Markets in Denmark, Finland, Norway, Sweden and Switzerland were closed for public holiday.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)

Samsung Raises Non-Memory Chip Investment Target as S.Korea Announces Bigger Tax Breaks

By Joyce Lee

Many countries are working to bolster local chip supply chains as the severe shortage affects production in industries such as autos, and in March U.S. President Joe Biden flagged plans to invest $50 billion in semiconductor manufacturing and research.

Some 153 chip companies including global No.1 and 2 memory chip makers Samsung Electronics and SK Hynix already have plans to invest a combined 510 trillion won or more between this year and 2030, according to the Korea Semiconductor Industry Association.

“As semiconductor competition intensifies around the world, it is clear that we also need to increase our competitiveness in the semiconductor industry,” South Korean President Moon Jae-in said earlier this week.

Samsung said on Thursday it would invest 171 trillion won ($151.10 billion) in non-memory chips through 2030, raising its previous investment target of 133 trillion won announced in 2019. It added that its third chip production line at Pyeongtaek, south of Seoul, will be completed in the second half of 2022.

SK Hynix said it is considering doubling 8-inch chip contract manufacturing capacity from a small base, adding that no final decision has been made.

The government will increase tax breaks to 6% from the current 3% or lower for capital expenditures between the second half of 2021 to 2024 for large corporations conducting “key strategic technology” including semiconductors, the ministry said in a statement.

The government will also offer about 1 trillion won in long-term loans for increasing 8-inch wafer chip contract manufacturing capacity and investment for materials and packaging.

Samsung Electronics, Hyundai Motor, the ministry and industry associations also agreed to join efforts to respond to the shortage of auto chips on Thursday, the presidential office said in its statement without providing any details.

($1 = 1,132.3400 won)

(Reporting by Joyce LeeEditing by Shri Navaratnam and Elaine Hardcastle)

Tesla’s Musk Halts Use of Bitcoin for Car Purchases

By Hyunjoo Jin and Kanishka Singh

Bitcoin fell more than 10% after Musk tweeted his decision to suspend its use, less than two months after Tesla began accepting the world’s biggest digital currency for payment. Other cryptocurrencies, including ethereum, also fell before regaining some ground in Asia trade.

The use of bitcoin to buy Tesla’s electric vehicles had highlighted a dichotomy between Musk’s reputation as an environmentalist and the use of his popularity and stature as one of the world’s richest people to back cryptocurrencies.

Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.

Musk said on Wednesday he backed that concern, especially the use of “coal, which has the worst emissions of any fuel.”

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” he tweeted. Tesla shares fell 1.25% after hours.

Tesla revealed in February it had bought $1.5 billion of bitcoin, before accepting it as payment for cars in March, driving a roughly 20% surge in the cryptocurrency.

Tesla would retain its bitcoin holdings with the plan to use the cryptocurrency as soon as mining transitions to more sustainable energy sources, Musk said.

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that currently often relies on electricity generated with fossil fuels, particularly coal.

At current rates, such bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, the latest available data from the University of Cambridge and the International Energy Agency shows.

Analysts said Musk’s about-face was inevitable.

“The environmental impact from mining bitcoins was one of the biggest risks for the entire crypto market,” said Edward Moya, a senior market analyst at currency trading firm OANDA.

Meltem Demirors, chief strategy officer at digital asset manager CoinShares Group, said Tesla was unlikely to have sold many, if any, cars using bitcoin and the backflip generated positive publicity while simplifying payment processes.

“Elon was getting a lot of questions and criticisms and this statement allows him to appease critics while still keeping bitcoin on his balance sheet,” Demirors said.

Mark Humphery-Jenner, an associate professor of finance at the University of New South Wales, said he was more concerned about Tesla management’s “very hasty and precipitous” decision-making.

Musk did not say in his Twitter comments whether any vehicles had been purchased with bitcoin and Tesla did not immediately respond to a request for comment.

CRYPTOCURRENCY SUPPORT

Some bitcoin proponents note that the existing financial system – with its millions of employees and computers in air-conditioned offices – uses large amounts of energy too.

Musk reiterated he remained a strong believer in cryptocurrencies.

“We are also looking at other cryptocurrencies that use <1% of bitcoin’s energy/transaction,” he tweeted on Wednesday.

Just a day earlier, Musk had polled Twitter users on whether Tesla should accept dogecoin, a currency he has helped turn from a joke into a valuable commodity.

He announced on Sunday that his commercial rocket company SpaceX will accept dogecoin as payment to launch a lunar mission next year – just hours after he sent the cryptocurrency spiraling downward when he called it a “a hustle” during a guest-host spot on the “Saturday Night Live” comedy sketch TV show.

CHINA DOMINANCE

The dominance of Chinese bitcoin miners and lack of motivation to swap cheap fossil fuels for more expensive renewables could mean there are few quick fixes to the cryptocurrency’s emissions problem.

Chinese miners account for about 70% of bitcoin production, data from the University of Cambridge’s Centre for Alternative Finance shows. They tend to use renewable energy – mostly hydropower – during the rainy summer months, but fossil fuels – primarily coal – for the rest of the year.

Officials in Beijing are conducting a check on data centres involved in cryptocurrency mining to better understand their impact on energy consumption, sources told Reuters last month.

In theory, blockchain analysis firms say, it is possible to track the source of bitcoin, raising the possibility that a premium could be charged for green bitcoin.

(Reporting by Ankur Banerjee and Kanishka Singh in Bengaluru, Anna Irrera and Tom Wilson in London, Megan Davies in New York, Kevin Buckland in Tokyo and Hyunjoo Jin in Berkeley; Editing by Sriraj Kalluvila, Peter Henderson, Edward Tobin and Jane Wardell)

BT Ups Fibre Broadband Target to 25 Million Homes by End-2026

By Paul Sandle

BT, Britain’s biggest broadband and mobile provider, set the new target as it reported a 7% fall in revenue and a 6% fall in adjusted earnings for the year to end-March, reflecting the impact of COVID-19.

Chief Executive Philip Jansen said changes in regulation and tax, along with a new agreement on the company’s pension payments, had cleared the way to raise its fibre ambitions.

“After a number of years of tough work, and as we look to build back better from the pandemic, we’re now pivoting to consistent and predictable growth,” he said.

Jansen has cast BT as the national champion that can build the broadband network Britain needs to drive an economic recovery, and he has focused on laying the foundations for the billions of pounds of investment needed.

As well as seeking a partner in fibre, it said last month it was in talks about selling a stake in BT Sport, a move that could relieve the pressure of buying expensive rights.

COVID-19 has also been a setback for the company despite soaring demand for fast broadband.

It said the pandemic was behind the fall in revenue to 21.33 billion pounds ($30 billion), just shy of analyst forecasts, and the hit to adjusted earnings, which also came in slightly below market expectations at 7.42 billion pounds.

It said adjusted revenue would be broadly flat this year, while earnings would be between 7.5 billion and 7.7 billion pounds.

BT said it had struck a new deal for its pension, which at 7.98 billion pounds is one of the biggest in the country.

Some 2 billion pounds of deficit will be met through an asset backed funding arrangement secured against its EE mobile business, while the balance will be met over 10 years, starting with an annual cash contribution of 900 million pounds.

($1 = 0.7118 pounds)

(Reporting by Paul Sandle; Editing by Kate Holton, Michael Holden and Guy Faulconbridge)

Spain’s Tecnicas Reunidas Posts Q1 Loss on Slow Oil Sector Spending

The net loss of 61 million euros ($73.75 million) compared with a profit of 8.7 million euros a year earlier while revenue fell to 763 million euros.

It blamed the revenue decline on requests from customers to slow investment due to the pandemic though it added the commercial environment has improved.

The company expects to sign contracts worth 4 billion euros this year and maintained its targets of revenue of 3.5 billion this year, the same as in 2020, with a margin of earnings before interest and taxes of 3%.

($1 = 0.8271 euros)

(Reporting by Inti Landauro; editing by Jason Neely)

Analysis-Cyberattack Exposes Lack of Required Defenses on U.S. Pipelines

By Timothy Gardner

The U.S. government has had robust, compulsory cybersecurity protocols for most of the power grid for about 10 years to prevent debilitating hacks by criminals or state actors.

But the country’s 2.7 million miles (4.3 million km) of oil, natural gas and hazardous liquid pipelines have only voluntary measures, which leaves security up to the individual operators, experts said.

“Simply encouraging pipelines to voluntarily adopt best practices is an inadequate response to the ever-increasing number and sophistication of malevolent cyber actors,” Richard Glick, the chairman of the Federal Energy Regulatory Commission (FERC), said.

Protections could include requirements for encryption, multifactor authentication, backup systems, personnel training and segmenting networks so access to the most sensitive elements can be restricted.

FERC’s authority to impose cyber standards on the electric grid came from a 2005 law but it does not extend to pipelines.

Colonial Pipeline, the largest U.S. oil products pipeline and source of nearly half the supply on the East Coast, has been shut since Friday after a ransomware attack the FBI attributed to DarkSide, a group cyber experts believe is based in Russia or Eastern Europe.

The outage has led to higher gasoline prices in the U.S. South and worries about wider shortages and potential price gouging ahead of the Memorial Day holiday.

Colonial did not immediately respond to a query about whether cybersecurity standards should be mandatory.

The American Petroleum Institute lobbying group said it was talking with the Transportation Security Administration (TSA), the Energy Department and others to understand the threat and mitigate risk.

THIN STAFFING

Cyber oversight of pipelines falls to the TSA, an office of the Department of Homeland Security (DHS), which has provided voluntary security guidelines to pipeline companies.

But a 2019 report by the General Accountability Office, the congressional watchdog, said that the TSA only had six full-time employees in its pipeline security branch through 2018, which limited the office’s reviews of cybersecurity practices.

The TSA did not immediately respond to a request for comment on current staffing and whether it recommends mandatory measures for pipelines.

When asked by reporters whether the Biden administration would put in place rules, DHS Secretary Alejandro Mayorkas said it was discussing administrative and legislative options to “raise the cyber hygiene across the country.”

President Joe Biden is hoping Congress will pass a $2.3 billion infrastructure package, and pipeline requirements could be put into that legislation. But experts said there was no quick fix.

“The hard part is who do you tell what to do and what do you tell them to do,” Christi Tezak, an analyst at ClearView Energy Partners, said.

U.S. Representatives Fred Upton, a Republican, and Bobby Rush, a Democrat, said on Wednesday they have reintroduced legislation requiring the Department of Energy to ensure the security of natural gas and hazardous liquid pipelines. Such legislation could get folded into a wider bill.

The power grid is regulated by FERC, and mostly organized into nonprofit regional organizations. That made it relatively easy for legislators to put forward the 2005 law that allows FERC to approve mandatory cyber measures.

A range of public and private companies own pipelines. They mostly operate independently and lack a robust federal regulator.

Their oversight falls under different laws depending on what they carry. Products include crude oil, fuels, water, hazardous liquids and – potentially – carbon dioxide for burial underground to control climate change. This diversity could make it harder for legislators to impose a unified requirement.

Tristan Abbey, a former aide to Republican Senator Lisa Murkowski who worked at the White House national security council under former President Donald Trump, said Congress is both the best and worst way to tackle the problem.

“Legislation may be necessary when jurisdiction is ambiguous and agencies lack resources,” said Abbey, now president of Comarus Analytics LLC.

But a bill should not be seen as a magic wand, he said. “Standards may be part of the answer, but federal regulations need to mesh with state requirements without stifling innovation.”

(Reporting by Timothy Gardner; Editing by Cynthia Osterman and Marguerita Choy)

Fuel Shortages Worsen on Sixth Day of Top U.S. Fuel Pipeline Outage

By Stephanie Kelly

A ransomware attack on the Colonial Pipeline last week halted 2.5 million barrels per day of fuel shipments in the most disruptive cyberattack on U.S. energy infrastructure. The pipeline stretches 5,500 miles (8,850 km) from U.S. Gulf Coast oil refineries to consumers in Mid-Atlantic and Southeast states.

In Washington, D.C., top Biden administration officials met late Tuesday to discuss the incident and were considering ways to alleviate gasoline supply shortages, the White House said. Congressional committee members have asked that a White House interagency task force provide a formal briefing to discuss the federal response to the cyberattack.

Colonial’s chief executive has indicated that by the end of the day Wednesday the company will be able to decide whether it can make a full restart, Energy Secretary Jennifer Granholm said Tuesday during a White House briefing. But she added the restart could take days to complete.

Privately owned Colonial Pipeline manually opened portions of the line to release needed supplies in Georgia, Maryland, New Jersey and the Carolinas. It has accepted 2 million barrels of fuel to begin a restart that would “substantially” restore operations by week’s end, the company said.

The supply crunch, amid panic buying by motorists, has brought long lines and high prices at gas stations ahead of the Memorial Day holiday weekend at the end of this month, which traditionally marks the start of the peak summer driving season.

The average national gasoline price rose to above $3.00 a gallon on Wednesday, the highest since October 2014, the American Automobile Association said.

Nearly 60% of gas stations in metro Atlanta were without gasoline on Wednesday, tracking firm GasBuddy said. More than 70% of stations were out in metro Charlotte and Raleigh, North Carolina, and Pensacola, Florida. The states of Virginia and South Carolina also saw relatively high outages.

LONG LINES

Stevenson Rosslow, 47, was filling up his Lexus with regular gas at a BP station in south Atlanta on Wednesday morning.

“This takes premium, but they’re out,” said Rosslow, the owner of the Wrecking Bar Brewpub in Atlanta’s Reynoldstown neighborhood. “Even at that, the price jumped to what, $3.39?”

The gas station Rosslow stopped at was the fourth he had tried. “I think we’re having a problem here because of hoarding,” he said.

Four southeastern states – Florida, North Carolina, Virginia and Georgia – joined federal regulators in relaxing driver and fuel restrictions to speed deliveries of supplies. Georgia suspended sales tax on gasoline until Saturday.

The FBI has accused a shadowy criminal gang called DarkSide of the ransomware attack. DarkSide is believed to be based in Russia or Eastern Europe.

Russia’s embassy in the United States rejected speculation that Moscow was behind the attack. President Joe Biden on Monday said there was no evidence so far that Russia was responsible.

REFINERS, AIRLINES REACT

It is unknown how much money the hackers are seeking, and Colonial has not commented on whether it would pay.

Gulf Coast refiners that rely on the Colonial Pipeline to move fuel to market have cut processing. Total SE trimmed gasoline production at its Port Arthur, Texas, refinery, and Citgo Petroleum pared back at its Lake Charles, Louisiana, plant.

Citgo said it was moving products from its Lake Charles refinery and “exploring alternate supply methods into other impacted markets.” Marathon Petroleum, another large refiner, said it was “making adjustments” to its operations due to the pipeline shutdown.

Colonial also serves major U.S. airports, including Atlanta’s Hartsfield-Jackson Airport, the world’s busiest by passenger traffic.

Airlines with large operations out of the East Coast have been transporting fuel by truck or fueling planes at their destination rather than their East Coast origin due to the outage. American Airlines has made changes to two long-haul flights out of Charlotte, North Carolina – one of its hub airports – through Friday.

(Reporting by Stephanie Kelly in New York; Additional reporting by Rich McKay in Atlanta and Tracy Rucinski in Chicago; Editing by Leslie Adler and Steve Orlofsky)

Tesla Says it Supports Standardisation of China Auto Industry

Tesla was commenting on China’s cyberspace administration’s draft rules on auto data regulation, which was published on Wednesday.

The draft rules said automakers need to seek customer approval to collect data from driving and need to get permission from regulators when they need to provide important and private data to foreign entities. The cyberspace administration is seeking public opinions on the rules.

Automakers have been equipping more vehicles with cameras and sensors to capture images of a car’s surroundings. Control of use, sending and storage of these images is a fast-emerging challenge for the industry and regulators worldwide.

In March, Tesla came under scrutiny in China when the military banned its cars from entering its complexes, citing security concerns over vehicle cameras, sources told Reuters at the time.

(Reporting by Yilei Sun and Tony Munroe, editing by Louise Heavens and Jane Merriman)

Airline CEOs Call for Summit to Speed Relaunch of UK-US Travel

By David Shepardson

“The airline industry needs adequate lead time to establish a plan for restarting air services, including scheduling aircraft and crews for these routes as well as for marketing and selling tickets,” said the letter to the transport chiefs of both countries.

It was signed by the CEOs of American Airlines, Delta Air Lines, United Airlines, British Airways , Virgin Atlantic and JetBlue Airways.

Flights between the United States and Britain, normally some of the world’s busiest international long-haul routes, are still largely stalled even as both countries are loosening COVID-19 restrictions and travelers are making summer holiday plans. Britain has administered the most vaccine doses per capita of any big country, and the United States is close behind.

MANAGING RISK

Willie Walsh, the former British Airways boss who now heads global airline body IATA, voiced exasperation over what he described as a failure by governments to “manage the net risk” proportionately.

“You see some politicians just afraid to make decisions because they’re afraid of the consequences, whereas (in) the airline industry we live with that all the time,” Walsh said at a virtual event on Wednesday. “Sometimes it’s necessary for us to be vocal and try to force that approach upon people.”

Since March 2020, the United States has barred nearly all non-U.S. citizens who have recently been in Britain. For its own citizens, the U.S. State Department on Monday eased its UK travel advisory, lowering it to a “Level 3: Reconsider Travel” rating.

Britain requires visitors from the United States to quarantine on arrival. Next week it is set to lift a nearly five-month ban on most international travel by its own residents, but it has so far excluded the United States from a small “green list” of destinations where British passengers can travel for leisure and return without a quarantine.

A spokesman for U.S. Transportation Secretary Pete Buttigieg noted that G7 Transport Ministers met last week “to discuss the complexities around reopening international travel and how to do so safely.

“These conversations are ongoing. The department will be reviewing the letter with other agencies as part of the whole of government approach to COVID recovery.”

The British Embassy in Washington did not immediately comment.

A coalition of U.S. and European travel, airline, union, business and airport groups called last week for a full reopening of the U.S.-UK air travel market “as soon as safely possible.”

Investment bank Cowen and Co said in a research note it believes “the Biden Administration needs to make a decision about international travel within the next week to 10 days…

“Americans are making their summer travel plans now, and without a decision on Europe soon, we believe they will continue to travel” to other destinations.

Travel firm TUI said on Wednesday it still expects a strong 2021 travel season, assuming some of its best destinations are added to Britain’s “green list” later this month.

(Reporting by David Shepardson; Editing by Chizu Nomiyama, Carmel Crimmins and Peter Graff)

U.S. Removes Xiaomi from Blacklist, Reversing Late China Jab by Trump

The filing stated that the two parties would agree to resolve their ongoing litigation without further contest, bringing to an end a brief and controversial spat between the hardware company and Washington that had further soured Sino-U.S. ties.

A Xiaomi spokeswoman said the company is watching the latest developments closely, without elaborating.

Shares in the company rocketed over 6% in Hong Kong as news of the decision spread. The company’s share price has tumbled roughly 20% since it was placed on the blacklist in January in the waning days of the Trump administration.

Department of Defense officials weren’t immediately available for comment after U.S. business hours.

The department had designated the firm as having ties to China’s military and placed it on a list that would restrict U.S. investment in the company.

Seven other Chinese companies were also placed under similar restrictions.

Xiaomi went on the offensive by filing a lawsuit against the U.S. government, calling its placement “unlawful and unconstitutional” and denying any ties to China’s military.

In March, a federal judge temporarily blocked enforcement of the blacklisting, citing the U.S. government’s “deeply flawed” process for including it in the ban.

Soon after that victory, Reuters reported that other Chinese firms placed on the same blacklist were considering similar lawsuits. [L1N2LD2YY]

Xiaomi was among the more high-profile Chinese technology companies that former President Donald Trump targeted for alleged ties to China’s military.

Trump had made countering the rise of Beijing a centrepiece of his administration’s economic and foreign policy.

Xiaomi’s local smartphone rival Huawei Technologies Co Ltd was also put on an export blacklist in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

The measures effectively crippled the company’s smartphone division.

Later, the U.S. Department of Defense placed similar restrictions on China’s Semiconductor Manufacturing International Corporation, a firm key to China’s national drive to boost its domestic chip sector.

Prof. Doug Fuller, who tracks China’s semiconductor sector at the City University of Hong Kong, says that Xiaomi’s win was “low-hanging fruit” for the Biden administration in its efforts to correct the excesses of Trump’s China policy as his term ended.

“I think it is a sign that Biden will be a bit softer,” he said.

“Calling Xiaomi a Chinese military company was always ridiculous. For firms tied to more legitimate defence concerns, or Xinjiang, however, it will be more difficult.”

(Reporting by Aakriti Bhalla in Bengaluru and Josh Horwitz in Shanghai; Editing by Christopher Cushing, Shri Navaratnam and Kim Coghill)

Danone to Sell Potential $2 Billion Stake in China Mengniu

The Chinese company has a market capitalisation of about 166 billion Hong Kong dollars ($21.4 billion), meaning a sale of Danone’s 9.8% stake could reap $2.1 billion based on latest market prices.

The French company, the brands of which include Actimel yoghurt and Evian water, added that the sale would take place via an accelerated bookbuilding process.

Danone shares were up 0.8% in afternoon trading.

Former Danone boss Emmanuel Faber was ousted as chairman and CEO this year after clashes with some board members over strategy and calls from activist funds for him to resign over the group’s lacklustre returns compared with some rivals.

French paper Les Echos this week reported that Antoine de Saint-Affrique was the frontrunner to become Danone’s new CEO. Danone declined to comment on that report.

Last October Danone also agreed to sell its stake in Japanese probiotic yoghurt maker Yakult Honsha.

($1 = 7.7660 Hong Kong dollars)

(Reporting by Sudip Kar-GuptaEditing by Carmel Crimmins and David Goodman)

Amazon Wins $303 Million Court Fight in Blow to EU Tax Crusade

By Foo Yun Chee

The bloc failed to show that Luxembourg had given the U.S. online retailer special treatment in violation of state-aid rules, the EU’s General Court ruled on Wednesday.

The victory follows last year’s landmark defeat for Vestager against Apple, which had contested an order that it pay 13 billion euros ($15 billion) in Irish back taxes.

Both Amazon and Apple were targeted by Vestager in a campaign to stamp out tax deals used by EU states such as Ireland, Luxembourg and the Netherlands to attract large companies. The Commission views such agreements as unfair.

“The Commission did not prove to the requisite legal standard that there was an undue reduction of the tax burden of a European subsidiary of the Amazon group,” the Luxembourg-based EU judges said.

Amazon in a statement welcomed the ruling, saying it was in line with its “long-standing position that we followed all applicable laws and that Amazon received no special treatment”.

Vestager said she would examine the ruling before deciding whether to appeal to Europe’s top court. [B5N2GD001]

It wasn’t all bad news for Vestager. In a separate case on Wednesday, French utility Engie lost its appeal against an EU order to pay back taxes of 120 million euros to Luxembourg.

But the spotlight was on the Amazon decision, which was criticised by groups campaigning for higher taxes to be levied on multinationals.

“Today’s ruling is a blow,” said Chiara Putaturo, a tax expert with Oxfam EU. “It shows again that case-by-case investigations do not solve large-scale tax dodging.”

The amount at stake in the Amazon decision was tiny compared to the billions of dollars the online retailer earns each quarter but the decision could help other companies in their appeals against the bloc’s tax probes.

Vestager has successfully made Belgium, Ireland, Luxembourg and the Netherlands change their tax ruling practices, and spurred the Organisation for Economic Cooperation and Development (OECD) to aim for a global deal on how multinational companies are taxed.

The OECD said last week that the chances of a global deal had never been higher.

The European Commission in its 2017 ruling, knocked down on Wednesday, said Luxembourg spared Amazon from paying taxes on almost three-quarters of its profits from EU operations by allowing it to channel profits to a holding company tax-free.

In its 2018 decision on Engie, the EU said the arrangement with Luxembourg authorities artificially reduced the company’s tax burden, which meant it paid an effective corporate tax rate of 0.3% on certain profits in Luxembourg for about a decade.

The court sided with the Commission, saying the French utility had benefited from a tax advantage.

The cases are T-816/17 Luxembourg v Commission & T-318/18 Amazon EU v Commission.

($1 = 0.8243 euros)

(Additional reporting by Marine Strauss; editing by Barbara Lewis and Carmel Crimmins)

Online Sales Help Supermarket Operator Ahold Beats Expectations

Net sales rose 5.8% at constant exchange rates to 18.3 billion euros ($22.2 billion), with online sales surging by 103%. A company compiled consensus forecast has predicted group sales of 17.4 billion euros.

Ahold said it was increasing its 2021 online sales outlook based on the performance.

($1 = 0.8247 euros)

(Reporting by Anthony Deutsch; Editing by David Goodman)

China’s April Auto Sales Rise 8.6%, Up for 13th Straight Month

Sales reached 2.25 million vehicles in April, data from the China Association of Automobile Manufacturers (CAAM) showed.

Sales of new energy vehicles (NEVs), including battery-powered electric vehicles, plug-in petrol-electric hybrids and hydrogen fuel-cell vehicles, maintained their strong sales momentum, jumping 180%, with 206,000 units sold in the month.

NEV makers, such as Nio Inc, Xpeng Inc and Tesla Inc, are expanding manufacturing capacity in China, encouraged by a policy of promoting greener vehicles to cut pollution.

(Reporting by Yilei Sun and Tony Munroe; Editing by Himani Sarkar and Clarence Fernandez)

Inflation Anxiety Jolts Stocks, Asia Tumbles to Two-Month Lows

By Swati Pandey

Futures pointed to a gloomy start for European and U.S. shares with those of Eurostoxx 50, Germany’s Dax and London’s FTSE all down 0.2% each.

E-mini futures for the S&P 500 stumbled 0.4% while futures for the tech-heavy Nasdaq were down 0.6%.

MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 1.5% to the lowest since March 26, adding to Tuesday’s 1.6% loss with all major indices under heavy selling pressure.

Analysts said a combination of inflation fears and some investors cutting their exposure to over-stretched stocks or sectors was behind the recent downturn.

At 678 points, the regional index is not too far from a record high of 745.89 touched in February and is still up 3% this year so far, on top of a 19% jump in 2020 and a near 16% rise in 2019.

Australian stocks slipped 0.9% while South Korea’s KOSPI index skidded 1.4%. Japan’s Nikkei reversed early gains to be down 1.5%. China’s blue-chip share index was little changed.

Taiwan’s benchmark index plunged 6% from all-time highs to levels seen in February on fears it may raise its COVID-19 alert level in coming days, which would lead to closure of shops dealing in non-essential items as infections rise.

Analysts, however, doubted the broader equities sell-off would extend much further in a world of easy accommodative policy and fiscal largesse.

“Despite the severity of the moves, we sensed limited panic in our client conversations with many using (the) weakness as an opportunity to buy the dip, particularly in the value orientated areas e.g. banks, energy and insurance,” JPMorgan analysts wrote in a note.

Overnight on Wall Street, technology stocks were among the biggest losers though the tech-focused Nasdaq reversed the bulk of its early 2% decline over the course of the day. The Dow dropped 1.4% and the S&P 500 fell 0.9%.

The equity rout barely helped drive any safe haven flows into the greenback even as futures pointed to yet another negative open for Wall Street.

“What is unusual about the last two days is that the equity-market angst did not provide the U.S. dollar with a notable lift,” said Alvin T. Tan, head of Asia FX strategy at RBC Capital Markets.

Tan said there was no sign of “risk-off” among regional currencies either with the high-carry Indian rupees and Indonesia rupiah largely holding their ground.

“Still, it is not yet obvious if this signifies a new market paradigm. As they say, one swallow does not make a summer,” Tan added.

All eyes are now on the U.S. consumer price index report to be released by the U.S. Labor Department on Wednesday with market-based measures of inflation expectations having moved higher.

“Prices are definitely on the increase and this is evident across a wide range of sectors and geographies. What is less clear is the longevity of the increase in prices,” ANZ analysts wrote in a note.

Treasury yields have remained stuck to a tight range. The yield on benchmark 10-year Treasuries drifted lower to 1.6217%, a far cry from the 2% level seen in before the coronavirus pandemic. [US/]

The U.S. Federal Reserve expects higher inflation though officials have pointed to transient factors and base effects for the temporary rise.

“The upshot is the Fed remains far away from achieving its aim of average inflation of 2% per year. The Fed’s ultra-accommodative monetary policy is part of the reason why we consider the USD downtrend is intact,” said Commonwealth Bank of Australia analyst Carol Kong.

The dollar was up 0.2% against the Japanese yen at 108.84 as it meandered in a narrow 107-110 band.

The dollar index, which measures the greenback against six major currencies, was a shade higher at 90.335, after touching a two-month low of 89.979. [USD/]

The currencies of major natural resource suppliers such as Canada have been buoyant amid rising commodity prices.

The loonie held near a 3-1/2-year high of C$1.2078.

The Australian dollar, another proxy for commodity prices, was not far from a 10-week high of $0.7891 struck on Monday. The Aussie, which is also played as a liquid proxy for risk, did falter in afternoon Asian trading to $0.7790.

Oil prices were higher with U.S. crude rising 13 cents at $65.41 a barrel. Brent crude slipped 10 cents to $68.65 per barrel. [O/R]

Spot gold was off slightly at $1,829 an ounce.

In cryptocurrencies, ether hit a fresh record high touched on Monday to be at $4,349.44. The value of the second-biggest digital token has surged over 5.5 times so far this year.

(Reporting by Swati Pandey in Sydney; Editing by Shri Navaratnam and Kim Coghill)

SoftBank Reports $37 Billion Vision Fund Profit on Coupang

Group net profit was 4.99 trillion yen in the year ended March. That compares with an 962 billion yen loss a year earlier after teetering tech bets

https://www.reuters.com/article/softbank-group-results-idINKBN22U0KM depressed the value of its portfolio.

Market enthusiasm for tech stocks drove the public listing of SoftBank-backed e-commerce firm Coupang and used-car trading platform Auto1 Group and the rising share price of ride-hailing firm Uber during the quarter.

Much of Vision Fund’s gain is on paper with the value of the portfolio locked up in the stock market amid concern over frothy valuations and a boom in special purpose acquisition vehicles (SPACs) which has drawn regulatory scrutiny.

($1 = 108.8600 yen)

(Reporting by Sam Nussey; Editing by Kim Coghill)

Japan’s Nomura Still Betting on Global Expansion to Lift Profit, Despite Archegos Hit

By Makiko Yamazaki

Nomura now estimates 320 billion yen ($2.94 billion) in pretax income for its three core divisions in the year from April next year, citing strength in the wholesale arm, comprising global markets and investment banking.

The new target raises the bar from the 280 billion yen profit targeted in an estimate issued a year ago, and represents a 29% jump from the 247.6 billion yen it posted for the year ended in March 2021.

The raised ambitions come soon after the implosion of Archegos, a family office run by Bill Hwang that failed to meet margin calls on heavily leveraged stock bets, rekindled concerns about Nomura’s global expansion strategy.

Chief Executive Kentaro Okuda told a media briefing on Wednesday that Nomura has exited more than 99% of its Archegos-related positions and reiterated that it has no plans to shy away from the prime brokerage business.

But he added that the bank would reduce prime brokerage transactions that only provide credit using stocks as collateral.

The upward profit target revision is driven by a higher forecast for the wholesale division, which is expected to post a profit of 150 billion yen for April 2022-March 2023, more than double the 64.3 billion yen posted for the year just ended.

Earnings at Nomura’s wholesale arm, which includes overseas operations, have been highly volatile since its disastrous 2008 acquisition of Lehman Brothers’ Asian and European businesses, forcing the bank to repeatedly implement drastic cost cuts.

In an effort to expand stable revenue sources, Nomura now targets a 50% income growth in the advisory business and a 40% increase from private equity and private debt markets, which includes businesses with unlisted companies, over the next few years.

($1 = 108.7400 yen)

(Reporting by Makiko Yamazaki and Takashi Umekawa; Editing by Kenneth Maxwell)