21Shares Launches Metaverse Focused ETP With The Sandbox Token

Key Insights:

  • 21Shares is soon going to be issuing The Sandbox’s SAND-based ETP.
  • This will be the company’s 30th investment product.
  • Although it is not at its lowest, 21Shares BTC ETF is still trading at a 27.5% discount.

Investment in crypto products has been a growing phenomenon with many investors, novice and experienced alike, looking to put their money into a more diversified asset class, but with the safety assurance of the traditional market.

What does that leave the market with, you ask? The answer is ETFs.

And More Importantly, Metaverse ETFs

Over time Bitcoin, Ethereum, Litecoin, and other major crypto assets have found an audience, however, the emerging altcoins are yet to do so. Regardless there are those who prefer it, and for them, companies such as 21Shares bring out altcoins-based ETPs.

Now the newest addition to this cohort is a Metaverse-based ETP launched with The Sandbox.

The Sandbox established its footing in the virtual world space a while ago, and since then, it has achieved everything from partnering with the HSBC bank to collaborating with celebrities and much more.

Even though it may not be as wildly successful as Decentraland, it still deserves credit for standing shoulder to shoulder.

Decentraland’s floor price is almost twice as much as The Sandbox | Source: Dune

But in line with the rising customer demand for the ETP, 21Shares officially launched the SAND ETP as its 30th product.

Commenting on the same, the Co-Founder of 21Shares, Ophelia Snyder, said,

“The conversation has really shifted away from, Is bitcoin going to exist in three years?, To what will the crypto ecosystem look like in three years? And that means that the types of discussions we’re having with institutional clients are much more sophisticated…and metaverse is one of those things where you’re starting to see real themes emerge in crypto.”

ETPs This Year

Although the emergence of newer and newer ETPs is expected to propel the ETP market to newer heights, that is not the case right now.

Even though 21Shares launched a new Cosmos ETP earlier this year, it did not make a change in 21Shares biggest ETP, the Bitcoin ETF (ABTC).

Trading at a discount since the beginning of November, ABTC is currently down by 27.5% from its standing five months ago.

ABTC is trading at the highest discount of all its competitors | Source: 21Shares

The recovering market from a few days ago was certainly helpful, but the broader market cues cut the rally, and as a result, ABTC’s recovery could not be completed.

But things might change with some positive development in favor of the market, such as the SAND ETP news.

Italian Banking Giant UniCredit Gets Sued by Crypto Firm for $144m

Key Insights:

  • UniCredit (UCG) gets fined $144m for closing crypto-related accounts.
  • A Bitminer Factory subsidiary sued UniCredit in Banka Luka, Bosnia and Herzegovina.
  • UniCredit joins several banks that have taken a hard line on crypto-related firms.

UniCredit SpA (UCG), Italy’s largest commercial bank, is the world’s 34th largest by assets and is headquartered in Milan. The bank offers services primarily in Italy, Germany, and Central and Eastern Europe.

In recent weeks, UniCredit Group has been in the news, with the Russian invasion of Ukraine and resulting sanctions leaving the bank with a possible €1 billion write-off of its Russian business.

Earlier this year, UniCredit Bank threatened to close the bank accounts of banking customers who buy crypto including Bitcoin (BTC). There was no u-turn on the threats made with the bank maintaining its anti-crypto stance.

UniCredit Hit Sued by Crypto Miner for €131 Million

This week, a court in Banja Luka, Bosnia and Herzegovina fined a UniCredit branch €131 million ($141 million) for illegally closing current accounts belonging to a Bitminer Factory subsidiary.

UniCredit closed the accounts held in UniCredit’s Banja Luka branch, preventing a reported ICO related to projects in the crypto mining sector. Bosnia and Herzegovina start-up projects are reportedly using renewable energy.

According to today’s news, UniCredit Bank stated that it is not permitted to service crypto-related firms.

While other banks have a similar stance to UniCredit Bank, the banking environment is becoming more crypto-friendly.

UniCredit Aligns with HSBC while Other Banks Embrace Crypto

In 2021, news hit the wires of UK commercial bank NatWest announcing it does not want to do business with clients and customers dealing in crypto. At a shareholder event, Morten Friis stated,

“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”

The NatWest news followed reports of the UK’s HSBC blocking customers from buying MicroStrategy stock in early 2021.

The banking environment has changed over the last 12-months. Certain jurisdictions have become more crypto-friendly in support of innovation.

Last week, FX Empire reported Australia’s ANZ Bank becoming the first Aussie bank to mint an Aussie Dollar (AUD) pegged stablecoin.

Ahead of the ANZ news, Australia’s Commonwealth Bank of Australia also hit the crypto airways. The bank reportedly plans to double the department responsible for the crypto industry.

While ANZ and the Commonwealth Bank of Australia are leading the way, UniCredit Bank has reportedly appealed against the court decision. It remains to be seen, however, whether the appeal will be successful. According to reports, the bank could not provide any policies against dealing with crypto-related companies.

The Sandbox’s Animoca Brands Lays Down Web3 Expansion Plans

Key Insights:

  • Animoca Brands’ Yat Siu talks about shepherding companies into the Web3 space. 
  • Web3 and metaverse expansion could be on Animoca Brands’ cards this year.
  • The Sandbox has also actively advocated the entry of institutions and celebrities in the metaverse. 

With institutional and retail interest in Web3 and the metaverse growing, the Hong Kong-based game software company and venture capital, Animoca Brands, has laid down plans to speed up the evolution of the internet into an open metaverse.

Shepherding Firms Into Web3

In a recent interview, Animoca Brands’ co-founder and chairman Yat Siu claimed that his firm would continue to ‘shepherd companies into Web3.’ Siu has advocated the evolution of the internet into an open Metaverse for a long time. 

The Hong Kong-based entrepreneur is not very fond of the idea of closed internet dominated by large centralized Web2 companies. Instead, Siu is pro -decentralization of the internet which heads towards Web3. 

In the interview during the Australian Blockchain Week event, Siu discussed the broader aspects of Web3 for companies. The discussion was hosted by the CEO of crypto exchange BTC Markets — Caroline Bowler.

It covered several topics, including the actual value of Yuga Lab’s BAYC NFTs, the limitations of Web2, and Animoca’s ever-growing portfolio of companies and investments.

During the discussion, Siu said, 

“When you buy an expensive handbag, you buy the network effect and the story that is embedded within it. The same goes for BAYC, except you receive extra commercial rights which develop deeper network effects.”

Siu’s argument remains that decentralized Web3 platforms and digital assets like NFTs offer users a chance to maintain ownership rights over their data and content online, instead of it being controlled and utilized by firms such as Meta.

Furthermore, discussing the plans for Animoca Brands, Siu highlighted that the firm is still ‘super early’ in its long-term goal of building an open Metaverse. The entrepreneur also emphasized the importance of speeding up the process of building a decentralized space due to the risk of having larger centralized firms dominating the virtual sphere. He added, 

“You will continue seeing us take that approach as we try to shepherd companies into Web3.”

Animoca Brands Strengthing Crypto Marketing

Crypto marketing has been an effective way for projects to take the lead in the market. One of the most notable names for effectively marketing its brand is Crypto.com. The firm once again made headlines after adding FIFA World Cup Qatar 2022 to its list of sponsorship deals with sports to drive brand awareness.

The Sandbox, a subsidiary of Animoca Brands, has also actively marketed its brand with celebrities on board the metaverse train alongside partnerships and collaborations with institutions. 

As reported by FXEmpire, HSBC was the new corporate giant to enter the metaverse through a partnership with the Sandbox (SAND). HSBC joined a swarm of global brands working with the Sandbox, including Gucci, Warner Music Group, Ubisoft, and Adidas.

With Sandbox’s crypto marketing game on point and Web3 expansion on its cards seems like Animoca Brands is set for a bright 2022.

Crypto Wallet Blocto Partners With Yahoo Taiwan to Launch NFT Store

Key Insights:

  • Blocto has announced its partnership with Yahoo Taiwan to launch Yahoo’s NFT store. 
  • The companies will work towards NFT adoption and accessibility. 
  • The Yahoo Taiwan NFT store could roll out in March-end. 

Portto, the company behind Blocto, has announced its partnership with Yahoo Taiwan to launch its non-fungible token (NFT) store in late March. The NFT store debuts with the ‘A-Hoo’ collection – the official mascot of Yahoo Taiwan.

Yahoo Taiwan’s NFT Store

Yahoo Taiwan’s NFT store will be made in collaboration with Blocto, the NFT and crypto wallet.

Information shared by Blocto highlights that all NFT creators in Yahoo Taiwan NFT Store would be officially curated and approved by Yahoo Taiwan. The same could pave the way for a trustworthy trading experience and a better quality guarantee.

The NFT store’s main focus would include a fiat payment gateway where credit card payment will be available, along with more fiat payment methods planned in the near future.

The platform would also lay stress on affordable pricing, providing users access to premium NFT products. Furthermore, the marketplace also aims to focus on user-empowering NFTs.

Hsuan Lee, CEO at Portto said,

“With our (Portto’s) expertise in blockchain technology, Blocto is creating this platform with Yahoo Taiwan so anyone can own and collect NFTs like ‘A-Hoo’ as easy as shopping on any e-Commerce platform.”

Thus, this new collaboration seeks to make NFT buying and selling process as easy as online shopping, thereby increasing adoption. About the same, Chen-Te Lin, VP of Taiwan E-Commerce and Regional Products, Yahoo, said,

“By collaborating with Crypto wallet Blocto and leveraging Yahoo Taiwan’s advantages in media and e-commerce to launch ‘Yahoo Taiwan NFT Store,’ Yahoo Taiwan is making NFTs accessible to all and creating a channel where local creators can expand their venture into NFTs.”

The Yahoo Taiwan NFT store will debut with its first NFT collection featuring its official mascot – ‘A-Hoo.’ A-Hoo widely appears on Yahoo Taiwan’s stickers, branded products, and delivery crates. The ‘A-Hoo’ collection would be available to trade on Blocto’s NFT marketplace BloctoBay.

NFTs Still Stealing the Show

Data from market tracker DappRadar shows that sales of NFTs reached close to $25 billion in 2021 as the crypto-asset exploded in popularity.

Yahoo Taiwan’s NFT launch announcement comes only a few days after Coinbase, a US-based crypto exchange, announced plans to launch an NFT marketplace. That said, FXEmpire reported just yesterday that Meta (FB) co-founder Mark Zuckerberg said they are working to bring NFTs to Instagram in ‘the near term.’

The boom of NFTs in the crypto space has been constant despite the recent consolidation of the cryptocurrency markets as top assets like BTC and ETH continued their rangebound movement.

Furthermore, with finance giants like HSBC entering the Metaverse, as reported by FXEmpire, it seems like the NFT and Metaverse space is bound to gain popularity in the near term. HSBC is set to buy a plot of land at The Sandbox metaverse.

SAND Targets $4.00 With Metaverse Entrants Too Big to Ignore

Key Insights:

  • Interest in the Metaverse and The Sandbox is too significant for the crypto market to ignore.
  • On Wednesday, SAND surged by 19.4% to return to $3.2 levels after a dip to sub-$2.70.
  • Technical indicators are becoming bullish, with a bullish cross looking imminent.

It was a good day for SAND on Wednesday. Unfazed by the FED monetary policy decision, SAND rallied from an early morning low of $2.69 to strike a final hour high and end of the day $3.26.

The upward trend throughout the day came despite the broader crypto market hitting reverse ahead of the FED’s overnight monetary policy decision.

While Bitcoin (BTC) and the other major cryptos have been at the mercy of market risk sentiment, inflation, and monetary policy, a surge in Metaverse-related trademark applications and events in The Sandbox has lifted SAND clear of a current year low of $2.63.

Big Players and Major Events Bring the Metaverse into Focus

It’s been a busy year for the Metaverse, as mainstream players catch up on early Metaverse entrants.

The Metaverse provides endless opportunities that go far beyond gaming. Russia’s invasion of Ukraine and COVID-19 have further demonstrated the need for virtuality.

Companies filing Metaverse-related trademarks are rising, with events in the Metaverse becoming more frequent.

On Wednesday, Paris Hilton was live at The Sandbox Game SXSW.

Paris Hilton set the stage for music industry icons to go Metaverse. In January, Warner Music Group (WMG) acquired a beachfront property in The Sandbox. WMG will turn the site into a musical theme park and concert venue.

With bands and artists under the WMG banner, including Ed Sheeran, Gorillaz, and the Red Hot Chili Peppers, virtual events will drive fan engagement and investor interest in LAND and SAND.

The Paris Hilton show followed news of HSBC partnering with The Sandbox and AMEX filing Metaverse-related trademark applications.

Such has been the interest in the Metaverse that, in February, JPMorgan projected a $1 trillion Metaverse.

SAND Price Action

At the time of writing, SAND was down by 0.68% to $3.235.

SANDUSD 170322 Daily
Another bullish day ahead would bring $4.00 levels into play.

Technical Indicators

SAND will need to avoid the day’s $3.07 pivot to make a run on the First Major Resistance Level at $3.45. SAND would need the broader crypto market to support a breakthrough this morning’s high of $3.36.

An extended rally would test the Second Major Resistance Level at $3.64. The Third Major Resistance Level sits at $4.21.

A fall through the pivot would test the First Major Support Level at $2.88. Barring an extended sell-off, SAND should avoid a return to sub-$2.70. The Second Major Support Level sits at $2.50.

SANDUSD 170322 Hourly
Resistance levels remain in play, despite a mixed start to the day.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bullish signal. Wednesday’s rally saw SAND move through the 50-day, the 100-day, and the 200-day EMAs. At present, SAND sits above the 200-day EMA at $3.2073.

This morning, the 50-day EMA narrowed to the 100-day EMA, delivering support. The 100-day EMA narrowed marginally on the 200-day EMA, also price positive.

The markets will be looking for a further narrowing of the 50-day EMA to the 100-day EMA to support a bullish cross.

Avoiding the 200-day EMA and a bullish cross of the 50 through the 100 would bring $3.6 levels into play.

SANDUSD 170322 4-Hourly
A bullish cross would bring $3.60 levels into play.

HSBC Partners with The Sandbox, Opening Doors Into the Metaverse

Key Insights:

  • The British banking giant HSBC has made its way into the metaverse.
  • HSBC is the first global bank to enter the Sandbox metaverse.
  • The partnership aims to help the bank ‘take sports engagement to a new level.’

The multinational investment bank and financial services holding company HSBC is the new corporate giant to enter the metaverse through a partnership with the Sandbox (SAND).

Finance Giant Entering the Metaverse

One of the world’s largest international banking and financial services providers, HSBC, made the partnership announcement today.

A blog post by the firm said that the new collaboration could potentially open more opportunities for virtual communities across the world to ‘engage with global financial services providers and sports communities.’

HSBC would acquire a plot of virtual real estate in the Sandbox metaverse to increase engagement and connect with sports, e-sports, and gaming enthusiasts.

Additionally, the financial giant believes that the agreement opens the door for other global institutions to continue innovating in Web3.

HSBC thinks that increased consumer adoption calls for robust experiences in the metaverse through decentralized and gamified offerings.

The statement provided no details of HSBC’s development in the virtual plot of land. However, the firm posted a promotional GIF in the blog showing an HSBC stadium next to a virtual body of water.

The Chief Marketing Officer, Asia-Pacific, at HSBC, Suresh Balaji, said,

“At HSBC, we see great potential to create new experiences through emerging platforms, opening up a world of opportunity for our current and future customers and for the communities we serve.”

Balaji further added that the firm’s partnership with the Sandbox will allow the bank ‘to create innovative brand experiences for new and existing customers.’

Customer Engagement through Metaverse and NFTs

The Metaverse and NFT space boom has led to many multinational firms entering the space to woo customers and increase consumer engagement. HSBC joins a swarm of global brands working with the Sandbox, including Gucci, Warner Music Group, Ubisoft, and Adidas, among others.

The Sandbox is a subsidiary of the Hong Kong gaming company – Animoca Brands. The firm raised $93 million in a funding round led by SoftBank Vision Fund 2 in November 2021.

The Sandbox has had its fair share of social attention over the last few months. On February 17, Snoop Dogg turned the Death Row record label into an NFT label and launched Snoopverse in the Sandbox.

Furthermore, just today, Paris Hilton announced a partnership with the Sandbox wherein the singer would appear as her voxel avatar.

Apart from gaming and sport, the metaverse has attracted celebrities from the music and entertainment industry. Interest from the Music industry has been so immense that even Tencent Music (TME) and Warner Music Group (WMG) have entered the metaverse.

UK Mining and Financial Stocks Deliver Early FTSE100 Support

It has been a particularly quiet morning on the economic calendar. There were major economic indicators from the Eurozone or the UK to spook the markets going into the open.

Appetite for riskier assets improved through the morning. A rebound in Chinese stocks provided much-needed support. In response to hopes of Beijing delivering stimulus, the Hang Seng Index surged by 9.08%, with the CSI300 rallying by 4.32%.

The FTSE100 Early Movers

Following a Tuesday slump that left bank and mining stocks in the deep red, it was risk-at the open.

At the time of writing, the FTSE100 was up 1.01% to 7,260.45.

UK100 160322

Standard Chartered led the banking sector, rallying by 3.27%. Barclays (+1.85%), HSBC Holdings (+0.97%), and Lloyds (+1.76%) saw more modest gains.

The upside across the miners was more impressive. Rio Tinto (+2.28%), Glencore (+2.12%), and Antofagasta (+2.55%) led the way, while Anglo American (+0.46%) and BHP Billiton (+1.07%) trailed.

Hopes of economic stimulus eased pressure on mining stocks early in the session, with the upside coming despite an anticipated FED rate hike after the market close.

Risk Appetite Delivers Early GBP/USD Support

Following Tuesday’s gain, today’s shift in market risk sentiment provided further respite for the Pound.

At the time of writing, the Pound was up by 0.18% to $1.30673. On Tuesday, the Pound rose by 0.31% against the Dollar to end the day at $1.3042.

Cable 160322 Daily Chart

For the day ahead, much will now rest in the hands of the FED. The markets are expecting a 25-basis point hike. Of greater influence will be the interest rate and economic projections. Russia’s invasion of Ukraine is likely to push inflation even higher. The markets will be keen to see how the FED plans to respond.

China’s Economic Wobbles Cast Long Shadow for Asia

China’s gross domestic product faltered in the third quarter, data showed this week, with growth hitting its weakest in a year, hurt by power shortages, supply chain snags and a property market crisis.

For China’s trading partners, the slippage presents new risks to what is shaping up to be a bumpy global recovery from the pandemic slump.

“Yes, growth elsewhere, namely the U.S. and Europe, appears robust,” wrote Frederic Neumann, co-head of Asian economics research at HSBC. “But it is China that’s been the main engine for growth across the region – and as it sputters, Asian economies will lose much of their torque.”

HSBC analysis showed Asia-Pacific economies from South Korea to New Zealand far more correlated to changes in China’s growth than they were to changes in U.S. or European GDP.

For every percentage point China added to its growth, trade powerhouse South Korea reported about 0.7 of point of additional growth, the bank’s economists said.

South Korea was by far the most sensitive to changes in Chinese growth, according the analysis, followed by exporting nations Thailand and Taiwan.

An anticipated Chinese slowdown has already prompted Citi analysts to downgrade growth projections for economies in the region, including South Korea, Taiwan, Malaysia, Singapore and Vietnam.

A Reuters Corporate Survey last week showed a majority of Japanese firms were concerned that a slowdown in China, Japan’s largest trading partner, would affect their business.

The slowdown is being felt across most of China’s economy, from the retail to factory sectors, which posted its weakest output growth since the start of the pandemic.

China’s auto sales slumped 19.6% in September from a year earlier, industry data showed last week, falling for a fifth consecutive month amid a prolonged global shortage of semiconductors and the power crunch.

Similarly, sharp declines in new construction starts in China’s property market, due to a regulatory crackdown, loom as risks for exporters of raw materials, such as Australia.

Iron ore prices have nearly halved since hitting a record in mid-May, with demand hurt by China’s steel output curbs and the property slowdown.

Last week, mining giant Rio Tinto downgraded its 2021 iron ore shipments forecast, mostly due to tight labour market conditions in Australia, but it also warned of headwinds from China’s regulatory crackdown.


Despite the risks from China, analysts say Asia will be able to prevent a precipitous collapse in domestic demand, as improved vaccination rates allow countries in the region to shake off COVID-19 restrictions.

Similarly, Chinese demand for some goods, such as fuel and food, remains firm. That means for now, central banks are unlikely to swerve from their general shift away from crisis era monetary settings.

Singapore last week tightened its monetary policy.

Beyond the broader demand shock, complications for economies in Asia and elsewhere could come from worsening supply-side problems in China, such as the power crunch.

So far, China’s manufacturers and exporters have yet to significantly pass on higher costs caused by supply shortages of everything from coal to semiconductors.

But analysts warn the situation around inflation is fluid.

While weaker demand could relieve pressure on prices, supply chain bottlenecks, if unresolved, could create a “stagflation” nightmare in which surging prices are accompanied by stagnant growth.

“I think it could potentially be a bit of a double whammy now. Because China is one of the economic engines for the region, any slowdown can affect the demand for regional goods and services,” said Selena Ling, head of treasury research and strategy at OCBC Bank.

“Secondly, the ongoing power crunch, in all likelihood, policymakers will prioritise home (use) for winter demand over industrial activity. So that could exacerbate global supply chain disruptions.”

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Tetsushi Kajimoto, Kantaro Komiya and Leika Kihara in Tokyo; Orathai Sriring in Bangkok; and Tom Westbrook in Singapore; Writing by Sam Holmes; Editing by Raju Gopalakrishnan)

European Stocks Rally as Energy Prices Cool

The pan-European STOXX 600 index rose 1.1% in broad-based buying to reverse weekly losses, with miners, automakers and utilities in the lead.

Oil prices dropped for a second session, while European gas futures also fell back from record highs. [O/R]

There was also some relief on the U.S. debt ceiling front after U.S. Senate Republican Leader Mitch McConnell announced plans to extend the borrowing limit into December.

French luxury goods maker Hermes jumped 3.1% after HSBC upgraded the stock to “hold”, while peers LVMH, Richemont and Kering all rose more than 2%.

Royal Dutch Shell inched up 0.4% after saying that soaring natural gas and electricity prices around the world will provide a significant boost to its cashflow in the third quarter.

Swiss construction chemicals maker Sika rose 2.0% after it said it could overcome rising raw material costs and supply chain restrictions to increase its sales and profit margins this year.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu)

PBOC Promises to Protect Consumers as China Evergrande Teeters

Once the epitome of an era of helter-skelter borrowing and building in China, Evergrande has now become the poster child of a crackdown on developers’ debts that has left investors large and small sweating their exposure.

In a letter to investors seen by Reuters, the Shenzhen Financial Regulatory Bureau said “relevant departments of the Shenzhen government have gathered public opinions about Evergrande Wealth and are launching a thorough investigation into related issues of the company.”

It is also urging China Evergrande and Evergrande Wealth to work to repay investors, the letter said, which was sent following investor demands for an inquiry.

The People’s Bank of China (PBOC) made no mention of Evergrande in a statement posted to its website, which contained just a line on housing along with promises to make its monetary policy flexible, targeted and appropriate.

But at a delicate moment for the world’s most indebted developer, which missed a bond interest payment last week and has another due this week, its pledge to “safeguard the legitimate rights of housing consumers” hinted at the sort of response markets had begun to hope for.

With liabilities of $305 billion, Evergrande has sparked concerns its problems could spread through China’s financial system and reverberate around the world – a worry that has eased as damage has so far been concentrated in the property sector.

The PBOC’s broad-ranging statement was issued after the third quarter meeting of its Monetary Policy Committee. Its housing line echoed comments from Evergrande’s leadership that point to containment efforts and prioritizing small investors in properties ahead of foreign holders of Evergrande debts.

“We expect that any impact to the banking system will be manageable and that the government will instead focus on the social fallout of unfinished housing units,” said Sheldon Chan, who manages T. Rowe Price’s Asia credit bond strategy.

Suppliers exposed to Evergrande payables and domestic bondholders would also take priority over dollar bond holders, he said.

Evergrande dollar bonds have been trading accordingly, and remained on Monday at distressed levels around 30 cents on the dollar.

Research firm Morningstar listed BlackRock, UBS, Ashmore Group and BlueBay Asset managers as bondholders with exposure to Evergrande in a Friday report which said funds at HSBC and TCW had closed positions.

Ashmore, BlackRock, BlueBay, HSBC, TCW and UBS declined to comment.

Evergrande’s stock rose 8%, though at HK$2.55 it isn’t far above last week’s decade-low of HK$2.06 and stock borrowing costs have surged as short sellers pile in.

Shares of Evergrande’s electric car unit fell heavily after it warned of an uncertain future.

Work on a soccer stadium Evergrande is building in Guangzhou is proceeding as normal, the company said on Monday.

The focus now turns to whether a coupon payment of $47.5 million due on Wednesday is made, and then to whether China can contain the economic damage if Evergrande collapses.

Its struggles so far to pay suppliers and sell assets have already begun to dent confidence among homebuyers and force sector-wide price cuts, signaling that consolidation – at the very least – looms for the real estate industry.

“Evergrande’s potential credit event, in our view, is part of a ‘survival of the fittest’ test in China’s property sector,” Deutsche Bank strategist Linan Liu said in a note to clients.

“Allowing orderly exits by weaker players in the property sector, while painful, is necessary to improve overall leverage conditions in the sector and bring about a soft landing.”

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Ryan Woo in Beijing, Anne Marie Roantree in Hong Kong and Tom Westbrook in Singapore Writing by Tom Westbrook Editing by Stephen Coates, Mark Potter and Nick Zieminski)

Evergrande Domestic Debt Deal Calms Immediate Contagion Concern

Evergrande, Asia’s biggest junk-bond issuer, is so entangled with China’s broader economy that its fate has kept global stock and bond markets on tenterhooks as late debt payments could trigger so-called cross-defaults.

Many financial institutions have exposure to Evergrande through direct loans and indirect holdings, while any defaults will also trigger sell-offs in the high-yield credit market.

In an effort to reassure investors, the People’s Bank of China’s injected 90 billion yuan to the banking system, signalling support for markets as they braced for what is expected to be one of China’s largest-ever debt restructurings.

Evergrande is scrambling to avoid defaulting on a number of bonds with payments due this week and its main unit, Hengda Real Estate Group, said on Wednesday it had “resolved” one coupon payment due on Thursday on its Shenzhen-traded 5.8% September 2025 bond, via “private negotiations”.

It did not specify how much interest would be paid or when, nor did Hengda mention Evergrande’s other pressing debts, leaving it unclear what this means for $83.5 million in dollar bond interest payments due on Thursday.

Evergrande did not immediately respond to questions about its deal or its intentions.

But engagement with bondholders, a common way to avoid default, on top of chairman Hui Ka Yuan’s vow this week that Evergrande would “walk out of its darkest moment,” cheered investors and soothed markets more broadly.

“These events seem to suggest that the company is taking control of the situation and is trying its best to work out a solution with creditors,” Singapore-based Dexter Tan, a senior fixed income analyst at Bondsupermart.com, said.

Evergrande, which epitomised the borrow-to-build business model and was once China’s top-selling developer, also has a $47.5 million dollar-bond interest payment due next week.

“We do not have a clearer picture as how Evergrande settled its onshore coupon,” Singapore-based Chuanyo Zhou, a credit analyst at Lucror Analytics, said.

“It doesn’t look like a cash payment. It may still miss the coupon on offshore bonds due tomorrow.”

Evergrande’s woes have seen its shares fall 85% this year. The concerns have reverberated throughout China’s property market.

Shares of R&F Properties and Sunac China have both slumped around 50% year-to-date, Shimao is down more than 40% and Country Garden and Greenland Holdings have shed 30% and 20%, respectively.

Evergrande’s Hong Kong shares did not trade due to a public holiday but rose 40% in Frankfurt to 0.38 euros ($0.45).

Its dollar bonds maturing next year and in 2024 remained below 30 cents on the dollar.

In the wider market, the U.S. dollar slipped while the S&P 500 rebounded from recent losses.


Analysts have been downplaying the risk that a collapse threatens a “Lehman moment”, or liquidity crunch, which freezes the financial system and spreads globally.

Only some $20 billion of $305 billion outstanding debts is owed offshore, according to Refinitiv data.

But the risk of failure remains high, particularly if offshore bondholders are less willing than those in China to cut deals, and the fallout has already begun to trigger tremors in the property market of the world’s second-largest economy.

“There are now comparisons being made between Evergrande with the collapse (of) Lehman Brothers and the crash in the U.S. housing market, with many analysts dismissing this comparison,” wrote Sebastien Galy of Nordea Asset Management in a recent note. “The reality is that it will take weeks to figure out the impact on growth given the impact on the real estate market.”

There is also mounting political pressure to act as the anger of retail investors with their savings sunk in Evergrande properties or wealth management products swells.

Asked at a regular daily briefing on Wednesday whether China would take measures to intervene, foreign ministry spokesman Zhao Lijian only referred to the “responsible departments”.

Some funds have been increasing their positions in recent months. BlackRock and investment banks HSBC and UBS have been among the largest buyers of Evergrande’s debt, Morningstar data and a blog post showed.

Other bondholders include UBS Asset Management and Amundi, Europe’s largest asset manager.

Still, many market participants believe the fallout from Evergrande is likely to be contained.

“Despite the worry, so far this looks like a corporate bankruptcy and not something worse,” said Brad McMillan, chief investment officer for Commonwealth Financial Network in a recent note. “It’s a big one, to be sure, but one that can be handled within the system.”

(Reporting by Anshuman Daga in Singapore, Andrew Galbraith and Samuel Shen in Shanghai. Additional reporting by Hideyuki Sano in Tokyo, Clare Jim in Hong Kong and Gabriel Crossley in Beijing and Ira Iosebashvili in New York. Writing by Anne Marie Roantree and Tom Westbrook. Editing by Richard Pullin, Jacqueline Wong and Alexander Smith)

UK Shares Rise on Travel, Banking Boost; Retail Sales Data Ease Taper Fears

The blue-chip FTSE 100 index rose 0.3%, with banking shares gaining after a series of brokerage upgrades and price target hikes.

Asia-focused banks HSBC Holdings and Standard Chartered jumped 1.8% and 0.5%, respectively, after Barclays raised price targets on the stocks. RBC also upgraded HSBC to “outperform” from “sector perform”.

However, gains on the FTSE 100 were capped by miners Rio Tinto and Anglo American, which slipped 2.7% and 3.6% after Morgan Stanley cut its price targets on the stocks.

The domestically focused mid-cap FTSE 250 index advanced 0.5%.

British retail sales dropped 0.9% on the month in August versus a Reuters poll for a rise of 0.5%, after data earlier this week pointed towards a sharp recovery in the jobs market and a spike in inflation.

Investor focus will now be on the outcome of Bank of England’s (BoE) policy meeting next week.

“Next week’s policy decision should reaffirm that some tightening will be needed over the next few years to keep inflation (and the economy) in check. But we don’t expect the BoE to conclude that there is a sufficient case yet for near-term rate hikes,” Deutsche Bank economist Sanjay Raja said.

Airlines Wizz Air, Ryanair Holdings and British Airways owner IAG, and holiday company TUI AG rose between 1.2% and 4.7%, as Britain was set to consider easing its COVID-19 rules for international travel.

“The hope will be that a shift in the rules is the precursor to people jetting off for autumn and winter getaways,” said Russ Mould, investment director at AJ Bell.

Wickes Group jumped 5.6% to the top of FTSE 250 index after Deutsche upgraded the DIY retailer to “buy” from “hold”.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Shounak Dasgupta)

Europe Shares Mark Biggest Daily Drop in a Month as Miners, Luxury Stocks Tumble

The pan-European STOXX 600 was down 1.6% at a two-week low, with mining stocks sliding 4.2% in their biggest one-day decline since March.

Luxury stocks with a large exposure to China’s economy such as LVMH, Kering and Richemont dropped between 5.8% and 9.2% on Beijing’s plans to target excessive corporate profits and wealth inequalities.

“The increasing determination on the part of China to pour sand in the wheels of its own recovery story with a crackdown on various sectors, including tech and luxury, also appears to be weighing on sentiment, as well as on demand for raw materials,” said Michael Hewson, chief market analyst at CMC Markets UK.

Stocks around the globe fell earlier in the day, as minutes published Wednesday from the U.S. Federal Reserve’s latest policy meeting gave the impression of a looming cut in its massive, pandemic-era bond-buying programme.

Although the European Central Bank has held steady, rising inflation has prompted some policymakers to say it must begin to rein-in its easy money policies that have been instrumental in lifting the STOXX 600 to record highs.

Focus will turn to the high-profile annual U.S. Jackson Hole conference of central bankers in late August, where Fed Chair Jerome Powell could signal he is ready to start easing monetary support.

ECB President Christine Lagarde will not attend the conference, an ECB spokesperson said this week.

Banking stocks including Asia-focused HSBC, as well as Spain’s BBVA and France’s BNP Paribas fell about 3% each.

The travel and leisure index declined 2.5% as a surge in cases of the Delta variant of the coronavirus added to concerns of slowing global growth and took the shine off a solid second-quarter corporate earnings season.

With the European earnings season nearly at the halfway mark, profit for STOXX 600 companies is expected to have surged 150% in the second quarter, the best since Refinitiv IBES records began in 2012.

Among individual stocks, Swedish heating technology specialist Nibe Industrier jumped 10.1% after posting a 64% jump in first-half profit.

Swiss building materials supplier Geberit, on the other hand, fell 1.7% as it warned about rising raw materials prices.

Utilities , considered a safe bet at a time of economic uncertainty, were the only sector in the green.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sagarika Jaisinghani and Shreyshi Sanyal in Bengaluru; Editing by Barbara Lewis and David Holmes)

HSBC Profit More Than Doubles as Economies Rebound, Loan-Loss Fears Ebb

By Alun John and Lawrence White

Encouraged by an economic rebound in Hong Kong and Britain, its two biggest markets, HSBC reinstated dividend payments and released $700 million that had been set aside to cover potential bad loans. That compares with $6.9 billion in loan-loss provisions made in the same period a year ago.

Pretax profit for Europe’s biggest bank by assets came in at $10.8 billion versus $4.32 billion in the same period a year earlier and was higher than the $9.45 billion average of 15 analysts’ estimates compiled by the bank.

Revenue, however, fell 4% due to the low-interest rate environment.

HSBC said given the brighter outlook globally as economies recover better than expected from the pandemic, it expects credit losses to be below its medium-term forecast of 0.3%-0.4% of its loans.

The bank also said that for the year, it could even make a net release of funds from earlier provisions rather than add to them, but it was hard to say definitely due to the unknown impact of government support programmes, vaccine rollouts and new strains of the virus.

It plans to pay an interim dividend of seven cents a share after the Bank of England scrapped payout curbs last month.

Reflecting its better than expected loan performance, HSBC will move to within its target payout range of 40-55% of reported earnings per share within 2021, it added.

(Reporting by Alun John in Hong Kong and Lawrence White in London; Editing by Edwina Gibbs)

Bank of England to Ease Rule for Small Lenders to Boost Competition

Banks are required to issue MREL, or minimum requirement for own funds and eligible liabilities, which is a form of debt that can be written down to absorb losses and avoid repeating the 137 billion pound ($188.6 billion) taxpayer bailout of lenders in Britain during the financial crisis more than a decade ago.

The targets were set under European Union rules, which Britain now can amend more easily after leaving the bloc last December.

“Making it easier for firms to grow into MREL responds directly to firms’ concerns about barriers to growth created by the step up in MREL requirements as firms expand their balance sheets,” Bank of England Deputy Governor Dave Ramsden said in a statement.

The central bank has authorised 27 new banks since 2013, but Lloyds, Barclays, HSBC and NatWest continue to dominate retail lending and the so-called challenger banks have said that blunt thresholds for issuing MREL create a “cliff edge” that holds them back from building market share.

The BoE proposed replacing its indicative threshold of 15 billion to 25 billion pounds with a notice period setting out when a lender can enter transition to its MREL targets if the company grows beyond 15 billion pounds in total assets.

The central bank would assess a lender’s business plan as it approaches the 15 billion pound threshold and issue a bespoke transition path.

“The banking industry must now assess the implications of the new regime in terms of ability to compete, and highlight any potential challenges to how they serve customers or change their business models as a result,” said Tom Groom, a financial services partner at consultant EY.

The proposals for an extended transition path directly respond to calls for change, the BoE’s Ramsden said.

“They are inherently flexible and agile as they allow for a further extension if unforeseen circumstances demand it,” Ramsden said.

Challenger lenders Metro Bank, TSB and Co-op Bank did not respond immediately to requests for comment.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 0.7264 pounds)

(Additional reporting by Iain WithersEditing by Alison Williams and David Goodman)

HSBC Says Asia Pacific CEO Peter Wong to Retire

Liao, who was HSBC’s head of global banking for Asia Pacific, and Rosha, who was CEO of HSBC India, will continue to run the region as a single entity and be based in Hong Kong.

Wong has been CEO of Asia Pacific since February 2010. Last year he sparked a backlash from the British and U.S. governments when he signed a petition backing China’s imposition of a national security law on Hong Kong, breaking years of neutrality for the UK-based, Asia-focused lender.

Wong is to become non-executive chairman of HSBC Asia Pacific, replacing Laura Cha.

(Reporting by Rachel Armstrong, Editing by Himani Sarkar)

HSBC Profit Rises 79% as Vaccine Rollout Sparks Improved Outlook

By Lawrence White

HSBC cautioned, however, that uncertainty about a global recovery meant it was unlikely to sustain that level of reduction in the $3 billion bad debt provision it had set aside a year ago as the pandemic took hold.

“We are still are being relatively cautious, and we’ve retained about 70% of the reserve build up we did last year,” Chief Financial Officer Ewen Stevenson told Reuters.

“Some of that you would expect to unwind over the next year or so, but we don’t know we are going to see a repeat of what we just saw,” Stevenson said.

Europe’s biggest bank by assets posted profit before tax of $5.78 billion for the three months ended on March 30, up from $3.21 billion a year ago and well above an average analyst forecast of $3.35 billion compiled by the bank.

Hong Kong-listed shares of HSBC rose as much as 2.5% to their highest since April 20.

HSBC, which makes the bulk of its profits in Asia, said its credit losses for 2021 were likely to be below the medium-term range of 30-40 basis points it forecast in February.

“We are more optimistic than we were back in February, we expect GDP to rebound in every economy in which we operate this year,” Chief Executive Noel Quinn told Reuters, citing the successful rollout of vaccines in the U.S. and Britain as a key factor.

Still, HSBC’s improved outlook and profits paled in comparison to U.S. rival JPMorgan, which earlier this month reported a 400% increase in quarterly profit and released more than $5 billion in bad loan provisions. HSBC’s fortunes are heavily tied to global interest rates. Revenue fell 5% in the quarter from a year ago as low interest rates in its main markets constrained the bank’s ability to generate large revenues from lending.

Hibor, the benchmark lending rate in HSBC’s most profitable market of Kong Kong, was near ten-year lows for much of the quarter.


HSBC in February announced a revised strategy to focus mainly on wealth management in Asia, aiming to earn more revenue from client fees rather than the difference between the interest rates the bank offers savers and charges borrowers.

HSBC said on Tuesday it was continuing negotiations for the sale of its French retail banking business, but no final decision has been taken. Reuters reported last month that HSBC had entered final negotiations to sell the business, which has 270 branches, to private equity firm Cerberus.

HSBC is the first of Britain’s big banks to announce first quarter earnings. Lloyds Banking Group is due to report on Wednesday, Standard Chartered and NatWest Group on Thursday, and Barclays on Friday.

(Reporting by Lawrence White; Editing by Tom Hogue and Jane Wardell)

Abu Dhabi Ports raises $1 Billion Loan

By Yousef Saba

Nine banks provided the facility, with Citi and First Abu Dhabi Bank having lead roles in the transaction, the first source said on condition of anonymity.

The source added that HSBC and Standard Chartered were also involved in the loan for the company, which is owned by Abu Dhabi state holding company ADQ.

Abu Dhabi Ports, FAB, HSBC and Standard Chartered did not immediately respond to Reuters requests for comment. Citi declined to comment.

Issuers in the Gulf have been raising debt, seeking to benefit from low rates as the region emerges from an economic downturn caused by the COVID-19 pandemic and last year’s oil price plunge.

Abu Dhabi Ports was also likely to issue bonds soon, the second said. Fitch Ratings and S&P Global Ratings both assigned the company an A+ credit rating on Thursday.

ADQ, which sovereign wealth fund tracker Global SWF said last month was worth $110 billion, has gained prominence in the past year as Abu Dhabi consolidated several government assets under its banner.

Another ADQ subsidiary, power utility TAQA, raised $1.5 billion in a bond deal last week. Food and beverages group Agthia, also owned by ADQ, mainly used bank debt to finance its acquisition of three quarters of Egypt’s Ismailia Agricultural and Industrial Investment.

(Reporting by Yousef Saba; Editing by Edmund Blair)

Countdown to the Fed: What the Analysts Say

Federal Reserve officials are due to issue new economic projections on Wednesday, with an upgrade to GDP growth. Markets predict the Fed may be forced to act sooner than expected in raising rates.

Benchmark 10-year Treasury yields have jumped from 0.953% at the beginning of the year to 1.67% on Wednesday, in the midst of the two-day policy meeting that began on Tuesday. The rise in yields in recent weeks came on optimism about the economic recovery and as the United States readied new fiscal stimulus.

However, a rapid rise in yields can ripple through to other assets, affecting everything from tech and financial stocks to the housing market.

Investors hoping for action from the Fed to cap rising yields on longer-dated Treasuries may be disappointed. While Powell has said he is watching recent Treasury market volatility, he brushed off concerns that the move up in yields might spell trouble for the Fed.

Here are what analysts are saying as the Fed meets:


“There is a risk that the markets will again be disappointed by the post-meeting policy statement,” wrote Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA LLC.

“The Fed’s new operating procedure of targeting maximum employment to finally achieve its 2% average inflation target is designed to see inflation expectations and long-term rates rise. This means policymakers are supportive of recent market developments, i.e. rising long-term rates,” he wrote.


“The risks are… that long yields react further to all this “running hot,” wrote Michael Every, senior macro strategist, Rabobank. Even “a moderate move higher in yields could be painful – and not just to bonds,” Every wrote.


“Bond investors will be wary of perceptions that the Fed could potentially allow the economy to run too hot for too long,” wrote https://think.ing.com/articles/us-what-to-watch-at-the-march-fed-meeting James Knightley, Padhraic Garvey and Chris Turner, at ING, noting that inflation is “set to accelerate to well above 3%.


“We expect the FOMC’s economic and rate projections will be in line with the bond market’s expectations,” wrote Lawrence Dyer, head of U.S. rates strategy and Shrey Singhal, fixed income strategist. “And, we do not expect the FOMC statement or press conference to provide pushback to the recent increase in yields. Thus, there should be a moderate market reaction to the announcement and press conference.”


“We think the FOMC will have a hard time expressing concern about asset markets,” wrote Steve Englander and John Davies at Standard Chartered, while adding that if the Fed’s policy-setting committee and Powell do not “push back against current yield levels, investors are likely to take yields higher as better data arrives.”


“Broader financial conditions remain easy, and luckily for (Powell) the U.S. rates market just got through a week of long supply relatively unscathed, at least until Friday, and Friday’s move did not negatively impact risk,” wrote John Briggsglobal head of strategy, NatWest Markets.

“What I do expect is for Powell to push back against the recent rise in the front end, dot move or not, which has pushed market pricing for the first hike to December 2022, from September 2023 at the beginning of the year.”


“The Fed likely hopes market pricing is right, since it implies a faster recovery and more rapid attainment of its inflation and employment goals,” wrote Michelle Meyer, Mark Cabana, Ben Randol, Meghan Swiber and Stephen Juneau at Bank of America.

“Powell is likely to reiterate that higher rates are consistent with a re-pricing of fundamentals… Limited pushback on rate hike pricing will also likely be a disappointment for those expecting a continued ultra-dovish Fed, supporting higher belly rates.”

Intermediate-dated notes, known as the “belly” of the Treasury curve, are more sensitive to rate increases.

(Reporting by Karen Brettell; Additional reporting and editing by Megan Davies; Editing by Andrea Ricci)

Global Markets Break Hard To The Downside – Watch Support Levels


  • New reports of widespread financial corruption likely triggered the current sell-off.
  • Watch out for market support levels to see if this is a short-term correction or the start of a downtrend.
  • Support for the DOW is just above 26,000.
  • Support for the SP500 is around 3,100.

US and global markets were already under pressure over the past few weeks related to COVID-19 issues and global economic expectations.  The technology sector had driven valuations to levels not seen since the DOT COM bubble near the end of August and many of the US Indexes has reached or breached all-time highs again.  My research team and I warned followers to “stay cautious” throughout much of the price rally as our proprietary price modeling systems suggests the rally was isolated and not organic.  The US Fed has spewed capital into the markets and speculative traders piled into the “excess phase” of the market to drive price levels higher.  Take a moment to review these recent research posts to learn more:

September 13, 2020: MAKE OR BREAK – BIG TRENDS AHEAD




Before we get into the price charts, we want to highlight the news that is driving much of this selloff in the markets.  Early Monday reports (or late Sunday, depending on your location) were published highlighting illegal and nefarious activity by many global banks related to money laundering and supporting criminal rogue elements throughout the globe.  The names of the banks implicated include Deutsche Bank, Standard Chartered, Barklays, Commerzbank, Danske Bank and HSBC Holdings.  It appears the European and Asian banks had the largest exposure to this activity and risk.  There is some talk that Russian banks may have been involved as well (unconfirmed at this time by our research).

What this means for traders is that a broad, global financial crisis may be starting to unfold – this time vastly different than the 2008-09 credit crisis.  This event will be centered around illegal and corrupt actions at some of the world’s largest financial institutions and the far-reaching aspects of rogue government or private elements involved in this activity.  We believe the markets will attempt to find support after the shock of this news is digested.  Longer-term, I believe a broader market downtrend may continue – it’s just a matter of what happens next and how fast global authorities are able to engage in a proper form of legal resolution (indictments).

At this point in time, the news that global banks were acting illegally and improperly may prompt a much broader market downtrend over time.  Right now, we believe the initial “shock-wave” will be processed in price and support levels will be found fairly quickly.


This Daily YM chart below highlights the support level near 26,000 that we believe will become the first floor for price as this selloff continues.  Our proprietary Fibonacci price modeling system is also suggesting support levels just above the 26,000 are valid (see the RED and BLUE SQUARES on the right side of this chart).  My research team believe price will attempt to find support near the 26,000 level as this broad market selloff matures.

This ES Daily chart also highlights the support levels near 3,090 (the lower YELLOW line) and aligns with our proprietary Fibonacci price modeling suggested support levels just above 3,100.  We believe this will be the first level of support for the ES if the downtrend continues.

Yes, my team has been warning to stay cautious throughout much of the uptrend and we have highlighted a multi-year Head-and-Shoulders pattern that we believed could prompt a broader market decline.  But we were not aware of this illegal activity related to the global banking system.  Our research helps to confirm that technical analysis and our proprietary price modeling/research systems can act as clear forward-looking techniques for any skilled traders.  The theory that price always internalizes news before or as the news happens suggests that technical analysis will, in almost all cases, highlight the most probable outcome before the news is known.  Only in very rare “acts of God” is technical analysis sometimes delayed in reacting to the news.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

If you want to survive the trading over a long period of time, then you learn fairly quickly how important it is to protect against risk and to properly size your trades.  Subscribers of my Active ETF Swing Trading Newsletter can ride my coattails as I navigate these financial markets and build wealth. My research and trading team are here to help you find better trades and navigate these incredibly crazy market trends.

While most of us have active trading accounts, our long-term investment and retirement accounts are equally at risk. We can also help you preserve and even grow your long term capital when things get ugly (likely now) with our Passive Long-Term ETF Investing Signals.  Don’t wait until it is too late – subscribe today!

For a look at all of today’s economic events, check out our economic calendar.

Stay safe and healthy!

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.