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Emami Q2 Results Review - Cautiously Optimistic, Winter To Watch Out For: Prabhudas Lilladher
Raw material remains benign, aiming for ~250 bps Ebitda margin expansion in FY24
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Prabhudas Lilladher Report
We increase our FY24E/FY25E earnings per share estimates of Emami Ltd. by 3.6%/2.1% following higher than expected gross margin expansion and higher volume growth at 2% in Q2.
Emami has given cautiously optimistic outlook given benign raw material prices, expected pickup in rural demand and likely traction from various new launches under Zandu and international business.
Q2 saw volume growth of 2% led by robust growth in both modern trade and e-commerce channel. Emami remains positive on over-the-counter healthcare, Navratna and new launches under Boroplus.
Emami is investing for growth with-
new launches in existing categories like Boroplus, Zandu, Kesh King and new product launches in D2C,
investment in new direct-to-consumer new age businesses and modern trade,
increase in direct town coverage to 60,000 and
strengthen its healthcare portfolio with acquisition of Axiom Ayurveda (blend of fruit juice and aloe Vera).
We estimate 9.6% profit after tax compound annual growth rate over FY23-26 and value the stock at 26 times Sep-25 EPS assigning a value of Rs 564 (Rs 524 earlier). Retain 'Accumulate'.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Consumer & Retail |
WASHINGTON -- A group of congressional Democrats reported Wednesday that three large tax preparation firms sent “extraordinarily sensitive” information on tens of millions of taxpayers to Facebook parent company Meta over the course of at least two years.
Their report urges federal agencies to investigate and potentially go to court over the wealth of information that H&R Block, TaxAct and Tax Slayer shared with the social media giant.
In a letter to the heads of the IRS, the Justice Department, the Federal Trade Commission and the IRS watchdog, seven lawmakers say their findings “reveal a shocking breach of taxpayer privacy by tax prep companies and by Big Tech firms.”
Their report said highly personal and financial information about sources of taxpayers' income, tax deductions and exemptions was made accessible to Meta as taxpayers used the tax software to prepare their taxes.
That data came to Meta through its Pixel code, which the tax firms installed on their websites to gather information on how to improve their own marketing campaigns. In exchange, Meta was able to access the data to write targeted algorithms for its own users.
The program collected information on taxpayers’ filing status, income, refund amounts, names of dependents, approximate federal tax owed, which buttons were clicked on the tax preparers' websites and the names of text entry forms that the taxpayer navigated, the report states.
The letter to federal agencies was signed by Sens. Elizabeth Warren, Ron Wyden, Richard Blumenthal, Tammy Duckworth, Bernie Sanders and Sheldon Whitehouse and Rep. Katie Porter. The lawmakers called for the agencies to “immediately open an investigation into this incident.”
They ask the agencies to investigate “and prosecute any company or individuals who violated the law," saying it could result in billions of dollars in criminal liability to the firms.
The Markup, a nonprofit journalism outlet focusing on technology, initially reported on the data-sharing between tax firms and Meta.
TaxAct told The Markup that it takes the privacy of its customers’ data “very seriously” and ”endeavors to comply with all IRS regulations.” H&R Block said it has an “ongoing commitment to privacy” and regularly evaluates its practices. TaxSlayer said that its customers’ privacy is “of utmost importance” and that it had removed the Pixel to evaluate its use.
Meta did not immediately respond to an email seeking comment.
Representatives from the IRS, the DOJ, the FTC and the IRS watchdog also did not immediately respond to requests for comment.
The Democrats say their report serves as an argument for the creation of an electronic free-file system for submitting tax returns that would be run by the government, which the IRS is currently piloting.
The IRS plans to launch a pilot program for the 2024 filing season to test a “direct file” system and help the federal government decide whether to move forward with potentially implementing it in the future.
The IRS in May published a feasibility report laying out taxpayer interest in direct file, how the system could work, its potential cost, operational challenges and more.
The report shows that the majority of surveyed taxpayers would be interested in using an IRS-provided tool to prepare and file their taxes electronically — almost 50% of respondents who preferred the IRS free-file option over commercial tax preparation firms said they preferred to give their financial information directly to the IRS instead of the third party. | Consumer & Retail |
A former Deutsche Bank executive testified this week that the German financial behemoth only agreed to make massive loans to Donald Trump because of Trump’s vast personal fortune. The problem? The bank apparently thought, based at least partly on financial statements provided by Trump, that he was far wealthier than he really was.
The Deutsche Bank exec, Nicholas Haigh, was testifying in Manhattan as part of New York Attorney General Letitia James’ $250 million civil fraud lawsuit against Trump. Going over internal documents in court with Haigh, James’ attorneys showed that the bankers didn’t really believe all of Trump’s claims about his wealth. They estimated that Trump was significantly less wealthy than he claimed, but they were still convinced that he had more money than he really did.
James contends that Trump didn’t have anywhere near enough wealth to qualify for the loans he received, and she alleges that the financial statements he gave to Deutsche and other institutions were fraudulent because he vastly over-valued his real estate properties. New York judge Arthur Engoron, who is overseeing the case, has already ruled that he agrees—the ongoing trial involves a handful of lesser allegations over the paperwork and will also determine how much of a fine Trump should have to pay.
Trump and his legal team have largely declined to try to argue the facts of the case. The former president’s comments on the ongoing proceedings have mostly been limited to angry outbursts accusing James of pursuing a political or racist agenda. (James is Black.) Wednesday’s testimony highlighted just how hard it is for Trump to deny the allegations. As James’ attorneys repeatedly showed in court, not only did Trump sign his name to documents listing incorrect values for his properties, the banks largely believed what he told them and made their decisions based on his claims.
According to the documents and Haigh’s testimony, at least one of the transactions required that Trump maintain a net worth of at least $2.5 billion to avoid defaulting on the loan. At the time, Trump claimed his net worth was well over $4 billion. But James’ office contends that it was actually only about $1.6 billion.
Haigh testified that when Trump approached the bank for loans, he offered several properties as collateral, including his Doral golf course and his Chicago hotel and condo building. Those properties alone, Haigh said, would not ordinarily have been enough. Haigh, who was head of risk assessment for the Deutsche’s private wealth management division—a division that handles banking for very wealthy clients—said that it was unusual for a customer to try to offer those types of properties as collateral.
“In general terms, my conclusion was the client owned a lot of real estate, a lot of golf courses, which I didn’t know how to value,” Haigh said.
Fancy houses, works of art, or planes were more typical big-ticket items offered for collateral, he said. With Trump offering golf courses and condo projects instead, Haigh said, the bank relied on Trump’s guarantee that he could use his personal wealth to cover the loans if his business went bad. And, Haigh said, Deutsche agreed to that arrangement based on the documents Trump provided. James’ now charges that those same documents were fraudulent.
When Trump’s attorneys had an opportunity to cross-examine Haigh, they once again didn’t attempt to discredit either Haigh or the documents. Instead, they wheedled out of him an admission that Deutsche Bank had not lost money lending to Trump—even if Trump had deceived the bank when he asked for the loans. But, he said, the transaction was still flawed because the terms of the loan—for example, the interest rates Trump was charged—didn’t reflect the true risk that Trump represented. Or, put another way, whether Trump paid the loans back or not, Deutsche Bank would have likely charged him higher interest rates and made more money from the deal had bank executives known the true state of Trump’s finances.
A key part of Trump’s defense in the case has been that no one was really hurt by the deceptions, so James has no reason to sue him for fraud. Judge Engoron rejected that idea in his ruling before the trial. He found that Trump had indeed committed fraud and noted that even if fraud doesn’t cause a loss to anyone, it can undermine the stability and credibility of the financial system.
Although James’ attorneys didn’t mention it during Haigh’s testimony, at the time Trump was applying for the Deutsche loans, Trump did have a very recent history of failing to pay back banks. Prior to pursuing loans with the private wealth management division of Deutsche Bank—where Haigh worked—Trump had borrowed billions from Duetsche’s separate commercial division, the part of the bank that usually lends money for projects like golf courses and hotels. In fact, in 2008, when he owed Deutsche Bank $640 million for his Chicago tower, Trump came up short and filed a multi-billion dollar lawsuit against Deutsche, accusing the bank of helping cause the global financial crisis, which he argued had crippled his business and made it difficult to repay that loan.
Part of the eventual resolution of the lawsuit over that bad loan was a re-financing deal in which, according to James, Trump lied about his wealth. Trump also struggled to pay back a second loan on his Chicago project—$130 million that he owed to a hedge fund called Fortress Investment Group. Trump eventually settled that loan for $48 million, with Fortress forgiving the rest. | Banking & Finance |
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NEW YORK (AP) — Donald Trump returned Tuesday to the civil fraud trial that imperils his real estate empire, watching and deploring the case as an employee and an outside appraiser testified that his company essentially put a thumb on the scale when sizing up his properties’ value.
Incensed by a case that disputes his net worth and could strip him of such signature holdings as Trump Tower, the former president is due to testify later in the trial. But he chose to attend the first three days and came back Tuesday to observe — and to protest his treatment to the news cameras waiting outside the Manhattan courtroom.
Star witness Michael Cohen, a onetime Trump fixer now turned foe, postponed his scheduled testimony because of a health problem.
Instead, Trump company accountant Donna Kidder testified that she was told to make some assumptions favorable to the firm on internal financial spreadsheets. Outside appraiser Doug Larson said he didn’t suggest or condone a former Trump Organization comptroller’s methods of valuing properties.
“It doesn’t make sense,” Larson said of the way the ex-controller reached a $287.6 million value for a prominent Trump-owned retail space in 2013.
READ MORE: Trump’s fraudulent financial statements were key to getting loans, former bank official says
Trump, outside court, reiterated his insistence that he’s done nothing wrong and that New York Attorney General Letitia James’ lawsuit is a political vendetta designed to drag down his 2024 presidential campaign as he leads the Republican field.
“We built a great company — a lot of cash, it’s got a lot of great assets, some of the greatest real estate assets anywhere in the world,” Trump said outside the courtroom. He dismissed the case as “a disgrace,” the legal system as “corrupt” and the Democratic attorney general as a “radical lunatic.”
James’ lawsuit alleges that Trump and his company deceived banks, insurers and others by massively overvaluing his assets and inflating his net worth on his financial statements.
“Mr. Trump may lie, but numbers don’t lie,” she said after court.
“He can call me names, he can engage in distractions,” she said, but “his entire empire was built on nothing but lies and on sinking sand.”
Trump says his assets were actually undervalued and maintains that disclaimers on his financial statements amounted to telling banks and other recipients to check out his numbers themselves.
READ MORE: Trump once signed a document with real size of NY penthouse, trial evidence shows
Larson, a real estate brokerage executive and certified appraiser, assessed Trump properties for lenders. He was taken aback when told on the stand that he was repeatedly cited as an outside expert in former Trump Organization controller Jeffrey McConney ’s valuation spreadsheets.
“It’s inappropriate and inaccurate,” Larson testified. “I should have been told, and an appraisal should have been ordered.”
When it came to valuing a storefront formerly known as Niketown, McConney relied on rates of return for a different type of property, rather than for comparable retail space, Larson testified. He also said he appraised a Trump-owned Wall Street building at $540 million in 2015, while McConney valued it at $735.4 million on Trump’s financial statement.
In cross-examining Larson, Trump lawyer Lazaro Fields asked whether anything “prevents President Trump, as a real estate developer, from valuing his own properties.”
“I don’t know. I wouldn’t know,” Larson responded. Asked again, Larson said: “Not that I know of.”
Kidder, the Trump company accountant, testified that as she filled out spreadsheets documenting the value of a Trump-owned Wall Street office building, then-finance chief Allen Weisselberg told her to act as if the skyscraper would be fully leased by a certain date, even if some space was currently vacant. For a Park Avenue residential tower, she was told to project that unsold units “would all sell out” in a certain timeframe.
Kidder said she wasn’t aware that those assumptions would be used to improve Trump’s bottom line on financial statements that helped his company make deals and get financing and insurance.
Trump lawyer Christopher Kise objected to what he deemed “very granular” testimony from Kidder, who also alluded to a prior Trump tangle with New York state’s lawyers.
READ MORE: Trump civil fraud trial resumes with ex-CFO Weisselberg testifying
In explaining a spreadsheet, she noted an entry about a $12 million loan to pay a $25 million settlement of lawsuits from former state Attorney General Eric Schneiderman and others over the now-defunct Trump University real estate seminar program.
Judge Arthur Engoron is hearing the current case without a jury. The suit was brought under a state law that doesn’t allow for one.
Trump has repeatedly criticized both the statute and the judge, a Democrat. The ex-president said Tuesday that he had come to like and respect Engoron but believed that Democrats were “pushing him around like a pinball.”
After Trump maligned a key court staffer on social media during the trial’s first days, the judge ordered him to delete the post and issued a limited gag order, warning participants in the case not to smear members of his staff.
In a pretrial decision last month, Engoron resolved the case’s top claim, ruling that Trump and his company committed years of fraud by exaggerating his asset values and net worth on his financial statements.
As punishment, Engoron ordered that a court-appointed receiver take control of some Trump companies, putting the future oversight of Trump Tower and other marquee properties in question. An appeals court has since blocked enforcement of that aspect of the ruling for now.
The trial concerns the suit’s remaining claims of conspiracy, insurance fraud and falsifying business records.
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- Michael Cohen, former personal lawyer for Donald Trump, is set to begin testifying in the civil fraud trial of the former president and the Trump Organization.
- Trump will be in the courtroom staring down his once-close aide.
- Cohen is a key witness in the civil case brought by New York Attorney General Letitia James.
- James seeks around $250 million in damages, and she wants to bar Trump and his co-defendants from running a business in New York.
Michael Cohen, the former personal lawyer and fixer for Donald Trump, is set to begin testifying Tuesday in the $250 million fraud trial of the former president and his company.
Trump will be in the courtroom, his spokesman confirmed, setting the stage for a dramatic face-to-face showdown between the ex-president and his once-close aide.
Trump's presence "will not affect me either way," Cohen told CNBC in an email Monday afternoon.
Cohen's appearance in Manhattan Supreme Court offers more than just the chance of a clash between the two men, whose bitter falling-out took place largely in public view during Trump's presidency. Cohen's testimony to Congress in 2019 about his former boss's business practices is what spurred New York Attorney General Letitia James to open an investigation in the first place.
The lawsuit that emerged from that probe accuses Trump, his two adult sons, the Trump Organization and top executives of fraudulently inflating the values of real estate properties and other assets over a decade in order to get tax benefits and better loan terms.
James seeks around $250 million in damages, and she wants to bar Trump and his co-defendants from running a business in New York.
Judge Arthur Engoron, who will deliver verdicts in the no-jury trial, has already found Trump liable for fraud and ordered the cancellation of the defendants' New York business certificates. The trial, which is expected to stretch into late December, will resolve James' six remaining claims.
Trump was in court for two days last week, when Cohen was first expected to be called to testify. But Cohen's appearance was delayed due to what Cohen said was a "pre-existing medical condition that impedes my ability to testify."
Trump has denied all wrongdoing in the case. At the courthouse and on social media, he has repeatedly criticized James, the judge and the proceedings in general, claiming he is the victim of a politically biased proceeding.
Engoron imposed a narrow gag order on Trump earlier this month, after Trump attacked the judge's law clerk. The judge last week accused Trump of violating that gag order, imposing a $5,000 fine on Trump and warning him that repeated violations could lead to his imprisonment.
The gag order prohibits Trump from making public statements about the judge's staff. But he is currently not barred from attacking others involved in the case — including Cohen.
This is developing news. Please check back for updates.
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- Wells Fargo CEO Charlie Scharf said low staff turnover means the company would likely book a big severance expense in the fourth quarter.
- "We have seen turnover come down and so because of that, we're likely going to have some more severance than we otherwise would have anticipated," Scharf said.
Wells Fargo CEO Charlie Scharf said Tuesday that low staff turnover means the company would likely book a large severance expense in the fourth quarter.
"We have seen turnover come down and so because of that, we're likely going to have some more severance than we otherwise would have anticipated," Scharf said during a New York conference hosted by Goldman Sachs.
"We're looking at something like $750 million to a little less than a billion dollars of severance in the fourth quarter that we weren't anticipating just because we want to continue to focus on efficiency," Scharf said.
This story is developing. Please check back for updates. | Banking & Finance |
SACRAMENTO, Calif. -- California Gov. Gavin Newsom signed off on two proposals Thursday to transform the state's mental health system and address the state's worsening homelessness crisis, putting them both before voters in 2024.
The Democratic governor needs voters' approval because he wants to borrow billions of dollars through a bond to pay for the proposals. They would allow the state to borrow $6.38 billion for 11,150 new treatment beds, housing and 26,700 outpatient treatment slots to serve up to 100,000 people a year. The measure would also overhaul how counties pay for mental and behavioral health programs.
Newsom spoke to state and local leaders at an event Thursday in a historic hospital in Los Angeles. The vacant General Hospital is being converted into roughly 1,000 affordable units.
Newsom said the proposals will bring accountability to the system, adding he understands why residents in California have grown increasingly frustrated with the crisis.
“Today, again, is about holding ourselves to a higher level of accountability and higher level of expectation,” Newsom said before signing the two pieces of legislation. “It’s about creating a framework where we actually can deliver.”
“Here in L.A. and throughout our city and state we know that we are facing a crisis," Los Angeles Mayor Karen Bass said. “We are going to transform the system, but we're also doing something that should've been done 50 years ago, and that is build the beds and facilities to make sure that people can get the treatment they need."
The proposals will appear together as one item on the March 2024 ballot, when voters will also be weighing in on the state and presidential primaries.
Newsom and supporters said the spending would help the state make a dent in its growing homelessness crisis. It would mark the first major update to the state's mental health system in 20 years.
Voters in 2004 approved a special tax on millionaires that has been used to fund mental health programs. Newsom wants to add more restrictions to how local governments can spend that money.
Under his proposal, two-thirds of revenue from the tax would pay for housing as well as services for people who are chronically homeless and have severe mental illnesses, and drug and alcohol addiction. Democratic Sen. Susan Eggman, who authored the bill that would reform how services are funded, said the changes would also help the state better assess programs’ outcomes by requiring counties to provide uniform reports of how they spend the money.
“It’s a crisis that we have turned away from for too long,” Eggman said Thursday. “The days of looking away are gone.”
The proposals won overwhelming support from state lawmakers, some of whom said the reforms are “long overdue.” But local counties said the new spending requirements would result in a loss of more than $1 billion, which could be detrimental to existing programs such as mental health outpatients, crisis, recovery and peer-supported services. Some Republican lawmakers also criticized Newsom's plan to borrow more money when the state faces budget shortfalls.
It's one of several efforts by Newsom to reform California's mental health system. Last year, Newsom signed a law that created a new court process where family members and others could ask a judge to come up with a treatment plan for some people with specific diagnoses, including schizophrenia. That law would let the judge force people into treatment for up to a year. The program launched in seven counties in early October.
Newsom signed a law earlier this week that would make it easier for authorities to compel treatment for people with untreated mental illness or addictions to alcohol and drugs, many of whom are homeless.
California is home to more than 171,000 homeless people — about 30% of the nation’s homeless population. The state has spent more than $20 billion in the last few years to help them, with mixed results. | Real Estate & Housing |
NEW YORK — Donald Trump’s lower Manhattan court cases continued to pick up speed Thursday — as the former president was temporarily freed from a gag order in his civil case and criminal prosecutors argued his political power shouldn’t shield him from accountability in his criminal one.
Trump’s lawyers convinced a mid-level appeals court to temporarily lift Judge Arthur Engoron’s orders prohibiting them and Trump from commenting on his court staff after filing an emergency request for relief earlier this week. They argued the gag orders imposed during his civil financial fraud trial violated his right to free speech and their ability to defend him.
First Department Judge David Friedman cited constitutional concerns in his handwritten order pausing Engoron’s gag rulings, intended to stop Trump from putting his staffers on blast, namely, his principal law clerk, Allison Greenfield. Trump is free to say what he wants until the appeals court hears arguments, when the panel may reinstate the order.
“Fortunately, the constitution and the First Amendment protect everyone, including President Trump. The public will again have full access to what is taking place in this unprecedented trial,” Trump lawyer Chris Kise said in a text to the Daily News.
Engoron issued the limited gag order after learning of a disparaging Truth Social post about Greenfield published to the former president’s account while he was inside the courthouse on Oct. 3, which boosted the false claim she’s dating Sen. Chuck Schumer. Trump’s since been fined $15,000 for violating it twice.
The judge expanded his order on Nov. 3 to include Trump’s lawyers when they continued to cast aspersions about his working relationship with his clerk, citing worries over his staff’s safety amid “hundreds of harassing and threatening phone calls, voicemails, emails, letters, and packages” his chambers had received since the trial started.
Greenfield sits beside Engoron on the bench and has played an active role in the case in the years since New York Attorney General Tish James’ investigation into Trump’s real estate empire spilled into court during the investigation phase. In their mistrial motion Monday, Trump’s lawyers charged that Greenfield’s “unprecedented and inappropriate” role in the case should get it thrown out of court. State lawyers on Thursday asked Engoron to give them more time to respond to the “total lack of merit” motion.
Engoron is considering six claims against Trump, his two older sons, and former top executives Allen Weisselberg and Jeffrey McConney at the trial now in its seventh week. Trump’s defense case started Monday with testimony from Don Jr.
The judge found Trump and his crew liable for repeated and persistent fraud before the trial started based on undisputed evidence showing they inflated Trump’s net worth by as much as $2.2 billion in financial statements over a years-long period to illegally profit in deals with banks and lenders. The ruling could see Trump lose control of prized properties in his real estate portfolio if upheld on appeal.
The outcome of the remaining six claims could see him forced to repay more than $300 million in illegal gains and be prohibited from serving as head of a New York business.
Thursday’s appeals court development was one of several to emerge in Trump’s unwinding New York cases.
In new court filings, prosecutors for Manhattan District Attorney Alvin Bragg said Trump’s belief that his “politically powerful” stature should shield him from legal jeopardy should be rejected along with the high-profile defendant’s bid to nix his criminal hush money case.
Opposing Trump’s request last month to get the case thrown out of court and other remedies, Assistant District Attorney Matthew Colangelo said it should proceed to trial. He told Judge Juan Merchan the ex-president’s outlandish requests “mischaracterize the factual record and disregard controlling law.”
“[Trump] repeatedly suggests that because he is a current presidential candidate, the ordinary rules for criminal law and procedure should be applied differently here,” Colangelo wrote Merchan.
“This argument is essentially an attempt to evade criminal responsibility because [Trump] is politically powerful.”
Trump’s motion to toss the case argued that the DA lacked evidence showing he’d reimbursed his ex-fixer Michael Cohen for a hush money payment to porn star Stormy Daniels under the table to commit or conceal other crimes, necessary to charge him with felony-level falsification of business records. In response, Colangelo revealed prosecutors have gleaned fresh evidence from “campaign insiders” of Trump’s criminal motivations before and after the election in relation to hush money payoffs.
Prosecutors allege the payment marked an attempt to undermine the integrity of the 2016 election by keeping the truth about the alleged one-night-stand from voters. In the partially-redacted filings, Colangelo also said grand jurors had heard evidence they could infer meant Trump intended to deceive election regulators.
Trump has pleaded not guilty to 34 felony counts in the indictment returned by a grand jury in March, which marked the first in history against a former or current U.S. president. Each count represents a separate check to Cohen in 2017 as secret reimbursements for the Daniels transaction the year before, with interest. Cohen went to federal prison for the payoff and other crimes in 2018 and is cooperating extensively.
As he sits atop the polls in the lead-up to the 2024 presidential election, Trump faces 91 felonies in four criminal cases and a slew of lawsuits demanding hundreds of millions of dollars for alleged criminality before, during and after his presidency.
He denies all allegations, characterizing his cases as part of a Democrat-led “witch hunt!” intended to prevent him from regaining power.
_____ | Real Estate & Housing |
Crisil Says India's Dairy Success Holds Key To Food Price Stability
Long-term supply-side measures are necessary to control price volatility, according to Crisil.
Retail inflation rose to 7.44%, the highest since April 2022, led by inflation in food and beverages which stood at 10.47%, the highest since January 2020.
As prices of various food items rise due to a combination of global and local factors, including extreme weather conditions, the government has continued supply-side interventions. These include releasing buffer stocks, imposing export curbs on some commodities and importing more of others.
But the need for long-term supply-side measures persists.
According to Pushan Sharma, director at Crisil, volatility in prices of perishables is high due to their sensitivity to temperature, rainfall, and issues around shelf life.
While the government has announced minimum support prices for field crops, there is limited government procurement and no benchmarks for prices when it comes to vegetables and fruits.
Pushan Sharma, director at Crisil.
Excerpts from the interview:
Is there space for policy intervention to help stabilise prices?
Pushan Sharma: Some of our policies are focused on addressing near-term challenges. Bringing in supplies into the market can tackle short-term measures. However, structural measures need to be taken to address recurring challenges.
There is need for food processing. While milk is one of the most processed foods with multiple by-products, that's not the case for tomatoes. Just about six months back, farmers were forced to sell tomatoes only for Rs 2-3. They were not harvesting crops since it was more expensive to harvest than selling the produce. Cut to now, tomatoes were fetching even over Rs 200 per kg.
If you have excess produce, process and store it at the right temperature, you can have longer shelf life. Same goes for other vegetables such as onions. Even in case of fruits, such as bananas, we feel that it has low shelf life, but that too can be enhanced when stored at the right temperature and controlling air composition because oxidation process is what ripens it.
Structural measures can help in the medium-term, not immediately. The lowest hanging fruits for this problem is to get better sorting, grading and processing infrastructure. Sorting and grading similar quality together also incentivises farmers to produce better quality. That's being done very manually today. It needs to be more scientific.
From the government perspective, what can be done?
Pushan Sharma: From the government perspective, best practices can be drawn from the dairy value chain and wherever sustainable, can be applied to the crop value chain.
For instance, almost half the milk that's produced goes to farmer producer organisations. While so much milk is running through FPOs, coverage of FPOs on crops is limited because of the value proposition. A farmer will engage with an FPO if he derives value from it. In case of milk, the FPO will provide artificial insemination, care for cattle, fodder, procurement at a fixed price, that's not solved in case of crops.
One needs to see how the value proposition of FPOs can be enhanced on the crops side. There is need for more availability and access to agri extension services as well, by the public and private sector. Farmers understand climate change and need to prepare for changing patterns to reduce volatility.
Barring pulses, sowing for all other crops is in excess of what it was in the corresponding period last year. What's the price trajectory going forward?
Pushan Sharma: There is a reason for that. Pulses are sown in the month of May and June. Because of extremely low rainfall in Maharashtra and Karnataka then, the sowing window was lost then.
The impact is already showing on prices, with prices of tur already trending at over 30% more than an year ago. For pulses, we may see government imports and supply-side interventions. However, overall agri production is set to be higher than last year.
Wheat is not in season, stocks are slightly low because the government has not procured as much as it intended to. Besides, these are commodities linked to the global prices, with both rice and wheat seeing higher global cues.
In case of vegetables, while the rise in tomato prices is seasonal and might wane, onions might cause some pressure. Milk has seen a sharp increase in prices but prices are expected to stabilise going forward. | Inflation |
- The Powerball jackpot soared to an estimated $900 million without a winner from Saturday's drawing.
- While it's still the third-largest prize in the game's history, the winner can expect a significant tax bill.
- There's a 24% mandatory federal tax withholding, but you'll likely still owe millions more.
It's still the third-largest prize in the game's history ahead of Monday night's drawing, according to Powerball. But the windfall will shrink significantly after taxes.
If you choose the lump sum payout, the estimated pre-tax cash value is $465.1 million, whereas 30 years of annual payments are worth an estimated $900 million before taxes.
If you win the jackpot, experts suggest working with a tax professional, financial advisor and estate planning attorney immediately.
"It's all about protection and paying the least amount of taxes possible, so working with professionals is very important," said certified financial planner John Chichester Jr., founder and CEO of Chichester Financial Group in Phoenix.
He said winners who choose the 30-year annuity payments option may have "a lot more flexibility" for tax planning.
The chances of winning Powerball's grand prize are 1 in about 292 million.
Winners need to plan for a hefty upfront federal withholding. The IRS requires a mandatory 24% withholding for winnings of more than $5,000.
If you choose the $465.1 million cash option, the 24% withholding automatically reduces your prize by roughly $111.6 million.
Chichester said it's similar to the mandatory withholding for required minimum distributions from retirement accounts. But since your actual tax bracket may be higher, you can owe additional levies at tax time.
"That's exactly what happens with the lottery," he said. "The 24% [withholding] is not the only tax bill" because the highest federal tax bracket includes another 13%.
While inflation increased the federal income tax brackets for 2023, millions from the lottery still pushes the winner into the 37% bracket.
For 2023, the 37% rate applies to taxable income of $578,126 or more for single filers and $693,751 or higher for married couples filing together. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
But the 37% rate doesn't apply to all of your taxable income. For 2023, single filers will pay $174,238.25, plus 37% of the amount over $578,125. As for married couples filing together, the total owed is $186,601.50, plus 37% of the amount above $693,750.
The jackpot winner's remaining tax bill after the 24% federal withholding depends on several factors but could easily represent millions more.
You may also owe state taxes, depending on where you live and where you purchased the ticket. Some states have no income tax or don't tax lottery winnings, but others have top-income state tax brackets exceeding 10%.
Powerball isn't the only chance to win big. The jackpot for Tuesday night's Mega Millions drawing now stands at an estimated $640 million. The chance of hitting the jackpot in that game is roughly 1 in 302 million. | Consumer & Retail |
The Fifth National Climate Assessment, mandated by Congress and recently published last week by federal scientists, highlights practical solutions to the climate crisis that are already available - including blue carbon.
The term refers to atmospheric carbon sequestered in marine and coastal environments, such as mangroves, tidal marshes, reefs, and seagrasses. It is analogous to ‘green’ carbon (soils and forests) with two big differences: it can trap carbon much faster and store it for longer.
The key is protecting marine systems from harm and restoring degraded ones, exemplified by the work of global initiatives like the Reef Resilience Network. For more than 16 years, the Reef Resilience Network has served as a global leader in building the capacity of marine managers to effectively manage, protect, and restore coral reefs and reef fisheries around the world. Important work like this also provides multiple co-benefits, such as ensuring food sources for local communities, building resilience against flooding, and protecting marine life.
Restoring and protecting blue carbon is a promising regenerative solution in an essential place: the oceans, which cover nearly three-quarters of the earth’s surface.
Another important initiative is a program known simply in the conservation world as “Blue Bonds.” Essentially, it finds nations which have a lot of debt, low tax revenue, and important territorial waters, and recruits financier partners to buy outstanding debt from the previous holders and re-negotiate terms with more favourable interest rates - provided the nation spends the savings on ocean conservation. Blue bonds have been successfully deployed in Barbados, the Seychelles and, most recently, the Galápagos Islands struck the world's biggest debt for nature deal. | Renewable Energy |
It looks like the Internal Revenue Service (IRS) truly was working on a free TurboTax alternative like earlier reports had claimed. The US tax authority has announced that it will start pilot testing its new Direct File program for the 2024 filing season, though it will initially be available for select taxpayers in 13 states only. During its pilot period, Direct File will only cover individual federal tax returns and won't have the capability to prepare people's state returns. That's why 9 out of the 13 states testing it — namely Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — don't levy state income taxes.
Arizona, California, Massachusetts and New York, the other four states in the list, worked with the IRS to integrate their state taxes into the Direct File system for 2024. The IRS says it invited all states to join the pilot program, but not all of them were in a position to participate "at this time." In addition to being only available in certain locations, Direct File will only be accessible by people with "relatively simple returns" at the beginning. It will cover W-2 wages and tax credits like the Earned Income Tax Credit and the Child Tax Credit, for instance, but it will not cover self-employment income and itemized deductions. However, the agency is still finalizing the tax scope for the pilot, so it could still change over the coming months.
Based on the screenshots the IRS shared with The Washington Post, taxpayers will only have to answer a questionnaire to be able to file their taxes directly, simplifying the process without having to pay for a third-party service. An IRS official told the publication that select eligible taxpayers in the aforementioned states will start getting invitations to use the service sometime around mid-February next year. The agency says it will begin with a small group of taxpayers before expanding access to more and more people as the filing season for the 2023 federal tax return progresses.
"This is a critical step forward for this innovative effort that will test the feasibility of providing taxpayers a new option to file their returns for free directly with the IRS," IRS Commissioner Danny Werfel said in a statement. "In this limited pilot for 2024, we'll be working closely with the states that have agreed to participate in an important test run of the state integration. This will help us gather important information about the future direction of the Direct File program."
The IRS is hoping to gather data and feedback during the pilot to be able to analyze how effective Direct File is. It's also hoping to identify areas of improvement for a "potential large-scale launch in the future." | Personal Finance & Financial Education |
Kaynes - Execution Superiority In A Favorable Ecosystem: HDFC Securities Initiates Coverage With A 'Buy'
Kaynes has a superior operating margin, RoE metric among peers given B-B products, focus on VAP, scale of operation
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
Kaynes Technology India Ltd. is one of the prominent players in electronics system design and manufacturing services with three decades of experience (mainly in B-B). It serves various industries such as automotive, industrial, aerospace, defence, outer space, nuclear, medical, railways, IoT, and IT.
Kaynes is one of the key beneficiaries of the Government of India’s focus on the ‘Aatmanirbhar Bharat’ initiative along with the global need of ‘China+1’. Covid was an inflection point for the ESDM industry and India has seen a massive trend change thereafter.
Top ESDM players have seen revenue compound annual growth rate of 14%-33% over the last three years, and Kaynes has clocked 45% CAGR.
The industry is expected to clock more than 30% CAGR over FY22-27E to reach Rs 6 trillion, and Kaynes aims to grow ahead of the industry.
We model a 42% revenue CAGR for FY23-26E to Rs 32 billion in FY26E (seven times of gross block). Kaynes has a superior operating margin (14-15%) and return on equity (~20%) metric among peers given B-B products, focus on value-added products, scale of operation, etc.
Besides traditional business, Kaynes has announced its forays into OSAT (phase-1 in Telangana, proof of concept by April 2024, phase-II in Karnataka), whose benefits will begin from FY25 onwards.
Major benefits will be back-ended but considering its potential to achieve more than Rs 30 billion revenue with ~18% Ebitda margin at full efficiency (with both phases), we assign Rs 23 billion value in our SoTP (with discounting of 18%).
We value the traditional business at 45 times price/earning on Dec-24 earnings per share and add Rs 400/share value of OSAT.
We initiate coverage on Kaynes with a 'Buy' rating and a target price of Rs 2,850.
Risk:
The industry tailwinds are strong with enough investments in setting up the ecosystem. We do not expect much business reversal risk due to the change in government (a key risk for many B-B stories, particularly after seeing a sharp stock run-up).
However, we do see risks which are associated with the nature of the business (particularly when growth assumptions are very bullish along with rich valuation multiples).
We see business risks such as-
client forfeit,
order execution delays,
change in policies,
delays in payment,
global supplies of key raw material,
cost of funds and
intervention of state, bodies, etc. in key approvals.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Move over M&S and John Lewis - there's a new Christmas advert from Northern Ireland which is packing an emotional punch.
Charlie's Bar in Enniskillen, County Fermanagh, posted a video on Saturday and it has already racked up millions of views on social media.
It tells the story of isolation and companionship - beginning with a man who cuts a solitary figure at a graveside, then wanders alone through the streets, only to be befriended by a couple and their dog in the pub.
The pub manager who came up with the idea for the now-viral video said the response had been overwhelming.
"We wanted people to feel something when they watch this video," Una Burns said.
"The idea came really from what we have seen over the years in the bar."
Many people have been commenting on or sharing the video across social media platforms including X, formerly known as Twitter, Instagram and TikTok.
It has even generated comment from retail giant John Lewis itself - and it is seen by many as the doyen of Christmas advertising.
John Lewis posted on TikTok: "We're not crying, you are".
The two-minute video - which cost £700 to make - shows a bereaved man - played by Fermanagh local Martin McManus, in a quiet moment of reflection while laying flowers in memory of a loved one.
In one scene, he walks through Enniskillen, seemingly ignored by passers-by, before entering Charlie's Bar.
There, Missy the dog seeks him out and joins him, before Missy's owners, a young couple, ask if they, too, can join the man for a drink.
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'Completely overwhelming'
The video draws to a close with words from the poet, WB Yeats: "There are no strangers here, only friends you haven't yet met".
People help the people by Birdy provides the soundtrack throughout the footage.
Ms Burns said the bar has posted some videos online before - usually they are "quite light-hearted" - but then a friend suggested they do a Christmas advert.
"The day he texted that, it was the only thing I could think about, I couldn't focus on anything else," she said.
"It was very important for me that this message was more serious.
"We wanted people to feel something when they watch this video and get across the idea that, unfortunately, Christmas isn't as positive and joyful for some as it is for others, and we probably see that more than others at this time of year".
Ms Burns said she never expected the advert to strike a chord in the way that it has.
"It has completely blown me away," she said.
"There were so many headlines yesterday saying we'd blown John Lewis out of the water.
"For us to be even in the same headline as John Lewis is completely overwhelming".
Meagan Daley, who along with her partner Alex Middlemass, play the younger couple, said there is a poignancy to the video's themes.
"The whole message is really important , and it is told in a lovely way. But we never imagined it would take off in the way it has," she said.
She and Alex are pub regulars, and Missy, an Irish terrier, is their much-loved pet.
"She really is the star. She just needed a few treats during filming but she is an amazing dog," Meagan said.
Colin Neill, the chief executive of Hospitality Ulster, which represents pubs in Northern Ireland said the bar had perfectly captured an important aspect of pub culture.
The video's underlying message, he said, highlights the "central role of the local pub in our society, and how even in our contemporary world and an age dominated by social media, pubs are still a sanctuary for many".
He added: "For some of the most vulnerable in our community, pubs are an antidote to loneliness and provide a safe space for people to come together, open up, and share life with others over a pint".
Mr Neill said it's impossible to watch "without a tear in your eye". | Consumer & Retail |
(Bloomberg) -- Berkshire Hathaway Inc.’s cash pile scaled a fresh record at $157.2 billion, bolstered both by elevated interest rates and a dearth of meaningful deals where billionaire investor Warren Buffett could put his money to work.
Most Read from Bloomberg
The hoard — which Berkshire has largely parked in short-term Treasuries — hit its highest since level since the third quarter of 2021, the Omaha, Nebraska-based firm said on Saturday. The conglomerate also reported operating earnings of $10.76 billion, a jump on the prior year, as it benefited from the impact of elevated interest rates on the cash pile.
Despite ramping up Berkshire’s acquisition machine in recent years, the company has still struggled to find many of the big-ticket deals that galvanized Buffett’s renown, leaving him with more cash than he and his investing deputies could quickly deploy. After hanging back during the pandemic, he’s since snapped up shares in Occidental Petroleum Corp. and struck a $11.6 billion deal to buy Alleghany Corp. Buffett has also leaned heavily on share repurchases amid the dearth of appealing alternatives, saying the measures benefit shareholders.
The deal drought hasn’t damped investor enthusiasm for the company. Its Class B shares crested a record high in September as investors sought out its diversified range of businesses as a hedge against deteriorating economic conditions. And while the shares pared some of those gains, the stock is still up almost 14% for the full year.
Read More: Buffett’s Berkshire Rallies to Record High on Earnings Beat
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©2023 Bloomberg L.P. | Banking & Finance |
For Ukraine, the year since Russia’s invasion has been one of widespread death, destruction and displacement, as millions had their lives changed forever. Americans got off easy by comparison, with most feeling the impact of the war only at the gas pump.
But the effect on Americans was far less than it was across Europe, where energy prices for driving and heating climbed much higher. Still, Americans have paid a price for the war, and for the sanctions that the United States and its allies imposed upon Russia after its invasion.
Since Russia is one of the world’s major oil exporters, the sanctions riled global energy markets, where the price of oil is set.
US gas prices shot up $1.48 a gallon, or 42%, to a record $5.02 between the day before Russia’s invasion a year ago and the record price reached on June 14.
That peak was short-lived — the national average price of gasoline, as tracked by OPIS for AAA, fell continually for 98 straight days starting right after that record was reached in June until September 20. On Friday, the one-year anniversary of the invasion, the national average stood at $3.39 a gallon, compared to $3.54 on the day the war started.
But even with the steady decline since that June record high, US drivers spent $528 billion on gasoline last year, up $120 billion from what they spent in 2021, according to OPIS. That works out to about $900 more per US household.
Last year’s total is nearly double the amount spent on gasoline in 2020, when stay-at-home orders and massive job losses in the pandemic’s early months crashed demand for gasoline and sent prices plunging. Even compared to pre-pandemic 2019, the amount spent on gas last year jumped $156 billion, or $1,200 per household on average.
Why prices shot up, then fell
A number of factors have coincided to bring prices steadily lower since then. Now, a year after the start of the war, crude oil prices on global markets and the retail price of regular gas across most of the United States are below pre-war levels.
And forecasts suggest they will stay that way going forward. OPIS expects the average price throughout the course of 2023 to come in around $3.45, down from $3.96 last year. Even some higher forecasts, such as one from Goldman Sachs, estimates an annual average of $3.87 this year.
To understand why they’re down, it’s important to understand why they went up so much and so fast.
Crude oil prices are determined on global commodity markets. And to some extent, those markets overreacted to the start of the war.
“The market’s reaction was due to uncertainty,” said oil analyst Andy Lipow. He said that those trading oil futures thought the global market would have to find a replacement for all the Russian oil when there wasn’t an alternative available.
But Russian oil shipments continued even with the sanctions, although they were redirected elsewhere. Instead of sending much of its oil and refined products to Europe, Russia sent them to countries like China, India and Turkey.
And the sanctions never completely shut down the shipments of oil to Europe, although a price cap limited the shipments and the amount that buyers in those countries would be willing to pay.
So the sanctions achieved the goal of reducing the revenue Russia got from oil sales.They also they allowed global prices to retreat from the June peak.
“There was a belief Russian production would be crimped. But its production is close to what it was a year ago,” said Tom Kloza, global head of energy analysis for OPIS.
In addition, the United States and its allies announced in March they would start releasing oil from their stockpiles of crude, such as the US Strategic Petroleum Reserve, putting downward pressure on prices.
Economic outlook also drove oil prices
Oil is traded globally in US dollars, and the strong dollar that benefitted from the Federal Reserve’s historic interest rate hikes helped to limit the effect of the price hikes on US consumers, even as drivers who pay in other currencies had to spend far more.
Few things take a bite out of gas prices like a recession, or even just the fear of one. People who lose their jobs don’t have to commute andpull back their spending on discretionary items like travel. Consumption falls, followed by prices.
A prime example of this took place during the Great Recession 15 years ago. The average price of a gallon of regular gas hit a then-record of $4.11 in early July 2008, according to OPIS data. Six months later, following the meltdown in financial markets, and massive job losses, it was down 61% to $1.62.
RIsing fears of a global and US recession roiled markets in late 2022, pushing down the price of oil futures. Fears of a US recession have receded recently, with very strong reports on US job growth and retail sales, but they’re not gone — particularly not with the Fed expected to continue raising interest rates.
Finally, while many of the restrictions on daily activity imposed during the pandemic have disappeared in the United States and Europe, China lockdowns in late 2022 hurt worldwide gasoline consumption, and with it global prices. China has since reopened but whether it stays open remains to be seen.
Price below pre-war levels
By the end of November, the national average price for a gallon of regular had fallen below the $3.53 average on Feb. 23, 2022, the day before the invasion. It has remained below that mark ever since, even though it’s up a bit from the post-invasion low of $3.10 a gallon in the week around Christmas. That is typically a time period that sees the lowest pump prices of the year.
Of course, the national average might not have much to do with what the stations near you are charging. There’s a wide variation in prices, with Western states, particularly California, paying much more because of a drop in refining capacity there and tougher environmental rules.
“It’s easy to say we’re not going to match last year’s prices,” said Kloza. “It might be a year when California is paying $6, and Texas is at $2.99.” | Energy & Natural Resources |
The $79 billion sneakers (or “trainers,” for our U.K. readers) industry has spawned a lucrative resale market, expected to hit $30 billion by the end of the decade — up from $5 billion in 2020. Some have even called sneakers an alternative asset class, an investable product that can be bought and sold on for an inflated price — particularly for limited edition or otherwise hard-to-get sneakers.
Throw into the mix the prevalence of counterfeit sneakers, with some reports indicating that the fake footwear industry out-values the legitimate market five-fold at a staggering $450 billion, and it’s easy to see why there might be value in technology platforms designed to give sneakerheads peace-of-mind when parting with their hard-earned cash.
This is precisely the reason why long-established marketplaces have been investing in authentication services spanning all manner of luxury goods, such as eBay which acquired Sneaker Con Digital’s sneaker authentication business back in 2021.
It’s against that backdrop that U.K. startup Laced entered the fray five years ago, serving as a centralized platform for buyers and sellers to trade premium sneakers safe in the knowledge that everything is above board. The company today announced it has raised $12 million in a Series A round of funding, adding to the $1 million pre-seed round it raised some three years ago.
How it works
Founded out of London in 2018, Laced facilitates sneaker sales between sellers and buyers. Now, sellers might be individuals looking to offload hard-to-find sneakers for a profit after buying from the original brand, or they might be professional sellers dedicated to finding desirable footwear at volume.
The seller sets a price, with no eBay-like auction element available, and the shoes are then placed in a queue which is prioritized by the lowest price first — this, according to Laced chief of staff Gareth Olyott, is designed to encourage sellers to set their goods at a reasonable price.
“To get to the front of the queue, and have the best chance of selling your item, the price must be the lowest,” Olvott told TechCrunch. “This disincentives sellers to list items at astronomically high prices in comparison to their value.”
There’s no escaping some of the similarities here with something like secondary ticketing marketplaces, whereby touts (maybe aided by bots) scoop up all the tickets for a concert from a primary ticketing outlet, and instantly sell them on “legitimate” secondary marketplaces for a hefty profit.
The arguments for these model are very similar too, insofar as having a properly authenticated, legitimate business managing the resale process ensures that buyers aren’t dealing with dubious merchants.
“Footwear accounts for 20 percent of the value of all counterfeit goods, and the counterfeit sneaker market is estimated to be worth five-times the legitimate market,” Olvott continued. “This shows that the proliferation of counterfeit items in this sector is a huge problem for collectors and enthusiasts alike. Laced removes the risk of buying an item from an unregulated marketplace, and for it to arrive and be inauthentic.”
All trainers should be new and in their original packaging, and after each completed transaction the seller ships their goods to Laced which uses in-house authenticators to check their veracity and forwards them to the buyer, taking a 15% cut on top of the list price.
And unlike something like eBay, buyers and sellers on Laced remain entirely anonymous — both to the public, and to each other.
“Laced operates purely as the middleman in the relationship between the buyer and the seller,” Olyott said. “We not only exist to ensure quality and authentication of the items but to also keep everyone involved anonymous and safe. We believe that for the customer at least, anonymity keeps things more streamlined and simple. Especially where high-value and highly desirable items are concerned.”
Laced is focused exclusively on the U.K., which does set it apart from many of its counterparts, while it also claims to have a unique authentication process, though it wasn’t at complete liberty to say exactly what this is.
“We’re of course limited to how much we can divulge through fear of giving the counterfeiters any information they could use to attempt to game the system here,” Olvott said. “But it’s the use of pattern identification alongside a huge database of variables specific to each ‘silhouette’ which we use as markers to identify the authentic against the counterfeit. This is then supported by a syllabus which we’ve developed internally for training our teams. As you can imagine, there are new items launching every day, so we’re in a perpetual state of updating these methods.”
Moreover, Laced says that while many others in the space rely heavily on third-party infrastructure such as that provided by Shopify, it has built its entire tech stack “with long-term scale and flexibility” in mind.
“Building our own tech stack, and not relying on third-party services, means that we can offer speed beyond our competitors at every point of the process,” Olvott said.
That all said, there is no getting away from the crowded space in which Laced operates, and there are plenty of companies doing something similar already, attracting sizeable chunks of venture capital (VC) money for their efforts. These include Californian unicorn Goat; the U.K.’s Edit Ldn; Japan’s Soda; Los Angeles- and Hong Kong-based Kicks Crew; and Michigan’s StockX, which is facing ongoing legal proceedings from Nike which accuses StockX of selling counterfeit goods.
All this is to say, of course, that despite economic headwinds and consumer trepidation, there remains an almost insatiable appetite for sneaker resale platforms. And with another $12 million in the bank, Laced is looking to capitalize on this trend by building out its platform including investing in technology, product, and data science.
“As the industry and model is so unique, there’s no tech that we can pull off the shelf, so we’ve had to invest heavily in proprietary technology to provide the best service to our buyers, sellers and our authentication model,” Olvott said. “We know that by doing this, we will unlock the ability to scale rapidly with clear purpose.”
Laced’s Series A round was led by London-based investment firm Talis Capital, with participation from H&M’s investment arm, H&M Group Ventures; B&Y Venture Partners; Truesight Ventures; and a handful of angel investors. | Consumer & Retail |
- Ripple said it received in-principle approval of a Major Payment Institution Licence from the Monetary Authority of Singapore, the country's central bank.
- The license allows Ripple to offer regulated digital payment token products and services and expand customers' use of XRP, a cryptocurrency it is closely associated with.
- It comes as Ripple continues to spar with the Securities and Exchange Commission over a lawsuit.
Blockchain company Ripple said Thursday it received in-principle regulatory approval to operate in Singapore, in a rare moment of good news for the cryptocurrency industry globally as it faces tightening policy back home in the United States.
Ripple said that it was granted in-principle approval of a Major Payment Institution Licence from the Monetary Authority of Singapore, the country's central bank.
The license will allow Ripple to offer regulated digital payment token products and services and expand the cross-border transfers of XRP, a cryptocurrency the company is closely associated with, among its customers, which are banks and financial institutions.
XRP was trading at around 50 cents late Wednesday evening.
Ripple, a San Francisco-based fintech company, is mostly known for XRP as well as an interbank messaging services based on blockchain, the distributed ledger technology that underpins many cryptocurrencies.
The company's on-demand liquidity service uses XRP as a kind of "bridge" between currencies, which it says allows payment providers and banks to process cross-border transactions much faster than they would over legacy payment rails.
But Ripple also operates a blockchain-based international messaging system called RippleNet to facilitate massive transfers of funds between banks and other financial institutions, similar to the global interbank messaging system SWIFT.
The Securities and Exchange Commission charged Ripple, co-founder Christian Larsen and CEO Brad Garlinghouse with conducting an illegal securities offering that raised more than $1.3 billion through sales of XRP.
Ripple denies the SEC allegations, contending that XRP is a currency rather than a security that would be subject to strict rules.
Singapore is one of the largest currency corridors from which Ripple sends money across borders using XRP, the company said in a press release.
A majority of Ripple's global on-demand liquidity transactions flow through Singapore, which serves as the company's regional Asia-Pacific headquarters, Ripple said.
Ripple has doubled its headcount in Singapore over the past year across key functions including business development, compliance, and finance, and plans to continue increasing its presence there.
MAS, the Singaporean financial regulator, was not immediately available for comment when contacted by CNBC.
The central bank was previously in the news for blasting Three Arrows Capital, the disgraced crypto hedge fund that imploded after betting billions on failed stablecoin terraUSD, for providing misleading information concerning its relocation to the British Virgin Islands in 2021.
The Asian megacity has gained a reputation over the years for being a more financial technology and crypto-friendly jurisdiction, opening its doors to a number of major companies including domestic banking giant DBS, British fintech firm Revolut, and Singapore-based crypto exchange Crypto.com.
Garlinghouse is due to speak at the Point Zero Forum in Zurich, Switzerland, next Wednesday to "discuss the resurgence of innovation in digital assets through investment and thoughtful regulation," the company said.
It comes on the heels of Ripple's $250 million purchase of Metaco, a crypto custody services firm, to expand its reach in the Swiss market and diversify away from its home in the U.S. Recently, Ripple's Garlinghouse said the firm will have spent more than $200 million in legal fees by the time its legal battle with the SEC is wrapped up. | Banking & Finance |
Voltas Denies Reports Of Tata Group Considering Sale Of Home Appliance Operations
Voltas said that the news 'caused embarrassment' and concern among shareholders.
Voltas Ltd. has denied news reports that the Tata Group is considering selling the home appliance operations of the company.
The report that appeared on Bloomberg, and was also picked up by a few other publications is “totally incorrect and blatantly false, with no factual basis whatsoever”, the company said in an exchange filing on Tuesday.
Bloomberg reported that the Tata Group is considering selling the home appliance operation of Voltas, as the conglomerate foresees difficulties scaling up the business in a competitive market, quoting people familiar with the matter.
Tata Group’s management is deliberating the possibility of the sale and hasn’t decided whether to include its local joint venture with Arcelik AS in a deal, it further said.
Voltas said that the news “caused embarrassment”, apart from concerns among shareholders, and is separately taking up the matter with Bloomberg to issue a necessary clarification.
“Voltas re-affirms its commitment to the home appliances business, and the company will further strengthen its market-leading position in the categories that it represents,” it said in a statement.
Shares of Voltas closed 1.70% lower at Rs 813.8 apiece, as compared with a 0.03% decline in the benchmark Nifty 50 on Tuesday. | Consumer & Retail |
(Photo: UAW International Union/Facebook)
Sep 19, 2023
Despite reaping tens of billions of dollars in profits between them over the past five years, General Motors and Ford paid an average combined tax rate of just 1% on total pre-tax income, an analysis published Tuesday by economic justice advocates revealed—as the auto giants claimed they cannot afford striking workers' demands for better pay.
The Americans for Tax Fairness (ATF) analysis—which posits that "the tax system is rigged to benefit multinational corporations over the workers who keep them running"— notes that over the past five years, GM and Ford made a total of $34 billion and $8 billion respectively, but paid an effective federal tax rate of only 1.3% for GM and -0.2% for Ford.
"While some of those tax savings have found their way into rapidly rising compensation packages for the firms' top executives and board members, wages of rank-and-file workers have lagged," the report states. "Average executive pay at GM and Ford grew by 32% over the past five years, while median autoworker pay grew by just 8.8% over the same period, widening the executive-to-worker pay gap to 183-to-1."
"Over that same period, GM and Ford paid out a combined total of $14 billion in dividends (34 times more than they paid in taxes), spent $3.6 billion on stock buybacks (nine times more than they paid in taxes), and lavished $614 million on top company executives (50% more than they paid in taxes)," the publication continues.
The analysis comes five days into a "stand-up strike" by around 13,000 United Auto Workers (UAW) members at GM, Ford, and Stellantis plants. The workers are seeking better pay and benefits.
"General Motors and Ford are refusing to meet UAW's demands, claiming that what workers are asking for is unreasonable," the report states. "An Americans for Tax Fairness analysis of GM and Ford's most recent [Securities and Exchange Commission] filings finds that what is truly unreasonable is how the auto giants get away with paying practically nothing in federal taxes while further enriching their top executives with huge pay packages and their shareholders with dividend payments and stock buybacks."
ATF executive director David Kass argued that "Ford and GM have thrown their priorities into reverse."
"They're overcompensating their already wealthy executives, board members, and shareholders, while shortchanging the workers and nation that made their success possible," Kass continued. "They need to offer serious proposals for sharing the wealth with rank-and-file employees and start paying their fair share of taxes."
"They're overcompensating their already wealthy executives, board members, and shareholders, while shortchanging the workers and nation that made their success possible."
Kass additionally asserted that the National Labor Relations Board "must ensure these corporations treat their workers justly; and in its upcoming budget negotiations, Congress must ensure big corporations like Ford and GM are contributing what they should to America's fiscal health."
Corporate tax dodging is pervasive in most U.S. industries. According to a Government Accountability Office (GAO) analysis commissioned by Sen. Bernie Sanders (I-Vt.) and released in January, more than a third of large, profitable corporations in the United States paid no federal income tax in 2018, the year that the so-called Republican "tax scam" signed into law by then-President Donald Trump took effect.
The GAO report also found that "average effective tax rates—the percentage of income paid after tax breaks—among profitable large corporations fell from 16% in 2014 to 9% in 2018."
Other analyses of more recent data confirms the trend continues. A Center for American Progress study of 2021 investor filings for Fortune 100 companies revealed that 19 of the largest profitable corporations in America "are paying effective tax rates that are in the single digits—or paying nothing at all."
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
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Manappuram Finance - Robust Growth In Non-Gold Businesses To Continue: Nirmal Bang
Maintaining pricing discipline in gold loans
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
We attended the analyst meet of Manappuram Finance Ltd. held on November 28, 2023. Manappuram Finance maintains gold loan growth guidance of 8-10% for FY24, 80% of which will be driven by volume growth and the balance through value growth.
With respect to the impact of RBI circular on risk weighted assets, on the asset side, there is no impact while on the liability side it expects the cost of funds to increase by 15-20 bps.
Return on equity guidance for FY24 at the consolidated level has been maintained at 20%, which will be supported by faster growth in higher yielding non-gold businesses and maintaining profitability in the gold loan business.
We remain positive about Manappuram Finance’s growth prospects as a diversified lender. Further, the changes at the macro level post the recent geopolitical tensions leading to firm gold prices should provide some benefit on the growth front when it comes to Manappuram Finance’s core gold loan business.
With double-digit growth expected to return in the core business, yields stabilizing at 21-22% (more than 90% gold loan yields being in excess of 12%), strong growth in higher yielding non-gold businesses, lower opex (led by improved productivity levels) and control on asset quality, we expect return on asset to be at 4.7% over FY23-FY25E versus 4.1% in FY23.
We maintain 'Buy' on Manappuram Finance with a target price of Rs177, valuing it at 1.1 times September-2025E consolidated adjusted book value (same as earlier).
Higher-than-expected competition in future impacting profitability would be a key risk to our estimates.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Banking & Finance |
Christmas dinners could be in jeopardy with storms causing havoc for farmers struggling with one of the toughest harvests on record.
Britain's latest potato crop is predicted to hit a record low of 4.1 million tonnes with retailers forced to supplement supplies from cold storage, experts say.
Shoppers can also expect empty shelves after the harvests of broccoli and cauliflower were badly affected.
Supplies of Christmas cornerstones sprouts and parsnips have also suffered but are expected to recover enough to reach plates on 25 December.
Unprecedented rainfall, almost double the average for October, including Storms Agnes, Babet and Ciaran have meant waterlogged farms have struggled to produce enough vegetables for the festive rush.
Fred Searle, editor of Fresh Produce Journal, said: "The British potato harvest has been hit hard by heavy rain and flooding in recent weeks, causing delayed lifting and large crop losses. This was preceded by a cold, wet spring and a cool summer with low light levels.
"With the potatoes that are in store there's likely to be enough supply to meet demand for the time being, but that might not be the case in the months ahead."
Lincolnshire grower Martin Tate, who manages 18,000 acres in the county, said: "There won't be enough broccoli to supply the Christmas dinner demand.
"Cauliflower is still a problem, and you can expect to see empty trays over the next few weeks but may return to normal before Christmas. After some initial issues, brussels sprouts supplies look like they will be okay."
Experts said that chips will not be affected as those potatoes used for chipping are mostly grown in Belgium.
Earlier this month, T H Clements, one of the country's largest suppliers of Brussels sprouts with 11,000 acres in Lincolnshire and 1,000 in Cornwall, warned that sprouts would be smaller this year than average.
CEO Chris Gedney told BBC's Farming Today: "Brussels sprouts are likely to be smaller this year as the larger ones tend to fall in the water and rot." | Agriculture |
Greg Hands is refusing to hand back a £7,920 taxpayer-funded severance payout he took despite getting a new job as a minister just weeks later.
The Tory Party Chairman received the generous windfall when he was sacked from his role at the Business Department in September 2022, where he’d served for just under a year. He was re-hired just four weeks later to be a minister in the Department for International Trade.
Ministers are entitled to receive severance payments worth a quarter of their salary on leaving office, provided they are not reappointed within three weeks.
Asked if Mr Hands would return the cash, his spokeswoman declined to comment.
Details of the payout emerged in the Business Department’s annual report. It also showed that Jacob Rees-Mogg pocketed £16,800 in severance pay for a job he held for seven weeks, after arguing civil servants should have their redundancy money slashed. The former Business Secretary, who now trousers more than £750 an hour as a presenter on GB News on top of his £86,000 MPs salary, was entitled to claim three months salary on leaving government when Liz Truss quit as PM.
But in his previous role as Government Efficiency Minister he unveiled plans to cut the amount of redundancy pay for departing civil servants by a quarter - from four weeks' salary per year of service to three. A consultancy document produced under his direction said changes to redundancy payments would “create significant savings on the current cost of exits”.
A Labour source said: “It is hard to know who is the bigger hypocrite for accepting these handouts: Jacob Rees-Mogg, who said the severance pay of civil servants was too generous; or Greg Hands, who is constantly preaching that the Tories are the party of sound money. They are both as bad as each other, and they deserve a permanent redundancy notice from the British people."
Mr Hands was appointed as Conservative Party Chairman in February after Nadhim Zahawi stood down in a tax row. After the Tories lost formerly safe seats in Tamworth and Mid Bedfordshire, Mr Hands is facing questions about his performance. Asked on Friday whether he would consider his position as Party Chair in light of the defeats, he replied: "No." | United Kingdom Business & Economics |
Global Fintech Fest 2023 — Seen And Heard On Day 3: Hype Overweighs Fact
Let’s look forward to 2024, when the fest returns, with hopefully even newer ideas.
The final day of India’s largest fintech fest saw a little sobering up after the mad rush of the first two days. Attendees were mostly in networking mode, with fewer high-voltage sessions lined up. The exhibition section, which housed an abnormally high number of metaverse-related innovations, was wound up before 3:00 p.m.
The fest was a success by all measures, including the ones this reporter made up without the organisers knowing. The organisers believe that the fest saw roughly a footfall of 75,000 this year, more than double of all three days last year. It also saw greater participation from foreign fintech delegates than last year, according to Navin Surya from the Payments Council of India in an interview with BQ Prime. Surya is founder of the Global Fintech Fest.
Of course, the Reserve Bank of India and the government’s full participation also helps. The hype was real. And soon, it becomes unreal.
For those outside of Jio World Convention Centre, the introduction of the UPI ATM became a hot topic of discussion. Hitachi Payments Services launched their white label ATMs, not with a card reader, but a screen displaying a dynamic QR code for cash withdrawals. NCR Corporation, the other big ATM manufacturer, displayed their UPI ATMs in collaboration with some public sector banks. People were fascinated that one could hypothetically go to an ATM without their card and still withdraw money using the UPI apps on their phones.
Some finfluencers capitalised on this fascination by doing viral videos at the ATMs. But what they failed to tell their followers (either because they did not know or because facts usually come in the way of fascinating content) is that this technology is at least four years old.
NPCI has been tinkering with UPI-enabled cardless withdrawals from ATMs for some time now, though banks have not been forthcoming with deployment. Technically, any traditional ATM can be enabled with a software patch making it UPI friendly for withdrawals, Arindam Basu of NCR Corporation told BQ Prime in an interview. The technology is likely going to be available at all ATMs in less than a year, he added.
Unofficial estimates suggest that about 15,000 such ATMs already exist in India. But this is a fraction of the more than 2 lakh ATMs deployed in the country.
The bottom line is that this was seen as an exciting new technology, where some social media users called it “the future of fintech”. But then this begets the question whether using a cashless payment method to withdraw cash is truly an “innovation”.
Maybe, this form of UPI usage could come in handy for people who need urgent cash, but don't have their cards, whatever the number of such people might be. Maybe.
What was truly worth the hype though was NPCI’s conversational UPI payments. The technology will allow users to either use a phone call, or their IoT devices (smart speakers, smart watches, smart TVs) to make payments using voice commands. This could potentially make payments as easy as asking Alexa to change the song in your playlist. Two-factor authentication will still require you to manually enter your PIN. But plans are on to use your voice as authentication.
Near-field communication technology (popularly called ‘tap and go’) and voice-based transactions are having their day in the sun, after being around for years. Maybe they will take digital payments and fintech, in general, forward. Maybe.
At the end of the three-day festival, fintechs would likely be flying high with what they saw and felt. The industry, for all its flaws, is still India’s best bet at occupying a commanding position in the global financial revolution. Let’s look forward to 2024, when the fest returns, with hopefully even newer ideas. | Banking & Finance |
LONDON, Nov 21 (Reuters) - Finance minister Jeremy Hunt will announce tax cuts for businesses on Wednesday - and possibly some for voters too - as he tries to speed up Britain's sluggish economy and help his struggling party before an election expected next year.
Buoyed by a fall in inflation, Hunt plans to use his Autumn Statement budget update speech to parliament to shift the government's focus to fixing the long-running weak growth problem of the world's sixth-biggest economy.
Another, more immediate concern of Hunt and Conservative Prime Minister Rishi Sunak will be the big opinion poll lead of the opposition Labour Party with an election likely within the next 12 months.
Hunt is due to announce ways to boost business investment by 20 billion pounds ($25 billion) a year over the next decade, cut taxes and get more people into work, according to excerpts of his speech shared with media.
"After a global pandemic and energy crisis, we have taken difficult decisions to put our economy back on track," Hunt is due to tell parliament. "But the work is not done."
Other measures will increase investment into high-growth industries, cut red tape, get debt falling and bring inflation down to 2% from 4.6% in the most recent data, the speech excerpts showed.
The Times reported that Hunt would cut the headline rates of national insurance for around 28 million people and make tax incentives for business investment permanent.
Hunt and Sunak have a bit more fiscal room for manoeuvre than they thought earlier this year after government borrowing came in lower than predicted in recent months, thanks to high inflation pushing up tax revenue.
But the problems they face still represent a major challenge.
The public finances are under strain after the government's huge spending to protect households from the energy price surge last year and prop up the economy during the COVID pandemic, as well as a big rise in borrowing costs.
Furthermore, Britain's budget forecasters will probably cut sharply their economic growth predictions on Wednesday due to high inflation, labour shortages and Brexit's after-effects.
That more sombre outlook will add to the challenge for Hunt to stay on course to meet his target to start reducing Britain's debt burden in five years' time.
Public debt has trebled as a share of gross domestic product over the last 20 years to almost 100%.
After the meltdown in British financial markets last year, triggered by the huge tax cut plans of former prime minister Liz Truss, Hunt and Sunak have promised to move carefully.
Any big tax cuts would also prove counter-productive if they stoked inflation and forced the Bank of England into raising interest rates, which are already at a 15-year high.
HOLD FIRE
With only limited fiscal firepower, many analysts think Hunt and Sunak will wait for a full budget statement, due in March, to announce big tax cuts for voters and announce only a small-scale easing of the tax burden for individuals on Wednesday.
That could anger some Conservative lawmakers who are alarmed that taxes are due to go up under the current parliament by the most since World War Two, based on calculations by the Institute for Fiscal Studies think tank.
Hunt and Sunak announced major tax-raising measures a year ago to assuage bond investors after Truss's mini-budget.
Many analysts say that in the coming years whoever runs Britain will have to raise taxes further, not cut them.
Sunak has said that as well as cutting taxes "carefully and sustainably" he wants to change welfare benefits for working-age adults to get more of them into work, a move which could help to ease a shortage of workers that is weighing on employers but leave the government open to charges of unfairness.
He has said building a sustainable energy network and a "world-class" education system are key to his growth plans too.
($1 = 0.8025 pounds)
Writing by William Schomberg Editing by Mark Potter
Our Standards: The Thomson Reuters Trust Principles. | United Kingdom Business & Economics |
A brazen booze bandit pulled off an “Ocean’s Eleven”-style heist to reportedly swipe $600,000 worth of pricey wine from a high-end California liquor store over the holiday weekend.
The conniving connoisseur cut a hole in the roof to break into Lincoln Fine Wines in Venice, Calif., and rappelled down before spending nearly four hours hauling away expensive French vintages, according to the Los Angeles Times.
Stolen bottles included Chateau Petrus 2016, which retails for $4,500, and brands from the Cotron-Charlemagne family, including a 1994 vintage, according to the outlet.
Although it’s unclear which exact Corton-Charlemagne blends were taken, a 1994 chardonnay from the label is listed online for $13,000.
Lincoln Fine Wines owner Nazmul Haque said some security cameras and sensors in the store were disabled days before the heist but wouldn’t speculate whether the robbery was an inside job, according to the Times.
Store manager Nick Martinelle said he found one of the security cameras covered with tape from the back of a “Smile: You’re on Camera” sign that was yanked off the door of the wine cellar — where many of the most expensive bottles were stored, according to CNN.
“It was like something out of ‘Ocean’s Eleven.’ We just couldn’t believe it,” he told the outlet.
The masked robber was seen on security cameras pulling into the wine store’s parking lot in a white pickup truck stripped of its license plates last Saturday at 12:30 a.m., the paper reported.
The thief, who remains on the loose, wore a black hoodie that says “Anti Social Social Club” on the back, plus a red baseball cap and gloves.
Haque was alerted by his security company of the break-in around 4 a.m. after one of the working sensors went off and immediately raced to the store, located about 3 miles from the famed Santa Monica Pier, he told the paper.
But all he found were empty wine crates, broken display cases and ransacked shelves.
“There were a couple of crates abandoned on the roof, which makes me think he heard me coming,” Haque told The Times.
One entire cellar wall full of French wines containing bottles that included Bordeauxs and Burgundys costing $1,000 on average was also cleared out.
Also snatched were a 2008 Bonneau du Martray, a 2018 Louis Latour, a 2019 Domaine Roulot and a 2020 Pierre-Yves Colin-Morey.
Haque estimated that 60% of his high-end inventory was swiped, totaling about $600,000.
“I’ve been working on a list of missing bottles, and that price could go up by the time I’m done,” he told the outlet.
“To lose 10, 15 years’ worth of work overnight is devastating. I’m not sure if I will recover emotionally,” he added, noting that it took him “years to build up that collection.”
One pricey spirit the thief failed to grab was a 1975 Glenfiddich “Rare Collection” single-malt whiskey, valued at $9,000.
Most other treasures, though, were swiped — whiles less expensive bottles like Dom Pérignon Champagne were left untouched.
The Los Angeles Police Department has yet to identify a suspect, and customers are speculating that the robbery was an inside job since only the best vintages appeared to be targeted.
Representatives for the LAPD did not immediately respond to The Post’s request for comment.
The Post has reached out to Lincoln Fine Wines for comment.
Martinelle called the incident “creepy,” telling CNN that it spooked him that the thief knew the location of the cellar from the roof and appeared to know that the most valuable bottles were in the cellar’s drawers rather than shelves.
Haque told The Times that “whoever did this was very knowledgeable of the diagram of the store.”
In an Instagram post, the wine shop shared photos of glass shattered across the floor, the hole that was cut in the store’s ceiling, empty shelves and surveillance clips.
The caption said it was “offering a $10,000 reward for catching the burglars,” and said the store believes that there could have been as many as three thieves involved. | Consumer & Retail |
The Jan. 6 insurrection at the U.S. Capitol played a significant role in the decision by one of the three major credit rating firms Tuesday to downgrade the nation’s pristine creditworthiness by a notch.
The 2021 attack, which also led to former President Donald Trump being indicted on multiple federal charges this week, was cited “repeatedly” by officials from Fitch Ratings, said a U.S. administration official who requested anonymity to speak to HuffPost.
And the man who made the downgrade call, Richard Francis, a co-head of Fitch’s Americas sovereign ratings division, said that the insurrection was something that loomed large in the agency’s considerations when deciding that the nation’s political dysfunction merited a credit demotion.
“We’ve seen a pretty steady deterioration in governance over the last couple of decades,” Francis said Wednesday on CNBC. “You can highlight a few key elements. One would be Jan. 6.”
Francis said Jan. 6 was not the only reason for downgrading Fitch’s assessment of U.S. governance, which was largely why overall creditworthiness was marked down.
“We’ve seen a pretty steady deterioration in governance over the last couple of decades. You can highlight a few key elements. One would be Jan. 6.”
He also cited “constant brinkmanship surrounding the debt ceiling, the debt ceiling debate,” as well as inaction on federal entitlement programs like Social Security and Medicare.
In its downgrade commentary, Fitch said, “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”
Financial markets mostly took the downgrade — which was released at nearly the same time as the Trump indictment was made public — in stride. Stocks were down a few hundred points Tuesday morning, and Treasury debt yields, which move opposite of their prices, were also up slightly.
Officials in Washington had largely assumed that a debt deal reached in early June — which came with more time to spare before the Treasury faced possible default, compared with some previous episodes — would take a downgrade off the table. But it may not matter much.
In 2011, the agency now known as S&P Global Ratings downgraded the U.S. for the first time ever in the wake of a standoff between then-President Barack Obama and a Republican-held House of Representatives. While the Government Accountability Office said that the impasse led to higher government borrowing costs of around $1.3 billion, the period studied did not include any impacts from S&P’s downgrade, which occurred a few days after the standoff ended.
Treasury and White House officials on Wednesday brushed off Fitch’s downgrade, which arrived as the Treasury preps for its high-profile quarterly debt sales next week. On Monday, it projected it would need to borrow about $1 trillion in the July-September quarter alone to keep the government afloat and restore the cash cushion that was drained by debt limit drama earlier in the year.
Josh Frost, the Treasury’s assistant secretary for financial markets, told reporters at a briefing Wednesday morning that there had been only “a very limited price response in markets” so far.
“We continue to see robust demand for Treasury securities, and the decision last night doesn’t change what Americans, investors and people all around the world already know, which is that Treasury securities remain the world’s preeminent safe and liquid asset, and that the American economy is fundamentally strong,” he said.
Indeed, President Joe Biden’s administration appeared less worried about any market impact from Fitch’s decision and more concerned about its timing.
The anonymous administration official said Fitch’s internal analytical model showed that the U.S. had pristine AAA credit under Obama, that it slipped to AA+ under Trump, and that Fitch failed to consider factors that should have merited AAA status now.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”
The official also said the June debt limit deal should have boosted Fitch’s assessment of U.S. governance, as the issue was resolved in time and on a bipartisan basis, and resulted in substantial deficit reduction.
Jared Bernstein, the chair of the White House Council of Economic Advisers, characterized Fitch’s decision to downgrade as “bizarre, arbitrary and against even their own estimates.”
“The idea that you would then somehow fail to do this under the prior administration, when these fiscal measures were massively deteriorating, and then go a notch down when we’re not only trying to move in the other direction but actually having some success in moving the other direction, it makes no sense,” he said in an interview with CNBC.
Francis, the division co-head at Fitch, said the rating could be changed upward if there was progress on the deficit and debt front, noting that the ratio of U.S. debt to gross domestic product was three times that of a typical country with the AAA rating.
“It’s much higher than the AAA median and much higher than any other AAA country actually, and it’s even higher than the AA category,” he said. | Banking & Finance |
Although the cryptocurrency industry remains shadowed by recent blowups and controversy, the world's most important token — bitcoin — is making a comeback.
The value of bitcoin soared to nearly $42,000 on Monday, marking the first time the digital currency cracked $40,000 in 18 months, price tracker CoinDesk Indices shows.
The resurgence stands in contrast to the questions that have dogged the sector since last year's spectacular flameout of crypto exchange FTX, leading to the November conviction ofon seven counts of fraud. Also last month, — the world's largest cryptocurrency exchange platform — agreed to pay $4.3 billion after admitting that it violated U.S. laws to prevent money laundering and sanctions violations, with CEO Changpeng Zhao pleading guilty to one federal charge.
Despite such scandals, bitcoin's priced has soared 150% this year, although it remains down from a high of roughly $69,000 in late 2021.
What is bitcoin again?
Bitcoin is the first cryptocurrency was created in 2009. Cryptocurrencies are digital tokens that use peer-to-peer technology to facilitate instant payments without the need of a third party such as a bank or payment processor, according to bitcoin's pseudonymous creator, Satoshi Nakamoto.
Unlike traditional money, cryptocurrencies can be used to purchase goods and services on the internet, in addition to being held as investments (like stocks). However, crypto prices are notoriously volatile, and investing in any kind of crypto can be risky, according to investment firm Charles Schwab.
There are more than 11,000 cryptocurrencies, but bitcoin is the most valuable (in dollar terms), in addition to having the largest market capitalization of any digital asset, data from crypto price tracker CoinGecko shows.
Why is bitcoin surging now?
Several factors are fueling bitcoin's latest rally. Perhaps the most important are signs that major investment firms are set to get regulatory approval to offer spot bitcoin exchange traded funds — a pooled investment security that can be bought and sold like stocks. Federal regulators are expected to give the green light for several bitcoin ETFs as early as January, which could make investing in crypto more accessible to investors, Yiannis Giokas, a senior product director at Moody's, told CBS MoneyWatch.
"As more and more managers venture into the bitcoin spot ETF space, more retail and institutional investors, even the more conservative ones, will feel a higher degree of comfort investing in this space," he said.
Bitcoin prices are also benefiting from a growing conviction on Wall Street that the Federal Reserve is done hiking its benchmark interest rate now that inflation is receding and that the central bank could even start loosening monetary policy by mid-2024 to keep the economy on track.
When interest rates fall, investors are more likely to pour money into riskier assets such as crypto.
"Lower rates are bullish for bitcoin," Greg Magadini, director of derivatives at crypto data firm Amberdata, told CBS MoneyWatch.
Giokas thinks 2024 could be a banner year for bitcoin, a proxy for how well the crypto market as a whole is doing.
Bitcoin "hit $40,000 for the first time in 2021, and every time it was followed by a bull run, so it's a logical expectation from the markets that another run is on its way," he said.
— The Associated Press contributed reporting.
for more features. | Crypto Trading & Speculation |
The Insurance Council of Australia's (ICA) new data analysis has revealed a concerning number of properties exposed to high flood risk.
In its submission to the House of Representatives Standing Committee on Economics' inquiry into insurers' responses to 2022 major flood claims, the ICA revealed that 229,455 properties have a 5% flood annual exceedance probability (AEP), known as a 1-in-20 year flood risk.
“The ICA is committed to working with all stakeholders to improve the way the insurance industry responds to floods, and we welcome the opportunity to make a submission to the House Economics Committee,” said ICA CEO Andrew Hall. “Our data analysis also shows that damage from flood is wildly disproportionate to the number of properties known to be exposed to flood risk, so by targeting mitigation efforts to those most affected we can relieve the burden on us all.”
The submission noted that more than half of the properties (123,475) with a 5% flood AEP are in New South Wales. It further revealed that over 674,000 properties in Australia face a 1%, 2%, or 5% AEP, commonly described as 1-in-100, 1-in-50, and 1-in-20 year floods, respectively.
Data from the National Flood Information Database included in the submission also showed that NSW, Queensland, and Victoria have 78.1% of properties across Australia, but account for:
The ICA called for greater investment by governments at all levels to further protect homes and communities from the impacts of extreme weather events.
“Governments must amend land use planning legislation to include a mandatory requirement for planning approvals to consider property and community resilience to extreme weather and improve building codes so future homes are made more resilient,” Hall said.
Last month, the ICA released a 2023 update of its climate change roadmap, which includes the industry's implementation strategies and case studies and results of a survey on ICA members' progress towards net zero. | Real Estate & Housing |
Check out the companies making headlines in extended trading.
Workday — Stock in the workforce platform provider added more than 6% after third-quarter results surpassed Wall Street estimates. Workday notched adjusted earnings of $1.53 per share on $1.87 billion in revenue, while analysts surveyed by LSEG, formerly known as Refinitiv, expected $1.41 in earnings per share and $1.85 billion in revenue.
NetApp — The data infrastructure firm climbed nearly 10% after a beat on the top and bottom lines in the fiscal second quarter. The company reported adjusted earnings of $1.58 per share on $1.56 billion in revenue, while analysts polled by LSEG forecast earnings of $1.39 per share and $1.53 billion in revenue. NetApp also issued higher-than-expected third-quarter earnings guidance.
Leslie's — Stock in the swimming supplies company plummeted more than 16% after the company forecast a wider-than-expected loss for the first quarter. Leslie's is calling for an adjusted loss of 21 cents to 20 cents per share, compared to analysts' expectations for a loss of 16 cents per share, according to FactSet. Fourth-quarter adjusted earnings were also below expectations.
Jabil — Shares fell more than 8% after the manufacturing solutions company issued a lower revenue forecast for the fiscal first quarter of 2024. The company now expects revenue in the range of $8.3 billion to $8.4 billion, down from a range of $8.4 billion to $9 billion.
Las Vegas Sands — The casino operator slipped 3.5% after it announced that Miriam Adelson would sell $2 billion in shares. Adelson is the largest shareholder of Las Vegas Sands, and the funds will be used to purchase a professional sports team, the company said in a regulatory filing.
Daily Journal — Shares of the Daily Journal are expected to be active. Charlie Munger, chair and publisher of the Daily Journal and second-in-command at Berkshire Hathaway, died Tuesday at age 99. Shares of the newspaper fell 4.5% during the regular session.
— CNBC's Contessa Brewer and Darla Mercado contributed reporting. | Stocks Trading & Speculation |
Newsom vetoes bill that would allow striking workers to get unemployment checks
California Gov. Gavin Newsom (D) on Saturday vetoed a bill that would have allowed workers on strike to become eligible for Unemployment Insurance (UI) benefits.
In his note to the California State Senate, informing them of his decision, Newsom cited the state’s high UI debt and said the state is not collecting enough in taxes to fund support the fund, making it “vulnerable to insolvency.”
The fund is supported through a tax that businesses must pay on each work, but the tax applies just on the first $7,000 of workers’ wages, which is the lowest amount allowed under federal law, The Associated Press reported. The financial structure has remained unchanged since 1984.
“Any expansion of eligibility for UI benefits could increase California’s outstanding federal UI debt projected to be nearly $20 billion by the end of the year and could jeopardize California’s Benefit Cost Ratio add-on waiver application, significantly increasing taxes on employers,” Newsom wrote.
“Furthermore, the state is responsible for the interest payments on the federal UI loan and to date has paid $362.7 million in interest with another $302 million due this month,” he continued. “Now is not the time to increase costs or incur this sizable debt.”
Newsom’s veto comes amid major strikes in the state continue. While Hollywood writers ended their strike on Sept. 26, there are ongoing strikes by Hollywood actors and Southern California hotel workers. This bill represented an effort on behalf of Democratic state lawmakers to show support for striking workers.
Democratic State Sen. Anthony Portantino, who authored the bill, noted to the AP that only two of the 56 strikes in California over the past decade have lasted more than two weeks.
Lorena Gonzalez Fletcher, executive secretary-treasurer of the California Labor Federation described the veto as a win for corporations and executives, in an interview with the AP.
“This veto tips the scales further in favor of corporations and CEOs and punishes workers who exercise their fundamental right to strike,” Fletcher said. “At a time when public support of unions and strikes are at an all-time high, this veto is out-of-step with American values.”
“I have deep appreciation and respect for workers who fight for their rights and come together in collective action. I look forward to building on the progress we have made over the past five years to improve conditions for all workers in California,” Newsom wrote.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Workforce / Labor |
Euler Motors Raises Rs 120 Crore In Funding Round
The ongoing series-C extension round saw commitment from British International Investment (BII), the U.K. government's development finance institution and impact investor, which is co-investing with Blume Ventures in the company, Euler Motors said in a statement.
Commercial electric vehicle maker Euler Motors on Monday said it has raised Rs 120 crore in a funding round from a bunch of investors.
The ongoing series-C extension round saw commitment from British International Investment (BII), the U.K. government's development finance institution and impact investor, which is co-investing with Blume Ventures in the company, Euler Motors said in a statement.
The company said it has also onboarded Green Frontier Capital, India's first investment firm focused on growth companies as part of this fundraising round along with existing investors, it said.
The freshly raised capital from the ongoing series-C extension round will be deployed strategically to drive Euler Motors' pan-India expansion initiatives, as it plans to enter 40 cities by the end of FY 2023-24, the company said in a statement.
The extension round takes the tally of total investments to about Rs 690 crore, it said.
"Euler Motors successfully raised Rs 120-crore in the ongoing series-C extension round," the company said in the statement.
The additional funds, it said, will also enable the company to reinforce its service and charging network nationwide to further facilitate the adoption of electric vehicles across the country, it said.
"The interest and commitment from our new investors, British International Investment & Green Frontier Capital along with continued support from our internal investors reaffirms our belief that we are on the right path," said Saurav Kumar, Founder & CEO of Euler Motors.
Moreover, existing investors Athera Venture Partners, Alteria Capital, ADB Ventures, Blume Ventures, GIC Singapore, and QRG Holdings, also participated in this round, it stated.
Euler Motors said over the next year, it plans to raise funds as needed, to execute its plan to scale-up production, presence and services, while setting sight towards the global market.
"We are delighted to work with Euler Motors on accelerating EV development in India, particularly in the commercial cargo transportation segment," said Manav Bansal, Managing Director and Head of India at British International Investment.
"This (commercial cargo transportation) segment is important, both for job creations and emission reduction. It is perfectly in line with our strategic objectives to promote productive, sustainable and inclusive economic growth," he added.
According to Sandiip Bhammer, Managing Partner, Green Frontier Capital, the 'investment in Euler Motors signifies our profound faith in the transformative promise of sustainable technologies targeted from within the mobility sector. | Renewable Energy |
Research Open Access Published: 20 January 2023 Laura Carter2, Tasneem Al Shizawi1, Michelle Queally2,3, Sarah Brennan4,5 & …Stephen O’Neill6 BMC Public Health volume 23, Article number: 140 (2023) Cite this article 280 Accesses 11 Altmetric Metrics details AbstractBackgroundIreland has one of the lowest BF rates in the world. This study investigates the association between breastfeeding and infant health in Ireland.MethodsA cross-sectional, secondary analysis of data collected from Growing Up in Ireland (GUI): the National Longitudinal Study of Children was conducted. The average morbidity for 2212.infants exclusively breastfed for at least 90 days (EBF90days) was compared to data for 3987 infants in the non-breastfed (Non-BF) group. Data were weighted using entropy balancing to ensure the comparability of groups. Sensitivity analyses considered alternative definitions of the breastfeeding group.ResultsInfants who were EBF90days were significantly less likely to be admitted to hospital (CI: − 0.06 to − 0.03), spent less nights in hospital (CI: − 0.37 to − 0.11), and were less likely to develop respiratory diseases including asthma (CI: − 0.03 to − 0.01), chest infections (CI: − 0.12 to − 0.08), snuffles/common colds (CI: − 0.07 to − 0.02), ear infections (CI: − 0.08 to − 0.04), eczema (CI: − 0.08 to − 0.04), skin problems (CI: − 0.04 to − 0.00), wheezing or asthma (CI: − 0.06 to − 0.03), vomiting (CI: − 0.03 to − 0.00), and colic (CI: − 0.04 to − 0.01). Further outcomes such as current health of the infant at time of interview (CI: − 0.04 to − 0.00), feeding problems (CI: − 0.04 to − 0.02) and sleeping problems (CI: − 0.02 to − 0.00) indicated a protective effect of EBF90days versus Non-BF. However, these infants were also more likely to fail to gain weight (CI: 0.01 to 0.02) and were at a slightly higher risk of developing nappy rash (CI: 0.00 to 0.02).ConclusionExclusive breastfeeding for 90+ days is associated with protection against childhood morbidity. Given the protective effect of breastfeeding on adverse health effects in infants, policy makers should prioritise policies that support, promote and protect exclusive breastfeeding. Peer Review reports BackgroundBy 2025, the World Health Organization (WHO) aims to achieve a 50% universal exclusive breastfeeding (EBF) rate in the first 6 months which is expected to significantly reduce maternal, neonatal, infant and childhood mortality [1]. In Ireland, poor practice of EBF prevails, with only 15% of children exclusively breastfed for the first 6 months compared with the global average of 38% and European average of 25% [2]. The WHO has identified several factors which contribute to a low rate of exclusive breastfeeding, including knowledge-related factors [3].Human milk has long been believed to protect against infection in infants [4, 5]. A vast scientific literature demonstrates the substantial health, social and economic importance of breastfeeding, including lower infant and young child morbidity and mortality from diarrhoea and other infectious diseases [6, 7]. The health benefits for mothers who breastfeed include a reduced risk of breast, ovarian, cervical and endometrial cancers, as well as reduced risk of anaemia and protection against osteoporosis and hip fracture [8, 9]. Given the health benefits of breastfeeding for both mother and child, the WHO recommend that infants ought to be exclusively breastfed for the first 6 months of life and that breastfeeding should continue as part of their diet with appropriate complementary weaning foods up to 2 years old and beyond [10]. However, despite gradual increases over the last ten years, Ireland’s breastfeeding rates continue to be the lowest in international comparisons [11] with implications for maternal and child health.To our knowledge, no studies to date have explored the relationship between breastfeeding and the incidence of infant illnesses in Ireland. This knowledge gap is compounded by the fact that no coordinated national breastfeeding monitoring system exists beyond the point of hospital discharge in Ireland, resulting in a lack of knowledge regarding national breastfeeding data. Ireland does not yet report to the World Breastfeeding Trends Initiative (WBTi) which collates data on the degree of implementation of the Global Strategy for Infant and Young Child Feeding [12]. Country-specific data on the relationships between breastfeeding practices and infant illnesses can inform policies supportive of early, exclusive and extended breastfeeding practises within population specific promotion programmes.The literature relating to breastfeeding and infant illness incidence almost exclusively relies on evidence from observational studies. Research suggests that breastfeeding is linked with infant health benefits [13]. There is also evidence however that the benefits are overstated due to selection bias [14, 15]. Mothers that self-select into breastfeeding rather than formula feeding may differ from those that do not in ways that influence infant health [16]. Without accounting for baseline maternal differences in the research design or fully including all confounding variables, statistical models may tend to overstate the positive relationship between breastfeeding and infant health.The objective of this study is to investigate the relationship between exclusive breastfeeding for at least 90 days and the incidence of infant illnesses in an Irish cohort, while accounting for such self-selection through weighting. We hypothesise that in an Irish infant cohort with high breast milk substitute use, morbidity among infants aged 0–9 months will be significantly lower in the exclusively breastfed cohort.MethodsDataData were obtained from the first wave of the Growing Up in Ireland (GUI) survey, a longitudinal cohort study of a nationally representative sample of over 11,000 infants. The GUI eligibility criteria for wave one was that the infant must be nine-months of age at the time the survey was conducted, between the beginning of September 2008 to the end of April 2009. The infants were randomly selected from the Child Benefit Register which recorded 41,185 eligible births between 1st December 2007 and 30th June 2008. The valid contact response rate was very high (70.2%).The GUI survey, asked parents whether the infant had been taken to a General practitioners (GP), Health Centre or Health visitor, or to Accident and Emergency for a range of conditions including whether the infant suffered from: cold, chest infections, ear infections, respiratory illness, digestive allergies, eczema, kidney disease, asthma, vomiting, diarrhoea/ constipation, meningitis, colic skin problems, nappy rash, failure to grow, developmental delay, feeding problems, sleeping problems, or dental problems. The survey asked about the health of the infant at birth, the current health of the infant, the severity of the infant’s most severe illness (minor, moderate or severe). The parents were also asked to report the number of times the infant was admitted to hospital and the average number of nights spent by the infant in hospital.GUI records information on whether the infant was currently breastfed or the age at which breastfeeding stopped as well as additional questions regarding whether the infant was ever exclusively breastfed, was still exclusively breastfed or the age when exclusive breastfeeding stopped. Considering the numbers of infants reported to be exclusively breastfed at 90 and 180 days were 2212 and 712 respectively, in our primary analysis we focus on a comparison between infants that were exclusively breastfed for at least 90 days (EBF90days) and those that were never breastfed (Non-BF) thus receiving only formula from birth given the greater statistical power to detect effects. In the appendix, we also conduct sensitivity analyses (SA) by considering three further comparisons: (SA1) between infants that were ever breastfed (BF) and those that were never breastfed (Non-BF) and (SA2) between infants that were exclusively breastfed (EBF) for any length of time and those not exclusively breastfed (non-EBF) i.e. receiving any formula from birth and (SA3) between infants that were exclusively BF for at least 90 days (EBF90days) and compare these to the non-EBF group.We assign infants to the relevant groups based on the respondent’s responses to the question “Was <baby> ever breastfed?”, and “was <baby> ever exclusively breastfed”, and “How old was <baby> when he/she stopped being exclusively breastfed?”Unfortunately, while response rates were generally high, data on at least one of the above-mentioned variables was unavailable for 1255 infants, resulting in a final analysis sample of 9879 infants for whom complete information was available (see Appendix for details and Fig. A12). As can be seen in Table A1 in the appendix, the rate of missingness was similar across our comparison groups, suggesting our assumption that data is ‘missing at random’ is plausible in this context.Ethical approvalEthical approval for this study was obtained through the College of Medicine, Nursing and Health Sciences Research Ethics Committee at the National University of Ireland Galway in March 2021.Data analysisA naïve comparison could be made by comparing the outcomes (e.g., incidence of each illness) between the two groups (EBF90days vs Non-BF). A concern with such an approach is that the compositions of the groups could differ e.g. it may be the case the infants born into higher socioeconomic groups may be more likely to be exclusively breastfed for at least 90 days, [17] leading us to wrongly attribute the effects of such variables on outcomes to be an effect of the fact the infant was EBF90days. Regression adjustment can be used to control for such covariates to improve the reliability of comparisons. However, it can be challenging to correctly specify regression models. Methods such as propensity score matching (PSM) [18] and inverse probability weighting (IPW) [19, 20] can be used to reduce the risk of bias from model mis-specification by making the ‘treated’ and ‘control’ groups similar in terms of their covariates.In this study we use Entropy Balancing [21] which extends inverse probability weighting methods by balancing the covariate moments (mean, variance and skewness for continuous variables, and mean for binary variables) of the comparison groups, while choosing weights that are as close as possible to uniformly distributed – reducing the tendency of IPW methods to give extremely high weights to some individuals. Entropy Balancing has been shown to be doubly robust [22] meaning that provided either the linear outcome regression or the logistic propensity score model implicitly underlying estimates are correctly specified, estimates will be unbiased. Differences in outcomes with and without exclusive breast feeding for 90 days can be estimated using separate weighted regressions with each outcome of interest as the dependent variable (Yi) and an indicator for the group of interest (Di= 1 if EBF90days, 0 if Non-BF), using the entropy balancing weights to control for differences in covariates between the groups. The regression model is specified as:$${Y}_i={\boldsymbol{X}}_i\boldsymbol{\beta} +\tau {D}_i+{\epsilon}_i$$where Xi is a vector of their covariates, with coefficients denoted by β and ϵi captures idiosyncratic shocks and individuals are weighted by the entropy balancing weights. The coefficient on Di captures the difference in conditional means between the two groups, and is our parameter of interest. Controlling for observed covariates is not essential here since entropy balancing tends to achieve near perfect covariate balance, hence we exclude Xi.The observed potential confounders to control for were informed by data availability and an extensive literature review. We control for an extensive set of variables (see appendix Table A2 for a full list of covariates) that can be summarised under the following headings: health of the infant at birth, the antenatal care received, pregnancy complications, folic acid consumption, maternal smoking history, method of delivery, stage of gestation at which the infant was born, infant’s weight at birth, birth complications, household equivalent annual income, highest education received by mother, hours’ sleep infant receives, and whether or not the infant has received their vaccinations.ResultsCovariate balanceOur estimation sample size was 9879 infants following exclusion of those who were missing these variables of interest. Tables A2 to A5 in the appendix compare the means of each group before and after reweighting and report the absolute standardised differences between the groups for our 4 comparisons respectively, including the socio-economic and demographic background of the mothers. A standardized difference greater than 0.10 is indicative of imbalance [23]. In general, we find balance is relatively good even before adjustment, while weighting by the entropy balancing weights almost completely eliminates imbalance. Thus, comparisons between groups after weighting should not be susceptible to observed confounding.Comparisons of outcomes between (weighted) groupsDescriptive statistics for the sample are reported in Table A9. There were 2212 infants that were EBF for at least 90 days compared to 3987 Non-BF babies. In Table 1, we compared the outcomes for EBF90days and Non-BF infants after reweighting the Non-BF group using entropy balancing weights to ensure the groups are comparable in terms of observed covariates (see appendix Table A2). The absolute risk difference between the EBF90days and Non-BF groups at 9 months in the incidence of chest infection (− 0.10 (CI: − 0.12 to − 0.08)), snuffles/common colds (− 0.05 (CI: − 0.07 to − 0.02)), ear infections (− 0.06 (CI:-0.08 to − 0.04)), asthmatic symptoms (− 0.05 (CI: − 0.06 to − 0.03)), respiratory symptoms (− 0.02 (CI: − 0.03 to − 0.01)), eczema or skin allergies (− 0.03 (CI: − 0.05 to − 0.02)), skin problems (− 0.02 (CI: − 0.04 to − 0.00)), vomiting (− 0.02 (CI: − 0.03 to − 0.00)) and colic (− 0.02 (CI: − 0.04 to − 0.01)) indicated a protective effect of EBF90days versus Non-BF. Further statistically significant protective effects were obtained for outcomes such as current health of the infant at time of interview (− 0.02 (CI: − 0.04 to − 0.00)), feeding problems (− 0.03 (CI: − 0.04 to − 0.02)) and sleeping problems (− 0.01 (CI: − 0.02 to − 0.00).Table 1 Difference in outcomes for EBF (90+ days) versus Non-BF after weighting to ensure covariate balance using Entropy Balancing weightsFull size tableEBF90days was also associated with lower health care resource use, with an absolute risk reduction for being admitted to hospital (− 0.04 (CI: − 0.06 to − 0.03)) and a reduction in nights spent in hospital (− 0.24 (CI: − 0.37 to − 0.11)). However, EBF90days was associated with an increase in the absolute risk of failure to grow (0.01 (CI: 0.01 to 0.02)) and persistent nappy rash (0.01 (CI: 0.00 to 0.02)). Table A6 in the appendix, shows the results of three further comparisons (a), (b) and (c) followed a similar pattern to those reported for the EBF90days versus Non-BF comparison.Comparisons of outcomes between (weighted) groups after standardisationSince there are many outcomes and these are measured on different scales, in Fig. 1 we present a forest plot of the estimates after rescaling the difference in outcome between groups by the standard deviation of the comparison group for each outcome. Comparisons between the EBF180 and NBF groups show similar magnitudes of changes, with wider confidence intervals reflecting the lower numbers in the EBF180 groups. Figures A1 to A3 in the appendix, present forest plots for our three additional comparisons (SA1), (SA2) and (SA3). Generally, across all comparisons the magnitudes of the differences are relatively small when expressed in terms of the standard deviation of the outcome, nonetheless at the population level these could translate into substantial differences.Fig. 1Entropy Balanced comparison of outcomes for EBF (90+ days) versus Non-BF rescaled by Non-BF standard deviationFull size imageSensitivity analysesResults based on naïve unadjusted comparisons (see appendix Table A7, Figs. A4 to A7) or using PSM (see appendix Table A8, Figs. A8 to A11) in place of entropy balancing are presented in the appendices and illustrate that results are not very sensitive to the choice of analytic approach, although the propensity score matched estimates yield less statistically significant differences as this approach is less efficient given that it does not use all of the available data unlike the other approaches.DiscussionBreastfeeding has not yet reached optimal prevalence in many countries, including Ireland [2, 5]. With a formula feeding rate of 43.1% in 2016, Ireland is a fertile population in which to study associated effects of infant feeding types on infant morbidity. The objective of this paper was to investigate the relationship between exclusive breastfeeding for at least 90 days and the incidence of infant illness while controlling for a broad range of potential confounders in an Irish cohort. We find that infants who were EBF for 90+ days were significantly less likely to be admitted to hospital, spent less nights in hospital, and were less likely to develop respiratory diseases including asthma, snuffles/common colds, chest infections, eczema, ear infections, wheezing and asthma, skin problems, vomiting, and colic indicating a protective effect of breastfeeding. Further outcomes such as current health of the infant at time of interview, feeding problems and sleeping problems were also statistically significantly negative, signalling the potential protective effect of EBF90days. However, these infants were also more likely to fail to gain weight and to develop nappy rash. It should be noted however that the implied differences with and without exclusive breast feeding for 90 plus days tend to be relatively small compared to the inherent variability of the outcome, less than 0.15 standard deviations in all cases (Fig. 1). The results of this research conforms to the international literature [24, 25]. But are striking in that they show that even in a high income country such as Ireland, breastfeeding is correlated with infant morbidity and health care utilisation.Our estimates indicate that, given the population of Irish infants born in the year GUI was collected (2008) was 73,996 [26], there would have been 17,766 less nights spent in hospital if all infants were exclusively breastfed for at least 90 days versus had none of them been breastfed. Furthermore, there would have been 1644 fewer cases of respiratory illnesses, 7429 fewer cases of chest infection and 4320 fewer cases of ear infections. This data again points to the risks of early introduction of formula into the diet of a breastfed baby and supports exclusive breastfeeding for at least 90 days and termination of the practice of human milk substitute supplementation for reasons avoidable by proper planning, antenatal expression of colostrum [27, 28] and availability of donor milk from community milk banks [29]. These practices are envisaged in the recent Code of Marketing of Breast Milk Substitutes’ policy adopted by the HSE [30] and WHO/UNICEF’s 10 steps to successful breastfeeding [31].The study reports a statistically significant increase in failure to grow among the cohort that were EBF for at least 90 days. In 2013, the Health Service Executive (HSE) in Ireland, introduced the use of new WHO growth charts, which were developed using natural infant weight gains in breastfeeding cohorts and thus showed slower weight gain trajectory in infants than in the previously used HSE growth charts developed using ‘natural’ weight gain data from formula fed cohorts. The use of the newer WHO growth charts is recommended in order to avoid mislabelling infants as underweight or failing to thrive [24] which led to unnecessary supplementation and cessation of breastfeeding. However, during the study period in 2008 Irish health care professionals were still using the old HSE growth charts which potentially led to erroneous beliefs among parents regarding failure to thrive/gain weight. Thus, parents of breastfed infants may have been more likely to report that their children exhibited ‘Failure to gain weight or to grow’. Previous research analysing GUI data has shown a significant risk reduction for obesity development in BF infants, with this risk reduction being greater with increasing duration of breastfeeding [32].Our analysis also showed that infants in the EBF90days group were more commonly reported to have persistent nappy rash (0.01 (CI: 0.00 to 0.02)) in comparison to the Non-BF cohort. A similar finding has also been observed in the 1997 Avon longitudinal dataset analysis of over 12,000 infants, which reported that breastfeeding is a risk factor for the development of nappy rash [33] in the first 4 weeks of life. This study also found frequent stooling, a phenomena associated with breastfeeding, to be an associated risk factor of diaper dermatitis. Despite this, studies show a protective effect of breastfeeding on nappy rash over the first year of life [34]. This finding in our study may relate to the presence of more frequent stooling, as is normal in exclusively breastfed infants and thus in the EBF90days cohort, who are similarly aged to those participants in the Avon study. This frequent stooling in exclusively fed infants is explained by the presence of Human Milk Oligosaccharides (HMOs), prebiotics for gastrointestinal microorganisms which, as indigestible by infants, leads to an osmotic laxative effect [35]. The whey dominant whey:casein ratio in breastmilk, in comparison to a casein dominant ratio in formula, also contributes to increased stooling in exclusively breastfed infants [36].Another consideration is the culturally accepted use of commercial infant wipes to clean babies on napkin changing. There is evidence to show that frequent use of multi-ingredient baby wipes leads to increased incidence of napkin rash [37]. As the cohort of infants in the GUI is from 2008, participants would have used wipes containing multiple ingredients rather than those subsequently invented with only 2 ingredients which were shown to be associated with a lower incidence of napkin dermatitis [37]. Interestingly, a case control study, albeit with only 30 participants, also has shown statistically significant therapeutic impact of breastmilk on napkin rashes [38]. As napkin dermatitis results in significant difficulty for both parents and infants, this area would warrant further research considering that an effective free easily assessed therapeutic option, such as breastmilk, could help significantly reduce this suffering.The findings from this study conform with the international data showing that the incidence of infectious illnesses increases with increasing exposure to human milk substitutes and that exclusive human milk feeding is most protective in terms of infectious illnesses [4, 5, 8, 11, 25]. Our results indicate that the protective effect against developing at least 1 of 4 infectious diseases examined, namely, chest infection, ear infection, common colds and meningitis; in a cohort of 100 infants EBF for 90, we estimate a reduction of 9.3 infants [CI 11.7 to 6.9] presenting with one of these infective illnesses when EBF for at least 90 days compared to a similar formula fed [Non-BF] cohort. Similar point estimates were found in the EBF180 vs NBF analysis, indicating beneficial effect of exclusive breastfeeding to 180 days as recommended by the WHO, albeit there was lower power to detect effects due to the reduced sample sizes for that analysis.Furthermore, our study shows greater protection may be provided by EBF over non-EBF and Non-BF infants (see appendix Table A6) which leads us to consider that it is the risk of feeding human milk substitutes, rather than on the benefits of breastfeeding per se, that leads to differences in morbidity and health care utilisation, between the EBF, BF and Non-BF groups. This is not a new idea [39] but does emphasise the newer narrative that breastfeeding is the physiological normal, one which has driven mammalian evolution for millions of years [40] and that replacing human milk feeding with substitute human milks may infer risk. Our findings indicate an increased associated risk of morbidity with the early introduction of and substitution with human milk substitutes, with the risks greater among formula fed [Non-BF] infants.There are some limitations to the present study. Most notably, GUI relies on recollection of whether a mother breastfed or not. However, there is evidence that maternal recollection of breastfeeding status tends to be a valid representation of breastfeeding status.42 We rely on self-reports of whether an infant was taken to the GP, Health Centre or Public Health Nurse or to Accident and Emergency for each of the conditions, which may be another source of misreporting bias. Linking the GUI data to administrative records was not possible in this study. Since GUI used a nationally representative sample, it is plausible that results would generalize to the population, although as we note in the appendix, results may be sensitive to the presence of unobserved confounders despite the rich set of covariates for which we controlled. Future work will explore the relationship between breastfeeding and the infants’ health in later waves. We could also assess the potential cost savings attributable to optimised breastfeeding in Ireland. Finally, we could explore whether findings are similar in other observational child cohort studies such as Growing up in Scotland, Growing up in New Zealand and Growing up in Australia.ConclusionResearch has shown that breastfeeding is the best source of infant nutrition and may prevent adverse health outcomes in infants. Findings from this study suggest that exclusive breastfeeding for at least 90 days is associated with protection against childhood morbidity and is also significantly associated with reduced health resource use in the form of hospital admission and reduced length of hospital stay. There is a need for research in this area to inform policy makers regarding the health benefits associated with breastfeeding and to provide an evidence base for appropriate funding of breastfeeding policy initiatives. Availability of data and materials The datasets generated and/or analysed during the current study are available in the Irish Social Science Data Archive (ISSDA) repository: https://www.ucd.ie/issda/data/growingupinirelandgui/. AbbreviationsBF: Breastfed CI: Confidence Interval EBF: Exclusive Breastfeeding EBF90days: Exclusive Breastfeeding for at least 90 days GP: General Practitioner GUI: Growing Up in Ireland HMOs: Human Milk Oligosaccharides HSE: Health Service Executive IPW: Inverse Probability Weighting Non-BF: Non-Breastfed Non-EBF: Non-Exclusive Breastfeeding PSM: Propensity Score Matching WBTi: World Breastfeeding Trends Initiative WHO: World Health Organization ReferencesWorld Health Organization (WHO). Global nutrition targets. Policy brief series. Geneva: WHO; 2025. p. 2014. Google Scholar World Health Organization, (WHO). World Health Statistics Annual, 2013. Geneva. Bai YK, Middlestadt SE, Joanne Peng CY, Fly AD. Psychosocial factors underlying the mother’s decision to continue exclusive breastfeeding for 6 months: an elicitation study. J Hum Nutr Diet. 2009;22(2):134–40. https://doi.org/10.1111/j.1365-277X.2009.00950.x.Article CAS Google Scholar Duijts L, Jaddoe VW, Hofman A, Moll HA. 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Angel One Shares Jump Over 10% To Record As Client Base Grows
The brokerage's client base grew 3.8% over October and 51.3% on year to 1.84 crore in November.
Shares of Angel One Ltd. jumped to hit lifetime high on Wednesday as its base and orders rose in November.
The brokerage's client base grew 3.8% over October and 51.3% year-on-year to 1.84 crore in November 2023, an exchange filing said. Orders rose 1.2% over the previous month and 51.4% on year to 10.72 crore.
Shares of the company rose as much as 10.45%, before paring gains to trade 8.5% higher at 10:45 a.m. That compares to a 0.3% advance in the NSE Nifty 50.
The stock has risen 144.5% year-to-date. The total traded volume so far in the day stood at 3.5 times its 30-day average. The relative strength index was at 71, implying that the stock may be overbought.
All eight analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month consensus price target implies an upside of 34.7%. | Stocks Trading & Speculation |
EU Commission approves 176 million euro Polish scheme to support companies
The European Commission announced in a statement on Friday (August 4) it has approved Polish scheme to support companies in the context of Russia's war against Ukraine.
"The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022, the EU Commission said in a statement on Friday.
The EU executive explained the scheme "will take the form of subsidies on loan interest rates, will be available to companies active in the trading or purchasing of cereals, trading of agricultural plant seeds, or the purchasing or freezing of soft fruit". "The measure will be open to small and medium-sized companies. There will be over 1,000 beneficiaries under the scheme."
"The purpose of the measure is to provide assistance to beneficiaries that are currently facing liquidity shortages caused by the current geopolitical crisis," we read.
Furtheremore, the Commission "found that the Polish scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework". "In particular, the aid (i) will not exceed €2 million per beneficiary; and (ii) will be granted no later than 31 December 2023."
"The Commission concluded that the scheme is necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis and Transition Framework," it said in the statement.
"On this basis, the Commission approved the measure under EU State aid rules."
Źródło: TVN24 News in English, PAP, EU Commission
Źródło zdjęcia głównego: roibu / Shutterstock.com | Agriculture |
- A supplemental budget signed into law by Democratic Maine Gov. Janet Mills allows most workers up to 12 weeks of paid family and medical leave.
- The program takes effect in 2026.
- "I know firsthand the challenges of providing care to loved ones while trying to manage all the unexpected ups and downs that are simply facts of life," Mills wrote in an op-ed.
Most Maine workers swill get up to 12 weeks of paid time off for family or medical reasons as part of a supplemental budget Democratic Gov. Janet Mills signed into law on Tuesday.
The spending bill included $25 million in startup costs for the state program which allows workers — starting in 2026 — to receive paid leave to deal with illness, to care for a relative, or for the birth of a child.
Maine joins a dozen other states that have paid family and medical leave programs. The focus of legislation has been at the state level after failure to gain traction in Congress.
The program caught the attention of the White House, where press secretary Karine Jean-Pierre applauded the state’s action.
"Paid family and medical leave improves the lives of working families and strengthens our workforce and economy," she said, adding that the Biden administration has worked to make the federal government a model by supporting federal workers in accessing needed leave.
Putting it in personal terms, Mills said that she deeply understood the need for the program — having dealt with the loss of a husband following a debilitating stroke, the realities of raising fives stepdaughters on her own and caring for her own aging parents, all while working full time.
"I know firsthand the challenges of providing care to loved ones while trying to manage all the unexpected ups and downs that are simply facts of life," she previously wrote in a newspaper op-ed.
The Democratic-led Legislature already approved a nearly $10 billion essential services budget that went into effect on July 1. That budget was approved along party lines in March, Democrats said, to prevent any late partisan attempt to use a government shutdown as a bargaining tactic.
The budgetary addendum, about $445 million dealing with extras, likely won't go into effect until late October because it failed to muster a two-thirds majority in the Legislature it would've needed to go into effect immediately.
It includes language to start the paid leave program that will be funded through a payroll tax split between workers and employers and capped at 1% of wages. Qualifying conditions include the birth or adoption of a child, a serious illness, care for a sick relative or transition from military deployment.
Businesses with fewer than 15 employees are not required to make employer contributions to the program. Companies that already offer comparable benefits can just stick with their current plans.
Key to support were several tax-related proposals including one that raised the amount of pension income that’s exempt from state income taxes from $30,000 to $35,000. Lawmakers also included money to double the pay of childcare workers, as well as funding for the governor’s proposed Dirigo Business Tax Incentive Plan, which would replace the existing Pine Tree Development Zones.
The governor initially balked at the paid leave proposal, which was opposed by the Maine State Chamber of Commerce and others in the business community, but the bill was tweaked to win her support.
"I am over the moon," said state Sen. Mattie Daughtry, D-Brunswick, after taking a congratulatory call from the White House and attending the signing ceremony. She sponsored the bill with Rep. Kristen Cloutier, D-Lewiston.
Together, the essential services budget and supplemental budget takes spending to historic levels — about $10.3 billion — but it remains balanced and the state's rainy day fund remains at a record-high level, said Kirsten Figueroa, commissioner for the Department of Administrative and Financial Services. | Workforce / Labor |
McDonald’s and Chipotle said they will raise menu prices in California to pay for the minimum wage hikes the Golden State recently passed into law.
McDonald’s CEO Chris Kempczinski said Monday the fast-food giant will hike prices in California after Gov. Gavin Newsom recently signed into law a measure that would give wage earners a $20-an-hour minimum — although the company hasn’t yet decided by how much.
The Chicago-based burger chain — which cited “strategic menu price increases” as it revealed on Monday that its revenue surged 14% in the latest quarter — already has been hiking prices nationwide amid rampant inflation, including charging $18 for a Big Mac meal at a location in Connecticut.
Surging prices have forced consumers to pare back spending on fast food, according to McDonald’s executives.
Fewer Americans earning $45,000 or less have been frequenting McDonald’s locations this past quarter, according to the company.
The latest inflation figures released by the federal government show that the cost of food away from home rose 6% in September compared to the same period last year.
Meanwhile, Chipotle’s chief financial officer, Jack Hartung, told analysts on a company earnings call last week that the chain will likely raise prices by a “mid-to-high single-digit” percentage.
Beginning in April, California’s estimated 500,000 fast food workers will be paid a minimum of $20 per hour — up from the previous minimum wage of $16.21.
The legislation that was initially proposed called for a minimum wage of $22 per hour.
The $20 per hour minimum wage would be the highest in the nation for the fast food industry.
The second-highest is the $17-per-hour wage earned by fast food workers in Washington, DC.
The Golden Arches brought in a total of $6.69 billion in revenue for the three-month period ended Sept. 30 — beating expectations of $6.58 billion, according to Refinitiv analysts.
McDonald’s — which has 13,513 restaurants in the US and over 38,000 abroad — did not disclose how much the franchiser has increased its prices, which generally vary between locations.
Chipotle last week reported higher-than-expected quarterly earnings which were fueled by higher menu prices for its signature menu items including burritos and bowls.
“I think the Chipotle value, when we haven’t raised prices in over a year until this latest action, is coming through, and people are choosing to dine at Chipotle because we are very affordable,” Hartung told analysts during the company’s conference call last week. | Inflation |
(Bloomberg) -- A period of unusual calm in crypto markets ended abruptly this week as the notion of higher-for-longer interest rates sparked a selloff in risk assets like Bitcoin, leading to mass liquidations of bullish bets.
Most Read from Bloomberg
The rout pushed Bitcoin from near $29,000 to as low as $25,314 in a 24-hour span. More than $1 billion of positions were unwound in the selloff, according to Coinglass data. The original cryptocurrency was down 5.7% to $26,057 as of 3:29 p.m. in New York.
Bitcoin remains about 60% above where it started the year, handily beating other well-performing assets like technology stocks. But a multitude of headwinds — from rising bond yields to regulatory pressures and economic weakness in China — threaten to undermine the appeal of assets like cryptocurrencies.
Read more: BofA’s Warning of a ‘5% World’ Sinks In as Bond Yields Surge
Meanwhile XRP slumped for a fifth day on Friday, falling 12%, as the Securities and Exchange Commission asked a federal judge for permission to appeal her ruling that Ripple Labs’ token is not a security when sold to the general public, arguing that the decision could affect other cases involving cryptocurrencies.
Crypto traders are now focusing on the $25,000 level for Bitcoin, below which options positioning suggests another cascade of liquidations could hit.
“With limited catalysts to push Bitcoin higher in the short term, a fall below $25,000 could put bears in charge, and if the rout in global risk assets continues, Bitcoin could face further downside,” said Josh Gilbert, market analyst at trading and investing firm eToro.
A Wall Street Journal report citing documents that Elon Musk’s SpaceX has sold off its Bitcoin holdings after writing down $373 million also weighed on sentiment. It wasn’t clear from the Journal report when SpaceX had sold its Bitcoin.
While broader markets are seeing a pullback in the selling as the dollar weakened, the selloff in digital tokens amid thin liquidity continued unabated on Friday. The top 100 digital tokens gauge fell 6%. Ether slipped 3.4% while Cardano and Solana fell 2.7% and 6%, respectively.
The largest single liquidation order happened on Binance, and was worth $55.92 million, Coinglass said in its website. The total amount of Bitcoin liquidations was the biggest for a single day since the market turmoil of June 2022, CoinDesk reported.
Read more: Hacker Swept Up in Wave of Crypto Liquidations Loses $63 Million
The $25,000 level for Bitcoin has the highest level of open interest among put options for Aug. 25 expiry, according to data from Deribit. Should it drop below that level, sellers of those puts would be forced to liquidate or hedge their positions, putting further pressure on prices.
ETF Support
The slide has almost erased the gains registered in the wake of BlackRock’s Inc.’s surprise filing for a Bitcoin ETF on June 15. After surging 72% in the first quarter, Bitcoin has declined almost 8% since the end of March. The token tumbled 64% last year amid a series of industry scandals and bankruptcies.
Some degree of optimism crept into the market after Bloomberg News reported that the US Securities and Exchange Commission is poised to allow the first exchange-traded funds based on Ether futures.
Read: SEC Set to Greenlight Ether-Futures ETFs in Crypto Industry Win
The drop in Bitcoin follows a period in which the cryptocurrency traded in a narrow range for months. Gauges that measure the price swings of the original cryptocurrency have been trending down, with the 90-day volatility reaching its lowest since 2016 this week, according to data compiled by Bloomberg.
“There was optimism earlier in the week that a resolution to the Grayscale Bitcoin ETF would come this week but that passed with nothing coming out,” Shiliang Tang, chief investment officer at crypto investment firm LedgerPrime, said. “Furthermore traditional markets have been weak all week with SPX and tech selling off, 10-year rates reaching highs and the dollar catching a bid, and China credit and econ data weakness, all of which are negatives for risk assets.”
--With assistance from Sidhartha Shukla and Akshay Chinchalkar.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
The US government's credit rating has been downgraded following concerns over the state of the country's finances and its debt burden.
Fitch, one of three major independent agencies that assess creditworthiness, downgraded it from the top rating of AAA to AA+.
Fitch said it had noted a "steady deterioration" in governance over the last 20 years.
Treasury Secretary Janet Yellen called the downgrade "arbitrary".
It was based on "outdated data" from the period 2018 to 2020, she said.
Investors use credit ratings as a benchmark for judging how risky it is to lend money to a government. The US is usually considered a highly secure investment because of the size and relative stability of the economy.
However, this year saw another round of political brinkmanship over government borrowing.
In June the government succeeded in lifting the debt ceiling to $31.4 trillion (£24.6 trillion) but only after a drawn-out political battle, which threatened to push the country into defaulting on its debts.
When Congress returns from its summer recess, lawmakers will have to work to reach an agreement on next year's budget before the end of September to prevent a government shutdown.
"The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance" relative to peers, said Fitch in a statement.
"In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025," the rating agency said.
Ms Yellen said she "strongly" disagreed with Fitch's decision.
"Treasury securities remain the world's preeminent safe and liquid asset, and... the American economy is fundamentally strong," she said in a statement.
The timing and rationale behind the downgrade has taken many economists by surprise.
Former US Treasury Secretary Larry Summers said Fitch's decision is "bizarre and inept," particularly as the US economy "looks stronger than expected," he said in a post on Twitter, now known as X.
Mohamed El-Erian, the chief economic adviser at financial services giant Allianz, said the Fitch announcement was "a strange move".
"This announcement is more likely to be dismissed than have a lasting disruptive impact on the US economy and markets," he posted on the Threads social media platform.
Fitch also said it expects the US to slip into a mild recession later this year.
However, Nobel Prize-winning economist Paul Krugman said "the biggest economic news over the past year has been America's remarkable success at getting inflation down without a recession".
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Others questioning the timing of the Fitch announcement included Jason Furman, who was an economic adviser to former US president Barack Obama. He called it "completely absurd."
Alec Phillips, the chief US political economist at Wall Street bank Goldman Sachs said: "The downgrade mainly reflects governance and medium-term fiscal challenges, but does not reflect new fiscal information," .
The move "should have little direct impact on financial markets as it is unlikely there are major holders of Treasury securities who would be forced to sell based on the ratings change," he added. | Interest Rates |
FTX Trading is examining restarting the crypto exchange with three bidders, according to a Bloomberg report Tuesday. This comes nearly one year after the company filed for bankruptcy, and as founder Sam Bankman-Fried sits on trial for alleged fraud.
The company’s investment banker Kevin M. Cofsky says FTX is negotiating details of potentially binding offers with investors, and will make a decision about how to proceed by mid-December, the report says. That decision date is just a month after final testimonies will be given in SBF’s trial, alleging billions in fraud committed while he was at FTX. Bankman-Fried resigned as Chief Executive Officer shortly after the company shut down last year.
Before November 2022, FTX was one of the world’s biggest crypto exchanges, with more than 9 million customers. The negotiations include discussions around selling the entire exchange or bringing in a partner to help restart the exchange in-house, according to the Bloomberg report.
FTX is also allegedly considering a reboot of the trading platform all on its own. Currently, the company has been busy trying to repay creditors from its bankruptcy filing. So far, $7 billion in assets have been recovered, including $3.4 billion of crypto. However, customers don’t know how much they will actually get back. FTX’s customers may get a higher percentage of their money back if the exchange is able to negotiate a decent sale or a successful reboot. Details of the current deal negotiations were announced in a Delaware court hearing on Tuesday.
The success of the platform became a measuring stick for cryptocurrency’s popularity. However, details of the fraud that have come to light in Sam Bankman-Fried’s trial put into question just how successful the platform truly was. Another leading crypto exchange, Binance, is currently fighting a handful of lawsuits from US regulators.
The negotiations come at a particularly optimistic time in the crypto universe, as the price of Bitcoin hovers around prices not seen since the crash of FTX; nearing $35,000. That optimism is spurred by speculation that Bitcoin ETFs will soon make their way onto the market, allowing large financial institutions to tap into crypto’s gains. The hope is that this would create a safer way for more people to invest in crypto, allowed for by the structure of ETFs. This move could open the floodgates on tons of capital into the crypto market, and it looks like FTX doesn’t want to rule themselves out of those gains just yet. | Crypto Trading & Speculation |
Online marketplace Etsy is facing growing calls for sellers to boycott the site for withholding their money.
A reserve system meant some sellers had 75% of their takings frozen for 45 days, leaving them struggling to trade.
Furniture seller Stephen James is one of the hundreds who have joined social media groups calling for other sellers to come off the platform in protest.
It is not clear how many would join in any boycott. Etsy said it would continue to review its reserve system.
It added that it took seller feedback seriously and that payment reserves were used to "keep the marketplace safe" and cover any potential refunds.
Small Business Commissioner Liz Barclay told the BBC her team were receiving a rising number of complaints about Etsy.
They had also noticed a growing number of people joining social media groups to discuss a strike or boycott.
On Facebook, the Etsy Reserve Strike group has more than 800 members and many are sharing tips on moving to other online platforms to sell their goods.
On Reddit, a thread known as a sub-Reddit, has been set up called r/EtsyStrike. The online group Not on Amazon has also become a place where Etsy sellers are airing their complaints.
A strike or boycott of Etsy would mean a seller would put their store on holiday mode, effectively stopping people from buying from them.
It is not clear how many people in these social media groups are sellers and how many of them would join a strike.
But with just under a million users in the UK, a boycott could dent the amount of commission and fees which Etsy received from each sale. Etsy told the BBC it had six million sellers worldwide and that only 2% of those active had reserves on their accounts.
Stephen James, 52, from Shropshire, said he would join any Etsy sellers strike or boycott after saying the reserve system left his furniture business with "only two planks of wood".
He said he was unable to buy any more material after a reserve led to £3,000 of his takings being withheld.
Stephen said the reserve hit "out of the blue", just when he was scaling up his business. He now only has two members of staff, instead of three.
When the reserve began, Stephen wrote to his buyers explaining what was happening. He said some buyers were "disgusted" by Etsy's approach, and cancelled their orders on his Etsy store.
Stephen is now building his own website to sell his furniture.
Julia Aufenast, 50, has been selling semi-precious gems on Etsy for 13 years and had a reserve imposed and removed without explanation.
"I have over 30,000 sales and really good feedback. Not only did they put my shop in reserve but they forced it into vacation mode," she said.
Ms Aufenast said she was able to continue trading online using her own website and PayPal account.
"But I did think about people who don't have that, and how on earth they manage to pay their bills let alone buy new supplies," she said.
Ms Aufenast stays in touch with other sellers on Facebook who are co-ordinating a boycott of the platform. She said she was prepared to stop selling on Etsy in protest but understands it would be painful for smaller sellers.
"There is nothing like Etsy and so it's not easy to find some other marketplace to sell with," she said.
'Only income'
Small Business Commissioner Ms Barclay told the BBC Radio 5 Live's Wake Up To Money show she found the situation "really concerning".
"In some cases people are saying: 'we can't afford to feed the kids over the weekend'," she said.
"A lot of people set up in the pandemic and Etsy is their only source of income," she added. "Women, ethnic minority and neurodiverse people found that Etsy's way of working really fits them and their lifestyle - they are going to find it really difficult to carry on."
Ms Barclay added that she had heard of many cases of sellers' takings being held on reserve from outside of the UK too.
She said sellers have told her there were increasing calls for them to take a united stand against Etsy.
"There are all sorts of groups being set up," she said. "There's the Etsy strike group which had 740 members by Friday afternoon. There all sorts of groups arising and a lot are saying 'I've been a seller for years, I'm no risk'. In some cases, sellers will have money held until October."
Other, smaller platforms such as OneFayre and Mayfli are now being sought out by sellers as an alternative.
A spokesperson said: "The vast majority of sellers receive their funds when they make a sale rather than having to wait until the buyer receives the item, like they might with other selling platforms."
They added: "As always, we will continue to iterate and improve upon our programs, including payment reserves, in order to support our sellers."
The BBC understands Etsy is in talks with the UK government about the payment reserve system. | Consumer & Retail |
Stocks To Watch: Reliance Industries, TCS, Wipro, Maruti Suzuki, SBI, Adani Enterprises, Airtel, BPCL, Lupin
Here are the stocks to watch before going into trade today.
U.S. stocks lost steam on Tuesday after a rally that put the market on pace for its best month since July 2022, with traders awaiting the Federal Reserve minutes and Nvidia Corp.’s results. Bonds and the dollar wavered, reports Bloomberg.
The S&P 500 index and Nasdaq 100 fell by 0.18% and 0.62%, respectively, as on 1:01 p.m. New York time. The Dow Jones Industrial Average declined by 0.19%.
Brent crude was trading 0.38% lower at $82.01 a barrel. Gold was higher by 1.19% at $2,001.54 an ounce.
India's benchmark stock indices advanced on Tuesday, snapping two days of decline as Reliance Industries Ltd. and HDFC Bank Ltd. led.
The S&P BSE Sensex closed 276 points, or 0.42%, up at 65,930.77, while the NSE Nifty 50 ended 89 points, or 0.45%, higher at 19,783.40.
Intraday, the Nifty Midcap 150 and Smallcap 250 hit lifetime highs. Among sectoral indices, realty, metal, and consumer durables advanced the most, while fast-moving consumer goods and public sector banks faced pressure.
Overseas investors remained net sellers of Indian equities for the third consecutive session on Tuesday. Foreign portfolio investors offloaded stocks worth Rs 455.6 crore, while domestic institutional investors mopped up stocks worth Rs 721.5 crore, the NSE data showed.
The Indian rupee ended flat at around 83.354, which was the lowest-ever close against the U.S. dollar.
Stocks To Watch
Reliance Industries: Chairman and managing director Mukesh Ambani said the company plans to invest Rs 20,000 crore in West Bengal in next three years.
TCS: U.S. Supreme Court rejected the company’s petition to appeal an earlier court verdict. The company will make a $125 million provision in its third-quarter earnings related to a case involving Epic Systems Corp.
Maruti Suzuki India: The company will consider the allotment of 1.23 crore equity shares of the company to Suzuki Motor Corp. on a preferential basis on Nov. 24.
SBI Bank: The government named Vinay M Tonse as Managing Director till Nov. 30, 2025.
Jio Financial Services: The company denied news reports that it is planning its maiden bond issue. It has no plans to raise money by way of bond issuance or otherwise, and the news circulated is "speculative", it said.
Adani Enterprise: Adani Defence Systems and Technologies signed a shareholders agreement and share subscription agreement with Israel-based Elbit Systems. Pursuant to this, ESL will be subscribing 44% stake in Atharva Advanced Systems and Technologies.
KEC International: The company bagged multiple new orders worth Rs 1,005 crore.
Lupin: The pharma major received tentative U.S. FDA approval for its Dapagliflozin tablets. Dapagliflozin is a generic of Farxiga tablets.
Texmaco Rail & Engineering: The board approved the opening of QIP on Nov 21. The floor price of QIP is set at Rs 135.9 apiece.
Life Insurance Corp: The company's has increased shareholding in Bank of Baroda. The current stake stands at 5.031%.
Bharti Airtel: The Department of Telecommunications, Madhya Pradesh imposed a penalty of Rs 1.31 lakh for alleged violation of subscriber verification norms. The company's OneWeb also received regulator nod to launch its commercial satellite broadband services in the country.
BPCL: The board will meet on Nov. 29 to consider the proposal of declaration of interim dividend for the FY24 and fixation of record date.
Aurobindo Pharma: The company's chief operating officer, Sanjeev I Dani, died on Nov. 21.
AstraZeneca Pharma: Central Drugs Standard Control Organization gave permission to import pharmaceutical formulations of new drug and permission for the additional indication of Olaparib film coated tablets.
JK Tyre: The tyre manufacturer appointed Dr. Jorg Nohl as an additional director in the category of independent director, for a term of five consecutive years w.e.f. Nov. 21, 2023.
NHPC: The company resumed head race tunnel works at Teesta-VI project in Sikkim.
Wipro: The IT Major announced collaboration with NVIDIA to help healthcare companies accelerate adoption of generative artificial intelligence through AI-driven strategies, products, and services.
Power Finance Corporation: PFC Consulting has incorporated a wholly owned subsidiary as Ramakanali B Panagarh.
Genus Power: The company incorporated two wholly owned step-down subsidiaries namely “Himachal Pradesh C Zone Smart Metering Pvt.” and “Garhwal Smart Metering Pvt.” on Nov. 21, 2023.
Sical Logistics: The company's arm DSPL Mining received order worth Rs 135 crore from the Coal India unit.
JK Paper: The company received income tax and penalty demand worth Rs 65.6 crore for AY 2020-21.
Titan: The Competition Commission of India approved the acquisition of an additional stake in CaratLane Trading by Titan.
IndusInd Bank: The bank denied the news report 'Hindujas raise Rs 8,000 crore by pledging IndusInd stake' factually incorrect. Promoter entities’ current pledge at 6.87% of the paid-up share capital of the bank has remained unchanged.
GMR Power and Urban Infra: The company acquired an additional 29.14% stake in subsidiary GMR Energy for $28.5 million. It raised the total stake in subsidiary to 86.90%.
Auto Ancillaries Stocks: India is closing in on an agreement with Tesla that would allow the U.S. automaker to ship its electric cars to the country from next year and set up a factory within two years, reported Bloomberg.
IPO Offering
IREDA: The IPO was subscribed 1.96 times on Day 1. The bids were led By non-institutional investors (2.73 times), portion reserved for employees (2.11 times), retail investors (1.97 Times) and institutional investors (1.34 Times).
Tata Technologies: The IPO will open for bids on Wednesday. It will comprise of fresh issue of Rs 3,042 crore and an offer for sale of 6.08 crore shares. The price band is fixed at Rs 475 - 500. The company has raised Rs 791 crores from anchor Investors.
Gandhar Oil Refinery: The IPO will open for bids on Wednesday. It will comprise a fresh issue worth Rs 302 crore and an offer for the sale of 1.18 crore shares, worth up to Rs 198.69 crore. The price band is fixed at Rs 160–169 per share. The company has raised Rs 150.2 crore from anchor investors.
Fedbank Financials: The IPO will open for bids on Wednesday. The offer has a fresh issue of Rs 600 crore, and the rest of it is an offer for sale. The price band is fixed at Rs 133 - 140. The company has raised Rs 330 crores from anchor Investors.
Flair Writing Industries: The IPO will open for bids on Wednesday. The price band is fixed at Rs 288 - 304. It will comprise a fresh issue of Rs 292 crore and Offer for sale of Rs 301 crore. The company has raised Rs 178 crores from anchor Investors.
Bulk Deals
Cressanda Solutions: Satyanarayan Jagannath Kabra bought 21.5 lakh shares (0.5%) at Rs 24 apiece.
Fiem Industries: Divya Mahesh Vaghela bought 75,489 shares (0.57%) at Rs 2012.79 apiece.
Insider Trades
Linc: Promoter Ekta Jalan bought 5000 shares on Nov. 20.
Paisalo Digital: Promoter Equilibrated Venture CFLOW bought 60,000 shares on Nov. 21.
Who’s Meeting Whom
TVS Motor: To meet analysts and investors on Nov. 24.
Advanced Enzyme Technologies: To meet analysts and investors on Nov. 24.
Dodla Dairy: To meet analysts and investors on Nov. 24.
RR Kabel: To meet analysts and investors on Nov. 24.
Jammu and Kashmir Bank: To meet analysts and investors on Nov. 28.
Ashok Leyland: To meet analysts and investors on Nov. 24.
Antony Waste Handling cell: To meet analysts and investors on Nov. 24.
Apcotex: To meet analysts and investors on Nov. 24 and Dec. 4.
Bosch: To meet analysts and investors on Nov. 27.
Rolex Rings: To meet analysts and investors on Nov. 23.
VA Tech Wabag: To meet analysts and investors on Nov. 28.
Minda Corporation: To meet analysts and investors on Nov. 24.
Shriram Finance: To meet analysts and investors on Nov. 24.
Piramal Pharma: To meet analysts and investors on Dec. 5.
Sapphire Foods:To meet analysts and investors on Nov. 24.
Trading Tweaks
Ex/record date interim dividend: Crisil, Ingersoll-Rand, IPCA Laboratories, National Aluminium Co.,Oil India, Pearl Global Industries, T D Power Systems.
Move into short-term ASM framework: Manoj Vaibhav Gems N Jewellers, Tata Investment Corp., Techno Electric & Engineering Co.
Move Out of short-term ASM framework: Orient Green Power.
F&O Cues
Nifty November futures rose 0.45% to 19,841.30 at a premium of points 57.9 points.
Nifty November futures open interest rose by 0.62% to 1260 shares.
Nifty Bank November futures rose 0.11% to 43,791.85 at a premium of 102.7 points.
Nifty Bank November futures open interest fell by 8.85% to 12826 shares.
Nifty Options Nov. 23 Expiry: Maximum call open interest at 19,800 and maximum put open interest at 19,700.
Bank Nifty Options Nov. 22 Expiry: Maximum Call Open Interest at 45000 and Maximum put open interest at 43,500.
Securities in the ban period: Bharat Heavy Electricals, Chambal Fertilizers, Delta Corp, Hindustan Copper, Indiabulls Housing Finance, India Cement, Manappuram Finance, MCX, NMDC, RBL Bank, Zee Entertainment.
Disclaimer: AMG Media Networks Ltd. (AMNL) currently owns 49% stake in Quintillion Business Media Ltd. (QBML), the owner of BQ Prime Brand. AMNL has entered into an MOU to acquire the balance 51% stake in QBML. Post acquisition, QBML will become a wholly owned subsidiary of AMNL. | Stocks Trading & Speculation |
These 4 Flexible Side Hustles Could Pay for Your Holiday Shopping
The holidays are rapidly approaching. And if you don't have the money you need in savings to cover all of your anticipated expenses, you may be starting to panic.
The average consumer is expecting to spend $875 on the holidays this year, says the National Retail Federation. That sum accounts for expenses like gifts, food, and decorations. If you're planning to travel during the holidays, your tab might end up even higher.
But don't stress. Even if you don't have a pile of money in your savings account, if you're willing to pick up a side hustle, you may find that you're able to spend on the purchases you want to make without running the risk of debt.
Of course, fitting a side hustle into your schedule isn't easy -- not in general, and not during a period of the year when you may have more plans than usual (think holiday parties and the like). That's why you may want to focus on side hustles that aren't so invasive as far as your schedule is concerned. Here are a few gigs you may find to be very flexible.
1. Content writing
Most content writing assignments come with a deadline. But if you're good at managing your time, you may find a content writing gig to be pretty easy to manage.
Let's say you sign up for a gig that wants three blog posts a week that take 90 minutes each to write. That means you'll need to find 4.5 hours during the week to meet your deadlines. But you can generally choose when you do that writing. This means that if your optimal window is 7 a.m., before you've started your day, so be it.
2. Driving for a ride-hailing company
The beauty of driving for a ride-hailing service like Uber or Lyft is that you don't have to commit to preset hours. You can simply log into the app when you're available and shuttle people around.
Of course, the more hours you work, the more money you stand to make. And you may be more likely to find passengers if you mark yourself as available during the evening hours, especially on weekends. But technically, you can work the hours you want.
3. Delivering groceries
If you don't like the idea of shuttling people around in your car, you may not mind loading your vehicle with groceries and dropping them at people's doors. Services like Uber Eats and Instacart allow you to sign up and accept grocery deliveries as you're able to fulfill them. And if your customers tip nicely, you could end up with a nice pile of cash in your checking account for your holiday purchases.
You could also choose to deliver groceries during off-peak times so you have fewer crowds at the store. That could, for example, mean doing more grocery runs during the workday if your schedule allows for it rather than during the evening, when supermarkets tend to be busier.
4. House-sitting
House-sitting isn't 100% flexible because you need to commit to watching over someone's property during a certain period. But the actual work you're doing is usually flexible.
Often, house-sitting simply means bringing in mail and packages, doing very light cleaning (like dusting surfaces), and perhaps caring for a pet. And usually, if you're being booked as a house-sitter and not a pet-sitter, the pet care aspect is low-key -- think of tasks like feeding fish, as opposed to having to walk a giant dog five times a day. You can find house-sitting gigs through sites like MindMyHouse and HouseCarers.
Paying for the costs of the holidays can seem overwhelming. But if you're able to bring in extra cash with a side gig, that might take a lot of that stress off of your plate. And it definitely pays to focus on side hustles that won't extremely upend your routine.
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China Is Speeding Up Infrastructure Bond Sales To Boost Spending
Provincial governments sold the most amount of special bonds in more than a year this month, according to Bloomberg calculations.
(Bloomberg) -- China’s local governments are accelerating the pace of borrowing for infrastructure investment, a move that could help lift economic growth while also putting pressure on financial markets.
Provincial governments sold the most amount of special bonds in more than a year this month, according to Bloomberg calculations. And with Beijing setting a September deadline for the regions to issue their remaining allocation for the year, analysts are expecting a boost to debt supply next month.
That, in turn, would result in a possible liquidity squeeze and prompt the need for more monetary policy easing steps.
Local governments have issued nearly 520 billion yuan ($71.4 billion) worth of special bonds, which are mainly used to finance infrastructure projects, in August. That’s more than double the amount sold in the previous month and is the highest since a record 1.36 trillion yuan in June 2022.
After a relatively slow start, provinces are now heeding a call made by China’s top leaders at a key July meeting to speed up bond issuance and make use of the funds raised. Beijing is betting that an increase in infrastructure investment would help offset the plunge in property and private business investment, bolstering economic growth.
Liquidity is tightening as banks mop up the notes, putting pressure on the People’s Bank of China to increase cash in the financial system, either by cutting banks’ reserve requirement ratio or interest rates, according to analysts.
“Monetary policy usually coordinates with spikes in local bond issuance to maintain stable interbank liquidity,” said Zhou Guannan, an analyst with Huachuang Securities Co. With even more local bonds likely to be issued in September, another RRR reduction to offset the impact on liquidity can’t be ruled out, she said.
The tighter liquidity has already contributed to a selloff in one-year sovereign bonds, with yields rising 20 basis points from this month’s low. Money markets are also reflecting the stress, with the seven-day repo rate at more than 40 basis points above the equivalent policy rate — that’s the biggest gap since 2021.
Finance Minister Liu Kun said Monday local governments aim to issue all of this year’s 3.8 trillion yuan quota of new special local bonds by the end of September, vowing to “reasonably accelerate” fiscal spending in the coming months.
That means provinces need to sell about 700 to 800 billion yuan worth of the notes in September, according to Bloomberg calculations based on debt sold so far this year.
Debt-Swap Bonds
Aside from those plans, Beijing is also considering allowing local governments to sell bonds to help repay off balance-sheet debt, much of which is owed by their financing vehicles. Bloomberg News previously reported that provinces will be allowed to tap unused quota from previous years to raise about 1 trillion yuan in 2023 for a swap.
Standard Chartered Plc. analysts forecast the size of the debt-bond swap may be even bigger, possibly in a range of 1.44-2.59 trillion yuan. If it hits the high end of the range, monthly net issuance would be 87% higher than the average seen in the first eight months of 2023, analysts including Becky Liu wrote in a note Tuesday.
That “may lead to some indigestion” in the markets, they said. The PBOC is likely to cut the RRR to “alleviate liquidity pressures if needed,” they added, although a reduction in the central bank’s one-year policy rate will likely only happen in the fourth quarter.
The PBOC has lowered that one-year medium-term lending facility rate twice this year, most recently a surprise reduction earlier in August.
After raising the funds, local governments will need to find quality infrastructure projects to invest in, something that’s become more challenging in recent years as urbanization in China increased.
In a recent survey by Guosheng Securities Co., a combined 70% of credit managers at banks said they observed the infrastructure project pipeline was unchanged or fell slightly in the third quarter from a year ago, and another 15% said the reserve contracted sharply, the brokerage’s analysts including Yang Yewei wrote in a Monday note.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
UK government meets pledge to halve inflation this year as rate falls to 2-year low
Inflation in the U.K. dropped sharply in October to its lowest level in two years largely because last year's steep rise in domestic energy bills dropped out of the annual comparison
LONDON -- Inflation in the U.K. dropped sharply in October to its lowest level in two years, largely because last year’s steep rise in domestic energy bills following Russia's invasion of Ukraine dropped out of the annual comparison, official figures showed Wednesday.
The Office for National Statistics said consumer prices in the year to October were 4.6% higher than the year before, much lower than the 6.7% recorded in the previous month.
The decline means Prime Minister Rishi Sunak's pledge to halve inflation this year has been met. Sunak made the pledge soon after becoming prime minister when inflation was more than 10%.
“I did that because it is, without a doubt, the best way to ease the cost of living and give families financial security,” he said. "Today, we have delivered on that pledge.”
Meeting the pledge — one of five set out by Sunak on taking office — will provide some comfort to his Conservative government, which is trailing the main opposition Labour Party in opinion polls ahead of a general election that has to take place by January 2025.
Labour's economic spokesperson Rachel Reeves said the government should not be “popping champagne corks” while people are still struggling with the cost of living.
“After 13 years of economic failure under the Conservatives, working people are worse off with higher mortgage bills, prices still rising in the shops and inflation twice as high as the Bank of England’s target,” she said.
Though the government has a role in containing inflation by, for example, keeping a lid on public sector pay awards, the main reason why inflation has fallen is due to actions by the Bank of England, which is tasked with meeting a target inflation rate of 2%.
Earlier this month, the bank kept its main interest rate unchanged at the 15-year high of 5.25% and indicated that borrowing costs will likely remain at these sort of elevated levels for a while.
The Bank of England, like other central banks, raised interest rates aggressively from near zero as it sought to counter price rises first stoked by supply chain issues during the coronavirus pandemic and then Russia’s full-scale invasion of Ukraine, which pushed up food and energy costs.
Higher interest rates — which cool the economy by making it more expensive to borrow, thereby bearing down on spending — have contributed to bringing down inflation worldwide.
Economists said the decline means that the bank's rate-setting Monetary Policy Committee is very unlikely to be increasing interest rates again in the near future. They also think that if inflation continues to fall towards 2%, then one or more of the nine-member panel may start mulling reductions in borrowing rates soon.
“This fall in inflation seals the deal on a December interest rate hold and may drive a three-way voting split among rate setters with a member voting for a rate cut as concerns over a flatlining economy grow," said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales. | Inflation |
Newly-jobless former Home Secretary is rumoured to be launching her own bid to lead the Conservative Party and possibly the country – but Artificial Intelligence has claimed that it could end badly for . . . well, everyone.
Prime Minister Rishi Sunak sacked Suella Braverman earlier today, as part of a ministerial reshuffle to "strengthen his team in government to deliver long-term decisions for a brighter future." Having found herself at the centre of a number of controversies over the years, leaving Brits fuming over a number of her cut-throat policies and bizarre comments over homelessness, she was replaced by James Cleverly who was later replaced as Foreign Secretary by ex-Prime Minister David Cameron.
And since being booted from her role this morning, several sources have claimed that she is now pondering mounting her own bid to lead the party either going into the next election, or after it should the Labour Party win.
But when asked by the Daily Star how a Braverman premiership look, Google's AI-powered large language chatbot Bard did not have much praise for the controversial 43-year-old, with four very specific areas proving her downfall – labour shortages, a rise in stop and search, decline in human rights protections and chaos for British business.
Bard said: ”Her policies and views are likely to be divisive, and she could higher prices for goods and services, while (stop and search) could disproportionately affect minority groups. A decline in human rights protections could lead to abuses of power by the government, while uncertainty and legal challenges for British businesses could damage the UK economy.
“If you are concerned about human rights, equality, and economic stability, then you may be more likely to oppose her policies.”
Braverman's only comments since being sacked are that she would have “more to say in due course” and that the role was an “honour” – she did not comment on her future. However, Bard also picked out the five main focuses of Braverman's tenure as PM, claiming that they would have a “significant impact” on the UK.
The policies Bard things she would focus on are:
A reduction in immigration levels, potentially through the introduction of stricter quotas or visa requirements.
An increase in police funding and powers, with a focus on tackling crime and anti-social behaviour.
A departure from the European Convention on Human Rights, which has been criticized by some for its perceived interference in British law.
A withdrawal from the jurisdiction of the European Court of Justice, which has been criticized for its role in upholding EU law in the UK.
A renegotiation of the UK's trading relationship with the EU, with a focus on securing a more favourable deal for British businesses.
Do you want to see Suella Braverman in charge of the UK? Let us know in the comments below.
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Investors from across the country have contacted New Times to recount how their funds in Disruptive MCA went missing and the company made allegedly empty pledges to make them whole. A merchant cash advance firm with its address listed in Brickell, Disruptive MCA halted payments to investors in December 2022, claiming its computer system had been hacked.
Some initially believed the explanation, but as the months passed, their money remained inaccessible, and they made an alarming finding: Disruptive MCA was registered in the name of Angelo Jose Sarjeant's wife.
Sarjeant, a 30-year-old Miami-area resident and equine sports aficionado, has been at the center of civil fraud claims in Miami court, and in a separate case, was sued by the feds in 2020 for allegedly running a deceptive trade scheme through a firm called Driver Loan. The Consumer Financial Protection Bureau (CFPB) ordered Sarjeant to reimburse nearly $3 million in the Driver Loan case, and he was permanently banned from deposit-taking.
On the heels of the ban, Disruptive MCA, registered under Sarjeant's wife Dayanna Delgado, ramped up advertising on Facebook and began amassing new investors' money.
After learning about the CFPB case and hearing allegedly nonsensical excuses about where his money went, one investor — a former trucking-business owner who was cut off from his savings in Disruptive MCA — tells New Times he can't help but feel scammed.
"I knew the ship was coming. All signs point to the money is gone," he says. "At this point, I just hope they don't fool anybody else."
Those who lost money in Driver Loan were appalled to learn that Disruptive MCA was able to solicit new investors and market itself on a major social media platform in spite of the federal action against Sarjeant. One woman, who was caring for her newborn and cancer-stricken mother when her funds vaporized, says she is still reeling from the Driver Loan scheme.
"You know how hard it is recovering from giving birth and then seeing my mom recovering from a major surgery for cancer, and not being able to tell her that we lost our money?" the woman tells New Times. "I keep blaming myself, but at the same time, they are good at what they are doing."
When reached by New Times, Sarjeant's and Delgado's attorney in Miami circuit court, Edward Buchanan, declined to comment, citing pending litigation.
No More Sleepless NightsMark wanted out of the rat race.
He spent most of his waking hours running a trucking business, on call 24/7, with few opportunities to wind down and spend time with his wife and kids back home in North Carolina. He needed an escape valve — a reliable source of income that didn't pull him a hundred miles away from home for weeks at a time.
"A trucker on the road, anything happens 2 a.m., I gotta deal with it," Mark, who asked to be identified only by his first name out of privacy concerns, tells New Times. "I was looking for a way to make a steady income, weekly installments type of thing."
When he saw the opportunity to sell his business for a healthy sum amid the COVID-19 pandemic, Mark pounced — and with the proceeds from the sale in hand, he looked around for a secure place to park his money. He believed he found what he wanted when a Facebook ad flashed on his screen for Disruptive MCA.
It didn't seem like some pie-in-the-sky company.
The firm had a sharp-looking website and, as an investor in Disruptive MCA, Mark was in solid company, alongside educated investors, some with prior experience in merchant cash advance companies.
Disruptive MCA advertised big returns on fixed investment periods from 12 to 72 weeks. According to the company's website, the longer investors kept their money in the program, the better the returns, as high as a 30-percent rate.
For most of 2022, while periodic payments from Disruptive MCA were flowing in, Mark felt he'd fulfilled his dream of cashing in his chips from his years grinding it out on the road and managing his trucking business. Finally, he'd have some rest — no more sleepless nights worrying in the wee hours about logistics or a broken-down trucking rig, he recalls thinking.
"On behalf of the hardworking team of the company who did not agree on changing the values of itself, we apologize and feel the need to notify about this massive scam before more parties may be affected," the email stated.
Hours later, investors received another email claiming Disruptive MCA's computer system had been "breached/hacked." The new message declared: "Disruptive MCA is here to stay, and you will be paid."
The company later stated in a December 14 email that it would be pausing operations for 90 days.
The emails left Mark and other investors perplexed, not knowing what to believe. But when Disruptive MCA stopped paying them, they feared the worst. Cut off from their money, they began to dig deeper.
That's when several investors discovered Disruptive MCA's familial connection to Angelo Jose Sarjeant, whose wife — Dayanna Delgado — was the registered officer of Doppelt AS LLC (Disruptive MCA's legal name) when the company was formed.
Disruptive MCA investors tell New Times they were shocked when they came upon the Consumer Financial Protection Bureau action against Driver Loan and the resulting June 2021 stipulated judgment under which Sarjeant was ordered to pay a $100,000 fine and reimburse millions of dollars to prior investors whom Driver Loan allegedly deceived.
As part of the civil judgment, the CFPB permanently banned Sarjeant from owning, working for, or providing services to businesses that take deposits. He told the court last year that he was attempting to reimburse clients but was steeped in financial problems, saying he had $27.18 in his bank account and no assets in his name.
Driver Loan and Disruptive MCA's investment model was similar: investors would hand over their funds, and the capital would purportedly be used to fund third-party loans (in the case of Driver Loan) or small-business cash advances (in the case of Disruptive MCA).
One of many who stand to suffer massive losses in Disruptive MCA, Mark says he is out more than $400,000 and doesn't expect to get much of it back. He questions why regulators did not put Disruptive MCA under the microscope at its inception in light of the CFPB case and the federal deposit-taking ban against Sarjeant.
"I try not to think about it because I get so upset. I don't want to get short-tempered with my kids. But how do you not think about losing that kind of money?" Mark asks.
There was a glimmer of hope when Disruptive MCA claimed it would resume reimbursements beginning in the spring of 2023. But in late April, it sent out a notice that it was again "unable to meet weekly payments at this time."
"With great disappointment, we have to inform you that Disruptive MCA has not been able to resume business activities as intended. We will continue to work hard to get back on track as soon as possible," the email reads.
Mark says the company offered him a reimbursement plan that stretched out nearly to 2026, well beyond the date by which he was supposed to be repaid under his agreements with the company.
"My wife's had to look for a job. Now we find out we're having another child — so that was a surprise in addition to everything else. We're in a position where I don't make enough money now," he says.
To no avail, Mark says, he demanded that the company provide documentation of how his funds were deployed, and evidence of the supposed security breaches that the company was blaming for payment delays.
In some instances, investors have been advised that if they speak out against the company, it'll hurt the business and they'll ruin their chances of getting their money back. In Mark's view, it's a way of keeping disgruntled investors from bringing to light what they've learned about the firm.
Several investors in Driver Loan and Disruptive MCA have nonetheless reached out to financial regulators — and some have communicated with federal law enforcement about their experience with the companies.
A Friendly Face
Angelo Jose Sarjeant's legal troubles date back long before the fallout from Disruptive MCA.
In 2017, Enoc Martinez claimed in Miami-Dade court that Sarjeant and his father, Angelo A. Sarjeant, were illegally retaining funds that he had entrusted to them as part of the Sarjeants' "investment program" involving the purchase of several vehicles. Martinez said he received only two of six promised vehicles and that his money for the remaining four cars was never refunded.
A judge granted a final judgment against the Sarjeants for $640,000 in favor of Martinez.
Also in 2017, claimant Luigi Quercia sued the father and son in Miami, alleging that they fraudulently induced him into investing in a foreign money-exchange business. Quercia claimed they had "no intention of using [his] money for the proposed business plan" and that they made minimal payments to him before ceasing reimbursement altogether.
Quercia's case was dismissed for lack of prosecution in 2020.
More recently, a 2021 civil case alleged that the younger Sarjeant and Delgado (his wife) defrauded plaintiff Henry Arteaga out of more than $120,000. Arteaga claims he invested the money with Delgado in exchange for a 20 percent interest in another cash-advance company, this one called DIDG Investments LLC.
Arteaga alleges the couple made off with his money and spent it to bankroll their rent, restaurant outings, and luxury items, including high-priced horses and equine sport activities, one of Sarjeant's hobbies.
"Angelo Jose Sarjeant Ponceleon and Dayanna Delgado conspired to convince the plaintiff to loan the monies to DIDG Investments knowing fully that they thereafter would divert the monies... to themselves, their family members, and to other entities," the lawsuit claims.
While many investors who've alleged big losses on deals tied to Angelo Jose Sarjeant have never met him, Arteaga claims to know the man in the flesh. While living in Miami, Arteaga spent time with Sarjeant and his family and toured a Doral office where Delgado and Sarjeant ran their business, he says.
Arteaga says Sarjeant, a Venezuelan native who came to the Miami area with his family as a youth and attended high school in Doral, has a warm personality and a good sense of humor.
"He's so lovely. If you met him, you would like him," Arteaga says of the younger Sarjeant. "He makes you feel comfortable. You can go to his house and he makes barbecue for you."
Social media posts show Sarjeant has an affinity for equine sports and has participated in ranch sorting tournaments, where participants wrangle confused cattle on horseback. He won a Southeast Regional competition in the all-handicap level at the 2022 Ranch Sorting National Championships in Georgia.
According to Arteaga, Sarjeant also took a liking to expensive watches and luxury vehicles.
"He spends money to show other people he's a millionaire — it's part of the 'movie,'" Arteaga opines.
While Arteaga claims Sarjeant is behind DIDG, Sarjeant denies as much, saying he shouldn't be named in Arteaga's case in part because he isn't a registered officer of the company. The defense team also argues that the fraud allegations are vague and that the lawsuit was filed in the wrong format — as a claim for individual damages, as opposed to an action known as a "shareholder derivative" case.
DIDG filed a counterclaim alleging Arteaga took information from the company "with the intent to build a business which would be essentially a copy of the business that Sarjeant built and compete with defendants."
Arteaga's case against Delgado, Sarjeant, and DIDG is still pending in Miami-Dade circuit court.
Feds Claim Deceptive Trade
Hearing stories of Disruptive MCA stirred up stinging memories for those who suffered losses in the Driver Loan program.
One investor tells New Times she lost tens of thousands of dollars in Driver Loan while caring for a newborn child and helping her mom through a battle with pancreatic cancer.
Like Mark's Disruptive MCA situation, she came across Driver Loan through a Facebook ad directing her to marketing materials that promised "amazing returns," as she phrased it. She first invested in Driver Loan in 2020 and encouraged her mom to do the same until they had more than $100,000 tied up in the company, she says.
"I worked really hard for that money. I came to the U.S. from South America around 2008 and learned English in four months," says the investor, who asked not to be named out of fear of retaliation by Angelo Jose Sarjeant. "I got a degree and started working some high-paying jobs, and it was going really good for me. But when my mom got cancer in March 2021, the game plan changed for me completely."
When Driver Loan stopped paying, she didn't have the heart to tell her mother right away, she says. In her family, she was known as a tech-savvy, meticulous researcher who always did her due diligence in financial deals.
"I have that reputation in my family, especially my mom. She knows what I'm about," she says. "I had to go to my family and ask for money. I'm almost 40. I'm not supposed to be doing that. But this guy put me through all that. I've missed out on so many opportunities because they didn't return my money."
Driver Loan's business was centered on issuing cash advances to Uber and rideshare drivers, among other recipients, which allegedly totaled more than $30 million before the CFPB ordered the business to shut down.
Beginning in 2020, Driver Loan solicited investors or "depositors" to fund those loans, which it touted as legitimate investments. In actuality, the CFPB alleged, the company was misleading borrowers about the loans' interest rates, which reached usurious levels as high as 900 percent APR in some instances, according to the regulatory action.
"The company deceived depositors seeking a safe rate of return while deceiving rideshare workers about the cost of its 900% APR loans," said the CFPB's then-Acting Director David Uejio.
The bureau has been seeking a contempt order against Sarjeant for more than a year, claiming he has failed to repay Driver Loan investors and refused to address questions about undisclosed accounts where Driver Loan funds flowed.
In court filings last year, Sarjeant claimed he paid back approximately $1.7 million of the $2.9 million Driver Loan judgment against him but was broke and unable to pay the remainder.
"As I mentioned before, I have all the intentions of paying back all investors, but l don't currently have the funds," he wrote in a note to the court, docketed in early 2022.
In August 2021, roughly three months after Sarjeant entered into the stipulated judgment with the feds, Disruptive MCA started soliciting investors on a dedicated Facebook page, which became spotted with motivational platitudes and celebrity quotes. One post from June 2022 declared, "Become a Buyer Member today and start earning passive income!"
"Making money is art, and working is an art. And good business is the best art," a company's post from October 2022 states, quoting Andy Warhol. | Banking & Finance |
High Street retailer Next has said it will put up its prices by less than expected this year.
It said it now expected prices to rise by 7% in the spring and summer of 2023, and 3% in the autumn and winter - slightly less than the increases it warned of in January.
The retailer credited falling shipping and production costs for the change.
It came as Next reported a 5.7% rise in pre-tax profits to £870.4m for the year to January.
On Tuesday, the retailer also announced it would buy the Cath Kidston fashion brand for £8.5m, but not its shops.
Next has about 500 stores and trades online. It is often considered a good indicator of how the British High Street is doing.
The retailer had already put up its prices in 2022, blaming rising production costs and a weaker pound.
And in January it said prices would have to rise again by 8% this spring and summer, and by a further 6% this autumn.
Despite the strong results, Next said it predicted 2023 would be bumpy, with sales and profits falling due to high wage and energy costs.
Inflation - the rate at which prices rise - has soared in the last year, putting households and businesses under pressure.
The Bank of England expects annual inflation to fall to under 3% by the end of the year, as energy and food costs come down. However, last month there was a surprise jump to 10.4% from 10.1% in January.
Governor Andrew Bailey urged businesses not to put up prices faster than inflation, warning it would drive up the cost of living even further.
"I would say to people who are setting prices - please understand, if we get inflation embedded, interest rates will have to go up further and higher inflation really benefits nobody," Andrew Bailey told the BBC's Today programme.
The Bank of England has put up interest rates 11 times since December 2021 to try to control rising prices. | Inflation |
Former President Trump testified on the stand Monday that New York Judge Arthur Engoron and New York Attorney General Letitia James are "trying to hurt" him for "political reasons" while blasting the "very unfair" and unprecedented non-jury civil fraud trial.
The former president and 2024 Republican presidential frontrunner took the stand Monday morning in the civil trial stemming from James’ lawsuit against him, his family and his businesses. James alleged Trump defrauded banks and inflated the value of his assets.
Trump has denied any wrongdoing and has repeatedly said his assets were actually undervalued. Trump has repeatedly said his financial statements had disclaimers, requesting that the numbers be evaluated by the banks.
During Trump’s unprecedented testimony Monday, Engoron tried to cut him off from providing lengthy answers to state lawyers’ questioning, and even said, "I don’t want to hear everything he has to say."
After a break in his testimony, Trump again took the stand, defending himself and his businesses, and blasting the investigation, lawsuit and non-jury trial.
"We shouldn’t be having a case here because we have a disclaimer clause that every court holds up except this judge," Trump said, referring to the disclaimers on all of his financial statements and statements of financial condition.
"They're trying to hurt me — especially her," Trump said, referring to Attorney General Letitia James. "For political reasons."
Trump went on to call James a "political hack," saying she used her investigation and lawsuit against him "to become governor, to become attorney general." The former president was referring to James’ campaigns, in which she vowed to "get Trump."
"This is a political witch hunt, and she should be ashamed of herself," Trump said. "The fraud is her."
James, a Democrat, sued Trump, his children and the Trump Organization last year, alleging he and his company misled banks and others about the value of his assets. James claimed the former president’s children — Donald Trump Jr., Ivanka and Eric — as well as his associates and businesses, committed "numerous acts of fraud and misrepresentation" on their financial statements.
Engoron, in September, ruled that Trump and the Trump Organization committed fraud while building his real estate empire by deceiving banks, insurers and others by overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.
"He ruled against me without knowing anything about me," Trump said on the stand. "He called me a fraud, and he didn’t know anything about me."
Trump went on to slam Engoron for undercutting the value of his Mar-a-Lago resort in Palm Beach, Florida, a property Engoron valued at $18 million.
"$18 million, he said — and I'm a fraud for not valuing the property? How do you call a man a fraud when you have a property 50 to 100 times more?" Trump said. "You believed the political hack back there, and that's unfortunate."
A state attorney, Kevin Wallace, who was leading the questioning of Trump, asked if the former president was "done."
"Done," Trump said.
This is a developing story. Please check back for updates. | Banking & Finance |
Vivek Ramaswamy Wants To End H-1B Visa Programme
Technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.
Calling the H-1B visa programme 'indentured servitude', Indian-American Republican presidential aspirant Vivek Ramaswamy has vowed to “gut” the lottery-based system and replace it with meritocratic admission if he wins the race to the White House in 2024.
The H-1B visa, the much-sought-after among Indian IT professionals, is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.
Technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.
Ramaswamy himself has used the visa programme 29 times.
From 2018 through 2023, US Citizenship and Immigration Services approved 29 applications for Ramaswamy’s former company, Roivant Sciences, to hire employees under H-1B visas.
Yet, the H-1B system is “bad for everyone involved,” Ramaswamy was quoted as saying by Politico.
"The lottery system needs to be replaced by actual meritocratic admission. It’s a form of indentured servitude that only accrues to the benefit of the company that sponsored an H-1B immigrant. I’ll gut it," he said in a statement, adding that the US needs to eliminate chain-based migration.
"The people who come as family members are not the meritocratic immigrants who make skills-based contributions to this country." Ramaswamy stepped down as chief executive officer of Roivant in February 2021, but remained the chair of the company’s board of directors until February this year when he announced his presidential campaign.
As of March 31, the company and its subsidiaries had 904 full-time employees, including 825 in the U.S., according to its Securities and Exchange Commission filings.
When asked about the mismatch in the Republican presidential hopeful’s policy stance and his past business practices, press secretary Tricia McLaughlin said the role of a policymaker "is to do what’s right for a country overall: the system is broken and needs to be fixed."
"Vivek believes that regulations overseeing the U.S. energy sector are badly broken, but he still uses water and electricity," she said in a statement. "This is the same."
Ramaswamy, who is himself the child of immigrants, has captured headlines for his restrictionist immigration policy agenda.
He also said he would use military force to secure the border, and that he would deport US-born children of undocumented immigrants.
H-1B visas are highly sought after, and the demand for these workers continues to increase. For fiscal year 2021, U.S. businesses submitted 780,884 applications for just 85,000 available slots, jumping by more than 60 per cent.
Ramaswamy acknowledged his own experience with immigration during his opening remarks at the first Republican debate in Milwaukee.
"My parents came to this country with no money 40 years ago," he said. "I have gone on to found multi-billion-dollar companies." Ramaswamy’s stance on H-1B visas is reminiscent of the 2016 Trump campaign, when then-candidate Donald Trump, who has also hired a number of foreign workers under H-1B visas for his businesses, took a hardline stance on these foreign workers before later softening his rhetoric.
As president, Trump temporarily suspended new work visas and blocked hundreds of thousands of foreign workers from U.S. employment, as part of his sweeping effort to limit the number of immigrants coming into the U.S.
Every year, the U.S. gives 65,000 H-1B visas which are open to all and 20,000 to those with advanced U.S. degrees.
In July, Indian-American Congressman Raja Krishnamoorthi introduced a bill proposing to double the annual intake of highly skilled foreign workers on H-1B work visas coveted by Indian professionals.
The bill also seeks to double the number of H-1B visas available annually from 65,000 to 130,000 to allow American employers, including in critical technology sectors, to draw the best talent from around the world. Currently, nearly three-fourths of H-1B visas go to Indian professionals. | Workforce / Labor |
Sam Bankman-Fried needs to decide soon whether he'll take the witness stand in his criminal trial.
The case is going badly for SBF, so he may think he has little to lose.
If the judge thinks he's lying under oath, he could get an even harsher sentence.
Prosecutors are nearly done walloping Sam Bankman-Fried in court.
They're scheduled to bring just one or two more witnesses in the case, which is playing out in a federal courtroom in downtown Manhattan.
Defense attorneys have said they may not present any witnesses at all. But if they do, there's a good chance Bankman-Fried himself will take the witness stand.
"We are still working through whether we are going to put a case on and, if so, of what nature," Bankman-Fried's lawyer Mark Cohen told US District Judge Lewis Kaplan, who's overseeing the trial, earlier this week.
If they do present a defense case, Cohen said later, they'll tell prosecutors before court resumes on Thursday after a break in the trial, and take about a week to present evidence to jurors.
Ever since his cryptocurrency exchange, FTX, collapsed last November — and billions of dollars of customer deposits seemed to evaporate in connection with his crypto trading firm, Alameda Research — Bankman-Fried has been trying to tell his own version of the story.
He's given numerous interviews with journalists, tweeted that FTX was solvent, spoken at a conference, and wrote a Substack post in his defense.
According to prosecutors — and Bankman-Fried's friends and former employees who testified at his trial — there's a very clear explanation for how $8 billion disappeared from FTX customer accounts: They all took the money for themselves.
Now, faced with the prospect of a century-long sentence, Bankman-Fried has to decide whether he'll take an oath and tell that story to jurors.
Bankman-Fried has little to lose
Defendants have a presumption of innocence, and can win at trial as long as at least one juror says they have reasonable doubt of their guilt during deliberations. But things are looking bad for Bankman-Fried.
Former Alameda Research CEO Caroline Ellison, and former FTX executives Gary Wang and Nashad Singh all pleaded guilty to conspiracy and fraud charges. They testified that they conspired with Bankman-Fried to siphon money from FTX customers.
The money, they said, pointing to internal records on the witness stand, was spent on crypto bets, investments, expensive advertising, and loans to themselves.
If Bankman-Fried believes he's doomed no matter what, he may decide he has little to lose by testifying, according to Sarah Krissoff, a former federal prosecutor in New York.
He may at least be able to elicit a little sympathy from jurors, she said.
"If a conviction seems almost inevitable based on what's presented in the courtroom so far, he has probably not that much to lose by testifying," said Krissoff, now a defense attorney at Cozen O'Connor. "Because it does humanize him in a way to the jury that can be very effective."
One of the biggest challenges for Bankman-Fried's defense team is that they might not have anyone else.
Kaplan refused to allow them to have their pick of expert witnesses testify. Court filings indicate they planned to suggest the norms of cryptocurrency exchanges — particularly those operating outside of the US, as FTX was — may allow for the use of customer funds.
Without those expert witnesses, Bankman-Fried's defense team has little scaffolding to support the closing arguments they'll present to jurors, according to Paul Tuchmann, an attorney at Wiggin and Dana, and a former federal prosecutor in New York.
"It's important for a number of reasons to have those witnesses, both because it gives the jury something to chew on, something to hang their hat on, and then by extension something for the defense to kind of point to in their closing arguments," Tuchmann said.
Prosecutors may have been preparing for SBF to testify
Prosecutors have spent a lot of time showing spreadsheets that demonstrate the behind-the-scenes financial relationship between FTX and Alameda Research.
But messages that directly point to how much Bankman-Fried knew — and when he knew it — are a little harder to come by.
Bankman-Fried did much of his communicating on Signal, a messaging app. He told employees to use its auto-deletion features, according to witnesses who testified in the trial.
"There wasn't much benefit to keeping messages around, and if regulators found something they didn't like in those messages, that could be bad for the company," developer Adam Yedidia testified, explaining Bankman-Fried's reasoning.
Much of the communication records shown at trial come from November 2022, when FTX was collapsing and those auto-deletion features were turned off, and in a smattering of screenshots taken by his colleagues.
For that reason, the case against Bankman-Fried rests on the credibility of his alleged co-conspirators.
In cross-examining Ellison, Wang, and Singh, his defense attorneys have suggested that they're implicating Bankman-Fried only to seek a lighter prison sentence themselves.
"At least theoretically, the question isn't so much necessarily, 'Is all of that wrong?' or 'Is that stuff that they walk through in the spreadsheet criminal?'" Tuchmann told Insider. "It's 'Did SBF know about it? Did he direct them to do it?'"
In their own questioning of the cooperating witnesses, prosecutors have encouraged them to be open about taking responsibility for their crimes. Wang forthrightly said that what he did was wrong. Ellison teared up on the witness stand when talking about the weight of her guilt. Singh talked about how he became "suicidal" with the pressure of knowing he took money from customers and covering it up.
Prosecutors have also taken pains to suggest that Bankman-Fried is a serial liar. They pointed to his tweets around the time of the FTX collapse when he falsely said the company had enough liquidity to cover customer withdrawals. And, according to Ellison, Bankman-Fried's unkempt hair and reputation for slovenliness was only a matter of public relations. She testified that he had a luxury car before getting a Toyota Corolla because "he thought it was better for his image."
On the witness stand, Ellison said Bankman-Fried told her that, under the effective altruism philosophy he subscribed to, it was OK to be dishonest because "rules like don't lie or don't steal" don't "fit into that framework."
"He said that he was a utilitarian, and he believed that the ways that people tried to justify rules like don't lie and don't steal within utilitarianism didn't work, and he thought that the only moral rule that mattered was doing whatever would maximize utility," Ellison said.
Prosecutors — and the judge — can use SBF's media interviews against him
Because prosecutors have the burden of proof in criminal cases, they often tell defendants not to testify. All they technically need to do is undercut the prosecution, not make any kind of affirmative defense.
The decision, however, is ultimately up to the defendant himself. And Bankman-Fried's earlier interviews complicate things.
"I had the sort of fortunate or unfortunate experience of having a lot of defendants testify. And there's a type," Krissoff told Insider. "In my view, there's often certain categories of defendants that like to testify. And in a white-collar case — particularly when the person's veracity is what's at issue — it's not uncommon for the defendant to want to testify and in fact do it."
If Bankman-Fried takes the stand, he'll be cross-examined by prosecutors. And those prosecutors have plenty of material to try to catch him in a lie. He's testified before Congress and given numerous interviews.
In court on Thursday, prosecutors pulled up a video of an interview Bankman-Fried gave to ABC News in December, days before he was extradited, where he squirmed when asked direct questions about what he knew and when.
He hesitated and hedged extensively, saying he was only "vaguely aware" that FTX deposits were being funneled to Alameda.
Ten months later, that wouldn't seem to be the case, according to testimony given by his former executives who have testified against him. If Bankman-Fried takes the stand, prosecutors will almost certainly point to more material and catch him in any contradictions.
"It's particularly complicated for him because of how much he's talked before," Krissoff said. "So he's going to have to weave a story together that both takes into account all of the evidence that's presented in the government's weeks of presentation and also all of the statements he made before."
The even bigger issue for Bankman-Fried could be Kaplan's future sentencing, if he's found guilty.
In court proceedings, Kaplan has shown little sympathy for Bankman-Fried. Over the summer, he jailed Bankman-Fried, finding that he tried to tamper with two witnesses ahead of trial and repeatedly violated the terms of his home confinement. And that was after expressing exasperation in several earlier hearings that prosecutors didn't seek more stringent restrictions in the first place.
If Kaplan finds that, on top of everything, Bankman-Fried lied on the witness stand, he could issue a much tougher sentence — not to mention add complications to a second criminal trial on campaign finance charges, scheduled for next year.
"He may make the calculation of, 'You know what, if I get convicted, Judge Kaplan's going to sentence me into next century anyway, so I might as well testify in an effort of avoiding that,'" Tuchmann told Insider. "But that's risky because maybe that's not what Judge Kaplan would do. But if he sees SBF testify on the stand then in a way that he believes is untruthful, then maybe he would tack on additional time."
Read the original article on Business Insider | Crypto Trading & Speculation |
- Per Axios, the Biden administration will take a hardline approach to remote work for federal workers.
- The White House chief of staff said federal workers should return to offices by September or October.
- The policy shift follows a pledge that Biden made during his March 2022 State of the Union speech.
President Joe Biden's administration is set to take a more forceful approach to ending remote work in the coming months, asking federal workers to return to physical offices by the fall.
According to a new report by Axios, citing an email sent from Biden's chief of staff Jeff Zients to cabinet members, Zients said that federal workers would aim to return to in-person work between September and October.
The plan builds on a pledge Biden made during his March 2022 speech, urging Americans to "fill our great downtowns," as many office spaces in Washington DC are still largely empty.
"We are returning to in-person work because it is critical to the well-being of our teams and will enable us to deliver better results for the American people," Zients said in the email, according to Axios. "This is a priority of the President — and I am looking to each of you to aggressively execute this shift in September and October."
The White House did not immediately respond to Insider's request for comment.
The request by the Biden team was echoed by former New York City mayor Michael Bloomberg earlier this week, who claimed that customer service at federal agencies has suffered as a result of remote work.
Real estate experts previously told Insider that office vacancy in DC rose from 14.8% before the pandemic, to almost 20% at the start of 2023.
And a Government Accountability Office report from July stated that "17 of the 24 federal agencies used on average an estimated 25 percent or less of the capacity of their headquarters buildings."
As it stands, Biden's administration is seeking to buck a trend upheld by the administrations of Barack Obama, Donald Trump, and his own, where federal offices have downsized over time and digitized more records. | Workforce / Labor |
Rishi Sunak’s government will use next week’s king’s speech to advance expansion of North Sea oil and gas exploration, as well as pro-car policies, in the hope of opening up a clear divide over the green agenda with Labour, the Observer understands.
Energy industry sources and senior figures in Whitehall say they expect ministers to announce legislation to usher in a new annual system for awarding oil and gas licences, despite the UK’s commitments to move away from fossil fuels and reach net zero carbon emissions by 2050.
The king’s speech, the final legislative programme before the next general election, is also expected to include measures that will explicitly favour motorists, including making it more difficult for local authorities to introduce 20mph speed limits or supposedly unpopular schemes such as the ultra-low emission zone (Ulez), recently expanded in London.
Laws to bring in tougher sentencing for serious crimes including rape, and moves to allow the government to rent prison space abroad to ease the current problems of overcrowding are also expected.
With his party lagging way behind Labour in the polls, Sunak announced a major U-turn on green policy in September, postponing the deadline for selling new petrol and diesel cars and the phasing out of gas boilers, prompting fury from the car and energy industries. He hoped to win over voters worried that green policies would add to the cost of living.
But since relaunching his premiership and axing the Birmingham to Manchester leg of HS2, the Tories have made no progress. In today’s Opinium poll for the Observer, they remain 15 points adrift of Keir Starmer’s party.
Despite this, Whitehall insiders and the energy industry say there are now clear signs that Sunak intends to double down in the hope that he can create “wedge issues” with Labour.
Labour suspects the king’s speech will be packed full of bills that will be there almost entirely for political reasons. One senior opposition figure said: “Many of these are not bills that are even necessary, nor does the government think they will ever come on to the statute book. They will be there because they want to be able to ask us: do you dare oppose this or not?”
Environmental campaigners point out that more oil and gas exploration licences are not only irresponsible, given the climate crisis, but that new laws are not needed to award more licences. This has been shown by the fact that the results of a new round of licences, launched just over a year ago during Liz Truss’s brief stint as PM, are due to be announced imminently.
The government argues that awarding more licences will enhance the UK’s energy security and reduce dependence on higher-emission imports, while protecting more than 200,000 jobs in a vital industry.
But the plans have been cast into doubt by new analysis that shows that 13 years of North Sea licensing under the Tories has led to the discovery of very small amounts of gas, the equivalent of just nine weeks’ worth of typical usage across the country.
New data from Uplift – an NGO that supports the transition from fossil fuel production – shows that hundreds of North Sea licences have been issued in six rounds since the Conservatives came to power in 2010. However, this has led to the discovery of only five new oil and gas fields and enabled a further seven previously discovered fields to be developed.
These 12 new fields contain just nine weeks of gas, but only half have begun producing. To date, just 16 days worth of gas has been produced from them since 2010. And half of this has been produced by the Sillimanite gas field, which is 30%-owned by Russian gas giant Gazprom, and has been exported to the Netherlands.
After five decades of drilling, the North Sea’s dwindling reserves, which are largely (70%) oil, mean significant new discoveries are unlikely.
Tessa Khan, executive director of Uplift, said: “Over the past 13 years under this government, new licences – hundreds of them – have lead to a couple of months’ worth of new gas being discovered, and only just over a fortnight’s worth actually being produced.
“The Conservatives are selling us a pipe dream when they need to be straight with people about how we’re going to power this country. Rather than coming up with a coherent plan for ensuring we have a secure and, crucially, affordable power supply, they’re trying to score political points.
“An estimated 6 million households in this country now can’t afford to heat their homes in winter, and bills are likely to stay high for the rest of the decade. Does this government care, or is it more concerned with playing political games with energy policy?” | Energy & Natural Resources |
Electric cars should be charged a pay-as-you-drive tax as they damage roads more due to their extra weight, a Tory think tank has proposed.
The Centre for Policy Studies (CPS), which has close ties to the Government, said the current system of vehicle duty “treats motorists as a cash cow” and should be scrapped.
It warned that the longer ministers delay bringing in charges on battery powered cars, the more “politically difficult” the decision to do so will become.
In a report the think tank said the Treasury faced a £25 billion budget black hole in the near future as receipts from fuel duty dwindled.
It added that the Government should respond by introducing road pricing for electric vehicles, meaning their owners would pay per mile driven.
The CPS said the system should later be rolled out to remaining petrol and diesel cars, the sale of new models of which will be banned after 2030.
To win public support for the switch, the CPS said ministers should pledge to plough the proceeds back into upgrading the road network.
‘Government should use transition’
“As the rate of EV take-up increases over the coming decade, the introduction of an effective per-mile charging system will become ever more urgent,” the report said.
“The Government should use this transition as an opportunity to rebalance taxation away from disproportionately penalising motorists in the medium term.”
It added: “By their nature EVs tend to be significantly heavier than their petrol or diesel counterparts, meaning that they will cause more damage to the roads over time.
“We believe the per-mile rate should vary based on the weight of the vehicle (as heavier vehicles cause more damage to the roads).
“This of course reflects the current system, under which heavier cars consume more fuel and hence pay more fuel duty.”
Motorists paid £33 billion in fuel duty and vehicle tax in 2021, but only £11.8 billion of that was reinvested into maintaining and upgrading roads.
Electric cars are not subject to excise duty, though the Treasury has announced they will have to do so from 2025 in line with petrol and diesel cars.
Far cheaper to run
The CPS said that even with the introduction of road pricing they would still be far cheaper to run than petrol and diesel alternatives.
Tom Clougherty, research director, said: “The Treasury has grown used to motorists being a cash cow but with electric vehicles on the rise, those days are numbered.
“We shouldn’t replicate the old, punitive tax system, but it is still important that all drivers pay a fair amount for the roads they use.
“The ‘pay as you drive’ approach our report recommends would meet that objective and could be phased in gradually over the next decade or so alongside targeted, local initiatives to manage congestion and reduce air pollution.”
Jeremy Hunt, the Chancellor, told MPs in March that the Government had no plans to introduce road pricing. | Energy & Natural Resources |
Children England to close after 81 years
Fiona Simpson
Wednesday, September 20, 2023
Children England, the collective body for children’s charities, will close after 81 years, the organisation’s leaders have announced.
The charity, launched as the National Council of Voluntary Child Care Organisations (NCVCCO), in 1942, has cited “financial challenges” as the reason behind its closure.
Chief executive Kathy Evans said: “No chief executive wants to close the organisation they love and feel responsible for, but I am proud of the decisiveness of our board in knowing when it’s time to call it a day.
“In the extraordinarily difficult economic circumstances the whole nation is experiencing, we know that many other charities, businesses and public services are facing similar mathematical impossibilities in trying to find ways to juggle the bills, the income and the security that employers and employees need, just to stay afloat.
“We know we aren’t the first, nor likely to be last, purposeful organisation that will have to grasp the necessity of closing this year, despite still believing passionately in the value and importance of what they do. Our profound concern about what’s happening to all charities and public services in the pernicious economic context will outlast our ability to continue campaigning about them.”
Children England began as a collective of charity children’s homes during the Second World War with an objective of influencing government in its plans for the welfare state, and the creation of the Children Act 1948.
During its development into the NCVCCO experts from the charity were seconded into the Whitehall teams leading on both the Children Act 1989, and again in 2004.
More recently, Children England has focussed on policy development including its “Keep Profit Out of Child Protection” campaign in May 2014, which overturned Department for Education plans to allow the outsourcing of child protection functions to private sector businesses.
This is very sad news @Childrenengland - one of our of first partner organisations nearly 30 years ago. A huge loss for #children and young people. Thank you for all your work tirelessly campaigning for children & young people's rights. https://t.co/Fc9zxKrDtk— Race Equality Foundation (@raceequality) September 20, 2023
Earlier this year, Children England created the ChildFair State Inquiry, a programme led and conducted by young people, the findings of which were launched in May.
Evans added: “In their inspiring work launched just this year, our young leaders of the ChildFair State Inquiry have been our great source of inspiration and hope for the future, laying out a positive and practical agenda for restoring the sense of collective responsibility we have to every child, every person, in this society.
“As we close down our charity, we hope their work can spread far and wide, like sycamore seeds in the autumn breeze, coming to life in reality long after Children England is gone.”
An incredibly sad day. I gained so much knowledge and insight from working with @Kathy_CEO_CE and Chloe, a fantastic team and a wonderful support to the children’s social care sector - which will be much poorer without @Childrenengland in it 💔 https://t.co/FBN0RN8zro— Ali Gunn (she/her) (@ali__gunn) September 20, 2023
Children England plans to spend the coming months sharing its 81 years of learning with the sector.
Sector leaders have lamented the charity's closure, describing it as “a truly sad day” for the sector.
Andy Elvin, chief executive of foster care charity, Tact Fostering, said: “The clear political choice that was, and is, austerity is disproportionately impacting the most vulnerable members of our society.
“The building blocks of our civil society are being deliberately dismantled and the extremely regrettable closure of Children England is the latest example of this. A system that allows private equity investors to excessively profit from children’s social care but cannot fund organisations that protect and speak up for these children is profoundly broken.”
Mark Russell, chief executive of The Children’s Society said: “It has been a privilege for The Children’s Society to be a member of Children England and I have so valued their incredibly important work campaigning, leading and fighting for change for young people, whilst at the same time being some of the glue that holds the children’s charity sector together.
“I pay tribute to Kathy Evans their fabulous chief executive for her leadership and I am deeply sorry that Children England is closing. A truly sad day for our entire children’s sector.”
Carol Homden, chief executive of Corman added: “Children England has been a passionate and vocal campaigner for children through continued austerity and cuts. At this time, with London and the North East united by having the worst levels of child poverty in England, and a need for national and regional responses for the future, this work has never been more important.”
Jonathan Stanley, director of the National Centre for Excellence in Residential Child Care, said: “The loss of Children England should make us all sit up alarmed. Community voluntary organisations, the people often serving others for little or no reward doing the “things that fire you up in the morning, that drive you, that you truly believe will make a real difference to the country you love”, a quote from David Cameron, are hanging by a thread.” | Nonprofit, Charities, & Fundraising |
GMR Power Consolidates Stake in GMR Energy To 87%; Shares Hit Upper Circuit
The company acquired an additional 29.14% stake from Power and Energy International (Mauritius) Ltd. for $28.5 million.
Shares of GMR Power and Urban Infra Ltd. surged to hit the upper circuit on Wednesday after it increased its stake in its subsidiary, GMR Energy Ltd.
The company acquired an additional 29.14% stake from Power and Energy International (Mauritius) Ltd. for $28.5 million, according to an exchange filing.
Following this acquisition, the company has consolidated its stake in GEL to 86.9% from about 57.76% held by the company and its subsidiaries, it said.
With this, the shareholders' agreement with Power and Energy International stands terminated, thereby enabling full consolidation of revenues and earnings of GEL with the company, which till now was being done on an equity method or joint venture accounting, the company said.
Shares of the company rose as much as 5% to Rs 42 apiece. It pared gains to trade 1.25% higher at Rs 40.50 apiece as of 10:30 a.m. This compares to a 0.07% advance in the NSE Nifty 50 Index.
It has risen 75.05% on a year-to-date basis. Total traded volume so far in the day stood at 3.1 times its 30-day average. The relative strength index was at 64.5. | Energy & Natural Resources |
More than 2.4 million people who are on long-term sickness and disability payments will be able to try going to work without losing any of their benefits under a new plan announced by the DWP.
Those claiming Universal Credit who are deemed medically unfit for work after an assessment get an additional amount of £390 a month on top of their standard allowance. The Department for Work and Pensions has today unveiled a new Chance to Work Guarantee to encourage people to find a job and say those who give it a go won't have their 'limited capability for work' payment stopped or face a reassessment of their claim.
In two years' time, work assessments will be completely overhauled so they are geared more towards offering people support to get back into employment rather than writing them off as unfit for work. The major rule changes come as it emerged that two-thirds of people claiming Universal Credit or ESA (Employment and Support Allowance) end up on long-term sickness payments.
READ MORE:
- DWP confirms new Universal Credit rates for 2024 with exact amounts you will get
- DWP launches new work push for 1 million over-50s Universal Credit claimants
The DWP said: "The changes announced today as part of the Government's next generation of welfare reforms will free up claimants to try work with no fear of losing their benefits, including health top-ups, with the prospect of re-assessments removed entirely for most claimants."
It explained: "The proportion of people on the highest level of award and assessed as having no work-related requirements has risen from 21 per cent in 2011 to 65 per cent in 2022 – meaning people are over three times more likely to be written off work today than they were over a decade ago.
"One in five people currently on the highest tier of health benefits, with no work preparation requirements, would like to work in the future with the right support. But more than half of those who felt they could work within the next two years saw a fear of not being able to return to benefits as a barrier.
"We know people remain on these benefits for a long time – only 1 per cent of people leave certain health and employment benefits each month. The Government's Chance to Work Guarantee is designed to address these concerns, empowering more health benefit claimants who want to try work, while ensuring fairness for the taxpayer as claimants' benefits taper off over time as they increase their hours in work."
Alongside the new Chance to Work Guarantee, claimants will have increased work allowances meaning they can keep more of their earnings every month without a cut in their Universal Credit payments. The work allowance for those with housing costs will rise to £404 per month from April 2024 and £673 per month for those without housing costs. For wages above those levels, Universal Credit is reduced by 55p for every £1 of pay.
The DWP points out that today's more flexible labour market means more people can undertake "some form of tailored and personalised work-related activity, with the right support." It says 40 per cent of people are now able to work from home compared with just 12 per cent in 2019, before the Covid pandemic forced a major change in job requirements. Out of around 8 million jobs advertised online between April and October 2023, over 20 per cent were either remote or flexible, compared with less than 4 per cent over the same period in 2016, it said. | Workforce / Labor |
BOJ Loosens Grip On Long-Term Yields In Ueda’s First Surprise
The yen dropped against the dollar following the decision, to pare earlier large gains.
(Bloomberg) -- The Bank of Japan jolted financial markets by loosening its grip on bond yields in Governor Kazuo Ueda’s first surprise move since taking the helm, a step that will likely spur talk of potential policy normalization to come. The yen whipsawed to give back some of its earlier sharp gains against the dollar.
The BOJ kept the target for 10-year government bond yields at around 0% but said its 0.5% ceiling on yield movements was a reference point not a rigid limit as it sought to make its easing program more flexible. The bank left its short-term negative interest rate unchanged at -0.1%.
The continuation of the main policy settings will likely enable Ueda to argue that the new guidance on the band was a technical move aimed at improving the sustainability of its stimulus, rather than a step toward imminent policy normalization.
The yen dropped against the dollar following the decision, to pare earlier large gains following a Nikkei report that said the BOJ’s board would discuss whether to tweak yield curve control policy to let long-term interest rates rise above its 0.5% cap by “a certain degree.”
The yield on 10-year government debt rose to 0.53% after having earlier breached 0.5% following the Nikkei report.
Only 18% of 50 economists polled by Bloomberg were expecting a YCC tweak at this meeting, though about half foresaw such a move no later than October. In addition, there was a widespread view that any change to the program would have to come as a surprise, as any foreshadowing might trigger a massive bond sell-off, complicating the move.
In the end, Ueda probably chose to rid the board of a major headache at an early stage in his tenure, taking advantage of relative calm in the market, as investors mostly stopped trying to test the BOJ’s resolve to defend its targeted ranges in recent months. The bank last surprised investors in December, when it doubled its yield cap in a move that now appears to have been insufficient to allay concerns at the bank over the side effects of the program.
A growing consensus that the US and European central banks are nearing an end to their tightening cycles has eased upward pressure on global bond yields, a development that offered a window of opportunity for the BOJ to adjust YCC with a lower risk of a surge in Japanese yields.
The European Central Bank raised rates Thursday, a day after the Federal Reserve also hiked. While Fed Chairman Jerome Powell held out the possibility of further action, pricing in the swaps market indicates a widespread belief that any subsequent move would be the last.
Japan’s stocks hit a 33-year high earlier this month and the yen has stayed around 140, limiting adverse impacts from the yield control adjustment.
Ueda will hold a press briefing at 3:30 pm local time.
(Adds more details from statement and outlook)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
Ghar Kharcha: The Long-Weekends Edition
March and April are characterised by hot summers, long weekends and, this time, also by falling inflation offering some respite.
The months of March and April are characterised are by hot summers and, this year, by long weekends and—finally—falling inflation, which has seen a broad-based decline but continues to weigh on household budgets. What do the summers entail?
From Ram Navami to Mahavir Jayanti to Good Friday to Eid, the months of March and April have holidays in plenty.
We are witnessing an over threefold rise in demand compared to previous long weekends of 2023, according to Rajeev Kale, president and country head at Thomas Cook India.
Airfares in March declined 5.3% sequentially and rose 1% annually. Hotel lodging charges rose by 0.1% sequentially and by 3.5% on an annual basis, according to data by the Ministry of Statistics, published on Wednesday. While that could just be the base effect at work, in our experience, airfares to most tourist destinations for the long weekends are through the roof, with hotel tariffs too offering little respite.
Our demand trends indicate an uptick for destinations like Kashmir, Himachal, Uttarakhand, Leh, North East, Kerala, Goa and Andamans for domestic travel; and South East Asia’s Singapore, Malaysia, Thailand and Indonesia; also Maldives, Mauritius, Dubai, Abu Dhabi and Ras Al-Khaimah for international travel, Kale said. New emerging destinations peaking customer interest are Azerbaijan, Kazakhstan, Vietnam and Cambodia.
The start of the summer vacations in April means that travel is likely to get pricier still, even as food and headline inflation will continue to provide comfort to household budgets.
India's retail inflation cooled to the lowest in 15 months, coming in at 5.66% in March. What led to the fall? Inflation in food and beverages rose 5.1%, the lowest pace in three months. Except for pulses, most food categories saw a decline including cereals, milk and spices that have been pain points for several months now.
Cereals, for instance, rose 15.3%, down from 16.7% last month. Milk and spices inflation also eased annually but rose on a sequential basis.
Clothing and footwear inflation fell to a 16-month low after scaling fresh highs through the past year at 8.18%. However, housing inflation rose to the highest in nearly four years at 4.96% in March.
Bills And More Bills
Fuel and light inflation slowed to 8.9% from 9.9% in February. On a sequential basis, prices were unchanged in contrast to our expectations of an increase due to LPG prices having been raised early in March, said Rahul Bajoria, chief economist at Barclays.
Electricity tariffs are expected to rise in the coming months in light of increased demand, which may be reflected in the CPI numbers from April or May, he said.
Safe travels! | Inflation |
Campaigners calling for more state money for daycare places have submitted 105,000 signatures to the Federal Chancellery.
If 100,000 votes are valid, the popular initiative will go to a nationwide vote.
The “daycare initiativeExternal link” demands the cost of daycare places be capped at 10% of parents’ income. It wants to make not only daycare centres and after-school care centres accessible and affordable for all families but also the entire spectrum of supplementary family and school care, such as day families.
Every child who needs a place in childcare should be entitled to it, the campaigners believe. Prices should be graded according to income.
Today, many parents cannot afford supplementary childcare, the initiative committee led by the left-wing Social Democratic Party said at a press conference in Bern on Wednesday. The result is that in many cases women with children give up their jobs completely or partially – and thus have lower wages and pensions.
Even though there are no estimates of what the initiative could cost, all representatives of the initiative committee said the state would receive more funds in the long run. The investment would be worthwhile in economic terms because the children’s educational opportunities would be increased and Switzerland would ultimately benefit from higher added value.
Cédric Wermuth, co-chairman of the Social Democratic Party, calculated that a full-time childcare place can sometimes cost more than a quarter of one’s income. “A good daycare offer is a central piece of the puzzle for more equality,” he said.
In compliance with the JTI standards | Workforce / Labor |
Emami Q2 Results Review - Volume Muted; Rural Recovery Essential: Motilal Oswal
Emami's management has guided for a 200-250 basis points expansion in Ebitda margin and high- single digit sales growth in FY24.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Emami Ltd. reported 6.3% sales growth in Q2 FY24 (broadly in line with our estimates), attributed to factors like poor monsoons, food inflation, and subdued demand in rural markets.
Domestic business growth at 4% YoY led by 2% volume growth, which was mainly driven by channels catering to urban markets such as modern trade and e-commerce.
The Navratna and Dermi Cool reported robust double-digit growth, while single-digit fall see in BoroPlus/Kesh King/ Male grooming due to low demand from price-sensitive consumers.
Emami's management has guided for a 200-250 basis points expansion in Ebitda margin and high- single digit sales growth in FY24.
We retain our 'Buy' rating on Emami, considering a gradual rural revival (over 50% of sales), inexpensive valuations at 28 times FY25E earnings per share, improving revenue performance, rural distribution expansion, and increased ad spending.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Consumer & Retail |
IREDA IPO Subscribed 2.29 Times On Day Two
The IPO has been subscribed 2.29 times as of 10:30 p.m. on Wednesday.
The initial public offering of Indian Renewable Energy Development Agency Ltd. opened for public subscription on Tuesday. It was subscribed 1.96 times on the day 1.
The offer—first government IPO in 18 months—will continue till Thursday.
The government is looking to raise Rs 2,150 crore through the primary share sale, which is a mix of fresh issue and an offer-for-sale portion. The Union government, which is a promoter in the firm, will offload 2.69 crore shares, reducing its stake will decline to 75% from 100%.
Issue Details
Issue opens: Nov. 21.
Issue closes: Nov. 23.
Total offer size: Rs 2,150 crore.
Fresh issue size: Rs 1,290 crore.
Offer for sale size: Rs 860 crore.
Face value: Rs 10 apiece.
Fixed price band: Rs 30–32 per share.
Lot size: 460 shares.
Listing: NSE, BSE.
Shareholding Pattern
The pre-IPO shareholding stands at 2,28,46,00,000 and will increase to 2,68,77,706 after the initial public offering.
Promoters selling shareholders will be taking part in the offer for sale. The President of India, acting through the Ministry of New and Renewable Energy, Government of India, will be offloading a total of 2.69 crore shares.
Post-IPO, the promoter and public group shareholding to public shareholding ratio will stand at 75:25, from 100% with the promoter and public group category previously.
Business
Incorporated in 1987, Indian Renewable Energy Development Agency Limited is a public limited government company. It is a Mini Ratna (Category - I) government enterprise and is administratively controlled by the Ministry of New and Renewable Energy.
The company operates in four key sectors: solar, wind, hydro, biomass, biofuels and cogeneration.
IREDA is a non-banking financial institution that promotes, develops and extends financial assistance for new and renewable projects. With 36 years of experience under their belt, the company provides a comprehensive range of financial products and related services, from project conceptualization to post - commissioning, for renewable energy projects and other value chain activities, such as equipment manufacturing and transmission.
Use of Proceeds
The offer includes a fresh issue and an offer for sale. The company will not receive any proceeds from the offer for sale part of the issues, and all proceeds from the OFS will be received by the promoter selling shareholder.
The company intends to utilise the net proceeds from the fresh issue for the following purposes:
To augment the company's capital base to meet future capital requirements and onward lending.
Subscription Status: Day 2
The IPO has been subscribed 2.29 times as of 10:30 p.m. on Wednesday.
Institutional investors: 1.34 times
Non-institutional investors: 3.43 times
Retail investors: 2.36 times
Employees reserved: 2.54 times | Stocks Trading & Speculation |
The U.S. Postal Service is in the midst of a 10-year plan aimed at erasing losses and eventually turning a profit. But in its last fiscal year the agency reported a loss of $6.5 billion, a major step backward after USPS leaders has predicted it would break even.
The 10-year plan is the brainchild of Postmaster General Louis DeJoy, who has argued that the overhaul was essential to stop the financial bleeding and put the USPS on the road to profitability. Under his plan, which he , the agency had been projected to reach a break-even point in fiscal year 2023 and begin turning a profit in 2024.
The agency's turnaround plan centers on slower delivery standards and postage hikes, changes geared to cutting costs and raising revenue but that proved unpopular with some businesses and consumers. Yet the most recent fiscal year revealed significant headwinds for the agency's plans, including inflation and a decrease in mail volume, the USPS said on Tuesday.
Revenue slipped $321 million, or 0.4%, to $78.2 billion for the fiscal year ended September 30 compared with the year-ago period, the agency said. The USPS last year reported net income of $56 billion, primarily because of a one-time, non-cash adjustment stemming from the Postal Service Reform Act in 2022, which ended a mandate to pre-fund retirees' health benefits.
Mail volume across the U.S. declined almost 9%, with the number of mailed items falling to about 116 billion, compared with 127 billion the previous year.
In comments delivered to the Postal Service Board of Governors on Tuesday, DeJoy he is "not happy" with the USPS' latest financial results and pointed to issues that weren't accounted for in the plan's forecast.
"Our efforts to grow revenue and reduce labor and transportation costs were simply not enough to overcome our costs to stabilize our organization, the historical inflationary environment we encountered and our inability to obtain the [Civil Service Retirement System] reform we sought," he said.
Some critics are pointing to DeJoy's string of postage rate hikes as the reason for the decline in volume, with a group called Keep US Posted claiming the "unprecedented postage increases" are aggravating the USPS' financial situation.
"Twice-annual, above-inflation postage hikes are worsening the USPS' financial woes and trapping it in quicksand, as even more mail is driven out of the system," Keep US Posted Executive Director Kevin Yoder, a former Congressman from Kansas, said in a statement.
Keep US Posted, which represents businesses that rely on the USPS, such as greeting-card companies, magazines and catalog businesses, said the losses shows that Congress should "provide more oversight."
"DeJoy shouldn't receive any more blank checks from Congress to only raise postage rates, cut service and drive more debt," Yoder added.
The USPS is planning toin January, which would mark the fifth rate hike since 2021 and come on the heels of a July postage increase.
for more features. | Inflation |
Shoplifting has become an "epidemic" in the past year, the boss of John Lewis, Dame Sharon White, has told the BBC.
She told the Today programme the retailer had seen offences double over the past 12 months.
Dame Sharon said it was also "not right" that shop workers were "having to put up with abuse and attacks".
A group of retailers, including John Lewis, have agreed to fund a police operation to crack down on shoplifting, called "Project Pegasus".
Ten retailers will spend about £600,000 on the project, which will use CCTV pictures and data provided by the shops to get a better understanding of shoplifters' operations.
Images of shoplifters provided by shops will be processed by the police and compared with a national database using facial recognition technology.
Dame Sharon, chairwoman of the John Lewis Partnership - which also owns Waitrose, said that some areas had become "shells of their former selves" due to violent attacks and repeated offenders "causing havoc" in shops.
During the interview, she said that reported incidents have not always been responded to by the police.
According to figures from retail trade body the British Retail Consortium (BRC), retail thefts across the sector in England and Wales rose by 26% in 2022.
Its crime survey suggested that nearly 850 incidents were taking place every day, with staff facing physical assault and being threatened with weapons on some occasions.
Data, analysed by the BBC, also shows that shoplifting offences have returned to pre-pandemic levels as the cost of living rises.
Other retailers, such as the Co-op, Tesco and Iceland, have said they are spending heavily on anti-crime measures.
Steak and cheese are being fitted with security tags and coffee replaced with dummy jars in Co-op stores, whose boss has warned that some areas are becoming "no-go areas" due to a rise in "horrific incidents of brazen and violent theft".
Tesco is also offering all of its staff body cameras due to the risk in physical assaults and theft, while the managing director of Iceland, Richard Walker, wrote in a social media post on Monday that the chain was spending "more than ever" on security as "serious incidents" have never been higher.
The BRC has previously told the BBC that these high level of theft cost retailers almost £1bn in the 2021 financial year, "money that would be better used to reduce prices and invest in a better customer experience".
Dame Sharon said the UK needs a comprehensive plan to stop organised gangs, and called for Scottish legislation that makes the abuse of a retail worker an offence to be brought in nationwide.
As part of the efforts to improve relations with police, Waitrose and John Lewis are also offering free hot drinks to on-duty officers.
In John Lewis, police officers will be able to use staff cafeterias for breaks and buy discounted food there too, in the hope that their presence will deter criminals.
Dame Sharon is calling for a royal commission - essentially an independent inquiry - into the future of British High Streets.
Retailers have highlighted increased competition from online shopping, and high levels of business rates - which apply to commercial properties, as issues holding back physical stores in city centre locations.
She said there needed to be a "holistic view" of these problems, with input from government, academics and the industry, rather than individually investigating issues such as tax, crime, planning, housing, and environmental policy.
Dame Sharon has also been seeking ways to boost growth at the John Lewis Partnership, following concerns about its performance.
John Lewis is set to unveil its half-year financial results on Thursday. Earlier this year, the group reported a £78m loss before exceptional items for the latest financial year. | Consumer & Retail |
Frontline Tesco workers will be offered body cameras following an "unacceptable" spike in verbal and physical attacks.
The supermarket's chief executive Ken Murphy said the move to protect its "unsung heroes" was prompted by a rise in physical assaults by a third compared with this time last year.
Writing in the Mail on Sunday, Mr Murphy said those responsible are "small in number, but have a disproportionate impact" on staff.
Tesco has invested £44m in four years on security measures including door access systems, protection screens and digital radios, as well as the cameras, Mr Murphy said.
"Money spent on making sure people are safe at work is always well spent," he said.
"But it should not have to be like this. Crime is a scourge on society and an insult to shoppers and retail workers."
Saying it is "time we put an end to it", the retail boss labelled the rise in incidents as "unacceptable" and condemned the impact on workers.
He called for a change in the law to make abuse or violence towards retail workers an offence across the UK, saying "we cannot go on like this".
"I want those who break the law in our stores brought to book," he said.
"After a long campaign by retailers and the union Usdaw, last year the government made attacking shop workers an aggravating factor in convictions - meaning offenders should get longer sentences.
"Judges should make use of this power. But we need to go further, as in Scotland, and make abuse or violence towards retail workers an offence in itself."
Mr Murphy also called for better links with police forces and for businesses to be given a right to know how a case is proceeding when someone commits a crime in one of their stores.
"This would help us to spot patterns and provide reassurance that justice is being done," he said.
Tesco joins Sainsbury's, Waitrose and Co-op, which two years ago all began offering body cameras to staff over fears for their safety.
The figures reflect findings by trade association the British Retail Consortium published in March. It found attacks on staff, including racial and sexual abuse, physical assault, and threats with weapons, increased to over 850 incidents a day - almost double the pre-COVID levels of 450 a day.
Last summer, 100 retail chiefs wrote to 41 Police and Crime Commissioners in England and Wales, urging them to make crime in retail a priority in local policing strategies. | Consumer & Retail |
What Is Leading The Growth In Currency Demand?
The transactional use of cash is showing signs of decline, the paper shows.
While the simultaneous increase in digital payments and currency in circulation might appear paradoxical, the sustained growth in currency demand is likely influenced by the precautionary and store-of-value motives, according to a research paper by the Reserve Bank of India.
Using descriptive analysis and empirical insights, the central bank's research paper suggests that the transactional use of cash is showing signs of decline, while the ‘precautionary’ and ‘store-of-value’ motives significantly influence the demand for currency in circulation.
This is evident from the growing share of large denomination banknotes contrasted with muted growth in small-value notes and coins, subdued cash withdrawal, diminishing cash velocity and a shift towards digital modes for effecting small-value retail transactions, it said.
Despite the surge in digital payments, the growth in currency in circulation continues with the CiC-to-GDP ratio peaking at 14.4% in FY21. Owing to the perceived substitutability between digital payments and cash, the simultaneous growth in both seems counterintuitive, giving rise to a ‘currency demand’ paradox that necessitates a detailed analysis of the underlying drivers of different payment modes, the research paper said.
According to the paper, the currency in circulation-to-GDP ratio in the recent past may not be an appropriate indicator to gauge efficacy of ongoing digital initiatives due to possible overestimation, driven by a sharp fall in GDP, combined with uncertainty-fuelled uptick in currency in circulation during the pandemic.
Factors like falling interest rates on deposits (or the opportunity cost of holding currency), growing informalisation of workforce, and the larger-than-normal direct benefit transfer-based cash transfers during the pandemic may have contributed to increased preference for cash, it said.
The surplus precautionary financial savings in cash reflected partly the lack of opportunities to spend during the pandemic and partly the need to deal with the uncertain outlook for income and employment, as the economy was normalising from the pandemic shock, according to it.
Although income remains the dominant driver of currency demand in India, the rapid growth momentum in digital payments combined with its inverse association with cash has the potential to moderate the positive income effect, the research paper said.
India’s payments ecosystem has undergone a transformative revolution in the last two decades, it said. The pandemic-induced conditions further bolstered the adoption of digital payments.
Reflecting the success of the policy thrust of the Reserve Bank of India and the government, digital retail payments led by the Unified Payments Interface have grown rapidly between FY17 and FY23, with a compounded annual growth rate of 51% and 27% in volume and value terms, respectively. | Inflation |
Interest is one of the most popular forms of investment return. Although it tends to generate lower returns than capital gains, interest payments are both income-generating and tend to be a safe asset class. This appeals to investors no matter what their investment strategy. Let’s break down how much interest you can earn per year on $750,000.
A financial advisor could help you figure out if income investing is a good fit for your financial needs and goals.
What Is Interest?
As a threshold matter, it’s important to understand what interest is. Many websites, even financial sites, confuse the subject of “interest” and “returns.” They are related, but different, concepts.
Interest is money paid based on a debt. If you lend someone money, they pay you back the amount of the loan known as the “principal” and an additional amount as payment for using your money. This is the interest on your loan.
Returns are the money that you make back on an investment. For example, if you buy a stock for $10 and sell it for $11, you have $1 worth of returns. This is as opposed to losses, which is the amount of money that you lose on an investment.
Interest payments are a form of returns. If you buy a bond, for example, you receive interest payments over time. These are your returns on the investment. Specifically, interest generates what are known as “yields.” This is income that an investment generates over time. This makes interest-bearing assets particularly popular because you get income over the lifetime of your investment as opposed to having to wait until you sell the asset.
Not all returns are interest payments though. For example, there is no debt involved with buying a stock or investing in an options contract. Those products generate returns through capital gains, meaning that you make money when you sell the asset for more than you paid for it. Interest can lead to returns, but not all returns are based on interest payments.
How Much Interest Can $750,000 Generate Per Year?
Interest tends to be a narrower field than most forms of investment, meaning that there are fewer mainstream assets that generate interest payments. For the purposes of this article we will avoid discussing private investment options such as extending a personal loan or lending money to a small business. Those can be fine and viable investment opportunities, but they are not market-based. When it comes to interpersonal finance or small business lending you have relatively few legal protections and no market oversight. Exercise your best judgment on a case-by-case basis.
When it comes to mainstream assets, though, investors tend to gravitate toward a few major investments, including:
All of these asset classes generate interest payments, meaning a third party will pay you for a loan. Of these, we will not address annuities in this piece specifically because they are not one-year instruments. Annuities are products designed for long-term investing. You buy them years, if not decades, in advance of repayment and collect your returns over a similar time frame. There is no meaningful answer to how much you can make in one year off of an annuity, in part because within a year of your initial investment the answer is “nothing.”
However, if you were to invest $750,000 in another major interest-bearing asset, on average here is what you could expect to earn.
Bonds
Average Annual Return: Between 5% and 6%
Final Value After One Year: $795,000
Nailing down the average performance of the bond market is difficult.
On average, the annual return for bond investors falls somewhere between 5% and 6%. For example, a Vanguard analysis of their own portfolios found that funds built out of corporate and government bonds generated a 5.33% return.
This figure masks the staggering potential for year-over-year volatility of the bond market though. On an individual basis, any given bond is one of the safest financial assets you can buy. A government bond is backed by the full faith and credit of the U.S. government, while corporate bonds are backed by the assets of the entire corporation. It is rare for a well-rated bond to default.
However average returns across this market are a different story altogether. Each year, new bonds are issued based on current market conditions. This leads to average annual returns that range from 0.93% in 2021 to 23.33% in 2009, but also includes years like 2018 where the market generated an average return of -2.76%.
Predicting the bond market overall can be difficult. That said, for an interest/income investor this is still one of the strongest assets you can pick.
Certificates of Deposit
Average Annual Return: Between 0.60% and 3.5%
Final Value After One Year: $776,250
Certificates of deposit are a specialized form of bank account. With this product you place a given amount of money on deposit with the bank for a specific time. For example, if you buy a 12 month certificate of deposit it means you have placed your money on deposit for 12 months. You cannot withdraw or access it during this time.
When the certificate expires, you receive back your entire initial investment plus a given amount of interest. This is your payment for letting the bank lock up your money.
Certificates of deposit pay variable interest rates based on how much you invest and the maturity of the certificate. The more money you put in and the longer your certificate’s maturity, the higher the interest rate you will receive. At time of writing the FDIC reported a national average of 0.60% for 12 month certificates of deposit. But it’s important to note that this is just the national average. Many individual banks offer higher rates than this, and investors with more money can generally access better offers.
With $750,000 to invest, you should be able to find interest rates somewhere between 3% and 3.5%, leaving you with $776,250 at the end of the year.
Money Market Funds
Average Annual Return: Between 2% and 3%
Final Value After One Year: $772,500
Money market funds are income-generating mutual funds or exchange-traded funds (ETFs). These funds invest exclusively in short-term, high-liquidity debt assets. For example, they may buy short term Treasury bonds, certificates of deposit or corporate bonds with very short maturity dates.
The goal of a money market fund is twofold: First, they aim to generate interest-based income based on their basket of investments. Second, they aim to create an extremely low-volatility portfolio. Investing in short-term assets helps money market funds reduce volatility because it means they can almost always predict their cash flow in the immediate future. In other words, with shorter-term assets there’s less risk of something unpredictable happening over time.
The tradeoff to this kind of stability tends to be low returns. Money market funds tend to make less money than other forms of mutual funds or ETFs. This can be a particular risk for investors in high-inflation environments, as your portfolio may end up losing ground relative to the value of money.
High-Yield Savings
Average Annual Return: 2.5%
Final Value After One Year: $768,966
A high-yield savings account is a specific form of depository bank account. In most respects it works like an ordinary savings account. You hold your money with the bank and in exchange they pay you an interest rate based on your funds on deposit. Most institutions pay you monthly, allowing your interest to compound over time.
Like an ordinary savings account, a high-yield savings account will have some rules around withdrawals. You generally can only move money out of this account a limited number of times per month. In addition, with a high-yield product, your bank will often require you to maintain a minimum balance in the account.
Most people don’t consider high-yield accounts an investment product so much as a nice addition to their financial planning. If you are going to hold a large amount of money on deposit anyway, you might as well generate some additional interest off of it. However it’s worth considering that a good high-yield savings account can often generate better returns than many certificates of deposit or money market funds, while also leaving you with more flexibility than either of those products.
Bottom Line
If you have $750,000 to invest, interest-bearing products can often give you a strong balance of income and security. Whether you choose bonds, annuities or bank accounts, it’s worth considering the range of options.
Tips for Investing
A financial advisor help you create a financial plan for your investment goals. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
For many consumers, the main way they generate interest is through their bank account. While this is often a negligible amount of money, if you pick the right bank those payments can add up.
Photo credit: ©iStock.com/Worawee Meepian, ©iStock.com/songsak chalardpongpun, ©iStock.com/bojanstory | Interest Rates |
The boss of Pret A Manger says further pay increases for workers could be on the cards, but he also warned price may go up due to soaring food inflation.
Pano Christou said he knows what life is like for staff struggling by on low wages as he grew up in a family where money was tight.
The group CEO spoke after the business last week confirmed its third wage rise in the space of a year.
Mr Christou said: “If you pay people what they should be paid, you shouldn’t have a staff problem. I want us to pay more than the competition.”
He added that he “wouldn’t be surprised” if it looked at another increase “at some point this year.
The 45-year-old said: “It depends on inflation, whether it continues to push up.”
Pret’s extra 3% from April 1 for more than 7,800 UK shop staff means its average base pay will have increased by 19% in 12 months.
At £10.60 an hour, its lowest paid staff will still get just 18p an hour above the national living wage for 23-year-olds and above.
Pret insists a very small number are on this rate, that its base pay applies to those aged under 23 too, and that “team members” will get between £11.85 and £13.15 an hour.
Baristas will get up to £14.10 an hour. Staff already get free food and drink while on shift, and a 50% discount at other times.
Mr Christou, who took over in 2019 after joining the business aged 22, started work at McDonald’s when he was 16, on £2.75 an hour.
The married father-of-two grew up in Tooting, South London. His dad, half Greek, half Italian, was a mini-cab driver and his mum, from Cyprus, a nurse who, at one stage, also worked as a cleaner for extra cash.
Mr Christou said: “My first job, at 14/15, was delivering mini-cabs cards through doors. I washed my father’s car every Sunday.
"He would pay me a pound or two, but I would probably find more change under the seats then he paid me.”
Clothes often came from jumble sales. School was tough.
He added: “There were gangs, though I wasn’t part of that. There were knives."
Mr Christou said his parents were disappointed when he chose McDonald’s over university but they are now “proud” of his success.
And he told of his own pride in the sandwich chain’s community work.
The Pret Foundation has been donating unsold food to homeless shelters and charities since the business was started in London in 1986.
Some store managers either were homeless or ex-offenders and came through its Rising Stars programme.
Mr Christou has noticed the rise in demand through the charities it works with.
He said: “Rental prices are going up so significantly, so people are spending more time in the shelters as they can’t afford the cost of living.”
Mr Christou agreed inequality was getting worse.
With an annual salary of £400,000 plus share options worth £3.8million he is part of that divide. But he said: “I try to stay humble.”
Pret, like many other businesses, is facing soaring energy and food costs.
Asked if more price rises are on the way, Mr Christou replied: “If we continue to see food inflation as it is, it becomes very hard for us to hold everything down.”
Pret had to axe 3,000 jobs in the pandemic to save the business.
But it is growing again, with plans to open 50 stores this year, taking the total to 500. The firm has 18 shops abroad and hopes to open one in India next month. | Inflation |
India Derivatives Boom Helps Bourse’s Stock Trounce Global Peers
BSE Ltd. has emerged as the world’s best-performing exchange operator this year, and analysts are predicting more gains on expectations of its expanding derivatives business.
(Bloomberg) -- BSE Ltd. has emerged as the world’s best-performing exchange operator this year, and analysts are predicting more gains on expectations of its expanding derivatives business.
Shares of the Indian bourse have rallied 270% this year, trouncing global platforms such as cryptocurrency major Coinbase Global Inc. and Cboe Global Markets Inc., as well as the country’s Multi Commodity Exchange of India Ltd. The rally was partly driven by BSE relaunching derivative contracts on the benchmark Sensex and the banking sector gauge in May this year, attracting investors with reduced lot sizes and a new expiry cycle.
Rising derivatives business may help Asia’s oldest exchange to increase its profit by 40% annually for the next three years, delivering more stock gains, according to Mumbai-based brokerage Sharekhan Ltd.
The company, which is set to report its quarterly earnings later on Friday, has seen its revenue more than double since the pandemic as India continues to witness massive growth in new trading accounts.
Lured by products offering shorter-duration expiries and lower premiums, retail investors now make up a third of derivative option contracts. BSE trails its unlisted rival National Stock Exchange of India Ltd., which is the world’s biggest derivatives exchange with average daily volume at a little below $4 trillion.
“NSE’s derivatives volume is 28 times that of BSE on a monthly basis, and this gives us the sense of how big is the opportunity,” analysts at Sharekhan wrote in a note this week.
--With assistance from Chiranjivi Chakraborty.
©2023 Bloomberg L.P. | Stocks Trading & Speculation |
One in 20 adults reported running out of food and being unable to afford more as prices soared, according to an official survey.
Single parents were particularly vulnerable, the Office for National Statistics (ONS) survey suggested, as more than a quarter found themselves in such a scenario.
Certain groups of people are hit harder by the rising cost of living.
The ONS said renters were most likely to be stretched by housing costs.
Some 43% of tenants said they were finding it difficult to afford the rent between February and May, the ONS said. That compares with 28% of mortgage holders struggling with repayments.
"We can see that renters were among those currently more likely to be experiencing financial vulnerability," said David Ainslie, from the ONS.
"Our findings also show that lone parents, disabled adults and black, African, Caribbean or black British adults are among groups more likely to be finding their rent, mortgage and food costs difficult."
Savings struggle
Younger people - who are more likely to rent - were also shown to have felt a tighter financial squeeze than older people. The survey was conducted before the latest increases in mortgage rates, now at a 15-year high, which is likely to affect both homeowners and landlords.
The ONS survey suggested that nearly six in 10 renters (58%) said they were spending less on food shopping and essentials, compared with 48% of mortgage holders. They were also more likely to have run out of food in the previous two weeks - with 14% of renters compared with 3% of mortgage holders in that situation.
Renters, some of whom will want to buy a home, were less likely to say they could save money in the current climate.
Helen Morrissey, from investment platform Hargreaves Lansdown, said: "The cost of living crisis continues to squeeze the life out of our finances with renters particularly vulnerable to rising costs."
How can I save money on my food shop?
- Look at your cupboards so you know what you have already
- Head to the reduced section first to see if it has anything you need
- Buy things close to their sell-by-date which will be cheaper and use your freezer
The ONS said that renters were more likely to face financial vulnerability, compared with those who owned their home. That means they would be unable to cover an unexpected £850 bill, do not save, and are borrowing more than usual.
Overall, around a third (35%) of adults reported it was difficult to afford their rent or mortgage payments.
One in 20 said they had run out of food and had been unable to afford to buy more in the previous two weeks, the ONS survey suggested. That proportion increases to 28% of single parents.
This survey reflects people's attitudes to their finances, which may then have an impact on their financial decisions and the UK economy as a whole.
Andy Russell, from investment firm Wealthify, said: "When mortgage, food and energy prices absorb a huge amount of your income on a day-to-day basis, it's almost impossible to focus on your financial future, given how difficult the present is." | Inflation |
Selan Exploration Shares Hit Record After Board Nod To Antelopus Amalgamation
After the amalgamation, promoters' shareholding in the company would rise to 69.93% from 30.46% in the company.
Shares of the Selan Exploration Technology Ltd. surged over 16% to a record high on Thursday after its board approved its amalgamation with Antelopus Energy Pvt.
After the amalgamation, promoters' shareholding in the company would rise to 69.93% from 30.46%, according to an exchange filing. The amalgamation is subjected to the approval of BSE and NSE.
The company's board of directors also approved raising Rs 250 crore through issue of equity shares, fully or partially convertible debentures, non-convertible debentures.
Shares of the Selan Exploration rose as much as 16.05%, the highest since its listing on Sept. 27, 2006, before paring gains to trade 12.56% higher at 09:05 a.m. This compares to a 0.14% advance in the NSE Nifty 50.
The stock has risen 115.0% on a year-to-date basis. Total traded volume so far in the day stood at 12.0 times its 30-day average. The relative strength index was at 74.27. | Stocks Trading & Speculation |
Trezor, a hardware crypto wallet company, debuted two new products this week at the Bitcoin Amsterdam conference — and we got to take a first look at them.
Trezor Safe 3, a hardware crypto wallet, and Trezor Keep Metal, a “mistake-proof” backup solution for wallet passwords, launched in celebration of the company’s 10-year anniversary.
The new crypto wallet is designed specifically for new digital asset entrants with a focus on “maximum safety and ease of use,” Matěj Žák, CEO of Trezor, said to TechCrunch.
Hardware crypto wallets are one of — if not the — safest ways to store your digital assets, because they’re typically not connected to the internet, inhibiting the risk of an online attack. Also it’s arguably better sometimes to keep cryptocurrencies on a wallet instead of a centralized exchange, where they can be frozen and withheld like Celsius did in June 2022, because it gives you total control over the tokens.
But that control also comes with a lot of responsibility. While the device holds your coins securely, you only get told the passcode (seed phrase) once upon setting up a wallet. If you forget it, you might lose access forever.
In the past year to 18 months, a lot of crypto wallet providers have improved their user interfaces and products to create a user-friendly experience, given how difficult the onboarding process into the space has historically been.
In December 2022, Ledger, a security-focused firm that sells crypto hardware wallets, partnered with the designer behind the iPod, Tony Fadell, in hopes of creating an easier, more accessible way for users to secure their crypto assets.
“Our team has spent literally thousands of hours developing our user experience,” Žák said. “We have carried out extensive research and focus groups with crypto novice audiences to underpin development of our new products.”
Trezor Safe 3 aims to make crypto wallets easier to use
Trezor Safe 3 retails for $79 and is available in four colors — gold, rose gold, silver and black — with a 0.96” monochromatic OLED screen and two-button pad.
The wallet supports major cryptocurrencies like bitcoin and Ethereum, as well as over 7,000 other tokens. It can be integrated with Trezor’s desktop application, which helps users manage their cryptocurrencies on its platform. The product also has a tamper-resistant hardware component to provide additional protection in real life and can operate in conditions ranging from negative 4°F to 140°F, according to Trezor’s website.
The Trezor Safe 3 weighs only half an ounce and comes in a box about the size of an iPhone, which includes the wallet itself, a USB-C charging cable, some branded stickers and a pamphlet describing how to set it up, alongside two paper cards so you can write down your 12-word recovery phrase, also known as a seed phrase, that gives you access to your device’s assets.
It’s important to remember that for any crypto wallet you have you write down your recovery phrase on a piece of paper — not online — and store it in a safe place so no one else has access to it. Recovery seeds are randomly generated words created by the wallet that allows you to recover and access your funds; think of it like a password that you can’t forget because you can’t reset it.
In addition to commemorating its 10-year anniversary, the Trezor Safe 3 also launched to celebrate that it released a limited edition bitcoin-focused hardware wallet that solely runs on Bitcoin firmware and is only available in “Bitcoin orange” color. There were only 2,013 devices being sold at the same price, and according to the company’s X account, it sold out within a day.
Inside the orange-themed packaging there’s a quote from Satoshi Nakamoto, the pseudonymous creator of Bitcoin, that said, “If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.”
The setup process is pretty straightforward. First, users have to download and install Trezor Suite, which gives you access to your device’s contents from a better interface than the tiny little screen the product has. From there they connect their Trezor with the USB cable and set it up online. It’ll give you the option to create a new wallet or recover one from a backup recovery seed. I went the create a new wallet route.
Trezor gives you the option to do a standard seed backup or an ”Advanced Shamir Backup,” which allows users to recover the wallet by combining a list of words and can be secured in different places for additional security.
After writing down the seed phrase, creating an (optional) pin, the Suite allows you to select a handful of coins to show on its platform, I picked Bitcoin and Ethereum.
From start to finish, the setup process took less than 10 minutes. The company calls itself easy to use and I’d agree with that sentiment. The ultimate test, though, would be having someone who’s unfamiliar with testing it out (time for me to take a trip home to see if my non-crypto-native mom could set one up.)
The Trezor Keep Metal keeps your seed phrases safe from fire, acid and more
The Shamir product’s package is 67 ounces, or roughly four pounds, which is heavy, but the small flashlight-shaped product is 3.9 inches x 1.4 inches and weighs less than a pound. The standard product’s package is about 1.3 pounds and the actual product is 4.3 inches x 1.2 inches and also weighs less than a pound. The weight makes sense — it’s made to be damage resistant with “aerospace grade” stainless steel and a black surface treatment.
The Shamir version comes with three, 20-word backup devices, and the standard version comes with one device to secure a 12-word backup phrase. Both products come with a pre-marking pen to mark letters before using the punching tool to make the recovery seed phrase permanently ingrained into the product. There’s also tamper-evident stickers you can close the product with and step-by-step instructions.
The Keep Metal aims to ensure one’s recovery seed papers are safe under any conditions with its corrosion resistant exterior and watertight seal. (I put mine underneath water and the inside did stay dry.) It also claims to protect against fire, acid, chemical corrosion, extreme temperatures and other heavy impacts — but I’m not going to be testing it against those elements, for obvious reasons.
But for roughly $99 or $250, respectively, I’m not sure it’s worth the price for the average person. If you’re someone who loses a piece of paper the second you put it down or are likely to damage it, this might be good for you. With that said, the price point is steep for what it does, but I guess if your crypto wallets are holding astronomically higher digital asset value, the product’s price could seem like a bargain in the bigger picture.
The products are available for preorder and will be shipped to the public in mid-November, the company shared in a statement.
The well-known crypto wallet saying, “Not your keys, not your coins,” has also been a prominent theme over the last year after the high-profile implosion of such centralized exchanges as FTX transpired, Žák said.
In early December, Ledger’s chief experience officer, Ian Rogers, said the company had its biggest sales day ever, which ended its biggest sales week ever, in mid-November 2022 after FTX collapsed, which signals the demand for hardware crypto wallets is rising.
And as the trial for FTX’s co-founder and former CEO Sam Bankman-Fried continues, more people might be reminded of what happened 11 months ago and consider securing their digital assets — if they haven’t already.
There has been a significant uptick in interest in self-custody of crypto assets with hardware wallets, Žák added. “The reality is that too few people are using hardware wallets today, so we see huge potential for growth from both existing crypto users and new entrants to crypto.” | Crypto Trading & Speculation |
TAMPA, Fla. (WFLA) — Florida Chief Financial Officer Jimmy Patronis claims the IRS has “bad blood” with Taylor Swift fans.
In a news release Wednesday, titled “The IRS Is Targeting Taylor Swift Fans,” Patronis decried a recent tax law change affecting those who resell concert tickets at well over face value.
The new regulation, enacted under the American Rescue Plan Act, requires anyone who makes over $600 from sites like Venmo, CashApp, Ticketmaster or StubHub to disclose those earnings to the IRS. Anyone who exceeds the $600 threshold will receive a 1099-K tax form, which is used to report income from freelance ventures and side hustles, from running Etsy shop to reselling concert tickets.
According to a NewsNation report, the average resale price for tickets to Swift’s Eras Tour was around $1,100 on Stubhub and $1,600 on SeatGeek. In previous years, ticket sellers only had to report their earnings if they made more than $20,000 and at completed least 200 transactions per year.
Treasury Secretary Janet Yellen said the change intends to crack down on the wealthy and those who intend to cheat on their taxes. However, Patronis and other Republicans have slammed the new rule as government overreach.
“Just when you thought Washington couldn’t further intrude into the lives of Americans more, the deep state has found yet another way to screw over honest, hard-working taxpayers by digging deeper into your wallets,” Patronis said in a statement. “While Biden said he wants to go after millionaires and billionaires, turns out he wants to go after moms and dads who can’t attend Taylor Swift concerts.”
Patronis used the buzz around Swift to tout the Florida IRS Transparency Portal, which was created in 2013 to “report evidence of discrimination by IRS operatives and will help Florida identify patterns of discrimination where specific IRS agents are targeting certain political causes, practices, or beliefs,” according to the website.
In a statement, Patronis said Swift “has done more good for the economy than Biden ever will” and stoked fears the IRS is unjustly targeting individuals and small businesses. | Banking & Finance |
China GDP: economic growth expected to slip from 2025 after 1 trillion yuan bond bonanza wears off
- Budget deficit ratio will be raised to about 3.8 per cent of gross domestic product after a 1 trillion yuan (US$137 billion) issuance of sovereign bonds was approved
- But the impact of the ‘one-off’ move is set to to wear off, with tapering expected as the property market, youth unemployment and local government debts slow growth
China will face a wave of pressure late next year to implement tough economic reforms, as the effects of 1 trillion yuan (US$137 billion) of sovereign bonds starts to wear off, offshore financial institutions said.
It will be aimed at supporting reconstruction and improving disaster prevention and relief capabilities, with the first half set to be dispersed this year.
“I think it’s a clear signal of a shift towards more fiscal support for the economy going into next year, probably the clearest signal we’ve received all cycle,” said Chris Beddor, deputy director for China research at macroeconomic research firm Gavekal Dragonomics.
China’s nominal gross domestic product (GDP) could grow by about 1 percentage point as a result of the bond issuance, he added.
“Local officials probably won’t face quite the same pressure to deliver now, as the central government is taking on a greater role, but it doesn’t exactly augur well for potential growth in the medium and long term,” Beddor said.
Investment banks and other institutions have forecast lower Chinese economic growth after 2024 as the bond issue would not solve underlying problems, analysts said.
“One trillion yuan, while no drop in the ocean, is just a one-off for now,” said Heron Lim, an assistant director and economist at Moody’s Analytics.
“It is a rare occurrence for China to adjust its budget midterm, so it is more of a fiscal stimulus. Tapering is to be expected.”
China’s economy would grow by 4.9 per cent in 2024 and 2025, according to Moody’s Analytics, but will then fall to just 4.3 per cent expansion in 2026.
Fitch Ratings, meanwhile, forecasts growth of 4.8 per cent next year and 4.7 per cent in 2025.
DBS Bank predicts 4.5 per cent growth in both 2024 and 2025, while HSBC’s outlook puts growth at 4.6 per cent next year followed by 4.4 per cent in 2025.
Average annual growth should reach 4.9 per cent from 2021 to 2025 and 3.6 per cent from 2026 to 2030, said Alicia Garcia-Herrero, chief Asia-Pacific economist with French investment bank Natixis, in a report in June.
Among the lingering issues, China’s property sector is “projected to remain subdued”, DBS senior economist Nathan Chow said.
The government has tried since 2020 to reduce systemic risks from overleveraged developers by removing weaker ones from the loan and bond markets.
But some of China’s largest developers, including Country Garden and Evergrande, have gone into default.
Goldman Sachs anticipates that the property sector would make a net negative GDP contribution until the end of 2030.
Government debt is also likely to “rise further” even though local finances are under pressure amid “weak” land sale proceeds and a push for more spending, Fitch Ratings said in July.
Shaky financial health has challenged local governments to pay back their debts without wider economic growth, creating a worry for policymakers and investors.
The coronavirus pandemic “may have left significant scarring effects, such as structurally high youth unemployment”, Garcia-Herrero added.
China’s export-led, investment-fed economy grew by close to 10 per cent, often higher, every year from 2002 to 2011, but the impacts of coronavirus containment measures hurt the growth rate from 2020 until last year.
Officials in Beijing cite weak economies in other countries – the buyers of Chinese exports – and other external problems as barriers to GDP growth.
The central government would approve new policies and funding to resolve its economic issues, analysts said.
Government-led investment in public housing and “urban village” renewals should “buffer the decline in property investment,” Goldman Sachs said on Sunday.
Officials may increase spending to support the economy and raise youth employment, despite the risk of generating debt, said Chong Ja Ian, an associate professor of political science at the National University of Singapore.
Hidden debt refers to informal financing by local government vehicles for projects such as roads and housing.
Planners would also try to raise employment among college graduates, Zheng added. | Inflation |
NFTs aren’t gone yet — Disney will launch an “all-new socially driven collectible experience” called Disney Pinnacle later this year, turning characters from Pixar, Star Wars, and its classic animated films into tradable digital pins. The Disney Pinnacle website has a waitlist for interested traders and collectors; however, it doesn’t explain what the “digital pins” are actually like or why the company would bother to create a verifiable digital hoard.
While announcing Pinnacle, Disney and its partner Dapper Labs won’t even say the word “NFT.” Dapper Labs still calls itself “the NFT company,” but between a variety of scams, an eye-blistering episode at a recent Bored Ape event, and a market that has plunged since peaking in early 2021, that’s a term they apparently will steer clear of. The only thing available on the site right now is a privacy policy that makes clear this is a Dapper Labs effort that’s licensing content from Disney — not an in-house effort on the level of Disney Plus.
The NFT collection is being launched through an iOS app, and a spokesperson tells CoinDesk that web and Android applications will come later. Even without any appreciable details beyond a simple animation of the pins spinning around, there are reasons to believe Dapper Labs can get things off to a good start — it did that with NBA Top Shot in 2020 as well as with earlier projects like CryptoKitties.
However, anyone thinking about buying in should remember the history of Dapper’s previous projects. In 2017, flipping CryptoKitties was hot, with millions of dollars in sales. Now, CryptoKitties is remembered for its “spectacular fall,” while a channel for interested buyers in its official Discord has had messages from three people since September.
Dapper Labs followed that up with NBA Top Shot in 2020, replacing the cat artwork with “moments” collectibles commemorating players and highlights that appeal to basketball fans. Data from CryptoSlam shows the market peaked in February 2021 with over $220 million in sales, just before it broke 165,000 unique sellers. Top Shot hasn’t broken $2 million in monthly sales since the start of the current NBA season, there are fewer than 10,000 active sellers, and many people who bought into the hype aren’t happy with how things turned out.
Dapper Labs and its CEO, Roham Gharegozlou, are also facing a lawsuit accusing Top Shot of selling unregistered securities.
A similar effort with the NFL never reached those lofty heights, as NFL All Day NFT activity peaked with around 54,000 owners in the fall of 2022. The most recent data shows fewer than 1,000 owners are currently active.
A press release announcing Disney Pinnacle didn’t mention financial terms, but Disney’s IP can’t be cheap. This news was also revealed on the same day the ESPN Bet gambling operation is launching, with Penn Entertainment scheduled to pay Disney $1.5 billion over 10 years for a partnership that includes licensing the name of its sports channel. | Crypto Trading & Speculation |
Although the inflation rate has come down significantly in the past year to just 3% in June, prices are still substantially higher than they were just a few years ago. In an era where a dollar doesn't go as far as it used to, a rising dividend can be a coveted source of cash for investors. Yet not every company is able to raise its payout at the moment, and many that have done so recently have only boosted them by small, token amounts.
With that in mind, three top Motley Fool contributors went searching for companies that have recently boosted their payouts by at least 5%. At that level, investors have a shot at not just keeping up with inflation, but staying ahead of it. They singled out PepsiCo (PEP 1.24%), Starbucks (SBUX 1.05%), and Kroger (KR 0.42%) for your consideration. Read on to see how these everyday titans have been able to increase their payouts so much, and decide for yourself whether they might fit in your portfolio.
The king of snacks and drinks
Eric Volkman (PepsiCo): Here's one indication of the ubiquity of PepsiCo's products. Have you ever visited a convenience store, grocery, or supermarket in this country and not seen some of its brands?
The answer's surely "no." Although the company takes its name from the famous beverage that anchors its portfolio, it's a massive and unavoidable presence in the snack market, too. Ruffles potato chips, Doritos, and Cheetos are all owned by the company; heck, even that old ballpark standby Cracker Jack belongs to PepsiCo.
As for drinks, in addition to Pepsi, the company also sells the old favorite of thirsty athletes, Gatorade. Ditto for Mountain Dew and, in partnership with other drink industry titans, bottled Starbucks beverages and Tazo teas.
With that kind of lineup and ubiquity, you can be sure that PepsiCo moves a great deal of product. This means a vast amount of revenue and well-in-the-black cash flow. The company's latest annual sales figure was more than $86 billion (up 9% from the previous year), while its net profit zoomed 17% higher to $8.9 billion.
PepsiCo is a consistently profitable company that throws off lots of cash. That cash fountain has supported a dividend that's been raised at least once annually for an astonishing 51 years in a row. This year's plump 10% increase brought the annual payout to $5.06 per share. At the current share price, that yields 2.6%, well above the 1.5% average of dividend-paying stocks in the S&P 500 index.
A decade and counting
Jason Hall (Starbucks): The past couple of years have been rough going for global coffee giant Starbucks. Like many retail companies, it took a severe blow from the pandemic, and even the recovery has been challenging. Tens of millions of people now work more from home, meaning fewer stops at Starbucks on the way to the office, and fewer afternoon pick-me-ups on the way home. Meanwhile, the impact of China's extended zero-COVID policy was brutal on its international results. And to top off that bitter brew, sprinkle on a dash of labor strife.
But based on its just-reported quarterly results, Starbucks has turned the corner in a big way. Business in China is surging, it's making use of its strong pricing power in its more mature markets, and customers are even starting to buy more food with their caffeine fixes. Put it all together, and you get record revenue, a higher operating margin, and a 25% increase in earnings per share. We also learned that the situation on the labor front seems to be improving, at least based on employee churn, which has declined. Lastly, its growth story remains super-impressive, with nearly 600 net new locations opened last quarter.
All that growth is paying off for investors. Starbucks raised its dividend by 8% late last year. That marked a dozen straight years of payout hikes, and set investors up for another dividend increase later this year. Based on its usual rate of growth, a 5% increase is probably the low end of what investors should expect.
People still have to eat
Chuck Saletta (Kroger): On Aug. 14, grocery titan Kroger will trade ex-dividend on a quarterly payment of $0.29 per share. That dividend represents a nearly 12% increase over the $0.26 per share the company paid last quarter. Kroger's ability to hand out a dividend that much larger than its previous offering at a time when other businesses are slashing their payouts is a sign that it must be doing something right.
And certainly, it helps that Kroger is the largest supermarket chain in the nation. With food inflation still trending ahead of overall inflation, a greater fraction of consumers' dollars are being spent on that necessity of life. Kroger is clearly benefiting from that trend -- and sharing its profits with its shareholders.
Of course, Kroger can't rely on price inflation alone to support its dividend. After all, it doesn't get the food it sells for free, and its expenses to acquire that food are rising alongside the prices it charges consumers. Instead, it has to leverage its scale as such a large buyer to help control costs, and also keep innovating to stay in tune with the way people shop.
Groceries have been slower to move online than many other types of purchases. The difficulty in cost-effectively transporting perishable foods that "last mile" to consumers' homes has long been a barrier. In addition, often people want to pick specific foods based on perceived freshness, time to expiration, and specific sizes among foods that vary significantly from item to item. That combination has led to in-person grocery stores continuing to survive -- and even thrive -- in an area where much of retail has moved more rapidly online.
Still, Kroger is leading innovation on that front to help ensure its customers can shop where and how they want to. It's using a combination of pickup and delivery services that leverages both its large, local store presence and significant technological investments to stay on top of the trend.
By both investing in its future and leveraging its scale and physical footprint to keep costs under control, Kroger is doing what it needs to do to support its higher payout.
Get started now
Whether your dividend income comes from these companies or others, a key thing to remember about those payments is that to receive them, you must buy the stock before its ex-dividend date and hold onto it until at least that date. As a result, it's a good idea to start looking now for the next great dividend payers to add to your portfolio. Once an ex-dividend day arrives, if you haven't yet pulled the trigger on the stock, you'll have to wait until its next dividend comes to receive your share of the cash. So get started now, and give yourself the most time possible before those deadlines pass you by. | Inflation |
Thomas Cook Shares Locked In Lower Circuit On Promoter Plans To Sell Stake At Discount
The promoter will sell up to 3.2 crore shares, representing 6.8% stake.
Shares of Thomas Cook India were locked in the lower circuit on Thursday as promoter Fairbridge Capital (Mauritius) Ltd. plans to sell part of its stake in the company.
The promoter will sell up to 3.2 crore shares, representing 6.8% stake, as per an exchange filing on Wednesday. It will sell an additional 1.7% stake, comprising 80 lakh shares, if the offer for sale is oversubscribed.
Fairbridge Capital has set the floor price for the offer at Rs 125 per share at a 21.08% discount to the stock's previous close of Rs 158.40 per share on the NSE. The OFS will close on Dec. 1.
The promoter held 72.34% stake in the Mumbai-based omnichannel travel company, as of September. Post the stake sale, its share will fall to 65.54%.
Shares of Thomas Cook were locked in the lower circuit of 4.99% at Rs 150.50 apiece, after it hit the high of Rs 167.90 apiece on Wednesday. This compares to a 0.15% decline in the NSE Nifty 50 at 11:31 a.m.
The stock has risen 111% on year. Total traded volume so far in the day stood at 0.4 times its 30-day average. The relative strength index was at 52.93.
The one analyst tracking the company maintains a 'buy' rating, according to Bloomberg data. The average 12-month consensus price target implies an upside of 97.1%. | Stocks Trading & Speculation |
Miami “bitcoin mayor” Francis Suarez has a new pitch to potential voters and investors: Bitcoin President. The 45-year-old mayor released a brief video announcing his candidacy on Thursday and filed FEC paperwork officially entering him into an increasingly crowded 2024 Republican primary field. Suarez, who bills himself as an energetic, tech-friendly futurist was one of several prominent US mayors who emphatically boosted Bitcoin and other cryptocurrencies in the lead-up to the industry’s disastrous collapse last year.
Suarez’s announcement video shows him literally “running” for president through Miami’s lush city streets, making pit stops along the way at his parent’s home and former elementary school. “I have always been a runner,” Saurez says moments before dramatically staring into the camera.
The Miami mayor spent the remainder of the video taking a victory lap, noting an uptick in the city’s economy, a “historic” lowering of taxes, and lessening unemployment during his two terms. Suarez made a point to emphasize Miami’s recent attraction of tech companies andinvestors, some of which decamped in the city after fleeing former hubs during the pandemic.
“Today, our city is a major technology hub,” Suarez notes while weaving his way through traffic. “Because we chose to embrace innovation.” Suarez’s office did not immediately respond to Gizmodo’s request for comment.
One area notably absent from Suarez’s announcement video, however, was his embrace of cryptocurrency. Suarez was among the most vocal US politicians in 2021 singing crypto’s praises, with a stated goal of transforming Miami into the world’s first Web3 city. The mayor briefly explored paying residents dividends from a municipal “bitcoin yield.” At one point, Suarez even proposed giving municipal workers in the city the option to get paid and pay their taxes in Bitcoin. Suarez himself also revealed he would accept 100% of his own government salary in bitcoin.
“My wife asked me if that was a good idea, but certainly when governments are spending that kind of money that they are, when you have inflation at the point that it is, when you have rampant overspending in government and deficit spending, all of that pushes in favor of an increase in the price of Bitcoin,” Suarez told Fox News in a November 2021 interview.
Though it’s hard to say what effect those antics had on driving up actual cryptocurrency adoption in the city, it did lead to a hefty inflow of new campaign donations sent by wealthy tech investors. The pandering also led to an influx of boom-time crypto capital into the city. In maybe the clearest example of this, Miami-Dade officials in 2021 signed a 19-year $135 million naming rights agreement with FTX to make the now disgraced cryptocurrency exchange the face of the Miami Heat’s basketball stadium. The stadium revoked that name last year following FTX’s sudden collapse and its founder’s criminal indictment.
Saurez hasn’t disavowed cryptocurrencies, but he also isn’t mentioning it with the same level of frequent glee as he once did. The cryptocurrency industry experienced possibly the worst downturn in its brief history last year thanks to the collapse of multiple exchanges, criminal indictments, and more than a handful of lost fortunes. Suarez’s own Bitcoin salary took a plunge last year when the price of Bitcoin tanked by as much as 40% in a two-month span. The mayor still stands by the salary decision but he, like other crypto evangelists politicians, has since taken his foot off the Bitcoin hype accelerator.
“My salary is actually up,” Suarez assured CNBC in January. “It’s actually been a pretty good investment!”
Suarez enters the 2024 Republican presidential primary race less than one week after the front runner, former President Donald Trump, was indicted by a federal grand jury on criminal charges related to his improper storage of classified White House documents. So far, the list of contenders hoping to steal Trump’s chokehold on the party is already a dozen strong and includes Florida Governor Ron DeSantis, former South Carolina governor Nikki Haley, former New Jersey governor Chris Christie, former Vice President Mike Pence, and South Carolina Senator Tim Scott along with a handful of wishful longshots. | Crypto Trading & Speculation |
When a surprise medical emergency, such as a heart attack or incident that requires an airlift leads to a bill you can't afford to pay, do not fret.
There are tried and true tactics to negotiate down the bill's amount, as well as other ways to get assistance paying what you owe.
Here are rules of thumbs to follow when agives you sticker shock, according to experts.
File an appeal
If your insurer doesn't want to pay for treatment you received and has denied coverage of a procedure, find out why.
"It's important to understand the reason for denial," Braden Pan, founder and CEO of Resolve, a company that helps patients save money on medical bills, told CBS MoneyWatch. "We see claims denied all the time for stupid things, like a patient's middle initial was wrong, or their birth date was wrong so the insurance company denied coverage," he said. In cases like that, Resolve can always successfully clear up the claim, he added.
Other times, an insurance company won't cover the cost of a service that they don't deem medically necessary. All insurers have appeals processes in place. Find out what their process is and file an appeal arguing your case.
"Very often you can appeal and get things covered, but the success rate is slightly lower," Pan said. It helps to have a doctor or medical provider bolster your case by documenting why what you're being billed for was medically necessary.
"You want your doctor to weigh in on your side," he said.
Don't pay sticker price
Consider the total amount of the bill a starting point for negotiations.
"A lot of times, medical providers' prices are wacky," Howard Dvorkin, a certified public accountant and chairman of Debt.com, told CBS MoneyWatch.
Dvorkin recalls receiving a bill for a medical incident that required his daughter to be airlifted for treatment. The initial total? $18,000.
He asked the treatment provider what rate they would have billed his insurance company and said: "That's the rate I'll pay."
He ended up paying about $5,000, he recalled. "Every provider has the flexibility to reduce rates," he said.
Ask for an itemized bill to see exactly what you are being charged for. Go through it line by line to identify any errors, such as charges for services you never received.
"Make sure there's not a mistake there. Mistakes are made, people bill for the wrong thing and send bills to the wrong patients sometimes. Don't assume the bill is accurate," Patricia Kelmar, senior director of Health Care Campaigns for U.S. PIRG EducationFund told CBS MoneyWatch.
You could also inadvertently be billed for a medical test that was ordered but that you never received, for example. "Those are the kinds of things you might be able to flag and have removed," Kelmar added.
It's also worth asking the hospital if paying a lump sum, as opposed to paying a bill off in small chunks over time, will earn you a discount.
"Talk to the hospital and ask if they'll accept a lower amount in exchange for a lump sum settlement," Pan of Resolve said. "If you owe $5,000, say, 'I'll give you $2,500 right now if we can consider this settled and paid in full.'"
Make consistent payments, avoid credit cards
Large medical providers like hospitals, in particular, will often take what you give them, according to Dvorkin. Pay what you can afford on a monthly basis, and it will be applied to your balance.
"As long as you continually pay something, they usually wont turn it back," he said. "If you owe $1,000 and you can only afford $25 a month, guess what, they're going to take it."
Do not use a credit card to pay off medical debt unless you plan on paying the bill in full at the end of the month, because carrying ais costly, while unpaid medical bills don't .
"Most medical bills, even if they're delinquent, will not charge an interest rate. So putting medical bills on credit cards is not a great idea," Dvorkin said.
Hardship programs
All nonprofit hospitals in the U.S. are supposed to offer financial assistance programs to help patients who cannot afford to pay for their care, according to Kelmar.
Ask your provider if you are eligible for a discounted care program, Dvorkin advised.
Eligibility criteria vary, and they can be difficult to identify, so it pays to do your research on your provider's program.
They can be cumbersome to navigate and require lots of paperwork, but can save patients thousands of dollars.
for more features. | Consumer & Retail |
Free Ration Scheme Extension: Limited Impact In FY24, Adds To Medium-Term Risks
The government has already factored in a majority of the cost at the time of the Union budget.
Prime Minister Narendra Modi's announcement that the free foodgrain scheme would be extended till 2028 is expected to have a manageable impact on the Union government's finances in the current fiscal, according to economists.
However, when conflated with the possible revision of rural employment guarantees and housing schemes, this could mount pressure on the planned fiscal deficit for FY24, they said.
The subsidy cost could be around Rs 2 lakh crore in the current fiscal to Rs 2.55 lakh crore by fiscal 2029, based on current beneficiary data, according to Devendra Pant, chief economist at India Ratings and Research Pvt. "Assuming the quantity of grains distributed doesn't change and the number of beneficiaries remains 80 crore, the only thing that changes is the annual economic cost."
The economic cost includes the procurement price, incidental expenses and transport costs that are incurred in the procurement and distribution of food grains.
Assuming a 5% increase in economic cost annually and that the growth of nominal gross domestic product is faster than the economic cost at 8%, the "cost of the food subsidy could increase from Rs 2 lakh crore to Rs 2.6 lakh crore eventually, bringing the total cost to Rs 11.5 lakh crore over the five years", Pant told BQ Prime.
The impact of the extension on the overall subsidy bill and the fiscal deficit will be limited because the government has already factored in a majority of the cost at the time of the budget, according to Sonal Badhan, economist at the Bank of Baroda.
The Food Corp.'s resources were increased from Rs 55,000 crore, as per the revised budget estimates in the last fiscal, to Rs 1.45 lakh crore in FY24. Export bans are also likely to continue to keep procurement costs in check, Badhan said.
Despite muted near-term macro implications, higher revenue expenditure—including on rural employment guarantees—could impact the government’s fiscal deficit target of 5.9% of the GDP, Nomura Holdings Inc. said in a research note.
The government has budgeted Rs 1.97 lakh crore in FY24 as a food subsidy. From April–September, 48% of this, or Rs 95,149 crore, has been expended, according to data from the Controller General of Accounts. During the first half of the year, the fiscal deficit has reached Rs 7.01 lakh crore, or 39.3% of the target.
Healthy tax and non-tax revenue, which are poised to overshoot the target, and the expected increase in the nominal GDP in the last three quarters as the Wholesale Price Index corrects into the inflationary zone will help, Pant said.
After the free food grain distribution scheme ended in December 2022, in January this year, the government approved a new integrated food security scheme that provided free food grains to Antodaya Anna Yojna and Priority Household beneficiaries. The new scheme—Pradhan Mantri Garib Kalyan Anna Yojana—effectively subsumed the National Food Security Act and was estimated to cost over Rs 2 lakh crore in 2023, according to a parliamentary statement by Food and Public Distribution Minister Piyush Goyal in August.
Under the NFSA Act, beneficiaries pay a fee of Rs 1–3 per kilogramme for food grain, and 5 kg of food grain is allocated per person each month for priority households and 35 kg per family each month for AAY families.
The current subsidy allocation already accounts for food grain outgos till December.
Adding To Medium-Term Risks
The cost of the new integrated food security scheme is estimated at Rs 1.68 lakh crore annually. An extension for the next five years will mean a total outgo of Rs 8.4 lakh crore, which translates into 2.8% of the GDP at current prices, according to Yuvika Oberoi, economist at QuantEco Research.
Along with other food-oriented welfare schemes, this could mean an annual food subsidy bill of Rs 2 lakh crore or higher over the next five years, Singhal said. "It's an elevated cost compared to historical standards and a persistent burden."
Nomura said that over the medium term, the government is likely to forgo revenue from its subsidised food sales—0.05% of the GDP on an annualised basis, the note said.
As procurement costs increase, the food subsidy bill will also rise over time. While the need for subsidised grains for lower-income households is undeniable, there are risks with announcing free schemes that lead to competitive populism, it said. | India Business & Economics |
Bud Light sales plunged in May, toppling the beer brand from its longtime perch as the nation's best-selling brew.
Parent company Anheuser-Busch InBev (ABI) sold $297 million worth of Bud Light for the four weeks ending May 28 — a 23% drop from the same time period the year before, according to consumer behavior data analytics firm Circana. Modelo Especial ranked No.1 in May, with $333 million in sales — a 15% increase from 2022.
The sales drop for Bud Light follows a promotion debacle with TikTok star Dylan Mulvaney, a trans rights activist and actress, that sparked an uproar among conservatives including singers including Kid Rock and Travis Tritt, who called for a boycott of the popular beer.
The company's attempt to distance itself from the campaign caused further backlash, this time from the LGBTQ+ community, with some bars pulling all Anheuser-Busch products from their menu.
ABI did not immediately respond to a request for comment Thursday.
"Serious course correction" needed
To be sure, Bud Light is still enormously popular and has sold more cases than any competitor year to date, but the Mulvaney fiasco threatens to change that, according to Bump Williams Consulting, which tracks the alcohol industry.
"Unless Bud Light starts to experience a serious course correction in terms of performance, which can only come from consumers finding their way back into the brand family, then that firm grip on the No. 1 rank by year-end loosens a bit more every week," Dave Williams, vice president of analytics and insights at Bump Williams Consulting, told CBS MoneyWatch.
Modelo Especial is a pilsner-style lager that began nearly 100 years ago in Mexico. Constellation Brands bought Modelo from ABI in 2013. Since then, Constellation has prioritized sales of Modelo, specifically by making sure stores never run out of stock, Williams said.
Constellation also plans to increase the brand's sales by introducing "Modelo to new consumers through increased distribution and presence at retail," spokesperson Stephanie McGuane told CBS MoneyWatch on Thursday.
Summer sales heat up competition
The next two months will be crucial for Bud Light sales as the summer ushers in more holidays and beer-drinking, Williams said. Breweries also use the summer to place more in-store displays at grocers and gas stations, he added.
"Companies invest a lot into being front and center and top of mind during this season as there is only so much floor space to allocate; consumer money to spend and beer occasions to fulfill," Williams said. "And if a brand misses those opportunities, then that is almost impossible to fully recover that lost potential over the balance of the calendar year." | Consumer & Retail |
Nothing Should Be Given For Free, Says Software Industry Icon Narayana Murthy
Murthy said compassionate capitalism is the only solution for a poor country like India to become a prosperous nation.
Software industry icon N R Narayana Murthy on Wednesday said "nothing should be given free," and suggested people availing services and subsidies provided by the government should be made to contribute back for the betterment of the society.
The Infosys co-founder also said compassionate capitalism is the only solution for a poor country like India to become a prosperous nation.
"When you provide those services, when you provide those subsidies, there must be something in return that they're willing to do. For example, if you say — I will give you free electricity, then it would have been a very nice thing for the government to have said, but we want to see the percentage attendance in primary schools and middle schools go up by 20%, then only we will give you that," Murthy said.
Speaking at the 26th edition of Bengaluru Tech Summit 2023, here, the IT industry veteran said that in other words, nothing should be given for free, and that there should be a contribution of the citizens also towards making a better society.
"I am not against free services being provided. I fully understand, as I also came from a poor background once upon a time. But I think we should expect something in return from those people who received those free subsidies to take a slightly bigger responsibility towards making their own future generation, their own children and grandchildren, better in terms of going to school, you know, performing better. That's what I mean," he added.
Murthy was speaking during the 'Fireside Chat' moderated by Nikhil Kamath, Co-founder, Zerodha at the Tech Summit.
On whether there is an appropriate level of taxation, he said, in a country like India, where there's a large mass of poor people, the evangelists of capitalism must accept that they have to pay a higher level of taxation, because there are so many public services that the government will have to provide for the poor people.
"In order to create efficient, corruption-free and effective public goods in our country, the taxation will have to be obviously higher than what you see in developed countries. So, I personally would not at all grudge, if I have to pay a higher level of taxation," he said.
Murthy pointed out that a per capita GDP of $2,300 puts India about twice that of what is called 'low income countries' by the United Nations and other bodies and said, "we are still far away from being called a middle income country where the per capita GDP is somewhere between $6,000 to about $12,000 to $15,000."
Explaining about his transformation from being a strong leftist to a "determined compassionate capitalist", he said compassionate capitalism is the only solution for a poor country like India to become prosperous and not socialism and communism.
He said he believes that capitalism based on the twin pillars of free market and entrepreneurship is the only solution for any country to solve its problem of poverty.
To a question on his suggestion to the government on enhancing the per capita GDP, Murthy said political leaders should study China very very carefully.
"China which had all the same problems as us, has reached a GDP five or six times that of India's. So all that I would humbly request our political leaders is to study China very very carefully, and then see what are the good things that we can learn from China and implement here, so that India too advances at the same pace as China, and becomes a nation that has reduced the poverty of its people," he added.
However, he also noted that there is a difference between China and India, as the latter was a colonised country for 1,000 plus years, and both countries have a different model of governance.
Congratulating Prime Minister Narendra Modi's government for the National Education Policy, Murthy said it is a step in the right direction.
"Given that Dr. K Kasturirangan was the chairman and people like Manjul Bhargava were part of that (NEP), I have tremendous hope that it will show us a path towards becoming better," he said.
Murthy also suggested that political parties, intellectuals, academics and corporate leaders come together to think of practical solutions that can boost the foreign direct investments.
To make Bengaluru better, he suggested a good public governance system, starting more English medium schools, and improving infrastructure in the city with alacrity.
Speaking about infrastructure and completing metro services to Electronic City and other parts of the city where there are more number of companies on priority, he said, "people in that infrastructure industry must work three shifts."
Stating that he has noticed people working at least two shifts in other countries with high aspirations, he said, "....we want to be better than all those countries. So, ask people what are the requirements they need to work three shifts and complete the work in time and provide them that." | India Business & Economics |
The government is discussing plans for supermarkets to introduce a cap on the price of basic food items to help tackle the rising cost of living.
A voluntary agreement with major retailers could see price reductions on basic food items like bread and milk.
Food prices rose by 19.1% in the year to April - its second highest rate in 45 years.
Downing Street sources have stressed that there are no plans for a mandatory price cap.
The idea of a cap or freeze on basic food items, as first reported by the Daily Telegraph, is said to be at the "drawing board stage".
Supermarkets are expected to be allowed to select which items they would cap and only take part in the initiative, modelled on a similar agreement in France, on a voluntary basis.
Health Secretary Steve Barclay told BBC One's Sunday with Laura Kuenssberg programme that "this is about having constructive discussions with supermarkets about how we work together, not about any element of compulsion".
He added that the government was also keen to protect "suppliers who themselves face considerable pressures".
For Labour, shadow work and pensions secretary Jonathan Ashworth told the same programme that the reports were "extraordinary", saying "Rishi Sunak is now like a latter day Edward Heath with price controls".
However there is some doubt over what impact a price cap of food will have.
The British Retail Consortium says that the government should focus more on cutting red tape rather than "recreating 1970s-style price controls".
"This will not make a jot of difference to prices. High food prices are a direct result of the soaring cost of energy, transport, and labour, as well as higher prices paid to food manufacturers and farmers," says Andrew Opie, director of food and sustainability at the BRC."As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from government. Rather than recreating 1970s-style price controls, the government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible."
Earlier this week the boss of the Sainsbury's denied that his supermarket had been profiteering.
Simon Roberts said his business was "absolutely not" putting prices up to bolster profits - known as "greedflation".
He told the BBC that Sainsbury's and other grocery chains had spent money to "battle inflation" and avoid passing all of the rising costs onto consumers.
The competition watchdog, the Competition and Markets Authority, has said it will look at how the grocery market is operating.
At a meeting with food manufacturers last week the chancellor Jeremy Hunt stressed widespread concern about prices and agreed to engage with the industry on possible measures to ease pressure on household budgets.
Mr Hunt has said he would back an increase in interest rates if it curbed higher prices and soaring inflation - even if that risked plunging the UK into recession.
"Businesses don't have a price cap like consumers do and yet some smaller businesses buy energy like consumers do so it's been really hard for them to keep going," Shevaun Haviland, director general of the British Chamber of Commerce, told the same programme.
The rate of inflation can be calculated in various ways, but the main measure is the Consumer Prices Index (CPI) - which tracks the prices of everyday items in an imaginary "basket of goods".
The last figure for CPI was 8.7% in the year to April, down from 10.1% in March and 11.1% in October.
Soaring prices of some food products has meant inflation has not come down by as much as many predicted.
Experts have warned that expensive food is set to overtake energy bills as the "epicentre" of the cost-of-living crisis. | Inflation |
Vallabh Bhansali Says State Election Results Reflect Aspirations Of India
The BJP's three state win and rising aspirations make the market veteran bullish.
The state election results highlights rising aspirations of India, according to Enam Holdings' Vallabh Bhansali.
The current government is most successful in pushing the voters towards aspiration, instead of focusing on identity politics, Bhansali, founder and chairman of Enam Holdings Pvt., told BQ Prime's Niraj Shah. "When those aspirations rise, not only demand will rise, creativity will rise and therefore, our ability to add value or add meaning to the whole world will rise. So, I do feel very bullish."
Bhansali, however, sees elections only as an additional factor influencing the market. The results in Madhya Pradesh and Chhattisgarh, that have diversified voters, indicate that there is some truth in what Prime Minister Narendra Modi said: "'There is only one class poverty and there is only one hope growth.'"
He is betting on India's long-term growth. While it takes time for a "complex country" like India to "fight centuries of subjugation", there are efforts being made and that looks good for the markets and investors. If people focus on the aspiration and move away from backwardness, then it will help India, he said.
"There are people who are working very hard that how do we move from $15-20 trillion economy, which we will probably achieve partly on the basis of the demographic growth or demographic advantages, if not the dividend situation...Interest rate here are poised to go down and that makes a big thing for the markets."
Focusing on larger allocation from foreign investors and long-term players, Bhansali spoke about political stability and the need to have multiple Indian sovereign bonds in the global space. He sees India at the beginning stage of product nation. But with the growth in different sectors like infrastructure and defence, "value adding economy is just begging to shape", he said. | India Business & Economics |
A valuable income tax break for families inheriting pension savings will be closed under government plans.
All untouched pensions can be passed on free of inheritance tax, but if the person dies after the age of 75, their beneficiaries must pay income tax on withdrawals. If the person dies before 75, however, the pension is exempt from both inheritance tax and income tax.
It means those in receipt of a windfall can keep an inherited pension pot invested, grow the savings and draw down on it in later life, while saving thousands in income duties.
However, the Treasury and HMRC are now drawing up plans to axe the double tax break.
Buried in a raft of proposals published on Tuesday, the Government said it would consider charging all beneficiaries income tax on inherited pensions, regardless of the age of the deceased.
The official documents said: “Individuals will still be able to receive the benefits... but the values will no longer be excluded from marginal rate income tax under the Income Tax Earnings and Pensions Act 2003, with effect from 6 April 2024.”
Former pensions minister Sir Steve Webb described the plans as “unacceptable”.
He said: “For the last eight years, people have known that if a loved one died under the age of 75 they could inherit an untouched pension pot free of all tax.
“The money could sit in a drawdown account, being invested and growing, and would be a source of tax-free income whenever needed.
“It would be totally unacceptable to make such a big change through the back door. If ministers plan to remove this pension tax break they should announce their plans publicly and have them properly debated.”
Earlier this year Chancellor Jeremy Hunt abolished the pensions lifetime allowance, which previously capped tax-free pension savings at £1.073m.
Pensions are normally completely exempt from inheritance tax, which is levied at 40pc. The removal of the cap means families are increasingly relying on pensions as part of their estate planning.
However, experts have warned the apparent generosity of the tax break could make pensions a target for reform.
Labour has previously said that it would reinstate the lifetime allowance on pensions if elected, condemning its abolition as a tax break for millionaires. The party has suggested that it would make a special exemption for senior NHS doctors, who previously warned they were retiring early to avoid breaching the cap.
A spokesman for HM Treasury said: “We want to keep 15,000 experienced people in work to help grow our economy and clear backlogs, such as seniors in the NHS who had told us that pensions tax was disincentivising them from working, which is why we have abolished the lifetime allowance.
“We look forward to working with stakeholders over the coming weeks to help us craft the legislation which will ensure that our historical pensions tax cut delivers the right results for savers and the economy.” | Personal Finance & Financial Education |
Granules India Q2 Results Review -Healthy Launches Lined Up For U.S. Market In H2: Motilal Oswal
Work-in-progress for backward integration projects
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Granules India Ltd. delivered a better-than-expected performance in Q2 FY24. Production/sales activities have returned to normalcy after the resolution of an IT security issue. Further, shortage opportunities boosted U.S. business.
We cut our earnings estimate by 5% for FY24, factoring in a delay in certain launches in the U.S. and gradual utilisation of new facilities. We value Granules India at 14 times 12 months forward earnings to arrive at a target price of Rs 430.
Granules India is implementing efforts towards capacity addition and backward integration, and is enhancing product offerings for the regulated market, including some niche launches.
Accordingly, we expect a 16% earnings compound annual growth rate over FY23-25. Maintain 'Buy'.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Hindustan Construction To Sell Swiss Arm For Rs 928 Crore
The deal will be completed by end of this month or the beginning of next year.
Hindustan Construction Co. will sell its Swiss construction unit to a French company for Rs 928 crore.
The HCC-owned Steiner AG, Switzerland, has entered into a share purchase agreement with Demathieu Bard to sell its entire stake in Steiner Construction SA, Switzerland—a step-down material subsidiary of the company, according to an exchange filing released on Monday.
The deal will be completed by end of this month or the beginning of next year.
Steiner Construction is a total and general contractor in western Switzerland and has projects in Zurich and Bülach, among other cities.
HCC took a controlling stake in Steiner AG, Switzerland's second largest total services contractor, in May 2010. The company also operates in India through a subsidiary.
Separately, the company also said its unit HCC Infrastructure Co. has received Rs 110 crore as an earn out money from Cube Highways and Infrastructure V Pte. as part of the Baharampore-Farakka Highways Ltd. stake sale transaction.
Shares of Hindustan Construction closed 0.92% higher at Rs 29.69 apiece on Monday, as compared with a 2.05% advance in the BSE Sensex. | Real Estate & Housing |
The prime minister has declined to back extra support for mortgage holders despite higher interest rates making payments more expensive - and a further rise in rates expected.
Asked if the government will introduce financial support for mortgage bills, similar to those introduced to help with energy bills, Rishi Sunak said he understood the public concern but his priority is to bring inflation down.
"I know the anxiety people are going to have about mortgage rates," Mr Sunak said.
"The first priority at the beginning of the year was to halve inflation - that's the best and most important way that we can keep costs and interest rates down for people. We've got a clear plan to do that. It is delivering. We need to stick to the plan."
The average mortgage rate for two-year fixed mortgages is expected to rise to 6% and the Resolution Foundation think tank has said average annual mortgage repayments are set to rise by £2,900 for those renewing next year.
Not since the premiership of Liz Truss and the associated turbulence in the mortgage market will the average rate have reached 6%.
However, former Bank of England deputy governor Sir Charlie Bean warned against government intervention, saying it would be "risky" for the government to protect mortgage holders against rising interest rates.
Meanwhile, a Treasury source said: "Borrowing money to subsidise mortgages risks fuelling inflation further, forcing the Bank of England to respond with even higher interest rates. It would be totally self defeating."
The Bank is forecast to rise rates again on Thursday.
Mr Sunak pointed to existing supports for first time buyers to help get them on the property ladder in response to the mortgage support question.
He said: "There is also support available for people - we have the mortgage guarantee scheme for first-time buyers, we have the support for mortgage interest scheme to help people as well. That's why one of my first priorities is to halve inflation." | Interest Rates |
KANSAS CITY, Mo. -- As Monette Ferguson braces for the looming government shutdown to strip funding from her Head Start program for disadvantaged children in Connecticut, she harkens back to a decade ago when another congressional budget fight forced her to close preschools.
This time around she is more prepared, with money in reserve to keep serving around 550 children at 14 Head Start sites operating in three different towns. But only for about 30 days.
“It’s like a gut punch to our system,” said Ferguson, who is the executive director of the Alliance for Community Empowerment.
If the shutdown isn’t averted, Head Start programs serving more than 10,000 children would immediately lose federal funding, including Ferguson's program. Lawmakers have until Saturday to reach a deal, but that is looking less and less likely.
The programs set to lose money serve just a fraction of the 820,000 children enrolled nationally at any given time. Located in Florida, Alabama, Connecticut, Georgia, Massachusetts and South Carolina, they are in trouble because their grants start on Sunday, just as the shutdown would begin, said Tommy Sheridan, the deputy director for the National Head Start Association.
They wouldn’t necessarily close their doors immediately. Various entities run the programs, including school districts, YMCAs and other nonprofits. Depending on how deep their pockets are, some of these operators, like Ferguson's program, could readjust their finances to keep the programs going, at least short term.
“But from the ones that I’ve spoken to, there are some that really don’t have extensive possibilities," Sheridan said.
Many are located in poor communities, close to the families they seek to lift out of poverty with programs that include preschool as well as services to infants and toddlers that include home visits. Over the course of a year, as children come and go, the number served tops 1 million.
Programs whose grants don’t start on Sunday will continue getting money, said Bobby Kogan, the senior director of federal budget policy at the Center for American Progress, a liberal think tank. But, he said, if the shutdown drags on, the number of affected programs will grow as more grants come up up for renewal.
“This will get worse and worse and worse,” he said.
That's what worries Lori Milam, executive director of the West Virginia Head Start. One of its grants is up for renewal in November, so she's been making back-up plans and reassuring worried staff and parents.
“It’s consuming an enormous amount of our time,” she said.
Complicating the situation further, one budget proposal would cut $750 million from the nearly $12 billion program, which would eliminate tens of thousands of spots. All the uncertainty has spooked some workers into considering looking for what “they believe is a more stable job,” said Philip Shelly, a spokesperson for Democratic U.S. Rep. Nikki Budzinski, of Illinois.
This is a particular concern with nearly 20% of Head Start staff positions vacant nationwide, according to the National Head Start Association.
The timing couldn't be worse. Child care programs were propped up during the pandemic with $24 billion in federal relief, but the last of the money has to be spent by Saturday. Another pot of COVID-19 relief funds that helped Head Start ran out in the spring.
Some states, like Minnesota, New York and Maine, have chipped in extra money to fill in the gaps as the federal funding dries up, but those efforts are not universal, said Maureen Coffey, a policy analyst on the early childhood policy team at the Center for American Progress.
“It’s going to be a really messy time for child care,” she said.
Child care already was strained before the pandemic closed some centers, said Lynn Karoly, a senior economist at the Rand Corp., a nonprofit global policy think tank.
“We haven’t addressed really, in most cases, the fundamental problem of an underfunded system overall,” she said. “But now you have the potential of a shutdown on top of it.”
The 16-day October 2013 shutdown was the last to hit Head Start hard, affecting 19,000 children and shuttering programs in several states.
About half as many programs are affected now because many moved away from having their grant start date coincide with the beginning of the federal fiscal year. One reason, Sheridan said, is that the Oct. 1 date makes them more vulnerable when Congress deadlocks over the budget.
It was so bad a decade ago that Connecticut chipped in emergency funds, which allowed Ferguson's program to reopen.
Meanwhile, John and Laura Arnold, a wealthy Houston couple, pledged up to $10 million to the National Head Start Association to help other programs. Among the programs the donation helped reopen was one in Florida.
Tim Center, the chief executive officer at the Capital Area Community Action Agency, lived through that mess. This time around he has a backup plan that will allow him to keep serving more than 370 kids and families at six centers in three counties in northern Florida for several weeks. But it means tapping into savings and a line of credit.
Families still are spooked. Laketia Washington, a mother of eight whose 3- and 5-year-olds attend Head Start programs in Tallahassee, Florida, lamented the turmoil as she rang up customers at a discount store.
“The nerve wracking thing," she said, “is not knowing what’s next.” | Nonprofit, Charities, & Fundraising |
BOE Governor Pushes Back Against Market Bets On Early Cuts
(Bloomberg) -- Bank of England Governor Andrew Bailey pushed back against the market bets on interest rates, saying that officials need to carry on fighting inflation for now.
(Bloomberg) -- Bank of England Governor Andrew Bailey pushed back against market bets on interest rate reductions, saying that officials need to carry on fighting inflation for now.
Bailey reiterated that monetary policy will need to be restrictive for an extended period in comments that appeared to be more cautious about the possibility of lower rates than those made by BOE’s Chief Economist Huw Pill earlier in the week.
“It’s really too early to be talking about cutting rates,” Bailey said Wednesday in response to questions at an event in Ireland. “The market of course will reach a view. It has to reach a view on the future path of interest rates, I understand that. But we’re very clear, we’re not talking about that.”
The governor’s messaging did little to change market expectations. Traders on Tuesday moved to price in more reductions in the BOE’s benchmark lending rate next year after Pill hinted the central bank was open to cutting rates by the middle of 2024, in line with market wagers. Traders are anticipating around 75 basis points of decreases for the first time, up from just 30 basis points last month.
Bailey pointed out difficulties the BOE has in reining in Britain’s inflation rate, which remains the highest in the Group of Seven. He noted that the UK’s potential growth rate has fallen sharply from over 2% during most of his career to “a bit over 1%” since the pandemic, which indicates the limits the economy can grow without pushing up prices.
That remark chimed with a separate report from the National Institute of Social and Economic Research, which on Wednesday warned that the UK faces a “decade in the doldrums” unless the government boosts public investment. The economic think tank predicted anemic growth and deepening regional inequalities, calling on Prime Minister Rishi Sunak to back a revival of investment over pre-election tax giveaways.
Britain’s low growth rate, Bailey said, “complicates the setting of monetary policy.” He blamed those woes on an aging population, weak productivity and a withdrawal of workers from the labor force.
NIESR said public investment needs to rise to 3% of GDP per year to address an economic malaise that means that low to middle income households are undergoing seven years of falling living standards. It predicted lackluster growth of just 0.6% in 2023 and 0.5% in 2024 ahead of the autumn fiscal statement from Chancellor of the Exchequer Jeremy Hunt.
“The lack of public investment is a large part of the UK’s slow growth story,” said Stephen Millard, deputy director for macroeconomic modeling. “That’s what they should be doing. We don’t want to see a pre-election tax giveaway.”
The think tank said that slow growth is partly due to higher interest rates to tackle inflation. Bailey warned they may settle at higher levels.
On the topic of the neutral interest rate — or where rates would need to be to hold inflation steady at the target of 2% — Bailey said the considerations for the long-run and short-run were pointing in opposite directions.
In the long-term, an aging population suggested we are “going back to low rates,” he said. This conflicts with arguments from some other economists, who argue an older population will push up rates. In the short-term, however, a tight labor market and a mismatch between job vacancies and the workers available for the roles pointed the opposite way, Bailey said.
Bailey reiterated remarks he and Pill have made in recent days anticipating a sharp drop in inflation when the latest figures are published next week and that it’s likely to drop back to the 2% target within two years. That thought has prompted investors to bet that the BOE will soon shift its focus away from inflation and toward supporting an economy that some analysts think already may be in a recession.
Bailey dampened those hopes, repeating that policy makers aren’t yet talking about rate cuts because of risks that inflation will persist.
The governor said the first half of the fight against inflation had been about the unwinding of large shocks to the economy, with energy prices slipping from high levels and supply chain frictions easing. But the second half of the battle, he said, will require monetary policy to remain “restrictive” for long enough to wrench expectations for soaring prices out of the minds of consumers.
Repeating wording from the minutes of the BOE’s Monetary Policy Committee meeting this month, Bailey said, “What we’re saying is policy is going to have to be restrictive for an extended period to see the second half out, which is where policy is going to have to do the work to bring inflation back to 2%.”
--With assistance from Andrew Atkinson, Philip Aldrick and Irina Anghel.
(Updates with comment, market reaction and NIESR remarks.)
©2023 Bloomberg L.P. | Interest Rates |
The King's Speech is supposed to be the landmark moment in the life of parliament.
It is the occasion for a prime minister to set down his or her mission for government, and outline the laws they will pass to try to achieve their goals.
But this year, the moment will belong to King Charles III, rather than Rishi Sunak, for two reasons.
Politics live: Are ministers playing politics with their outrage over Gaza protests?
First is the sheer symbolism of the new monarch delivering the first King's Speech in over seven decades.
An epoch-making moment, it reminds us all in the most formal of settings, laced with symbolism, that we have passed from the Elizabethan era to the Carolean age.
Second is the reality of Mr Sunak's predicament.
His first King's Speech in power will be less about landing a vision and more about holding position, for this is a prime minister running out of time and with little space to push through new ideas.
Running out of time because very little can be done between now and an election when it comes to enacting new laws.
And even if Mr Sunak can get legislation onto the statute book, there isn't time for that to make a material difference to voters before a general election.
He is also a prime minister constrained by a resistive rump in his party who he is not willing to take on.
Running out of ideas, because what we expect to see in the King's Speech is hardly a grand plan for government.
Mr Sunak is instead going for a combination of new laws to creating dividing lines with Labour ahead of the election (including annual oil and gas licensing, and strike laws), seeing through policies being worked up by predecessors (such as leasehold reform) and the odd Sunak initiative (banning tobacco sales for anyone born on or after January 2009 and longer jail sentences of violent offenders).
Talk to his team and they frame the King's Speech as a "continuation" of what the prime minister has sought to put in place from the summer onwards - his tilt at long-term decision making as they put it, rather than a "wow moment".
One senior insider said: "The King's Speech isn't a conference speech or an Autumn Statement. There isn't a new shiny policy.
"It's not going to be a wow moment, but it's a continuation of travel of where we have been going and delivering, rather than focusing on polls day to day and week to week."
Instead, Number 10 argues that the programme for government backs up the prime minister's commitment to long-term decision-making; through growing the economy - be that energy security, regulatory frameworks for tech; strengthening society with legislation on smoking, reform on leaseholds and dealing with antisocial behaviour; more action on crime and safety and focusing on our national interest, be that around climate change, artificial Intelligence or security.
Read more:
Analysis: King will have to announce measures we know he is bound to dislike
Explainer: What will be in the King's Speech?
But some colleagues believe the sum of parts in this speech doesn't add up to much and certainly not a cogent vision for a country losing patience with the Conservatives.
"There's not much in here on cost of living," says one senior colleague who laments that Mr Sunak didn't do more on housing - planning and green belt reform - ahead of the general election to show voters he really is a candidate for change.
"It would have been bold, but it got shoved in the too-hard-to-do box," said the former senior minister. "A load of colleagues - 50 even 70 - would be against it, but when you have Labour and Starmer nimby bashing, you'd have got it through with Labour votes and send a message to under 40s that we are serious about helping them."
And there are pockets of Mr Sunak's backbenches, MPs looking to Canadian Tory leader Pierre Poilierve as inspiration, noting that his decision to turn the Conservatives into the party of housebuilding has revived the centre right's fortunes and brought younger voters.
But Mr Sunak does have his eye on an election in a different way, as he uses the King's Speech to try to lay traps for Labour, to draw dividing lines between the government and the opposition over thorny issues that have the potential to ignite in voters' minds - be it around net zero and environmental policies (think the row over ultra-low emission zones) or strikes.
On the former, the government will legislate for annual North Sea oil and gas licensing rounds to highlight the PM's "pragmatic, proportionate and realistic" approach to net zero, in contrast to Labour, which has said it will honour existing licenses but has ruled out granting new ones.
The PM will also introduce new strike laws to protect public services over Christmas, with minimum service regulations for rail workers, ambulance staff and border security staff.
Number 10 figures believe these dividing lines showcase Mr Sunak's values while also putting Labour on the spot about theirs.
But Labour insiders tell me they are "not worried" about the attacks.
"If they want to talk about their track record on energy bills and strikes, we'd be very happy," says one figure close to Sir Keir Starmer.
Another senior party figure said this approach just showed how out of touch the Tory party is.
"Finding dividing lines for us? Do they seriously think that is how voters want to see the government run the country?
"Sunak's meant to be the change? Where's the change? Where are the answers to the big challenges facing the country on the cost of living and the NHS. It's just more of the same. It doesn't deal with the things voters care about."
Even as Westminster chews over the content of the speech, while taking in the spectacle, I suspect the country has tuned out.
Because in the political backdrop to Tuesday's pageantry, the problems are piling up for the prime minister.
It is the grisly details of the COVID inquiry revealing a government that was woefully unprepared and ill-equipped to tackle the pandemic at a moment of national crisis.
There are serious questions being raised as to whether the Conservative Party failed to act on rape allegations surrounding an MP and instead paid for an alleged victim to receive treatment in a private hospital.
The prime minister said on Monday that the allegations were "very serious" as he urged anyone with evidence of criminal acts to talk to the police.
There is the Daily Mail's serialisation of former cabinet minister Nadine Dorries's book on the downfall of Boris Johnson again throwing into sharp relief party infighting, while disquiet grows among some MPs about the home secretary's provocative language, be it around protest marches or the homeless.
All of it has turned the public off, say some Conservative MPs, who fear that, whatever Mr Sunak does now, he won't be able to get voters to tune back in.
This is his first King's Speech - and it's hard at the moment to see how it won't end up his last. | United Kingdom Business & Economics |
The price of school lunches has increased by more than a third in parts of England, increasing the pressure on school finances and family budgets during the cost of living crisis, according to figures revealed by the Liberal Democrats.
Families with two children can be facing a bill for more than £1,000 a year for school lunches, a rise of more than £200 since 2019, because of inflation and rising energy and staff costs, according to the party’s estimates.
The increases have outstripped the funding that schools receive for pupils on free school meals (FSM) and the free lunches for infants up to year 2 in primary schools. This means schools have to make up the difference from their existing budgets.
While some school catering services charge £2.80 a day or more for lunches, the government only gives £2.41 for free infant meals, an increase of just 7p a day since last year.
Munira Wilson, the Liberal Democrats’ education spokesperson, said the government had created a “cost of eating” crisis in England, particularly for children from families who did not qualify for free meals but still struggled to afford school lunches.
Wilson said: “These price hikes are a double blow for parents, who are forking out hundreds of pounds more a year. Yet they’d be paying even more if schools weren’t sacrificing their teaching budgets to keep costs down. Under the Tories, schools choose between teaching children and feeding them. This isn’t a fair deal for parents, pupils or schools.”
Parents at 15 schools in East Sussex have seen daily lunch prices rise by 34% since the 2019-20 school year. The local authority told parents that its contract with school caterers meant prices had risen in line with inflation, with the cost of ingredients such as eggs up by 33% and cheese and chicken up by 20% between 2021 and 2022.
In a letter to parents, East Sussex county council said: “We want to assure you that we have explored all avenues to keep the meal price as low as possible as we understand this is a challenging time.”
In Hampshire, lunch prices at more than 400 primary schools have risen from £2.40 in 2020 to £2.80 in the current school year. Hampshire county council, which provides the lunches through its catering arm, blamed “significant increased costs including food and pay” for the rise.
The council has given extra support to schools to meet the difference between government funding for FSM and the additional costs.
The Lib Dems submitted freedom of information requests to local authorities that run their own school catering services or central catering contracts. They revealed price rises across the country, with the highest increases in London and the south-east of England.
Families on universal credit are eligible for FSM lunches if their household income is less than £7,400 before benefits and after tax, with the income ceiling frozen since 2018. The government’s restrictions mean more than 800,000 children in poverty miss out on free school meals, according to the charity Child Poverty Action Group.
About 1.9 million state school pupils in England – more than one in five of the total – were eligible for free meals last year, with a further 1.2 million receiving universal infant free school meals.
Wilson said the Lib Dems proposed extending FSM eligibility to every child living in poverty, and increasing the daily rates of funding that schools receive for providing free meals.
The Welsh government is to provide free lunches for all primary schoolchildren by 2024. In Scotland, children receive free meals for the first five years of primary school. | Inflation |
A group of Democratic House members is demanding the Internal Revenue Service accelerate its investigation into wealthy Americans who are allegedly illegally taking advantage of a generous tax incentive in Puerto Rico.
Rep. Nydia Velazquez, Democrat of New York, and a dozen colleagues sent a letter to the IRS late last week calling on the IRS to crack down on the noncompliant behavior of about 100 rich Americans claiming extraordinary tax breaks under what's known as Act 60, which benefits Americans who relocate to Puerto Rico and become bona fide residents. In 2019, Act 60 consolidated two tax havens, Act 22, which applies to individual investors, and Act 20, used for export services companies.
The provision provides these new residents of Puerto Rico with a 100% federal tax exemption from Puerto Rico-sourced income, interest, dividend and capital gains income.
The incentive program, which is overseen by Puerto Rico's Department of Economic Development and Commerce (DEDC), isn't available to native residents, who sometimes face tax rates as high as 33% — or to those who became residents before 2012, when the tax benefits were enacted.
It was set up as a way to lure rich mainland Americans to move to Puerto Rico to help boost its economy by building businesses and creating jobs for the island.
But for years, Puerto Rico failed to verify that those taking advantage of the tax haven were in compliance, according to the Center for Investigative Journalism of Puerto Rico. It wasn't until 2021 that the DEDC started to audit the program and its approximately 5,000 beneficiaries. No findings have been announced.
In July, the IRS said it had identified 100 individuals claiming the tax benefits in the U.S. territory who were violating the rules. Beneficiaries must buy a home on the island within two years of becoming Puerto Rico residents, are required to spend half their time there, pay federal taxes on income earned in the U.S. and must also give $10,000 annually to approved Puerto Rican charities.
"These wealthy individuals are attempting to avoid U.S. taxation on U.S. source income, and we expect many of these cases to proceed to criminal investigation," the IRS said in its July press release.
In response to a Freedom of Information Act request filed by Puerto Rican and U.S. advocacy groups, the IRS said initially that it planned to release documents stemming from its audit by the summer, the lawmakers' letter said, adding that the groups were informed by the IRS that the date for that release had slipped to December.
"The IRS and Treasury Department must make Act 22 enforcement a priority and shed light on their oversight of U.S. individuals unlawfully claiming benefits under this law, " Velazquez said in a statement.
In their letter to the IRS, Democratic lawmakers suggested that even those who may technically be in compliance are taking advantage of the law to force Puerto Ricans out of their homes.
"The tax haven that Act 22 has created in Puerto Rico has proliferated the use of short term rentals ("STRs"), increased cash property sales and market speculation, and caused displacement for the Puerto Rican people themselves," the letter says.
"What we have seen is the exacerbation of displacement as a result of these beneficiaries, you know, they come in, they don't pay taxes, they have cash, so they speculate on real estate, a property that would probably cost $100,000 now cost $300,000, half a million. And that has obviously exacerbated the housing crisis in Puerto Rico," Marlyn Goyco, national organizing manager for the Center for Popular Democracy, told CBS News.
The skyrocketing prices are putting home ownership out of reach for many Puerto Ricans, whose median household income is $21,967. At least 41% of the population live in poverty, according to the U.S. Census Bureau. At the same time, housing prices on the island have spiked at least 36% in the last five years, Federal Housing Finance Agency data indicates.
The lawmakers point out that Act 22 has resulted in loss of income to the U.S. Treasury, too, noting that 647 people who have become Puerto Rico residents and use the tax benefit altogether paid over $500 million in federal income taxes in the five years before they relocated to the island. That small statistic, they said, offers "a glimpse into the critical revenue that the United States is losing due to the tax evasion scheme created by Act 22."
The IRS has not yet responded to a request for comment.
Because it's uncertain when the IRS investigation will conclude and when the local government will decide to publish its findings about the beneficiaries of the program, Goyco says the biggest concern is the "unaffordability of living in Puerto Rico."
"We have the highest sales tax. We also get the highest electric bill," Goyco said. "Our concern is that it's going to be a Puerto Rico without Puerto Ricans because it's just becoming increasingly hard for people to live here," she added.
"For young people that go to university, there's not enough opportunities to work, and the thing is, this law does not provide any of that. If anything, it's just bringing people in to live here in paradise without having to pay and to support their communities," Goyco added.
for more features. | Real Estate & Housing |
The crypto world is shaky right now. Fewer checks are being written, and regulatory pressure in the U.S. as well as economic uncertainty globally are casting a shadow on the sector as a whole. But the developer space is showing signs of promise.
According to Alchemy’s latest Web3 Development Report, web3 developer activity continued to grow in the second quarter, both year on year and quarter on quarter. Ethereum and crypto wallet software developer kits (SDKs) saw 26.8 million and 11.1 million installations in the second quarter, respectively.
The market is seeing some signs of recovery: Ethereum’s price has increased 53.7%, to about $1,850, since the beginning of the year, potentially sparking greater interest.
To some, it feels like 2019 all over again, where outsiders see crypto solely as token prices and market movements and insiders see a view of a rapidly growing web3 ecosystem. “We are seeing the signs both in the number of devs contributing to projects, launching web3 apps/games, and in on-chain data, which is up massively compared to metrics just six months ago,” said Jack O’Holleran, CEO of Skale Labs, a multichain network.
Other layer-2 blockchains also saw massive gains last quarter. About 5.9 million smart contracts were created in Q2 on the Ethereum blockchain and on layer-2 blockchains like Arbitrum, Optimism and Polygon, among others.
But other subsectors of the crypto industry haven’t been as fortunate. NFT trading volume and users declined about 42% and 33%, respectively, quarter over quarter. Decentralized finance trading volume fell 27%, though users increased 35%, during the same period, the report found.
The increase in DeFi users “speaks to the stickiness” of the projects and products being built in that subsector, Blake Tandowsky, growth analyst at Alchemy, told TechCrunch+. “Even though prices might not be up and every celebrity isn’t uploading NFTs as profile pictures, there are developers who are super interested in the space,” he said.
If past cycles can predict the future, then things are looking up for crypto. | Crypto Trading & Speculation |
- Mastercard will no longer offer Binance-branded cards in Latin America and the Middle East, which let customers user their crypto to purchase goods, Binance said Thursday.
- Visa ended a similar card tie-up with Binance in Europe in July, a spokesperson for the company told Bloomberg.
- Crypto continues to face a broadly tepid response from the financial services industry.
Embattled cryptocurrency exchange Binance has lost some business with payment card networks Mastercard and Visa.
The development is a sign of how traditional financial institutions are growing wary of working with the company as it faces intense regulatory scrutiny and wider concerns around financial compliance within the crypto industry.
Mastercard will soon no longer offer Binance-branded cards in Latin America and the Middle East, which let customers user their crypto to purchase goods, Binance said Thursday via X, the company formerly known as Twitter.
"The product, like most debit cards, has been utilized by Binance's users to pay for basic daily expenses but in this case, the cards are funded with crypto assets," Binance Customer Support said on Twitter.
"Only a tiny portion of our users (less than 1% of users in the markets mentioned) are impacted by this. Users of this product will have until September 21, 2023, when the card will no longer be available for use."
"Binance accounts around the world are not affected. Where available, users can also shop with crypto and send crypto using Binance Pay, a contactless, borderless and secure cryptocurrency payment technology designed by Binance," the company added.
Mastercard confirmed that it is ending the partnership, with a spokesperson telling CNBC that, from Sept. 22, four pilot Binance co-branded Mastercard card programs the company had with Binance in Argentina, Brazil, Colombia and Bahrain "will no longer be in use."
"This provides cardholders with a wind-down period to convert any holdings in their Binance wallet," the Mastercard spokesperson said. "There is no impact on any other crypto card program."
Visa, meanwhile, also moved to distance itself from Binance. The company ended a similar card tie-up with Binance, as it ceased issuing new co-branded cards with the firm in Europe as of July, a spokesperson for the company told Bloomberg.
Binance and Visa were not immediately available for comment when contacted by CNBC.
It's a sign of how crypto continues to face a broadly tepid response from the financial services industry.
Mastercard had warmed to crypto in recent years. In Oct. 2021, the firm began allowing any bank or merchant the ability to offer crypto services. Last year, the company launched a product allowing banks to assess the risk of crime posed by crypto merchants, and started letting banks offer crypto trading.
For its part, Mastercard said its decision to end the tie-up with Binance has "no impact on our wider commitment to enabling and securing digital assets, which we continue to support."
Binance faces intense backlash from regulators including the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.
The SEC brought 13 charges against Binance and its CEO Changpeng Zhao accusing the company of commingling billions of dollars in customer money with Binance's own funds, similar to allegations made against the now bankrupt crypto exchange FTX.
Binance denies the allegations.
The firm recently filed a protective order against the SEC, saying the regulator's requests for information were "over broad" and "unduly burdensome."
Last week, Checkout.com reportedly dropped Binance as a customer, citing "reports of regulators actions and orders in relevant jurisdictions," "inquiries from partners," and concerns over the firm's anti-money laundering, sanctions and compliance controls. | Banking & Finance |
ICICI Bank Q1 Results Review: Robust Quarter Driven Strong Loan Growth
Brokerages maintain a 'buy' rating as the bank is well-positioned to deliver steady earnings supported by pristine asset quality.
ICICI Bank Ltd.’s first-quarter earnings beat market expectations, mainly driven by high core income and stable asset quality, according to analysts.
The private sector lender’s net profit surged 39.7% year-on-year to Rs 9,648 crore in the quarter ended June, according to an exchange filing. This is higher than the Bloomberg estimate of a net profit of Rs 9,222 crore. Net interest income increased 38% year-on-year to Rs 18,226 crore.
The bank’s asset quality also improved. The gross non-performing asset ratio fell sequentially to 2.76%. However, the net NPA ratio remained flat at 0.48% quarter-on-quarter. Provisions rose 13% to Rs 1,292 crore year-on-year.
While the bank experienced a slight increase in slippages on the Kisaan credit card portfolio, the management has stated that it is expected to normalise with time.
The lender’s overall advances grew by 18% year-on-year to Rs 10.57 lakh crore, whereas, the total deposits increased by 17.9% year-on-year to Rs 12.38 lakh crore.
This prompted most of the brokerages to maintain a 'buy' rating on the stock as the bank is well-positioned to deliver steady earnings, supported by pristine asset quality and strong momentum in business growth.
Shares of ICICI Bank closed 0.49% higher at Rs 1,000.45 apiece, compared with a 1.17% decline in the benchmark Nifty 50 at close of market on Friday.
Out of the 48 analysts tracking the company, 46 maintain a ‘buy’ and two recommend a ‘hold’ on the stock, according to Bloomberg data. The average 12-month consensus price target implies an upside of 16%.
Here is what analysts said about ICICI Bank’s Q1FY24 results:
Morgan Stanley
Deposit growth accelerated sharply amid sustained domestic loan growth, which remains strong and broad-based across retail, business banking, and SME segments.
Expect funding costs to increase by 40–50 bps and margins to trough around 4.25% to 4.3% in the next few years.
RoA likely to moderate but expected to remain above 2%.
Maintain ‘overweight’ with a target price of Rs 1,350 apiece; reiterates ‘top pick.’
Motilal Oswal
The bank is well-positioned to deliver steady earnings, supported by pristine asset quality and strong momentum in business growth.
Expect earnings growth to moderate to an 18% CAGR over FY23–25, primarily due to a decline in margins and the limited availability of levers in opex and credit costs.
A steady NII growth was driven by a stable mix of the high-yielding retail and business banking portfolio and the low-cost liability franchise.
A treasury gain of Rs 2.5 billion significantly aided the bank's other income growth, which increased by 17% year over year.
Maintain ‘buy’ with a target price of Rs 1,150, implying an upside of 15%.
Elara Capital
NIM is likely to be under pressure due to a rise in the cost of deposits. However, an aggressive NIM dip in FY24 is not expected.
ICICI Bank is seeing strong momentum across retail products.
A rise in slippages in the quarter was attributed to a seasonal addition to the KCC portfolio.
Maintain ‘buy’ with a target price of Rs 1,192, implying an upside of 20%.
Investec Securities
Cost of funds repricing may continue for two more quarters due to the relatively higher maturity of term deposits.
Stabilised NIMs are expected to remain at least 35–40 bps higher due to a steadily improving product mix.
Expect ICICI Bank to continue growing at an 18% plus CAGR over the next few years without any compromises to asset quality.
Maintain ‘buy’ with a target price of Rs 1,132. | Banking & Finance |
Vanguard and Fidelity are both major brokerage firms, with some of the largest client bases in the country. Each have broad financial offerings, from DIY brokerage accounts to financial advisors, robo-advisors and financial planning services. Vanguard is also widely known for its in-house selection of low-cost funds, as it runs a number of its own indexes. On the other hand, Fidelity offers in-depth investment tools that are great for veteran investors. Each firm has their own strengths and weaknesses, though, in relation to their fees, online experience and features.
If you'd rather have someone who can help you invest and build a financial plan, consider working with a financial advisor.
Overview of Vanguard and Fidelity
There are few bigger names in the brokerage space than Vanguard and Fidelity. They consistently boast some of the largest client bases in the country, and for good reason. Both brokerages have extensive investing tools and platforms that make managing your investments and financial plans much easier.
Vanguard has long been known for its wide range of in-house index funds and exchange-traded funds (ETFs). If you're looking to invest in funds, going directly to a main provider like Vanguard can significantly lower your costs. That's because Vanguard can afford to offer lower expense ratios than other brokerages that allow you to invest in third-party funds.
While Vanguard stands out with its suite of funds, the brokerage is more limited when it comes to other offerings. However, it does allow investors to trade individual stocks and bonds. Conversely, Fidelity allows clients to invest in individual stocks, bonds, ETFs, options, mutual funds and more.
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Vanguard vs. Fidelity: Fees
Vanguard Fees
Investment Fees
Stocks & ETFs: $0
Mutual funds: $0 ($20 for TF mutual funds)
Options: $0 commission and $1 contract fee
Secondary market bonds: $25 broker-assisted fee
CDs/U.S. Treasury securities: $0
Mortgage-backed securities: $35
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Account Fees
Account fee: $20 a year (waivable)
Wire transfer fee: $10
Foreign securities transactions: $50
Fidelity Fees
Investment Fees
Stocks & ETFs: $0
Mutual funds: $0 ($49.95 for TF mutual funds)
Options: $0 commission and $0.65 contract fee
New issue bonds: $0
Secondary market bonds: $1 and $19.95 broker-assisted fee
CDs/U.S. Treasury securities: $0
Account Fees
Account fee: $0
Domestic wire transfer fee: $0
Foreign exchange wire transfer fee: Up to 3% of principal
Foreign securities transactions: $50
Fees are important to consider when picking a brokerage firm to open an account with. You'll want to make sure that the fees are fair and within your budget, as an overbearing fee structure will have a large negative effect on your portfolio.
A commission-lowering wave has struck brokerage firms over the last couple years, and Fidelity and Vanguard have both followed suit. To trade stocks, ETFs, options and most mutual funds, clients of both firms will avoid commissions altogether. Options at Vanguard come with a minimal $1 contract fee, while Fidelity charges an even lower $0.65 contract fee. There are also some transaction fee mutual funds that can incur costs, with Fidelity and Vanguard charging $49.95 and $20 for them, respectively.
For bonds, Fidelity's commission is cheaper at $1, as well as a $19.95 fee if you initiate a broker-assisted transaction. Vanguard unfortunately doesn't offer new issue bonds. However, its secondary market bonds come with a higher $25 broker-assisted fee.
Vanguard’s funds lower the expenses that ETFs charge to around 0.10%, which equates to about $10 per $10,000 invested. But with actively traded funds, investors may see expense ratios as high as 0.19%. Fidelity mutual fund costs can vary, but they often have expense ratios that are higher, especially for active funds. It's no surprise that Vanguard is cheaper here, as the firm offers many of its own funds to clients.
In regards to account fees, Vanguard charges a $20 annual fee for brokerage and IRA accounts. On the other hand, Fidelity doesn’t charge anything. Vanguard has a few ways to waive this fee, including holding at least $10,000 in Vanguard ETFs and mutual funds, holding at least $50,000 in qualifying Vanguard assets, electing e-Statements or having an organization or trust account with a registered EIN.
Vanguard vs. Fidelity: Services and Features
Both Fidelity and Vanguard have a wide variety of low-cost mutual funds and ETFs. If you’re simply looking at the options offered by each firm, Fidelity has more options available. Vanguard has about 2,800 no-transaction-fee mutual funds and 1,800 commission-free ETFs, while Fidelity offers over 3,700 no-transaction-fee mutual funds.
However, when it comes to index funds, Vanguard offers the lowest expense ratio of any fund company on the market. Since Vanguard is essentially owned by its funds, which are then owned by the investors who hold the funds, expenses are minimized. However, many firms are trying to compete with Vanguard’s low-cost funds. Therefore, you may be able to find other firms that have lower expense ratios. In fact, depending on the funds you want to invest in, Fidelity may have funds with lower expense ratios.
Additionally, Fidelity has $0 account minimums and has several funds that have no minimums as well. While Vanguard also has a $0 account minimum the company often has fund minimums starting at $1,000 to $3,000 depending on the fund. Vanguard does not waive their minimums, even if you’re a repeat investor. But Vanguard may lower the minimums depending on the type of account that holds the funds, such as an educational savings account.
When it comes to investment options, both firms have offerings that may be suitable for your portfolio. If you’re unsure which firm has funds that meet your budget and investment objectives, you can compare funds by using each broker’s fund screener.
Fidelity and Vanguard both offer robo-advisor services, educational tools and mobile apps to help you better manage your money. However, for those who want to actively trade, Fidelity offers Active Trader Pro. This service helps investors stream data and customize charting. Vanguard doesn’t have a similar service.
For people who want investment advice, Vanguard has a hybrid robo-advisor service known as Vanguard Personal Advisor Services. This service has algorithms that help with portfolio construction and asset allocation. They also offer human advisors via phone or online who can help answer financial planning questions and concerns. Vanguard requires a $50,000 account minimum for this service and charges a 0.30% annual management fee.
Fidelity also offers a robo-advisor service known as Fidelity Go. This platform is best for self-directed investors, but also has brick-and-mortar locations where clients can find answers to some basic financial planning questions. If you don’t have a location in close proximity, you can also reach out to one of their call centers. There is no minimum for Fidelity Go, nor is there an annual fee if your account balance is less than $10,000. For accounts with a balance of $10,000 to $49,999, there's a $3 monthly fee. Any accounts above $50,000 are charged a 0.35% annual fee.
Vanguard vs. Fidelity: Online and Mobile Experience
Both brokerages have robust online and mobile experiences. So while each firm has features and investments that favor specific types of clients, the quality of their tools and platforms are unquestionably strong.
Vanguard’s trading platform and apps are fairly basic, in keeping with the general aesthetic of the company. You can do everything you need to do as a low-level investor; make trades, buy mutual funds and check your performance. The platforms don’t have all the bells and whistles an experienced investor might want, but for someone who just wants to manage a few basic investments, it works.
Fidelity, on the other hand, has a more complicated and extensive online and mobile experience. While this may be a bit overwhelming for someone without a ton of investing experience, if you have been trading for awhile, Fidelity may help you take your investing game to the next level.
In April 2021, Vanguard's mobile app has a major variance in its satisfaction level among users. For the Apple version, users rate it at 4.7 stars out of 5 across over 167,000 reviews. But on the Google Play store, Android users rate it at just 2.2 stars out of 5 across more than 5,350 reviews. The brokerage is releasing a new app called Vanguard Beacon, though, and it promises to have more features and tools for clients.
Fidelity's mobile app has a much higher level of user approval than Vanguard's does. In fact, more than 1.6 million iPhone users have rated the app to an average of 4.8 stars out of 5 in April 2021. And the app also holds a respectable 4.2-star out of 5 rating on the Google Play store across more than 87,000 reviews.
Who Should Use Vanguard?
Vanguard built a reputation as a platform that creates and offers low-fee mutual funds and exchange-traded funds. This makes it a good brokerage for clients who want to make basic investments and not think too much about them.
In addition, if you want low-cost funds, Vanguard has also grown to offer stocks and bonds. Though, trading these individual equities is much more limited.
Vanguard might also make sense for clients who want to open an IRA and manage it in a very hands-off manner.
At its core, the brokerage is designed for investors who want a simple and straightforward experience. Its accounts and tools are easy to use, and its website boasts a number of educational resources. This makes it extremely welcoming to beginners.
Who Should Use Fidelity?
Fidelity is a robust trading platform that is known for its individual trading products, which include stocks and bonds.
Most clients would be happy with Fidelity, but it is especially suited for those with ample investing experience. Its advanced investment tools and platforms can be overwhelming if you're a newbie. Beyond that, if you’re going to be making frequent trades, Fidelity is one of the best choices out there.
While Fidelity does not charge much for its investment resources, it is also worth noting that other brokerages and broker-dealers are shifting to fee-free investment models.
Keeping this in mind, you'd be hard-pressed to find a better selection of high-level tools at an established brokerage. Many competitors have smaller pools of potential investments and less overall reliability than Fidelity.
Bottom Line
If you want to actively trade within your accounts, Fidelity might be the better option. However, if you're more focused on index investing, or you want to use a robo-advisor, Vanguard has a slight edge. While both institutions offer robo-advisors, Vanguard’s Personal Advisor Services, which is available to clients who can meet a $50,000 account minimum, offers a little more hands-on investment guidance and assistance with portfolio construction. Vanguard also has slightly lower expense ratios on their index funds.
If you want help with financial planning, mutual funds or retirement and brokerage accounts, both have great options. It’s best to compare costs and minimum account requirements of each firm and fund selection. By comparing your options you can discover the most suitable firm for your financial needs.
Tips for Investors
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you decide to go with a brokerage, SmartAsset can recommend a few online options. Once you've considered the above factors and compared online brokerages, you'll be in a position to find the best choice for you.
Photo credit: ©iStock.com/nespix | Banking & Finance |
Asia’s Worst-Performing Currency Heads for Another Tough Year
The Pakistani rupee is set to end the year as Asia’s worst-performing currency and the losses are seen extending into 2024.
(Bloomberg) -- The Pakistani rupee is set to end the year as Asia’s worst-performing currency and the losses are seen extending into 2024.
The currency has fallen about 20% against the dollar this year and analysts say its troubles are far from over. BMI expects the currency will weaken to 350 rupees per dollar by the end of next year, while Karachi-based brokerage Topline Securities Ltd. sees it depreciating to 324 rupees per dollar. It closed at 285.64 rupees per dollar on Monday.
“This looks like a currency that is set to adjust downwards,” said John Ashbourne, global economist at BMI in London, a Fitch Solutions company, citing Pakistan’s high inflation and trade deficit among the factors putting pressure on the rupee.
Pakistan’s high debt payments and an external funding gap are weighing on the rupee. The country was on the brink of a default this year, and falling investments from overseas and Asia’s fastest inflation are adding to its woes. Remittances also stay muted, making it more dependent on foreign aid for dollar flows.
The International Monetary Fund this month agreed to a $700 million payout, helping the nation stave off a default for now. Concerns remain its challenges may extend well into 2024, with the government requiring more aid for its fragile economy.
Dollar Shortage
A dollar shortage may also lead to parallel currency markets that emerged last year after the central bank restricted access to foreign currency to preserve dwindling reserves. As the rupee slumped to a record low in September, the government intensified a clampdown on illegal buying and selling of dollar at a premium to the exchange rate. The sharp gains that followed appear short-lived.
“It’ll be very hard in the long term to convince people to use the official rate if parallel markets give more value for a dollar,” said Ashbourne. “The authorities can sort of push against the tide for a certain amount of time, but they aren’t able to do that sustainably.”
Goldman Sachs Group Inc. warned the market will continue to require a premium for the rupee given soaring interest costs and only short-term arrangements with lenders to support the external balance.
As the nation heads for national polls in February, Topline Securities expects the new government to sign the long-term program with the IMF next year, which could provide relief to the currency.
“Pakistan’s external account vulnerabilities can only be addressed effectively through a new and bigger IMF program,” its analysts wrote in a note this month.
©2023 Bloomberg L.P. | Asia Business & Economics |
(Bloomberg) — Binance Holdings Ltd.’s Chief Executive Officer Changpeng Zhao pleaded guilty to anti-money laundering violations and agreed to pay a $50 million fine Tuesday under a sweeping deal worked out with the Justice Department designed to keep the company operating.
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Zhao agreed to step down as part of the settlement, which included the Treasury Department and the Commodity Futures Trading Commission, according to people familiar with the matter. Binance agreed to plead guilty to criminal charges and pay a $4.3 billion fine, according to people familiar with the matter. The deal ends a years-long investigation into the cryptocurrency exchange.
In a charging document unsealed on Tuesday, Binance was charged with three counts, including money laundering violations, conspiracy to conduct an unlicensed money transmitting business, and US sanctions violations. Binance allowed at least 1.1 million transactions, worth more than $898 million, involving customers in Iran, according to the court filing.
The settlement negotiated between the two sides will resolve allegations of criminal wrongdoing. Bloomberg News reported the settlement on Monday.
Read More: US Is Seeking More than $4 Billion From Binance to End Case
Binance chose to “prioritize growth over compliance with US legal requirements,” allowing it to conduct billions of dollars in transactions without gathering required information on customers or monitoring transactions, the US said.
BNB, a cryptocurrency tied to the Binance ecosystem, slipped about 5% following the news. The token had hit a five-month high earlier in the day on the news that the DOJ would soon confirm its settlement with the exchange.
US Attorney General Merrick Garland and Treasury Secretary Janet Yellen will hold a press conference at 3:00 pm ET on Tuesday to announce more details of the settlement.
Criminal Charges
The Justice Department accused the company — as well as top executives, including Zhao — of taking steps to conceal that it was dodging US laws. The filing states that from about August 2017 until October 2022, Binance and Zhao were involved in a “deliberate and calculated effort” to profit from the US market without implementing controls required by law.
Binance “chose not to comply with U.S. legal and regulatory requirements because it determined that doing so would limit its ability to attract and maintain U.S. users,” according to the charging document.
Binance and its senior managers, from the company’s inception, tracked and monitored the user growth in the US, according to the complaint, which included a company graphic from 2017 that showed more than 23% of Binance’s users were from the US — a larger share than any other country.
The government said Zhao was well aware of the presence of US customers on the international exchange, writing in 2019 that if Binance blocked US customers from day one it “will be not as big as we are today.”
Zhao wrote that it was “better to ask for forgiveness than permission” and described the situation as a “grey zone.”
Zhao faces a maximum sentence of 10 years and fines up to $500,000, plus any profits he made from the alleged scheme. His lawyers said in court on Tuesday that his sentencing will be delayed by 6 months. Zhao’s agreement includes a waiver of his right to appeal, provided that his sentence doesn’t exceed 18 months, according to Judge Brian Tsuchida said during the plea hearing.
Crypto Crackdown
The resolution against the world’s largest cryptocurrency exchange and its top leader represents one of the largest penalties imposed within the cryptocurrency industry, which has been facing withering scrutiny from the Justice Department, other government agencies and lawmakers.
Binance, which exploded onto the crypto scene in 2017 and almost immediately took on and surpassed larger rivals, saw its market share surge to more than 60% worldwide after the fall of FTX in November 2022. Since then, its combined market share for spot crypto and derivatives has declined to less than 44% this month, according to researcher CCData.
The Justice Department recently prosecuted FTX co-founder Sam Bankman-Fried in New York for allegedly orchestrating a multibillion-dollar misappropriation of customer funds that led to the cryptocurrency exchange’s collapse. Bankman-Fried was convicted of fraud following a trial.
Both the CFTC and Securities and Exchange Commission have sued Binance and Zhao alleging a range of violations, including mishandling customer funds and allowing Americans to illegally access the platform.
—With assistance from Michael P. Regan, Yueqi Yang, stacy-marie ishmael and David Voreacos.
(Updates with details from the hearing starting in paragraph one new details from unsealed criminal information against Binance in paragraph three.)
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©2023 Bloomberg L.P. | Crypto Trading & Speculation |
- "I think the SEC, in my opinion, has lost sight of their mission to protect investors," Ripple CEO Brad Garlinghouse told CNBC's Dan Murphy at the Ripple Swell event in Dubai.
- Ripple was handed a pivotal victory in July as a judge ruled that XRP was not in and of itself a security; the next key step in the case is a remedies discovery process.
- Garlinghouse hopes that the U.S. will move beyond a situation where crypto regulation is dictated by litigation to a point where federal laws governing digital currencies are introduced by Congress.
The CEO of blockchain company Ripple has some strong words for the U.S. Securities and Exchange Commission.
Brad Garlinghouse told CNBC's Dan Murphy at the company's Ripple Swell conference in Dubai that he thinks the agency has lost sight of one of its key tasks as a regulator.
"I think the SEC, in my opinion, has lost sight of their mission to protect investors. And the question is, who are they protecting in this journey?" Garlinghouse said Thursday. The SEC was not immediately available for comment when contacted by CNBC.
The SEC in 2020 accused Ripple and its executives of conducting a $1.3 billion securities fraud via sales of XRP to retail investors. Ripple, the regulator alleged, failed to register an ongoing offer and sale of billions of XRP tokens to investors, depriving them of adequate disclosures about XRP and Ripple's business.
In July, Ripple was handed a pivotal victory as a judge ruled that XRP is not in and of itself a security. Following this, the SEC was denied a request for an interlocutory appeal. Then, in October, the SEC dropped its securities law violation charges against Garlinghouse and Ripple executive Chris Larsen.
The next key step in the case is the remedies discovery process. The SEC has 90 days from Nov. 9 to conduct remedies-related discovery, according to a proposed schedule submitted by the SEC.
"I think it is a positive step for the industry, not just for Ripple, not just for Chris and Brad, but for the whole industry, that the SEC has been put in check in the United States. And I'm hopeful this will be a thawing of the permafrost in the United States for really seeing an amazing industry that has immense potential thrive in the largest economy in the world," Garlinghouse told CNBC.
Garlinghouse hopes that the U.S. will move beyond a situation where crypto regulation is dictated by a constant stream of litigation to a point where federal laws governing digital currencies are introduced by Congress.
"One of the things that people talk about is, one of the definitions of insanity is doing the same thing over and over again, and thinking you'll get a different outcome, the SEC is doing the same thing over and over again. And they think, I guess, they're gonna get a different outcome at some point," Garlinghouse continued.
"[Digital asset manager] Grayscale also had, I think, an important victory in the United States about the bitcoin ETF, where the judge had to get, a federal judge talking about a federal agency, the SEC, saying the SEC is being arbitrary and capricious," he added, referencing an appeals court ruling that said the SEC was wrong to reject an application from Grayscale to create a bitcoin ETF.
"Generally, judges tend to be pretty down the middle and try to not be dramatic — those are damning words. So I think at some point, the SEC has to step back and realize that their approach of regulation through enforcement, let's just bring lawsuits, that has to break."
Ripple is a payments company that specializes in cross-border money transfers through the blockchain, a distributed database that records transactions across multiple computers. The company's RippleNet network is used by financial institutions to send funds from one country to another.
Ripple also leverages XRP, a cryptocurrency, to make cross-border payments. The XRP token, which has become commonly associated with Ripple the company, is meant to act as a kind of "bridge" currency between one fiat currency and another as those transactions flow across countries.
So, say you want to send some money from the U.S. to Mexico. Ripple's technology lets you do that by converting the U.S. dollars into XRP, transferring the XRP over to Mexico, and then converting it into Mexican pesos on the other side.
By doing so, Ripple says, you don't need to have pre-funded accounts on the other side of a cross-border transaction in order to get that money.
That's the business case for XRP from Ripple's point of view. But XRP in its most common usage is ultimately a token that investors speculate on. And when its price dropped like a stone — like other cryptocurrencies — in the 2018 crypto bear market, regulators got concerned about the impact of these digital currencies on retail investors.
In Ripple's case, unlike bitcoin, the cryptocurrency is predominantly owned by Ripple, which holds a huge amount of XRP in an escrow account and releases tokens on a quarterly basis to a mix of institutional investors and retail investors via sales on cryptocurrency exchanges. This is a big part of how Ripple makes money.
That has been a big point of contention for the SEC as it pursues its case against Ripple. Ripple, for its part, maintains that XRP shouldn't be considered a security and is more akin to a currency or commodity. Being designated a security would mean Ripple having to file lots of paperwork and disclosures with regulators, a process that could prove costly. | Crypto Trading & Speculation |
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