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Major equity markets closed higher across the globe today, with
the exception of Mainland China which ended the day modestly lower.
US government bonds closed lower and the curve steepened, while
benchmark European bonds closed mixed. European iTraxx and CDX-NA
indices were sharply tighter across IG and high yield. Oil and
copper closed higher, while gold and silver closed lower for the
second consecutive day.
Americas
US equity markets closed higher, with the DJIA closing above
30,000 for the first time; Russell 2000 +1.9%, S&P 500 +1.6%,
DJIA +1.5%, and Nasdaq +1.3%.
10yr US govt bonds closed +2bps/0.88% yield and 30yr bonds
+6bps/1.61% yield.
CDX-NAIG closed -2bps/52bps and CDX-NAHY -16bps/314bps.
DXY US dollar index closed -0.4%/92.16.
Copper closed +1.2%/$3.30 per pound, tying with the highest
close since June 2018. The last time copper's price exceeded
today's close was January 2014.
Gold closed -1.8%/$1,805 per ounce and silver -1.4%/$23.30 per
ounce.
Crude oil closed +4.3%/$44.91 per barrel, which is the highest
close since 5 March.
Genentech (part of Roche, Switzerland) has garnered USD FDA
expanded approval for Xofluza (baloxavir marboxil) as a treatment
to prevent influenza in individuals aged 12 years and older
following contact with someone who has influenza (post-exposure
prophylaxis). The regulatory approval was based on data from the
double-blind, multi-center, randomized, placebo-controlled Phase
III BLOCKSTONE trial, which was conducted by Shionogi (Japan) in
Japan. The percentage of household members (including adults and
children 12 years and older) living with someone with influenza who
themselves developed influenza was 1% in the Xofluza arm, compared
with 13% in the placebo-treated group - thus demonstrating a
statistically significant prophylactic effect from a single oral
dose. Xofluza is the first single-dose influenza treatment to be
approved by the FDA for post-exposure prophylaxis. Access to the
treatment could be more critical than ever during the current flu
seasons as the world battles with the COVID-19 virus pandemic. (IHS
Markit Life Sciences' Margaret Labban)
The global chemical-based crop protection market is predicted
to have increased by 4.3% in 2020 to $62,429 million at the
ex-manufacturer level, according to preliminary analysis by
Phillips McDougall. Sales of all pesticides, including non-crop
products will have grown slightly slower at 3.9% to $70,279
million. Growth was dimmer to almost flat for non-crop pesticide
sales, which will have added only 0.6% at $7,850 million. A
definitive survey of the market will be carried out in the new
year, and reported early in 2021, Phillips McDougall notes. The
report highlights that despite the major impact on the general
economy from the Covid-19 pandemic, agriculture has been largely
sheltered from the worst impacts. Agricultural input manufacturing
and supply have largely been excluded from lockdown restrictions,
with only some hurdles arising from reduced availability of migrant
farm labour and issues surrounding delays of shipments in ports.
Phillips McDougall has looked at financial reporting from the
leading companies active in the crop protection sector, trade data,
as well as crop acreage prospects and general economic factors in
preparing the report. Phillips McDougall is cautiously predicting
another low to mid-single digit market rise in 2021. It expects
further withdrawals of older chemistries, driving adoption of newer
ais and to a lesser extent biologicals. However, it stresses
increasing adoption of biological products, particularly 'hybrid'
conventional/biologicals products. Pressure from fall armyworms in
South-East Asia is likely to remain, driving the use of the latest
proprietary technologies, pyrethroid and organophosphate
insecticides, as well as alternative technologies such as
nucleopolyhedrovirus. (IHS Markit Crop Science's Robert
Birkett)
Ineos has agreed principle terms with Sasol for the
$404-million acquisition of Sasol's 50% stake in the companies'
Gemini high-density polyethylene (HDPE) manufacturing joint venture
(JV) at La Porte, Texas. The target closing date for the
acquisition is 31 December, the companies say. Ineos Olefins and
Polymers (O&P) USA, a wholly-owned subsidiary of Ineos, will
become the sole owner of the 470,000-metric tons/year HDPE unit.
The company has been the operator of the Gemini plant, located
within Ineos's Battleground manufacturing complex, since its
start-up in 2017. The proposed purchase from Sasol subsidiary Sasol
Chemicals North America will allow Ineos to "further expand its
reach" in the rapidly growing specialty PE markets for
pressure-pipe and high-molecular-weight film, it says. The deal
will also "increase Ineos Group's global HDPE market share and
strengthen its ability to service the rapidly-growing bimodal
markets," it adds. The transaction is subject to financing and
other customary adjustments. Sasol president and CEO Fleetwood
Grobler says the divestment "continues the transformation of
Sasol's chemicals business toward specialty chemicals markets."
Proceeds from the transaction will be used to repay near-term debt
obligations, the company says. The value of the net assets relevant
to the sale was $176 million as at 30 June 2020, which is net of
debt facilities, as disclosed in Sasol's financial statements, it
says. The loss attributable to the net assets was $18 million for
the fiscal year ended 30 June, with the proposed sale to be
effective only on restructuring of the existing debt facilities, it
adds. In early October, Sasol agreed to form an equally-owned JV
with LyondellBasell, with LyondellBasell to pay $2 billion to
acquire 50% of Sasol's new 1.5-million metric tons/year steam
cracker, and low-density polyethylene (LDPE) and linear low-density
polyethylene (LLDPE) plants at Lake Charles, Louisiana. That
transaction is also expected to close by the end of the year. (IHS
Markit Chemical Advisory)
Autonomous truck startup TuSimple has reportedly raised USD350
million in a Series E funding round. The financing round is led by
consulting and investment firm VectoIQ, headed by Steve Girsky,
with participation from current partner Navistar and Volkswagen's
(VW) Traton Group, a freight rail operator and grocery retailer,
reports Forbes. With the latest capital, TuSimple has raised a
total of USD600 million since its launch in 2015. TuSimple focuses
on developing Level 4 autonomous solutions for the logistics
industry. The company currently has about 40 vehicles in its test
fleet and expects to achieve fully autonomous operations in 2021.
Recently, Traton and TuSimple announced a global partnership on
autonomous trucks, which will involve Scania testing the technology
(see United States: 24 September 2020: Traton announces partnership
with autonomous vehicle company TuSimple). In August 2019, UPS's
venture capital arm, UPS Ventures, invested an undisclosed amount
in TuSimple, after the companies conducted trials in May. TuSimple
currently has 18 contracted customers and makes around 20
autonomous trips per day. (IHS Markit Automotive Mobility's Surabhi
Rajpal)
The US government has awarded a federal transportation contract
estimated to be worth up to USD810 million to Uber and Lyft,
reports Reuters. This deal will enable both the companies to offer
their ride-hailing services to public agencies in the United
States, involving over 4 million employees of the government
nationwide. The General Services Administration (GSA), the
procurement arm of the federal government, has granted the
five-year contract to Uber and Lyft. Previously, individual
employees could use ride-sharing services, but the new contract
allows the "companies to formally launch their services within
agencies and directly work with officials to promote the service",
the report states. (IHS Markit Automotive Mobility's Surabhi
Rajpal)
Pinellas Suncoast Transit Authority (PSTA) has partnered with
Beep to launch a three-month autonomous shuttle trial program in
St. Petersburg (Florida, US). The AVA autonomous shuttle, which is
developed by French company NAVYA, will share the road with cars,
busses and other vehicles, reports St. Pete Catalyst. The shuttle
will take passengers between the Vinoy Hotel and the Dali Museum on
Bayshore Drive. The shuttle operates without a steering wheel or
pedals and travels on a pre-programmed route using technologies
such as LiDAR sensors and GPS tracking for navigation. The AVA will
operate at a maximum speed of 15 mph and will have an onboard
shuttle attendant to intervene in case of emergency. To ensure
safety, the program has implemented various COVID-19 virus-related
safety measures; riders must wear face coverings and the shuttle
capacity is limited to six passengers, down from the normal
capacity of 15. Jeff Brandes, Florida Senator, said, "The world is
getting more shared, it's getting more electric and it's getting
more self-driving. Those three trends are represented in [AVA] and
that will only grow over time. The fact that we have scooters in
St. Pete, that we're seeing more and more electric vehicle charging
stations, that Uber and Lyft are thriving here, and now we have a
self-driving shuttle just highlights the world of shared, electric
and self-driving to come." Beep is an autonomous mobility solution
company that offers services to fleet operators in planned
communities and low-speed environments. (IHS Markit Automotive
Mobility's Surabhi Rajpal)
CAOA Group has announced plans to invest BRL1.5 billion (USD277
million) over the next five years at its Anápolis plant in Goiás
state, Brazil, reports Automotive Business. The automaker stated
that the investment will result in the creation of 2,000 new direct
jobs, on top of the current 1,600 jobs at the plant, the building
of two new production lines, and powertrain electrification. The
investment will also result in the manufacture of 10 models at the
plant, including new and renewed models of CAOA Chery, Hyundai, and
another brand that is in negotiations and the details of which will
be reveled soon, the company stated. Further, the company plans to
expand its dealership network from 104 to 151 centres. Mauro
Correia, CEO of CAOA Group, said, "With the support of the
government of Goiás and Governor Caiado, it was possible to extend
federal benefits and this was fundamental to make this investment
in Anápolis feasible. Without that, we would not be competitive
here." He added that the automaker's objective of increasing
production capacity from 86,000 units to 100,000 units per annum is
likely to attract more suppliers and create 20,000 to 25,000
indirect jobs as well. According to IHS Markit's light-vehicle
production data, CAOA's Anapolis plant produces three Chery sport
utility vehicles (SUVs), the Tiggo 5x, 7, and 8, and three Hyundai
vehicles, the ix35, Tucson, and HR. The plant is forecasted to
produce the Exceed LX and VX SUV in 2021. The plant's production is
forecasted to rise by 19% in 2021. (IHS Markit AutoIntelligence's
Tarun Thakur)
The governor of Argentina's province of Mendoza, Rodolfo
Suárez, signed an agreement on 19 November with Brazilian firm Vale
on the transfer of the Río Colorado potash mine to the province.
Vale acquired the mine in Malargüe in 2009, planning a USD6-billion
investment. However, the company left the project in 2013, citing
increased costs and a deteriorating business environment in
Argentina, with tight capital controls and high export taxes, and
the project has been paralyzed since. The 19 November agreement
includes the transfer of the totality of the mine's assets to
Mendoza at no cost for the province, while Vale is exempted from
penalties for abandoning the project. The revamped project is
slated to be managed by a new provincial mining company and would
be of much smaller scale than originally designed. It would require
a USD200-million investment to produce 200,000 tons per year, down
from the 4 million tonnes initially planned. Provincial authorities
are looking for an external investor, and are reportedly holding
conversations with Chinese, Swedish, Australian, Canadian, and
British firms. The reactivation of the project does not signal an
improving business environment in Mendoza for the wider development
of other minerals, such as copper and gold, as bans against
open-pit mining and the use of chemicals remain in place, despite
the governor's efforts to reactivate mining activity. Repealing or
amending the regulations that impose the restrictions on mining is
very unlikely. In December 2019, social protests forced Suárez to
repeal a controversial law that he had promoted himself, which
would have allowed the use of chemicals in metal mining (see
Argentina: 17 January 2020: Argentina's Mendoza and Chubut reject
pro-mining proposals, signaling likely delays to
government-sponsored framework to develop the sector). Since potash
uses different extraction methods, new investors in Río Colorado
would not be subject to the ban. The reactivation of Río Colorado
could take up to six years, based on the timeframe agreed with Vale
for it to continue paying for maintenance, costing a reported total
of USD30 million. Statements against the deal with Vale by local
opposition parliamentarians from the Justicialist Party (Partido
Justicialista: PJ) would indicate likely hurdles to the approval of
the bill in the provincial legislature, further delaying the
reactivation of the project. (IHS Markit Country Risk's Carla
Selman)
Europe/Middle East/Africa
European equity markets closed higher across the region;
Italy/Spain +2.0%, UK +1.6%, Germany +1.3%, and France +1.2%.
10yr European govt bonds closed mixed; Italy -1bp, Spain flat,
France/UK +1bp, and Germany +2bps.
iTraxx-Europe closed -3bps/49bps and iTraxx-Xover
-11bps/264bps.
Brent crude closed +3.8%/$47.78 per barrel, which is the
highest close since 5 March.
The U.K. recorded its lowest number of new coronavirus cases in
nearly two months on Tuesday, the latest indication that infections
are steadily declining. Restrictions in England are due to be eased
next week to make way for a regional approach that will allow many
businesses to reopen, and some socializing. (Bloomberg)
The deterioration in PMIs, consumer sentiment, and national
business surveys has deepened as more stringent COVID-19 virus
containment measures take their toll. (IHS Markit Economist Ken
Wattret)
"Hard" activity data for the eurozone are available only up to
September and offer mixed signals of potential "carry over" effects
for the fourth quarter's GDP.
Survey data for November have been released and they paint a
much more downbeat picture of short-term prospects.
IHS Markit's 'flash' composite PMI dropped for the fourth
successive month in November, with the decline (from 50.0 to 45.1)
the biggest since April. While the decline was largely attributable
to weakness in the service sector, inflows of new orders in
manufacturing rose at their slowest rate for five months.
The average reading of the eurozone composite PMI over the
fourth quarter to date (of 47.6) is the lowest since the fourth
quarter of 2012 in the latter stages of the eurozone crisis,
excluding the two COVID-19 virus-blighted quarters in the first
half of 2020.
Eurostat's 'flash' estimate of November consumer sentiment in
the eurozone also show its biggest decline since April, falling for
the second month in a row, by just over two points.
In the aftermath of the initial wave of the COVID-19 virus
pandemic, consumer sentiment was less affected than the equivalent
indices for services or industry (see chart below). However,
consumer sentiment is below its long-run average, sliding and set
to remain weak given deteriorating short-term growth and
unemployment prospects.
Business surveys across the eurozone's larger member states
also show renewed downward momentum in November. This is evident in
the drop in France's National Institute of Statistics and Economic
Studies (INSEE) survey and the slippage in Germany's Ifo business
climate index, although the manufacturing sector continued its
recent spell of outperformance, echoing the signals from the
PMIs.
Final November releases for IHS Markit's PMIs and Eurostat's
economic sentiment data could well show even bigger falls than
their respective 'flash' estimates, as containment measures in many
parts of the eurozone were only stepped up part way through the
month.
Germany's headline Ifo index, which reflects business
confidence in industry, services, trade, and construction combined,
declined even more sharply in November than in October, confirming
a serious setback to the recovery observed since May. It fell from
92.5 in October (revised down from 92.7) to 90.7 in November. These
levels compare with February's pre-pandemic level of 95.7, the
all-time low of 75.4 in April, and the long-term average of 97.1.
The Ifo Institute attributes the setback to the fresh uncertainty
caused by the second wave of the COVID-19 virus pandemic and
November's tightened containment measures. (IHS Markit Economist
Timo Klein)
In November, October's pattern of markedly deteriorating
expectations (from 94.7 to 91.5, a setback to the sentiment in
June) and greatly outperforming current conditions repeated (a
modest dip from 90.4 to 90.0). Expectations worsened the least in
construction and manufacturing, whereas the outlook for the service
sector deteriorated sharply, driven by plunging confidence in the
hospitality sector owing to the forced closures. Unsurprisingly,
current conditions also fell markedly in the service sector and
among retailers, in contrast with a small improvement in
construction and quite a large one in manufacturing.
The breakdown of overall indices by sector, which combines
expectations and current conditions, reinforces the picture that
the business climate in the service and retail sector is hurt the
most by the renewed lockdown, whereas construction sentiment has
hardly changed and manufacturing confidence posted a net gain
because of major further improvements in current conditions. The
manufacturing climate now outperforms that in all other sectors,
following two-and-a-half years of in part severe
underperformance.
The Ifo graph portraying the cyclical position of the diffusion
index of the headline measure - setting the current conditions and
expectations balances against each other - signals that the economy
is firmly in downswing territory now, having briefly touched
booming territory in August-September. Although the assessment of
current conditions slipped only slightly from 5.9 to 5.1,
expectations fell quite sharply from -1.4 to -8.1. This accurately
reflects the survey's participants' fear that the recent tightening
of COVID-19 virus-related restrictions might last longer and thus
deeply hurt their business prospects in the weeks and months
ahead.
Ifo's November survey results signal that Germany's economic
activity will be damaged by the renewed lockdown, but
manufacturing-sector resilience is providing significant support
that was missing during March and April.
France's business sentiment index declined by 11 points to 79
in November. The magnitude of November's fall is similar to the
decline in the index between February and March 2020, when it
dropped from 105 to 95. However, it is substantially lower than
collapse of 41 points recorded between March and April (when the
index fell to just 54, its all-time low). (IHS Markit Economist
Diego Iscaro)
Unexpectedly, given the nature of the new containment measures
implemented at the start of the month, confidence in the retail
sector fell particularly acutely in November (-23 points to 72),
reaching its lowest level since May, when it had stood at 63.
Confidence in the service sector also declined for the second
successive month. The index waned from 89 in October to 77, a
six-month low (the index had stood at 52 in April). The indices
measuring expected activity, demand, and employment in the service
sector plunged in November.
Meanwhile, confidence in the manufacturing sector fell at a
softer pace (2 points, to 92, a four-month low). The deterioration
in the index was almost exclusively driven by a substantial fall in
general and personal production expectations. On the other hand,
the indices measuring overall and export order books improved
modestly in November.
Solvay says it has reached an agreement to sell its
technical-grade barium and strontium business in Germany, Spain,
and Mexico, as well as its sodium percarbonate business in Germany
to Latour Capital (Paris, France), an independent private equity
firm. The company says its joint venture (JV) with Chemical
Products Corp. (Cartersville, Georgia) is included in the
transaction as part of Solvay's barium and strontium business. The
transaction—financial terms of which have not been
disclosed—will be completed in the first quarter of 2021 and
remains subject to the completion of information and consultation
procedures with employee representatives and approval from the
relevant regulatory authorities. Didier Gaudoux, partner at Latour
Capital, says that under Solvay's umbrella, the businesses "have
established leading competitive positions and proved to have very
efficient production processes. We will support the management to
deliver an ambitious and sustainable growth strategy, with the
right investments in capacities and continuous improvements on ESG
matters," he says. The agreement is a key step toward streamlining
Solvay's portfolio while reducing the company's footprint by
exiting its position in niche technical-grade chemical markets, the
company says. The divestment also aligns with Solvay's G.R.O.W.
strategy, announced last year, it says. (IHS Markit Chemical
Advisory)
Swedish truck-maker Scania has acquired Chinese truck company
Nantong Gaokai to start making vehicles in the country, reports
Reuters, citing information from Scania. The report has been
confirmed by local media reports indicating that Scania plans to
celebrate the opening of its new manufacturing base on 28 November
in Rugao, Jiangsu province. However, production launch timing and
planned capacity are not known at this stage. Scania has increased
its investment in China with its first production plant there. The
truck-maker is expected to expand its sales and service network
across China over the next two years, as it prepares to launch
locally built trucks. China's commercial vehicle (CV) market
rallied during 2020 as new infrastructure projects backed by the
central and local governments spurred demand for heavy trucks. In
the first 10 months of 2020, sales of CVs in China have risen by
20.9% year on year (y/y) to 4.20 million units. (IHS Markit
AutoIntelligence's Abby Chun Tu)
The Hungarian government-funded project to create a test track
for autonomous vehicles (AVs) is near completion, and the first
phase of the project is now open for clients, according to a BNE
IntelliNews report. Construction for the project, which is located
in Zalaegerszeg, began in 2017 with the government funding the
HUF45-billion (EUR138-million) facility, which will include a 2km
handling course, 300m-diameter dynamic platform and multi-surface
braking platform, five-hectare smart city, 2,000-square-meter
garage and conference center. The Hungarian government has applied
foresight to the construction of this facility, which will be the
only bespoke AV testing site in Europe. It has been specifically
designed for the testing of autonomous, connected and electric
vehicles, including both passenger vehicles and larger commercial
trucks up to 40 tons. Construction of the facility is now 70%
complete, according to local media reports; Knorr-Bremse, Bosch,
Continental, Porsche, and Volkswagen are already making use of it.
(IHS Markit AutoIntelligence's Tim Urquhart)
Israeli GDP bounced back 37.9% q/q SAAR in the third quarter
after the gradual lifting of the first shutdown. (IHS Markit
Economist Ana Melica)
Israel's Central Bureau of Statistics (CBS) released on 16
November its first estimate of third quarter GDP. Real GDP surged
at a 37.9% quarter-on-quarter (q/q) seasonally adjusted annualized
rate (q/q SAAR). This followed a slightly downwardly revised
contraction of 29.8% q/q SAAR in the second quarter of 2020.
In non-annualised terms, real GDP recovered 8.4% q/q after
-8.5% q/q in the second quarter. Third-quarter growth was the
highest on record since at least the early 1980s.
On an annual basis, real GDP was down only 1.4% year on year
(y/y). Compared to the first quarter, it was down only 0.8%, or
down 2.6% from the fourth quarter of 2019.
Virtually all of the growth recovery came from private
consumption, which contributed 4.6 percentage points (pps) of the
8.4% q/q growth, and exports, which contributed 4.3 pps. Private
consumption expenditure on housing grew 1.1% q/q; spending on food
grew 4.1% q/q; and spending on fuel, electricity, and water
expanded 13.1% q/q.
Fixed investment recovered only 7.3% q/q SAAR (1.8% q/q), as
industries continued contracting while residential building saw a
partial recovery.
Government consumption growth slowed to 5.1% q/q SAAR (1.2%
q/q) following a surge in healthcare and stimulus spending in the
second quarter.
Imports continued contracting, by 6.0% q/q SAAR (1.5% q/q).
However, exports surged by 63.9% q/q SAAR (13.1% q/q) or by 7.0%
y/y. Indeed, other than government consumption, exports were the
only component that expanded from a year earlier. This resulted in
the real trade surplus nearly tripling in size compared to the
second quarter.
Despite a strong recovery in the third quarter, real GDP is
likely to contract or slow in the fourth quarter following a second
nationwide lockdown from 18 September to 17 October and ongoing
restrictions. Additionally, a third lockdown is being considered
over the winter.
Qatar General Electricity and Water Corporation (KAHRAMAA) has
launched electric vehicle (EV) and charging infrastructure
guidelines in Qatar, reports the Qatar Tribune. The guidelines are
aimed at supporting the establishment of infrastructure regulations
for EVs, promoting the sale of EVs, contributing towards the
diversification of energy sources, and reducing carbon emissions in
Qatar, according to the report. KAHRAMAA, in co-operation with the
Ministry of Transportation and Communications (MoTC), issues
approvals for installations of different capacities of charging
stations according to their suitability in the locations. The
guidelines aid in the installation of EV charging units for both
the government and the private sector, and the selection of
technical specifications for chargers and charging equipment. (IHS
Markit AutoIntelligence's Tarun Thakur)
Nigeria's GDP rebounded by 12.1% quarter on quarter (q/q)
during the third quarter, from a 5.0% q/q contraction during the
second quarter. The q/q rebound in economic activity in the third
quarter was not enough to offset the losses incurred during the
second quarter, when GDP also contracted by 6.1% y/y, and GDP
decreased 2.6% y/y during the first three quarters of 2020, as well
as declining 3.6% y/y in the third quarter. (IHS Markit Economist
Thea Fourie)
Output in the oil sector fell by 13.9% y/y during the third
quarter, while non-oil GDP - accounting for 91.3% of total real GDP
- contracted by 2.5% y/y, from a contraction of 6.1% y/y during the
second quarter. "The average daily oil production recorded in the
third quarter of 2020 stood at 1.67 million barrels per day (mbpd),
or 0.37 mbpd lower than the average production recorded in the same
quarter of 2019 and 0.14 mbpd lower than the production volume
recorded in the second quarter of 2020," the Nigeria National
Bureau of Statistics (NBS) reported.
Sectors that showed the strongest rebound during the third
quarter included the agricultural sector (up 1.4% y/y),
construction (up 2.8% y/y), information and communication (up 14.6%
y/y), and finance and insurance (up 3.2% y/y). Public
administration, health and social services, and water supply also
recorded growth over the period.
Sectors that recorded the biggest contractions during the third
quarter included mining and quarrying (down 13.2% y/y), trade (down
12.1% y/y), accommodation and food (down 22.6% y/y), transport and
storage (down 42.9% y/y), and education (down 20.7% y/y).
The NBS reported that Nigeria's third-quarter GDP growth
numbers continued to reflect the aftermath of the COVID-19 pandemic
lockdown measures. In the third quarter, as
COVID-19-pandemic-related restrictions on movement and economic
activity were lifted, businesses across Nigeria slowly reopened,
while international travel and trade activities resumed. The upward
momentum is expected to be sustained in the fourth quarter.
Asia-Pacific
Most APAC equity markets closed higher except for Mainland
China -0.3%; Japan +2.5%, Australia +1.3%, India +1.0%, South Korea
+0.6%, and Hong Kong +0.4%.
On Nov. 12, President Trump signed an executive order barring
Americans from investing in 31 Chinese companies that the U.S. says
supply and otherwise support China's military, intelligence and
security services. The blacklist sparked a selloff in stocks and
bonds issued by some targeted companies or their units, though
analysts said it wasn't clear if the prohibition extended beyond
companies named directly by U.S. authorities to publicly traded
subsidiaries of those companies. Adding to the uncertainty, the ban
is due to start on Jan. 11, just days before President-elect Joe
Biden is due to take office. Late last week, MSCI said it was
consulting investors on the impact of the ban, including whether it
needed to change existing stock indexes or introduce new ones. FTSE
Russell said it was "seeking rapid feedback from clients and other
stakeholders on the scope of the sanctions and the timing of the
deletion of the affected securities from FTSE Russell indexes."
Kenneth Ho, head of Asia credit strategy for Goldman Sachs,
estimates that targeted companies and their subsidiaries have about
$53.9 billion in offshore debt, or about 6% of all Chinese bonds
issued in dollars, euros or yen. (WSJ)
Billions of dollars in market value of Asian makers of
protective and medical gear has been wiped out by the prospect of
effective COVID-19 vaccines, denting a rally that was prompted by
the pandemic. Shares in Kuala Lumpur-listed Top Glove, the world's
largest maker of rubber gloves, have dropped almost 30 per cent
from their October peak as of Tuesday, lopping about $5bn off its
market capitalization as part of a sell-off that has hit PPE groups
across the region. (FT)
Fast-food giant KFC has deployed several 5G-based autonomous
food trucks in China, reports Times Now News. This is a result of
partnership between autonomous delivery company Neolix.ai and Yum!
Brands, which owns KFC. These trucks aim to "minimize human contact
and promote social distancing" and can travel 100 km on a single
charge with a maximum speed of 50 km/hr. The trucks are integrated
with special sensors to detect and avoid obstacles on the road.
Users can select the food through a simple touchscreen and pay by
scanning a QR code on the vehicle with a smartphone. Once the
payment is successful, the food compartment door is unlocked,
allowing customers to pick their food package. Delivery services
are an attractive option as one of many potential
autonomous-vehicle (AV) business use cases. The expectation is
that, eventually, the ability to eliminate the cost of a human
driver could make delivery services far more affordable for both
the merchant and the consumer. Neolix was founded in 2014 and
offers Level 4 autonomous delivery vehicles. The company has its
own production plant and claims to operate the world's first
production line for Level 4 vehicles. It has partnered with Baidu,
Cainiao, and Meituan Dianping to commercialize its AVs. Its clients
include JD.com, Alibaba, Meituan, and Huawei Technologies. Neolix's
vehicles have been deployed in tourist attractions, campuses, and
logistics parks across China. (IHS Markit Automotive Mobility's
Surabhi Rajpal)
Chinese automaker GAC Motor Group has launched its AION product
series as a standalone brand with a focus on electric vehicles
(EVs). The company made the announcement of the spin-off of AION
from the GAC product line during the ongoing Guangzhou Motor Show
2020, at which the brand's fourth model, the AION Y, made its debut
in China. The AION Y, a compact EV, has the same underpinnings as
the AION V and the AION LX. The models are based on the GAC
Electric Platform (GEP). GAC did not reveal the interior design and
specifications of the AION Y at the auto show. According to the
automaker, the AION brand will be managed by its wholly owned
subsidiary GAC AION, which was previously known as GAC New Energy
(GAC NE). (IHS Markit AutoIntelligence's Abby Chun Tu)
ZNZ Pharma 2 Limited (UK), a newly incorporated
biopharmaceutical company, has acquired a majority stake in the
Hyderabad-based specialty generics company Celon Laboratories
Private Ltd. (India). ZNZ Pharma, which is backed by the UK's
publicly owned impact investor CDC Group plc, as well as private
equity firm Development Partners International (DPI) and the
European Bank for Reconstruction and Development (EBRD), has
acquired a 74% stake in Celon Labs for around USD75 million,
according to the Times of India. Middey Nagesh Kumar, Celon Labs'
managing director, said, "The primary investment by our new
shareholders will help Celon expand its capabilities and capacities
to match market opportunities in both therapeutic segments on a
much larger, global scale." The acquisition deal will see venture
capital player Sequoia Capital (US), which had held a 55% stake in
the Indian company since October 2010, divest its share. Through
its acquisition of a majority stake in Celon Labs, ZNZ Pharma
reportedly plans to establish a new oral and injectable
manufacturing facility for critical care and oncology products in
India. The investment will enable Celon to expand its manufacturing
capabilities, its product portfolio and its global reach. (IHS
Markit Life Sciences' Sacha Baggili)
Posted 24 November 2020 by Chris Fenske, Head of Fixed Income Research, Americas, S&P Global Market Intelligence
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