March 2 FT Ma the conflict in China, Protests in HK, Vaccines, Not wrong to take profit?


02 Mar

MARKETs at 2:15pm HK time 
General 
The general rebound continues as investors realised that rising Treasuries are part of the new investment landscape and that they are a sign of a healthy recovery, a steep yield curve is a good thing for the recovery. Covid recovery plays are the focus for investors the Russell has a particularly strong rebound along with the US dollar index; a slight -VE for inflation hedges and commodities but with so much stimulus coming they will have their day.
Worth noting that crypto currencies are up nearly 10 fold since last May whilst Gold and other precious metal have not risen as far. Whilst crypto and bitcoin may be the new gold for some, I still think a lot of investors will put their faith in the metal again as inflation becomes established.
S&P 500 hit support in the current channel so has potential for more upside ahead.
PMI and ISM data also suggests that we will see supply shortages and costs rising in the short term adding to the inflationary pressures; which is true globally including China.Apple is increasing its retail presence opening 17 mini stores in Target Stores, Buffett said it was one of the ’the family jewels’ +VE for the company and its supply chain in Asia.
China 
The fourth session of the 13th National Committee of the Chinese People's Political Consultative Conference, China's top political advisory body, will open in Beijing on Thursday, state media Xinhua reports. The decision was made at a meeting of the Standing Committee of the CPPCC National Committee on Monday.Members of the national committee are expected to join the fourth session of the 13th National People's Congress, which opens on Friday, as non-voting participants. They will discuss documents including the government work report and the draft 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, according to the proposed agenda.

AUSTRALIA 
The Reserve Bank of Australia (RBA) left its cash rate at 0.1%.
“The current monetary policy settings are continuing to help the economy by keeping financing costs very low, contributing to a lower exchange rate than otherwise, and supporting the supply of credit and household and business balance sheets,” RBA Governor Philip Lowe said in a statement. “Together, monetary and fiscal policy are supporting the recovery in aggregate demand and the pick-up in employment.”
JAPAN 
Nikkei 225 opened higher after the rebound in the US and the pre market data was good. Looked to rtes 30,000 in early trades but never reached there and trended lower through the session to close at lunch just below Monday’s close. PM opened lower and traded sideways to currently -221pts (-0.8%) @ 29,443
Topix followed a similar pattern although worked higher into the close Currently -7pts (-0.4%) @ 1,896
Yesterday’s PMI showed more factory activity expansion along with Input costs rising +VE
Watch Fukuoka Financial Group that technical chart shows its is set to breakout benefitting from the yields on Japanese 10 year bonds hitting the highest level in three years.
Data
Unemployment Rate Jan 2.9% vs +2.9% Dec (F/cast was 3%)
Jobs/application Ratio Jan 1.1 vs 1.06 Dec (F/cast was 1.07)
Capital Spending Q4 -4.8% vs -10.6% Q3 (F/cast was -5.5%)
S KOREA  
Re opened after good traded data out Monday, this mornings data was more mixed but PMI improved with improving new orders and output but rising input prices which were bing passed onto clients. Foreigner started as buyers as bond concerns eased.Kosdaq opened higher and initially rallied to 936 before drifting lower until around 1pm when the selling increased and it tested Friday’s closing level before a bounce to close +6pts (+0.6%) @ 920
Kospi followed a similar patter to close +22pts (+0.7%) @ 3.34.
Data
Industrial Production Jan -1.6% MoM vs +3.7% Dec (F/cast was +0.8%)
Industrial Production Jan +7.5% YoY vs +3.4% Dec (F/cast was +4.5%)
Manufacturing Production Jan +7.4% YoY vs +3.4% Dec (F/cast was +5.5%)
Construction Output Jan -6.4% YoY vs -2.5% Dec (F/cast was +1.5%)
Retail Sales Jan 0% YoY vs -2% Dec (F/cast was -1.5%)
Retail Sales Jan +1.6% MoM vs +0.2% Dec (F/cast was +0.5%)
During market hours Manufacturing PMI Feb 55.3 vs 53.2 Jan (F/cast was 53)
TAIWAN 
opened higher and tested 16,263 in early trading but then trended lower for the rest of the session and closed at the day low -7pts unch @ 15,947 Data
Manufacturing PMI Feb 60.4 vs 60.2 Jan (F/cast was 60)
The highest since April 2010. A substantial rise in new orders supported expansions of both output and employment. Also, export sales grew at the second-quickest rates since January 2011, with firms mentioning improved demand across mainland China, Europe, and the US in particular. In addition, buying levels rose the most in almost eleven years as firms looked to meet rising order volumes. Meantime, supply chain delays were the worst seen on record amid stock shortages and shipping-related delays. This in turn drove a further sharp increase in input costs, which was partly passed on to customers in the form of higher factory gate charges. Finally, sentiment slipped to a three-month low
CHINA 
CSI 300 opened higher at 5,450 and trade sideways initially testing that level but unable to break above and around mid morning sold down into lunch. PM opened lower around 5,350 and tested down to 5,305 level. Currently -66pt (-1.2%) @ 5,351
Caution ahead of the ’two sessions’ watching for policy decision on stimulus and debt.
HONG KONG 
Opened @ 29,708 +256pts vs +80ps ADR’s
Saw initial selling but then rebounded to the opening level but sold down following China; bounce off 29,200 into lunch. PM tested lower with support at 29,000 which it tested a couple of times. Currently -259pts (-0.9%) @ 29,185
EUROPE 
Expect markets open lower following Asian markets; London’s FTSE is seen opening 21 points lower at 6,558, Germany’s DAX down 55 points at 13,943, France’s CAC 40 down 16 points at 5,777 and Italy’s FTSE MIB 81 points lower at 23,170, according to IG.
UK markets likely to be cautious ahead of the Budget on Wednesday.
Data 
EUROZONE Core Inflation Rate, Inflation Rate
GERMANY Retail Sales, Unemployment
FRANCE No data due
UK Nationwide House Prices.
Earnings from HelloFresh, Man Group, Travis Perkins, Taylor Wimpey and Hotel Chocolat.
US Futures 
Opened in Asian time Dow +40pts, S&P +0.15% and NDX +0.3% but have retreated and now Dow -123pts S&P and NDX both -VE
AHEAD Redbook, ISM New York, IBD.TIPP Economic Optimism, API Crude Oil Change.Speeches from Feds Brainard and Daly
Earnings: Target, Box, Hewlett Packard Enterprise, Nordstrom, Ross Stores, International Game Technologies, AutoZone, Kohl’s, Abercrombie and Fitch, Hovnanian

FT Front Page
Sarkozy sentenced to 3 years’ jail over corruption pact with judge
• France’s former president guilty of peddling influence • Appeal against verdict planned
Greensill left scrambling for funding after Credit Suisse suspends $10bnThe decision was said to be “to protect the interests of all investors”, adding: “A certain part of the [funds’] assets is currently subject to considerable uncertainties with respect to their accurate valuation.”  It deprives Greensill, which is backed by SoftBank, of a key source of funding. It leaves the London-based group, which is in turn one of the biggest lenders to metals magnate Sanjeev Gupta, scrambling for alternatives.'Credit Suisse launched a review of these arrangements last year, after the Financial Times revealed that SoftBank had poured more than $500m into the funds, which then made big bets on the debt of struggling start-ups backed by the Japanese technology conglomerate’s Vision Fund.’

Opinion
Ma personifies the conflict in China’s ideology by Jamil Anderlini
Looks at Jack Ma’s recent disappearance and the questions raised by it; 'the brutal humiliation of China’s most famous entrepreneur reveals the sharp and growing contradiction at the heart of the Chinese state.’
Key is that President Xi needs the likes of Jack Ma to achieve the ‘great rejuvenation' of China; he relies on the private sector to do what the State cannot. But at the same time has 'centralised political power, expanded the state-owned sector and asserted the Communist party’s right to insert itself in to all aspects of people’s lives and business.’'
“East, west, south, north and centre, the party rules over all,” is one of Xi’s favourite slogans. Although he constantly touts the orthodoxy of Marxism and “socialism with Chinese characteristics”, the uncomfortable reality is that capitalists provide 80 per cent of urban jobs and account for 60 per cent of GDP.’
Ma; a successful businessman and communist party member (although that was only relative recently revealed), he survived the communist system to build a very successful empire and was the poster child of communist China to the world; the article refers to him as a pet capitalist. He was unequivocally committed to the party and to doing what ever it asked of him.
Notes he 'played a crucial role in the construction of a budding techno-totalitarianism. And like any wealthy person in China, he has scrupulously cultivated party officials and their relatives. Large investors in Alibaba and Ant Financial include several “princelings”, including the grandson of former Chinese president Jiang Zemin.’
Jamil thinks that his current problems are that those patrons no longer have the ability to protect him and the new regime which didn’t have a stake in the Ant IPO therefore had no interest.
I think its more likely that the in centralising power to himself it is all about President Xi and his view, rather than a new raft of leaders.
But he goes on the note that with the centenary of the Party Xi is keen to promote himself and 'boost his legitimacy with paeans to the country’s socialist pedigree.’ Hard when the richest 20% in China have a disposable income 10.2x that of the poorest one-fifth (in the US its 8.4x).
But Xi recently claimed responsibility for wiping out poverty (even if the Chinese definition is lower than the western one) and ignored that it was the communist party that had put so many into poverty.
Jamil points out that President Xi is now more marxist in think and goals 'even if his overwhelming ideology remains ethnonationalism. But his government knows it cannot just nationalise private enterprise as the party did after it won the revolution in 1949.’
He must be more subtle; get private enterprises to do the work but under communist control; seen in the requirement to set up communist party cells in companies. 'They specified that business people should be educated to “identify politically, intellectually and emotionally” with the party. Interference in the private sector, along with the humbling of high-profile capitalists like Ma, is likely to increase in frequency and intensity.’
He concludes 'The big question is what this means for foreign investors, in particular the Wall Street banks and money managers currently piling into China. Will icons of American capitalism such as Goldman Sachs and BlackRock really be able to align themselves “politically, intellectually and emotionally” with Xi? And how will the US government regard Communist party cells in their management structures?’
That is the key; I think that China will continue to limit the influence of foreign investment unless Biden and his team can force it to do otherwise. China is not interested in a level playing field but one on which it wins. It has been slowly opening up, but generally in sectors where it has incumbents that cannot be easily dislodged. In financial services it is allowing foreigners because it needs their financials skills to deal with the looming problems in the economy. In technology it would welcome them but US sanctions are preventing it happening. The fact that what Jack Ma said; which triggered his fall from grace was probably true but unset the establishment would seem to indicate that China; which has done so well in fintech is at a tipping point and the establishment wants to take back control.
That is likely to be bad for the continued rejuvenation of China.

EU plans vaccine pass to boost travel (Page 2)
Brussels envisages digital certificate to facilitate movement around bloc it would provide proof of inoculation, test results of those not yet jabbed and information on the holder’s recovery from the disease. But there remain concerns over privacy, the possibility that even inoculated people can spread Covid-19 and discrimination against those who have not had the opportunity to be immunised.
Other labelled the ’pass’ as confusing: '“For Belgium, there is no question of linking vaccination to the freedom of movement around Europe,” Wilmès wrote in a tweet. “Respect for the principle of non-discrimination is more fundamental than ever since vaccination is not compulsory and access to the vaccine is not yet generalised.”
There are also concerns that the system would take too long to implement ahead to work by this summer. With tour operators preferring regular and rapid testing.
The plans comes in response to Greece and others with a high reliance on tourism seeking help to revive their tourism industries.
I suspect that we are going to need a combination of both vaccinations and regular testing especially as the virus mutates and new variants may be capable of re-infecting those already vaccinated with historic vaccines, similar to the annual flu.  That means the drug companies and test makers are going see new revenue streams for a long time to come; as seen from the following articles.  See also Clear testing rules for school and office sought In Companies & Markets; looks at BD the maker of testing kits; who is calling on Governments to set out testing guidelines for schools, business and travel so they can be ready for a return to normal life and it no doubt can get orders and asses how much production it needs to ramp up!

Hungary buys China and Russia jabs in break from EU (Page 3)
Elderly given Sinopharm shot in spite of concerns about lack of trial data, it has not been approved for use in the EU. But Hungary has opted to break with an EU consensus that any Covid-19 shot used in the bloc be authorised by the European Medicines Agency and procured centrally. It is seeking to get as many vaccines as possible and has ordered doses of the BioNTech/Pfizer, Moderna and Oxford/ AstraZeneca vaccines via the EU but also Sinopharm and Russia-made Sputnik V vaccines.
Of concern is that the most countries including China have not given the Sinopharm vaccine to the elderly due to lack of data. Hungry is now the test case.
It shows how the centralised EU procurement programme which was beset by initial problems has left government scrambling to source vaccines as they seek to try and do what they consider best for their population and no doubt best to get re-elected.
Read also Austria and Denmark form alliance with Israel. Both are selling to boost vaccine supplies, and it is known that Austria is frustrated with the EU because of the delays  in procurement, especially as it was offered an deal earlier with Israel.
For China and Russia it helps with their vaccine diplomacy, something that in time will no doubt be leveraged at some point in the future.

Variant from Brazil evades natural immunity (Page 4)
Current vaccines could be less effective against P.1 version of Covid-19. A new and more virulent form of the virus; that can 'evade 25-61 per cent of protective immunity elicited by previous infection” with any earlier variant, the researchers found, in a sign that current vaccines could also be less effective against it.’
The researchers 'cautioned it was not possible to determine whether this meant the variant was more lethal or it was a result of increased strain on the city’s healthcare system, or a combination of both.’

Hong Kong Protesters show support for detainees (Page 4)
Hundreds (local press put it around 1,000) gathered outside the court where 47 Hong Kong pro democracy politicians were having their bail hearings having been charged under the new National Security Law. In doing so they were putting themselves at potential risk of being arrested. They chanted slogans such as “Regain HK, revolution of our times,” which is illegal under the new law.If the administration assumed they would silence the pro democracy movement with the recent arrests it appears that they may be wrong.The governments stance is 'The activists were involved in an unofficial primary vote by the opposition to select politicians to run in an election for the Legislative Council, the city’s de facto parliament.
Police charged the activists with “conspiracy to commit subversion”, a crime that is punishable with up to life imprisonment. The authorities allege the primary was part of a strategy to topple the government.’
Under the system then in place and designed by China to ensure it retained control of the Hong Kong administration it was facing defeat. It is expected that this week the ’two sessions’ in Beijing will propose new requirements again to ensure that China cannot lose control of the administration. Recent comments by the Hong Kong and Macao Affairs Office head Xia Baolong, who said that there is an urgent need for electoral reform to ensure only "patriots" fill important positions. The concern there is that it will impact on the independent judiciary which would be very negative for Hong Kong.

Whilst the number was relatively small the fact that so many were prepared to turn out should worry the authorities. The hopes of the Hong Kong people to determine their own future, which I think and believe they see as freely tied to China, will remain a contentious issue and is likely to bring China more pain.
The US national security adviser, Jake Sullivan said on Twitter the detentions underscored China’s “broken promises to the world about Hong Kong’s autonomy & democratic rights”. Also U.S. State Department spokesman Ned Price said on Monday Washington called on Hong Kong authorities to release those still held and drop charges against them.

Coming ahead of the Communist Party anniversary it is likely to be an embarrassment to President Xi but unlikely to change his policy.
'Willy Lam, a China expert at the Chinese University of Hong Kong, said the arrests underscored how the opposition was being squeezed. “What constitutes a breach of the national security law depends on the determination of the authorities and it’s relatively easy for them to use blanket legislation to incriminate politicians or activists who they think . . . have done something detrimental to the authority of the central government,” he said.’

Investors will be watching to see whether protests or other elements of civil disobedience rise now with trials pending.
Local press reports that the hearing went on past midnight and are due to resume Tuesday. They were only adjourned after one of the defendants fainted and had to be taken to hospital. Lawyers are challenging the prosecution bid to deny bail and keep the defendants in custody for up to three months. It is a challenge to the innocent until proven guilty premise of Hong Kong’s legal system.
Not mentioned in the article but notable that a number of staff from Hong Kong’s RTHK, the public broadcasting service modeled on the BBC have been resigning as the HK administration replaced its Head with a government appointee with no media experience. Yesterday as Patrick Li Pak-chuen took over as the new director of RTHK; the Head of Public and Current Affairs section under RTHK's Television and Corporate Businesses resigned. The press reported she is 'said to have acknowledged the fact that lots of colleagues around her "did not have the choice to quit" as they had been backing up the RTHK programs.’
She had spearheaded the Public and Current Affairs section Wong spearheaded, which oversees programs related to current affairs and social issues, has produced renowned programs such as "Hong Kong Connection", "LegCo Review" and "This Week”.
Two other RTHK producers quit past month including documentary "Hong Kong Stories” producer Fong Hiu-shan and satire program “Headline Daily” producer Liu Wai-ling, as they were reluctant to sign the declaration to uphold the Basic Law and pledge allegiance to the SAR government before February 18.

It will be interesting to see recruitment into the administration is impacted by the recent changes. It was interesting to see that around the time of the protests applications to join the HK police fell and those leaving the service early increased. Jobs within the HK administration have always been sought after for their permanence and career structure and used to allow holders to still maintain their right to freedom of expression. That is now changing, no doubt if recruitment becomes an issue China will be able to supply ‘patriots’ from the mainland to fill the gaps.

Utilities Texas power co-op files for bankruptcy in storm fallout (Page 4)
The company said it faced $2.1bn in bills for power during the storm; 3x's the amount if paid during the whole of 2020.It will no doubt bring the current system under review with many individual families probably unable to pay their bills too.

Companies & Markets
Exxon bows to activists and adds two new board directors
• Move follows oil group’s worst year
• Shareholders push for strategy change
Nice quote ‘[Our nominees] ensure a break from a mindset that has led to value destruction’ Said an Engine No 1, shareholder. The concern is that there has been lack of diversity or willingness to explore new alternatives. Whilst claiming they were going green many of the oil major were at the same time lobbying governments for policies that would enable them to maintain their current operations, often spending more on the lobbying than the change!
That at last seems to be coming to an end.

After a fashion Gucci owner Kering buys into second-hand luxury site Vestiaire Collective
'Luxury group Kering has invested in Vestiaire Collective, Europe’s biggest platform for high-end second-hand clothes and handbags, in a bet that the resale market will be a way to win over younger, more environmentally conscious consumers.’
It joins a number of other brands that are recognising the usefulness of second hand sales.The company is based in Paris is looking to move into new markets and working directly with brands to help them include ‘resale as a service’ in stores and with their customers.
It illustrates the change in retailing and a key part of that will be whether we see the same in Asia; which for many high end brands has been the saviour for new sales. Recently there have been a number of articles suggesting that even Asian buyers and especially Chinese ones are increasing looking at the second-hand market, which was previously looked down upon.

Retail investors begin to lose grip on Chinese stocks
Increasing influence of institutions calms volatility as US sees opposite trend
Was in the online edition last Friday
Notes that professional investors holdings in freely floating shares in Shanghai and Shenzhen climbed to more than 70% between the crash in 2015 and June 2020 according to China Renaissance with amateur traders holders dropping from around 50% to 23% over the same period. A reversal of what is being seen in the US.
The article suggest that the US might be able to learn from China as to how to crimp retail traders capacity.
The article however focuses on the changes the regulator made to the availability of margin finance from brokers. A key part of that was regulators decided which securities could be used as security and the maximum value that could be leant against those stocks. That effectively wiped out around $5tn in margin financing. But that occurred after the crash not before.
In the months leading up to the crash I remember we used to look at the numbers of new retail accounts being opened daily as an indication of how the market would trade. It was easy to open accounts and mobile apps were becoming available and often retail investors would open accounts with multiple brokers and take margin from each.
There were also a lot of ’star forecasters’ which people would follow and who become self fulfilling as retail piled in behind their calls. Many of them were banned after the market crashed and blamed; especially those that forecast a bounce! At times even the Government was active in prompting stocks.
Since the crash brokers and everyone else has been more careful.
The article mentions the rise in mobile app trading in the US as a reason for stocks to become disassociated and that was true for China too. Many of the brokers research was more about rumours and momentum than reports, cashflows, P&L’s and Balance sheets. Even a few years ago, when I was at Haitong a lot of the research out of China was issued without financials because it was targeted at retail. Equally analysts would not say they had dropped coverage... in case a stock become popular again.
The main reasons, in my view that the retail influence has dropped was the market crash which wiped out so many investors who were trading on margin. A number of articles over the past months have noted that some stocks have only recently climbed back to levels last seen around the 2015 crash. That experience left many retail investors scarred and it effectively scared them off trading. It was similar to Black Monday in the UK which was another incident that scarred off a generation of investors.

The crash in China also alerted the regulators to how money from personal loans was been leveraged in the market and hence the need to try and tighten up on bank lending along with the leverage that brokers could offer. But it is still not watertight in China and one of the reasons the PBoC is keen to have access to the data from Baba and Tencent which really shows where the money goes. Banks can issue personal loans against invoices for say a washing machine but its easy to find a retailer who will issue a fake receipt!
The other big change in China has been the rise of mutual funds; which had been growing since the late 1990’s and Governmental quasi institutional funds. The state (fortis investment funds) gives out mandates to certain fund mangers to be active in say; IPO’s, Blocks or other mandates. The middle class have seen the growth of wealth advisers and the use of more marketing and sophisticated structured products to help savers. Something the government has been pushing since the removal of the ‘iron rice bowl’. Today people are responsible for their own retirement not the state; that was what really drove the growth of insurance related selling and products in China. One only has to look at the growth in the pension company's sales forces to realise that. Pushing products that were seen as ‘safer' investments, not 'get rich quick’ but planned savings. A lot of that money went into the equity backed products.

But it also needs to be remembered that a lot of the institutional money is run by quite inexperienced managers and firms. Only a few have centralised dealing desks and often Fund Managers place their own orders. Compliance is improving but there are still cases of fund managers 'arranging trades’ to support portfolio valuations.

Today the government is a lot more aware of the potential implications of a market collapse as far as the standing of the party is concerned and the potential negative backlash from citizens losing money be it in the stock market or property market. Hence the use of what I call 'Team China', those government and quasi government funds that can can be deployed to ’support’ the market when required.

Retail may have less influence but other forces have replace them and it would only take a strong rally for China to see a resurgence of retail players which would create a more volatile market again. President Xi last year called for a controlled bull market and that is no doubt what China will engineer. The bigger problem is that with so many mutual funds and restrictions on overseas investment that the market becomes too small for the amount of money looking to be invested, as present the HK Connect programme can act as a safety valve but only for so long. It will be interesting to see if and when China recognises the threat from not allowing money to go off-shore.

Hang Seng to include more mainland China groups. 
Looks at the intended shake up of the Hang Seng Indexes to better reflect the influence of Chinese companies on the market. Changes include raising the number of companies included in stages; first from 52 to 80 and then to 100 by mid 2022. It will also cap stock weightings at 8% (from the current 10%) on all stocks including those that have secondary listings in HK (currently capped at 5%).
Key is that is will reduced the historical dominance of Property and Financials and give more importance to Tech and Ecommerce which is what investors have been seeking recently.
The changes in the index do not take account of the potential for further US sanctions on Chinese companies but rather assume more normal trading environment is prevalent. With the recent pressure on China over human rights in Xinjiang and condemnation of the recent arrests in Hong Kong under the new national security law that might not be the case. But with a bigger index Hong Kong is better placed to weather any potential disruption.
See also LEX Hang Seng index: all shook up. Thinks the changes are long overdue but worries Lex is that part of 'the plan to keep 20-25 Hong Kong stocks in the index to “sustain [its] representation”. Whether political or sentimental, the proposal means — almost by definition — keeping ties to old economy favourites like property, finance and conglomerates. Sure, the additional stocks will reduce these stocks’ relative weighting, from two-fifths now to a third and finally, once the index expands to 100 stocks, to 26.5 per cent. But Hong Kong  itself has provided little new by way of tech companies in recent years. To stay in the index, companies should be relevant as well as local.'

Midsized US banks head for further deals
Scale advantages underlined as focus on digital services raises pressure to invest.Follows last weeks deal between People’s United Financial to M&T Bank. Whilst there is more interest the deals will not necessarily be easy. HSBC wants to sell its 150 branch network but may not find a buyer. More deals are likely scalability and reducing branch costs as customers become more accepting of digital/on-line banking.It notes the difficulty HSBC could have because of the way its costs are entwined with the parent and the fact the once stripped of its international network it has no unique selling point.
I think the Japanese banks too are looking at more deals, whilst there is concern about monopolies the reality is that the sector is over banked especially at a regional level. The growth in digital and online should reduce the concerns about monopolies as on-line banks can operate nationally and internationally.

Read also Ahold Delhaize keeps US grocers on buy list. 
Looking at further acquisitions as consolidation in the supermarkets becomes more important with the shift to e-commerce makes small operations less profitable; especially the family owned businesses where there is not succession potential. The potential in the US is much better than Europe were large firms already dominate.

Freeport cites ‘fundamental support’ for copper boomRichard Adkerson, chairman and chief executive of Freeport-McMoRan, said stocks were at their lowest since the mid-2000s even though many big economies were still hampered by Covid-19.  Key is that there are no mining projects that can be quickly started leading to supply constraints.  The presence of speculators is adding froth to the market with a Chinese broker taking a large position last week. The key driver is the need for copper as the world goes increasingly electric.  The other beneficiary will be aluminium which is used is transmission cables.
Looks at the Freeport operations and expected expansion of production and outlook. For investors many of these companies are trading around five year highs, share prices have risen steeply since March 2020; the question is how much higher can they go?

Jeering short-sellers silenced as Novavax nears jab vindication
UK approval on way with Washington set to follow in reward for decades of investment in research. Looks at the turnaround story of the company which is set to get approval for its vaccine that is as good as others out there but cheaper, easier to transport and can be stored at room termperature for 24 hours. Notes that 'Citron has deleted its critical tweet and did not respond to a request for comment.’The article also notes that it is to start studies that combine covid and flu vaccines into a single shot; which is something I think we are going need going forward.

For Interest 
Taking profits is often a mistake for investors by Lawrence Burns an investment manager at Baillie Gifford
Looks at the potential losing out after taking profit. It quotes the old adage "it’s never wrong to take a profit” and notes 'A client is unlikely to be unhappy or notice if you sell a stock that subsequently goes up significantly. The loss of forgone upside is not captured in performance data. Perhaps it should be.’
An interesting read and quotes research by Hendrik Bessembinder, a professor at Arizona State University, 'has found that nearly 60 per cent of global stocks over the past 28 years did not outperform one-month Treasury bills. That might seem a case for not investing in equities at all. But the reason equity investing as a whole is thankfully still worthwhile is due to a small number of super star companies. Bessembinder calculates that about 1 per cent of companies accounted for all of the global net wealth creation. The other 99 per cent were a distraction to the task of making money.’
For me I advise clients to take some profit when stocks rise, protect your capital and once you have done that; the upside is all upside, the consideration then is whether you should reinvest gains or seek out other good performers.

FT BIG READ. MEDIA Succession and one last ‘big play’
When Murdoch turns 90 next week, he will become one of a handful of nonagenarians running a listed US company. Yet the question of what happens to the media dynasty still seems to involve a family struggle.
An interesting read

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