Goldman CEO on risk: The worst ‘absolutely will happen’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Investors should always prepare for the most extreme risk scenario because it will happen, Goldman Sachs CEO Lloyd Blankfein told the Australian Institute of Company Directors at a breakfast briefing on Friday.

Also Read: Yes Bank files replies to Madhu Kapur’s amended petition

Blankfein has headed up Goldman Sachs since 2006, steering it through the fallout of the global financial crisis of 2007-2008. He said the experience had taught him to accept the reality that the worst thing you can imagine will inevitably happen.

“Most risk management is really just advanced contingency planning and disciplining yourself to realize that, given enough time, very low probability events not only can happen, but they absolutely will happen,” said Blankfein.

“The definition of infinity is that you wait long enough, everything happens,” he added.

Harking back to the time of the financial crisis, which was triggered by the bursting of the US housing bubble, Blankfein said in his view, the major problem was that ordinary people were banking on the fact that the scenario they feared the most, at that time the collapse of real estate prices, was not a possibility.

“Once you think that something is improbable and everybody thinks it, people modify their behavior in a way that makes it more probable,” said Blankfein.

“Everyone thought it was so improbable that so many people would default on real estate, it actually created a greater probability that it would [happen] because more capital flowed into that sector,” he added.

Blankfein said risk managers needed to adapt their way of thinking to prepare for extreme events.

“Risk management is…training yourself so well to anticipate the possibility of things, that when things happen you get off the block so quickly that other people think it`s a false start. That`s the metaphor that risk managers should have,” he said.

Steering his firm through the volatility of the global financial crisis had given Blankfein a “thick skin” the CEO told the Australian Institute of Directors, but in retrospect he said the bank failed to “manage its relationship with wider society” in the best way possible.

“We did a better job navigating through the risks of the collapse of the prices of real estate…We probably did better on [that] than we did in managing our relationships with the wider society… to say it wasn`t perfectly executed is an understatement,” said Blankfein.

Goldman Sachs` reputation came under fire amidst the fallout from the global financial crisis.

In 2010, the Securities and Exchange Commission filed a civil fraud suit arguing that the bank built the financial equivalent of a time bomb that was set up to fail and sold it to unwitting investors, referring to the sale of a structured product, known as a collateralized debt obligation (CDO), blamed for contributing to the bursting of U.S. real estate bubble in 2008.

 -Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Is a big China currency move in the works?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Not for the first time this year, talk that China could widen the trading band for the yuan is doing the rounds with some analysts saying a move could come as early as this weekend.

Also Read: RBI tightens daily borrowing norms to douse rupee fire

China`s decision a week ago to scrap the floor on lending rates for commercial banks, as it takes another step towards opening up its financial markets, makes other reform measures such as widening the yuan`s trading band and establishing a new interest-rate framework more likely, say analysts at Credit Agricole.

“[One]message coming from the lending floor removal is that the currency regime will soon be liberalized as well,” analysts at Credit Agricole said in a note published on Wednesday.

“The last time that the dollar/yuan trading band was widened in April 2012, the move was announced not too far from the timing of rate liberalization,” they added.

The Chinese yuan, also known as the renminbi, is currently allowed to rise or fall by 1 percent in either direction from a level fixed against the dollar each day by the country`s central bank.

“We expect another dollar/yuan band widening, to plus or minus 1.5 percent or plus and minus 2 percent around the fixing, in the very near future – most likely in Q3 and quite possibly this or next weekend,” said the Credit Agricole analysts.

It is not unusual for Beijing to make big announcements regarding the economy late on a Friday or over the weekend and analysts said they would not be surprised by an imminent change in the yuan`s trading band.

“The widening of the yuan trading band is part of China liberalizing its markets and the talk does crop up from time to time – I have heard it in the last few days,” said Chris Weston, chief market strategist at trading firm IG.

The yuan traded at about 6.1330 per dollar on Friday. It had been on a strengthening trend for much of the first half of the year but has weakened a touch amid signs of weakness in the Chinese economy and broad-based strength in the US dollar.

Currency strategists say that while trade in the yuan was a one-way bet for a long time, this is no longer the case.

“In the mini stimulus measures announced by China this week, what was also suggested was that the currency would not be allowed to appreciate to an extent that it would hurt exports,” said Vishnu Varathan, market economist at Mizuho Corporate Bank.

Beijing unveiled a series of steps this week to support a weakening economy. The measures included scraping taxes for small firms and encouraging banks to lend to exporters.

“Given that the yuan hasn`t been strengthening at the pace that it was a couple of months back, it may be a better time to widen the band as a move would not be misinterpreted as a sign that China wants to allow greater appreciation,” he added. “So in terms of timing, the winds are shifting in favor of a yuan move.”

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

‘Mamma mia!’ has Super Mario succeeded in saving Europe?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

One year on from his “whatever it takes” speech and less than two years after taking the helm at the European Central Bank, Mario Draghi has won over some of the harshest critics of his controversial methods to fight the euro crisis. Not least in Germany.

“Mamma mia!” the headline of Germany’s Bild tabloid screamed in 2011 after the hawkish candidate Axel Weber withdrew from the race for the top spot at the ECB. “Please, not this Italian,” the paper said. “For Italians inflation goes with life like tomato sauce goes with spaghetti.”

The prospect of a central banker from the land of the lira, “a currency with a ludicrous amount of zeros” in which a bus ticket used to cost over 1,000 currency units was less than appealing.

But the tabloid changed its tune. The smooth operating Italian managed to win the support of German Chancellor Angela Merkel and Bild promptly published an image of Draghi wearing a spiked Prussian helmet alongside an article extolling his “German” virtues.

Although his love affair with German media wouldn’t last, with accusations he was too easy on heavily-indebted southern Europe, experts agree Draghi scores high on diplomacy.

“The German public was skeptical. So far he has maneuvered these difficult waters in an extremely capable way,” UBS economist Reinhard Cluse told CNBC.

In a CNBC poll of 10 economists and analysts, Draghi received an average score of 8 out of 10 for his performance as ECB chief so far, with many crediting his speech one year ago that the ECB would do whatever it takes to defend the euro, being instrumental in calming financial markets.

That speech led to drop in government bond yields, easing the pressure on countries such as Spain, which were facing increasingly high funding costs.
But it’s also sparked concerns that the ECB has merely bought the euro zone time, and that its monetary policy options are running out, fast.

“By being laissez faire [Draghi] has created a bubble in the debt market,” Steen Jakobsen, chief economist at Saxo Bank said. “I think we are at a Bear Stearns moment in terms of the European debt crisis. The euro zone debt crisis has not gone away by him issuing this statement.”

George Magnus, senior economic advisor to UBS, who was credited with predicting the US subprime mortgage crisis, agreed it was “hyperbolic” to say the speech – described by some as “legendary” – was a game-changer.

“It was an important communications exercise to convince the market that the ECB was willing to act as a lender of last resort…It bought a huge amount of time.”

Draghi certainly still has plenty of challenges ahead. Difficulties at second-tier banks not deemed too-big-to-fail could prompt another banking crisis, Greece could yet default on its debts and Portugal may need a second bailout. Some analysts argue Draghi has created an even bigger problem in buying politicians more time. “The problem with monetary largesse is that it gives governments the excuse to take the foot off the pedal,” Magnus said.

Draghi’s commitment to buy unlimited amounts of government bonds of crisis-hit countries – a scheme known as “Outright Monetary Transactions” or OMTs – is as yet untested. In addition, Germany’s constitutional court is expected to rule by the end of the summer on whether the bond-buying program is even legal.

But probably Draghi’s greatest challenge lies in getting the economy back to life. Small- and medium-sized enterprises are still gasping for access to funds, and unemployment hit 12.2 percent in the euro zone in May. An eye-watering 19.3 million people are out of work.

“The ECB cannot do QE (quantitative easing) of the type and scale the Fed, the Bank of Japan and the Bank of England have done,” Magnus said. “It is not a toothless dragon, but relative to its peers it has significant limitations to go beyond what it has already done.”

“We’re reaching the limits of what monetary policy can do. To go beyond this, the best thing Draghi can do is organize conference calls and encourage the EIB (European Investment Bank) and governments to do more,” Cluse said.

That will require more of Draghi’s fabled smooth persuasion.

After the “virtual reality” of the OMT program, Jakobsen warns, “2014 will be the year of reality.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Emerging Asia weakness may have hit bottom

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Economic growth in emerging Asian countries, which have slowed sharply since the start of the year, may have bottomed out with signs of a turnaround under way, economists say.

Research firm Capital Economics said growth in emerging Asian economies picked up slightly in May and there are signs of a gradual recovery in the region such as net capital inflows into stocks rising USD 386.6 million so far this month compared with a net outflow of almost USD 15 billion in June.

“Our GDP [gross domestic product] tracker suggests that although regional growth remains weak, it may have turned a corner in May,” Gareth Leather, emerging markets economist at Capital Economics said in a note published this week.

Gross domestic product (GDP) data for the second quarter from South Korea and Singapore for instance paint a brighter economic outlook for the two Asian countries.

Data on Thursday showed South Korea’s economy grew 1.1 percent in the second quarter of the year from the previous one, its quickest quarterly pace of growth in over two years.

Singapore’s economy, meanwhile, grew 15.2 percent in the second quarter from the first, according to an advance estimate – marking the strongest quarterly expansion since 2011, data showed two weeks ago.

Raymond Yeung, senior economist at ANZ said South Korea’s economy has bottomed and growth prospects are set to improve further in the second half.

“The second quarter release is encouraging. Domestic consumption has turned around, suggesting that the concerted efforts by both the government stimulus package and the central bank’s rate cut in May have started to contribute,” Yeung said in a note after the GDP data came out on Thursday.

The Bank of Korea cut rates 25 basis points to 2.5 percent in May, while the government unveiled USD 4.7 billion in stimulus spending plans in April in a bid to shore up flagging economic growth.

With a number of economies due to report GDP figures over the coming few weeks, Capital Economics said, they expect the economic data to show a brighter outlook for the region, which has been hurt by a slowdown in China and weak demand from Europe.

 “On the whole, we expect growth to have remained relatively strong in Southeast Asia, but for growth elsewhere to have stayed subdued,” Capital Economics said.

Average growth in emerging markets including those in Asia slowed to annual rate of 4 percent in the first quarter, its weakest pace since the global financial crisis, according to data from Capital Economics. In comparison, emerging market economies grew on average by an annual 6.4 percent during the past decade

 According to Capital Economics, one thing that bodes well for the outlook for emerging market economies in Asia are signs of a recovery in capital inflows.

“After falling sharply in June, net flows of capital into Asia’s equity markets have been positive so far in July,” Leather at Capital Economics said.

Benchmark indices are up on average around 6 percent in July across Asia excluding Japan, following steep falls in May and June amid fears of the U.S Federal Reserve tapering its quantitative easing program.

The Fed’s monetary stimulus program has pumped liquidity into global financial markets in recent years and emerging markets have been a big beneficiary of the extra money looking for a home.

More from CNBC

South Korea Q2 growth hits 2-year high, but China risks cloud outlook
Emerging Market Growth Hits Lowest Since Financial Crisis

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold bugs: Time for ‘ugly duckling’ to shine?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The recent rebound in gold prices has injected bullishness back in the market, as gold bugs call for further gains in the months ahead, with one analyst expecting bullion to hit USD 1,600 per ounce by year end.

David Lennox, resources analyst at equity research firm Fat Prophets, told CNBC he`s not ruling out another 20 percent upside for gold by December, as the expected robust recovery in the US economy remains elusive.

“We do think that the factors that did push gold towards those record levels are still in the market,” Lennox said on CNBC Asia`s “ Squawk Box .” “[U.S. economic] growth is mediocre and… we think that growth is going to stay mediocre for some time.”

Weakness in the U.S. economy will require the US Federal Reserve to keep its aggressive quantitative easing (QE) program for longer than what the markets are expecting, Lennox said.

“That`s going to be good for gold,” Lennox said. “All we`ve got to do is see the speculative end of the market again become convinced that perhaps the Fed is not going to ease QE and they`ll pile back in.”

Axel Merk, president and chief investment officer at Merk Investments, said the toning down of tapering talk by Federal Reserve chief Ben Bernanke would help drive the price of gold higher after the rout seen earlier this year.

Last week, Bernanke reassured markets that the US central bank will stay flexible on its timing of the winding down of its USD 85 billion per month bond buying program, and would only do so when the economy is strong enough.

“Until just a few weeks ago, pundits fell all over themselves to call an end of the gold bull market,” Merk said in a note on Tuesday. “As monetary policy appears on a more accommodative path than a couple of weeks ago when “exit” and “taper” talk was all the rage, it`s the ugly duckling [gold] that gets to shine.”

Gold snapped a four-day winning streak on Wednesday after hitting a month one high a day earlier, to trade around the USD 1,340 handle.

The precious metal has fallen 20 percent so far this year, with sharp declines seen since April when news of troubled euro zone member Cyprus selling gold reserves triggered a massive selloff. Talk of the Fed tapering in May also took a toll, pushing gold prices into bear market territory.

But since slumping to an almost three-year low of $1,180.71 in late June, gold is up almost 14 percent, and Merk says this could be due to the monetary easing in Japan as well as markets not being convinced of a strong economic recovery in the United States.

“A key reason why gold may be moving higher may well be that the market doesn`t believe in the sustainability of the housing recovery [in the US,” Merk said. “With regard to housing, we think Bernanke may soon find the glass to be half empty, encouraging him to err on the dovish side, a likely positive for the price of gold.”

On Monday, data showed that US home resales unexpectedly fell 1.2 percent in June after two straight months of hefty increases, Reuters reported.

Related

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Emerging Asia weakness may have hit bottom

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Economic growth in emerging Asian countries, which have slowed sharply since the start of the year, may have bottomed out with signs of a turnaround under way, economists say.

Research firm Capital Economics said growth in emerging Asian economies picked up slightly in May and there are signs of a gradual recovery in the region such as net capital inflows into stocks rising USD 386.6 million so far this month compared with a net outflow of almost USD 15 billion in June.

“Our GDP [gross domestic product] tracker suggests that although regional growth remains weak, it may have turned a corner in May,” Gareth Leather, emerging markets economist at Capital Economics said in a note published this week.

Gross domestic product (GDP) data for the second quarter from South Korea and Singapore for instance paint a brighter economic outlook for the two Asian countries.

Data on Thursday showed South Korea’s economy grew 1.1 percent in the second quarter of the year from the previous one, its quickest quarterly pace of growth in over two years.

Singapore’s economy, meanwhile, grew 15.2 percent in the second quarter from the first, according to an advance estimate – marking the strongest quarterly expansion since 2011, data showed two weeks ago.

Raymond Yeung, senior economist at ANZ said South Korea’s economy has bottomed and growth prospects are set to improve further in the second half.

“The second quarter release is encouraging. Domestic consumption has turned around, suggesting that the concerted efforts by both the government stimulus package and the central bank’s rate cut in May have started to contribute,” Yeung said in a note after the GDP data came out on Thursday.

The Bank of Korea cut rates 25 basis points to 2.5 percent in May, while the government unveiled USD 4.7 billion in stimulus spending plans in April in a bid to shore up flagging economic growth.

With a number of economies due to report GDP figures over the coming few weeks, Capital Economics said, they expect the economic data to show a brighter outlook for the region, which has been hurt by a slowdown in China and weak demand from Europe.

“On the whole, we expect growth to have remained relatively strong in Southeast Asia, but for growth elsewhere to have stayed subdued,” Capital Economics said.

Average growth in emerging markets including those in Asia slowed to annual rate of 4 percent in the first quarter, its weakest pace since the global financial crisis, according to data from Capital Economics. In comparison, emerging market economies grew on average by an annual 6.4 percent during the past decade

According to Capital Economics, one thing that bodes well for the outlook for emerging market economies in Asia are signs of a recovery in capital inflows.

“After falling sharply in June, net flows of capital into Asia’s equity markets have been positive so far in July,” Leather at Capital Economics said.

Benchmark indices are up on average around 6 percent in July across Asia excluding Japan, following steep falls in May and June amid fears of the US Federal Reserve tapering its quantitative easing program.

The Fed’s monetary stimulus program has pumped liquidity into global financial markets in recent years and emerging markets have been a big beneficiary of the extra money looking for a home.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Is China about to launch a new round of stimulus?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

China’s growing economic malaise, reflected in the latest batch of weak manufacturing data, may trigger a fresh round of stimulus measures from the government as Beijing looks to defend its annual growth target of 7.5 percent, economists tell CNBC.

The China HSBC flash purchasing managers index (PMI) fell to an 11-month low of 47.7 in July from a June final reading of 48.2, as the world’s second largest economy continues to reel from deleveraging and tight monetary policy.

“We do expect some support because now it’s quite uncertain how China can achieve 7.5 percent (annual growth), which is the floor, without introducing measures to deal with the situation,” Dariusz Kowalczyk, senior economist at strategist, Asia ex-Japan at Credit Agricole.

According to Jian Chang, economist at Barclays, economic support could come in a matter of weeks.

“Combined with the broad-based slowdown in economic activity in June, we expect more announcements from various government bodies in the coming weeks to support growth,” Jian Chang, economist at Barclays wrote in a note on Tuesday.

A factor that could swing the balance in favor of government intervention is the continued weakness in the labor market. The China HSBC PMI employment sub-index came in at 47.3, which is at a 52-month low.

“Employment conditions are more important for the government than output so deterioration here further boosts odds of stimulus,” Kowalczyk said.

Earlier this month, Frederic Neumann, co-head of Asian economics research at HSBC, said people worried about a hard landing in China as “policymakers sit on their hands,” should remember that joblessness is something the Communist Party of China takes very seriously.

“They’re less worried about growth in itself, they’re much more worried about the severity of the job market,” Neumann said. “So, if there are signs that the job market buckles, they will step on the gas and try to lift growth again, because that’s obviously the number one risk in China.”

What measures to expect

According to Dariusz Kowalczyk, senior economist at strategist of Asia ex-Japan at Credit Agricole, the government is not likely to launch extensive stimulus measures. He is expecting the government to step up fiscal spending in the third quarter.

Ting Lu, China economist at Bank of America Merrill Lynch agrees that Beijing will resort to fiscal stimulus, but not on a grand scale.

“We reckon that he could introduce a small scale fiscal expansion by tapping the central government coffer to support social housing, railway, environment related urban infrastructure such as sewage and IT infrastructure such as broadband and 4G,” Lu said.

Other measures could come in the form of encouraging the Chinese currency to depreciate and perhaps a cut to the central bank’s reserve requirement ratio (RRR) later this year, analysts say.

“The PBoC has likely realized that exporters are not as competitive as the inflated data from earlier in the year suggested and cannot withstand the current strength of the yuan. Policymakers are likely to help exporters by stabilizing the CNY if not orchestrating a modest correction lower,” said Kowalczyk.

Kowalczyk also anticipates the People’s Bank of China to loosen liquidity conditions in the fourth quarter by cutting the RRR by 50 basis points.

But Zhiwei Zhang, chief China economist at Nomura, has a more aggressive forecast, saying RRR cuts of 100 basis points in the second half can’t be ruled out.

“We believe China will experience a prolonged period of capital outflows in the second half of 2013 and first half 2014 as growth slows and investors worry about a potential economic hard landing in China. The People’s Bank of China will need to cut the RRR to offset the negative effects from capital outflows on domestic liquidity conditions,” Zhang wrote in a note published earlier this week.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Global IPO market half the size it should be: SGX CEO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The global market for initial public offerings (IPOs) is nearly half the size it should be, the CEO of the Singapore exchange (SGX) Magnus Bocker told CNBC.

“There is no doubt, we have a slowdown in IPOs. If you look long-term we are nearly down 40-50 percent,” said Bocker, referring to the projected annual growth rate for 2013.

According to Bocker, looking at IPO rates on a historical basis, the global IPO market is falling well short of its projected growth rate this year.

“If you go back to 1990 to 2000 there was a little less than 2,000 IPOs in the world per annum, then in the next ten years we had about 2000 to 2200,” he said.

“We should probably be at 2,300 to 2,400 [per annum] for the next ten years. So if you take that as a measure and look at it now, we are at a run rate of around 1,000 to 1,200. I would say we are 40-50 percent down,” said Bocker.

Appetite for new company listings on global stock markets has waned in recent times as volatile market conditions put investors off.

In the first half of 2013, the number of companies to list on Asian stock exchanges nearly halved from 209 (worth USD 24 billion) to 111 (worth USD16 billion), according to Ernst and Young. And in recent months, several firms have delayed launches or adapted their IPO strategies in a bid to try and attract investor interest.

But Bocker said one bright spot for Asia was that the percentage of global IPOs taking place in the region is growing.

“Ten years ago 30 percent of IPOs took place in Asia, but in the last 10 years, 40-50 percent of global IPOs taking place in Asia,” he added.

Furthermore,the pipeline of small and medium sized companies coming to market is growing, said Bocker, and overtaking appetite from larger companies.

Bocker said he expects to see an influx of Real Estate Investment Trusts (REITs) coming to market in the near future.

On Wednesday, Singapore`s IPO market got a boost from the debut of Singapore Press holdings` Real estate investment trust (Reit). The IPO featured 308.9 million shares at 90 cents each, raising a total of USD 504 million. The public tranche of about 84 million units was 25 times subscribed, the Straits Times reported.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Euro zone business activity expands, euro rallies

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Economic activity in the euro zone expanded in July, purchasing managers index (PMI) readings showed on Wednesday, marking the first uptick for business activity since January this year.

The euro zone flash composite PMI for July came in at 50.4 versus forecasts of 49.1 and June’s reading of 48.7. A reading above 50 indicates an expansion of business activity.

Activity in the euro zone’s largest economies, France and German, also improved in July, with business in the private sector in both Germany and France performing better than expectations.

The news sent the euro to a one-month high against the dollar.

“This is a very strong number, it was surprisingly strong across the board,” Chris Williamson, chief economist at Markit told CNBC. “Leading the growth is Germany, with strong growth in manufacturing and services and in France, which has been a weak spot in these surveys, the manufacturing there even returned to growth.”

France’s composite PMI was at a 17-month high with a reading of 48.8 up from 47.4 in June. Meanwhile, Germany’s composite figure came in at 52.8 from 50.4 in June.
While the readings were better than expected, one economist warned that the outlook for the euro zone economy remained weak.

“It’s encouraging to see the improvement but even my very downbeat forecast on Europe really requires the PMI to go up by one point this year and by another two points next year and that’s just to be able to clock in a little bit of growth,” Michala Marcussen, head of global economics at Societe Generale told CNBC.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

This African city is world’s most expensive for expats

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Luanda, the capital of Angola in Southern Africa, has overtaken Tokyo as the world`s most expensive city to live in for expatriates, according to Mercer`s latest annual cost of living survey.

The oil-rich nation, which struggles with high costs of accommodation and imported goods, is back at the top of the rankings after falling into second place last year, a 2013 survey by the human resources firm showed on Tuesday. Luanda topped the list in 2010, and again in 2011.

Europe and the Asia-Pacific region were tied for the number of cities among the top 10 costliest, at four each.

Moscow was the highest-ranked European city in second place, followed by the three Swiss cities of Geneva, Zurich and Bern, which were placed seventh, eighth and ninth, respectively.

The most expensive Asian city is Japan, coming in third this year after placing first in 2012.

The survey covers 214 cities around the world and measures the cost of over 200 items in each place in March such as housing, transportation, food and clothing, using New York as a the base city.

Angola, which is Africa`s second largest oil producer after Nigeria, attracts large multinational firms to set up base there.

But finding appropriate expat housing is one of the biggest expenses that employers face, Barb Marder, senior partner and global mobility practice leader at Mercer said in a media release.

“Despite being one of Africa`s major oil producers, Angola is a relatively poor country yet expensive for expatriates since imported goods can be costly,” Marder said. `In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly.”

Last year, the average monthly rent for a luxury two-bedroom apartment in Luanda was $6,500, according to Mercer, just about $500 less than the cost in Hong Kong – which considered one of the world`s most expensive real estate markets.

Europe and Asia dominate

European cities continue to dominate the rankings of the 10 most expensive places to live for expats despite moderate price increases, Mercer said.

“Switzerland remains one of the costliest locations for expatriates despite decreasing or stable accommodation costs and a robust Swiss franc,” the release said.

Last year, Geneva and Zurich ranked fifth and sixth, respectively, and also made top 10 rankings in 2011.

Other Asian cities to make the top 10 rankings include island nation Singapore in fifth place, followed by Hong Kong in the sixth spot and rounded out by Sydney in Australia and Bern in Switzerland, which tied for the ninth spot. The region also had a strong showing last year with four Asian cities ranked within the top 10 most expensive places to live.

But, currency fluctuations and impact of inflation on goods and services have impacted Asia`s overall rankings in the survey, according to Mercer.

“In Asia, about half of the cities went down in the ranking – Japan especially – due to local currencies` weakening against the U.S. dollar,” Nathalie Constantin-Métral, principal at Mercer said.

The Japanese yen (Exchange: JPYUSD=)has depreciated more than 15 percent this year to the 100 level against the U.S. dollar on Prime Minister Shinzo Abe`s radical economic policies to revive the world`s third largest economy.

-By CNBC.com`s Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow