Original link: https://www.latepost.com/news/dj_detail?id=1554
Further follow-up to Silicon Valley Bank bankruptcy
Just before we went to press, the pre-market stock prices of a number of U.S. regional banks that were at risk of a run were up more than 50%, including First Republic Bank, Westpac and Public Bank, and Alliance Western Bank.
The confidence in the capital market comes from a series of official statements and the risk itself is being resolved. Yesterday, while the U.S. Treasury, the Federal Reserve and the FDIC were jointly bailing out, President Biden emphasized in his speech that he would cover the bottom line for savers in an attempt to stabilize market sentiment. However, this approach was also commented by Sorkin, the author of “Too Big to Fail”, as “the banking industry is now officially a government-backed business.”
Silicon Valley Bank is open for business. Apollo Global Management, a U.S. asset management company, and the Blackstone Group, which is in charge of trillions of dollars, are both interested in acquiring some of the loans from Silicon Valley Bank. The bank ushered in a new CEO, Tim Mayopoulos, who is a member of the FDIC System Solutions Advisory Committee and has served as the president and CEO of Fannie Mae, one of the two largest mortgage lenders in the United States since 2012.
This is one of a series of actions after the FDIC took over the bank. Mayopoulos’ predecessors, Greg Becker and CFO Daniel Beck, are being sued by shareholders for failing to disclose to investors the damage to their business model from high interest rates and the impact of a single customer base on the bank.
Several well-known primary and secondary market investors expressed different views on the follow-up of the incident:
- Hedge fund manager Michael Burry, the prototype of the movie “The Big Short”, said that the crisis will be resolved quickly, and he believes that there is no real risk. But Michael Burry later deleted the tweet.
- Venture capital fund manager Bill Gurley sees the Silicon Valley banking crisis as a “black swan event.” In a string of tweets today, he also expressed support for measures to “protect depositors”, noting that the regulator’s policy has been far more restrained than that of the 2008 financial crisis.
- Hedge fund manager Bill Ackman tweeted again on the 14th that in the modern information society, no bank can escape the risk of a run on depositors. He also pointed out that if more banks explode, it will lead to an increase in the cost of capital for small and medium-sized enterprises in the long run.
- Rabobank strategists Michael Every and Ben Picton believe that the Fed’s policy will reduce the risk awareness of all parties in the financial system, leading to an increase in moral hazard.
- Andrew Tilton, chief Asia-Pacific economist at Goldman Sachs, said that given the rapid response of regulators, the Silicon Valley Bank incident did not spread to other institutions, so there is a high probability that the incident will not have a significant impact on Asian economic growth. (Intern Gao Jinglin and Gong Fangyi)
Foxconn Zhengzhou factory recruits workers in off-season
“Wan Lian Cai” learned today from the labor agency in charge of Foxconn’s recruitment that Foxconn’s Zhengzhou factory will start recruiting dispatched workers tomorrow (March 15), but there are not many places, and the working hours and subsidies are not as good as the previous peak season policy.
Foxconn’s Zhengzhou factory accounts for 70% of the world’s total iPhone production capacity, with a higher proportion of high-end models. It employs about 200,000 people, and can reach 300,000 during peak seasons.
The peak season for iPhone production is over now, and Foxconn’s parent company Hon Hai Group’s February revenue fell nearly 40% month-on-month. Industry sources pointed out that the main reason for the off-season recruitment is that the factory is expanding the production capacity of mobile phone components such as glass backplanes.
Recently, there have been frequent reports of Foxconn investing and building factories overseas, and some market voices worry that it is preparing for the relocation of production capacity overseas. However, considering the maturity of the upstream supply chain and the completeness of infrastructure such as logistics, communications, and electricity, it may be a more realistic path to keep the core production base in China and add new production capacity in Southeast Asian countries such as India. (Qiu Hao)
Many places in China subsidize childbirth, tending to two-child and three-child families
Recently, many places in China have intensively introduced maternity subsidy policies. In addition to the controversy over educational fairness caused by the extra points for the second and third children in the high school entrance examination in Zezhou County, Shanxi, public opinion mainly focused on the fact that subsidies in various places tended to favor the second and third children, and seldom covered the first child.
He Dan, a member of the National Committee of the Chinese People’s Political Consultative Conference and director of the China Center for Population and Development Research, stated in this year’s two sessions that attention should be paid to one child, and the difference in birth order in the fertility support policy should be eliminated. She believes that one child is the basic plan for maintaining and improving the overall fertility level, and its shrinkage and delay are the main reasons for lowering the fertility rate.
He Dan shared a set of data:
- China’s total fertility rate will drop from 1.52 in 2019 to 1.07 in 2022;
- The one-child fertility rate dropped from 0.7 to 0.5;
- The average age of one child has risen from 26.4 to 27.4.
She believes that the poor experience of raising a child is the main factor affecting the family’s rebirth.
The Hangzhou Municipal Health Commission later stated in an “authoritative answer” that since 2017, the city’s first-child birth rate has been generally stable, but the second-child birth rate has plummeted, and citizens of the right age are obviously less willing to have second and third children. The objects of childcare subsidy are determined as these families.
Combining relevant overseas policy experience, the timing of the implementation of maternity subsidies in most economies is related to the level of the total fertility rate, and most of the subsidy objects include “one child”. Countries with better subsidy effects have more policy interventions earlier and more intensively.
For example, Japan stopped its suppressive birth policy when the total fertility rate fell to 2.05, and began to implement the “Angel Plan” to promote fertility when the total fertility rate fell to 1.5. South Korea adopted similar policies when the fertility rate fell to 1.57 and 1.09 respectively, and the effect was obvious. Not as good as Japan.
Singapore, where the current fertility rate is only 1.12, continued to increase maternity subsidies in February this year. The total cash subsidy for families with one child can reach up to 33,000 Singapore dollars (about 168,000 yuan). (Qiu Hao)
Century-old investment bank Credit Suisse reveals major flaws in annual report
Credit Suisse Bank released its annual report on March 14, stating that it has found material weaknesses in the internal control of financial reporting in 2021 and 2022 and is taking remedial measures. Negative opinions on the validity of the
On March 9, when Credit Suisse originally planned to release the annual report, it received a technical inquiry from the US Securities and Exchange Commission (SEC) regarding the revision of the consolidated cash flow statement for 2020 and 2019, and decided to postpone the release of the annual report.
Although Credit Suisse emphasizes that internal control deficiencies will not affect the “fair” presentation of its financial status in the 2022 and 2021 statements, the negative opinion issued by the audited institution on the effectiveness of internal control means that there are serious deficiencies in the design or implementation of Credit Suisse’s internal control , failure to detect and correct errors or fraud in a timely manner, resulting in potentially material errors in financial reporting.
In recent years, the bankruptcy of Greensill Capital invested by Credit Suisse and the liquidation of Archegos Capital have caused Credit Suisse to suffer billions of dollars in losses. At the same time, credit suisse negative news emerges endlessly, such as high-level espionage against former employees, criminal conviction for allowing drug dealers to launder money, alleged corruption cases in Mozambique, resignation of the chairman of the board of directors in violation of epidemic prevention rules, and a large amount of customer data being leaked to the media.
A series of events has seriously damaged the reputation of Credit Suisse in the market, resulting in negative profits in 2021, and the stock price has also been falling all the way. It is currently down 81% from its 2021 high.
On March 5, David Herro, the former major shareholder of Credit Suisse and the vice chairman and chief investment officer of Harris Associates, an American investment management company, said in an interview that he had sold Credit Suisse shares since October last year and had already cleared his positions by the time of the interview.
Shares in Credit Suisse fell more than 5 percent to record lows on the news. Credit Suisse’s five-year credit default swap rose to 522 basis points, a record high, according to S&P Global Market Intelligence.
Credit Suisse is the second largest bank in Switzerland after UBS. It has a history of 165 years and is one of the top ten large investment institutions in the world. Will Credit Suisse, which has been rumored to be bankrupt since last year, be the next century-old investment bank to disappear? (Intern Fu Xiaoyu)
Medical insurance expands the scope of support for “Internet +” medical care
According to the Beijing Daily, the National Medical Insurance Bureau recently clarified that the “Internet +” medical services provided by designated medical institutions can be included in the medical insurance payment if they have the same content and charges as the offline services covered by the medical insurance. Other qualified Internet medical institutions (including non-public) can also join by signing agreements with medical insurance institutions.
This means that the scope of medical insurance support for “Internet medical care” may be further expanded, not limited to some common diseases, follow-up consultations for chronic diseases, and not limited to the new crown epidemic. However, it will take some time for local implementation.
For a long time before, regulators have been cautious about “Internet medical care”. Although it is clarified in 2020 that “Internet +” medical services can be included in medical insurance, it is limited to follow-up visits.
The epidemic has accelerated progress. The “Notice on Doing a Good Job in Internet Medical Services for New Coronary Pneumonia” released in December last year proposed to use Internet medical care to alleviate the pressure of offline medical care. Although the notice did not mention medical insurance, Beijing, Guangdong and other places have started online diagnosis and treatment of new crowns one after another. The first visit also supports medical insurance reimbursement.
Perfect infrastructure also creates conditions for promotion. For example, the construction of an online diagnosis and treatment system, and the national unified medical insurance information platform announced in May last year—the industry believes that big data can help detect abnormal behavior.
“Internet medical care” has also been placed with some new expectations, such as reducing medical costs, stimulating demand, and alleviating the imbalance of medical resources between urban and rural areas. The “Strategic Planning Outline for Expanding Domestic Demand (2022-2035)” at the end of last year and the “Opinions on Further Deepening Reform and Promoting the Healthy Development of the Rural Medical and Health System” at the beginning of this year both mentioned the need to vigorously promote “Internet + medical and health”. (Lin Guangying)
Record performance, Porsche continues to be high-end
Porsche released its first financial report since its listing. In 2022, revenue, sales profit, new car deliveries, and net cash flow from the automotive business all hit new highs. Despite a difficult 2022, Porsche delivered its strongest performance ever, management said.
Among them, affected by the epidemic, the number of new cars delivered in China in 2022 will decrease by 2.5% year-on-year to 93,286 vehicles, but it is still the largest market for Porsche, and its performance is much better than that of Bentley in the same period (-9%). The domestic markets of Europe, North America, and Germany all achieved growth, and the growth rate of “other regions” reached the fastest at 13%.
Management said the success was due to factors such as “mature price positioning” and “strong product portfolio”. We have also sorted out before that Porsche’s average new car sales price in 2021 is 109,600 euros, and 301,915 vehicles will be delivered, while Ferrari’s new car average price will be 310,000 euros, and 11,155 vehicles will be delivered. As a super sports car brand, Porsche seems to be more cost-effective.
But Porsche’s goal is also to develop to the high end. This year, it announced that it will increase the long-term return on sales (net profit after tax/total sales) to more than 20%. In addition to controlling costs, there is a high probability that it will increase pricing and launch more expensive models. Production and sales data can also illustrate some consumption trends: Last year, more than 40,000 people became new owners of 911 cars, and more than 90,000 people became owners of Cayenne cars.
Electric vehicles are still an important direction. Eighty percent of the new cars Porsche plans to deliver by 2030 will be electric vehicles. In addition to model development, it will also invest more in battery technology and digital software. (Lin Guangying)
CHART OF THE DAY | Inventory pressure is high, and many joint venture car companies will join the price war
Many joint venture car companies such as Beijing Hyundai and SAIC MG are cutting prices and promoting sales in various ways. Beijing Hyundai subsidizes up to 55,000 yuan nationwide, and SAIC MG announced to launch the “car purchase promotion” again.
- In February 2023, the inventory coefficient of auto dealer joint venture brands is 2.15, which is higher than that of imported brands and self-owned brands.
- The upcoming implementation of National VI B from July 1 will also increase the inventory pressure of joint venture car companies. Compared with China VI A, China VI B strictly restricts vehicle emissions, leaving little time for destocking. (Intern Chang Junfei)
OTHER NEWS
Hangzhou Market Supervision Bureau signed a cooperation agreement with Alibaba.
According to the Hangzhou Market Supervision and Administration Bureau, it has signed a cooperation agreement with Alibaba Group to comprehensively deepen the healthy and high-quality development of the platform economy. Director Ma Chengrong said, “I hope that Ali Group will continue to be the ‘leader’ of government-enterprise cooperation, empowerment development, compliance management, and innovation leadership.” Since the beginning of this year, Hangzhou Municipal Government and Hangzhou Yuhang District Government have successively signed strategic cooperation agreements with Ali.
Yichun lithium industry is facing environmental protection rectification, and the price of lithium slag was once “returned to zero”.
According to China Business News, lithium companies in Yichun, Jiangxi are required not to place lithium residues in landfills or open-air stacks. In addition, many lithium carbonate calcination enterprises have been shut down, and the price of lithium residues has dropped from 100 yuan/ton before environmental protection to a minimum of 0 yuan. . Half a month ago, the Ministry of Land and Resources and other four departments formed a central working group to investigate and supervise the chaos in Yichun lithium mining, and the environmental protection problems caused by lithium slag were the focus. In addition, secondary extraction of lithium from lithium slag is expensive and pollutes the environment. Before the price of lithium carbonate soared last year, no one cared about it. At present, the price of battery-grade lithium carbonate has fallen below 350,000 yuan/ton, down more than 40% from last year’s high.
Huachuang Securities said that African swine fever has returned.
Huachuang Securities reported on March 13 that the “African Swine Fever” attenuated virus is spreading. Based on the survey feedback, it is speculated that half of the northern production areas have been infected, and the sow production may be reduced by 20 to 30%. The situation in the south is not optimistic. Coupled with the fact that the industry started to cut production capacity at the end of last year, it is expected that the supply of pork will be under pressure, and the long-term pig price may rise to 20-30 yuan per kilogram. Pigs infected with African swine fever are 100% fatal. In 2018 and 2019, the number of domestic pigs was reduced by 40%. In February 2020, the price of pigs rose to a record high.
Xueersi responded to the “advanced and super-class teaching”, saying that it will resolutely implement the “double reduction” requirement.
The Financial Associated Press reported on the 13th that Xueersi uses “literacy courses” to carry out advanced and super-standard teaching, such as teaching Pinyin in the “Humanistic Creation” class, and selling courses with “junction between young and old” and “examination preparation” as selling points. Xueersi responded later that it was the behavior of individual stores, and a comprehensive inspection has been carried out, and supervision from all walks of life is welcome. In 2021, the central government will issue a double reduction policy, strictly prohibiting training institutions from “exceeding the standard and advancing” training.
Huawei called the “developed chip stacking technology solution” a rumor.
According to market rumors, Huawei announced that it has successfully developed a chip stacking technology solution, which can achieve 7nm level under the 14nm process. Huawei responded today by calling the news a rumor.
Ideal Auto announced that if the price is reduced within 90 days of car purchase, the price difference will be refunded.
Ideal Auto has launched a price protection policy. Within 90 days from the day consumers order an Ideal L series model, once the official price is lowered, Ideal Auto will actively refund the difference. After Ideal CEO Li Xiang made it clear that he would not cut prices, Ideal Auto became the first brand to launch a price protection policy in the auto price war. In February 2023, Li Auto delivered a total of 16,620 new cars, and has completed about 60% of its sales target for the first quarter.
China Mobile’s A-share market value is second, “only” behind Moutai by 200 billion yuan.
On the 14th, China Mobile’s stock price once exceeded 100 yuan per share. Although it fell before the market closed, the market value still exceeded 2 trillion yuan as of the close, approaching Kweichow Moutai (2.2 trillion yuan). Recently, the concepts of ChatGTP and AIGC are hot, and the stock prices of telecom operators actively deploying in this field have also risen. On the evening of the 12th, China Mobile and China Telecom announced that they would gradually expand the distribution of profits in cash, which ignited their stock prices again.
South Africa is investigating whether SHEIN underreported import duties.
In response to the concerns of local labor and industry groups, the South African government is investigating China’s cross-border fast fashion brand SHEIN over import tariffs. A SHEIN spokesman said the company strives to comply with local market laws and regulations. Specifically, two South African clothing and textile workers unions and the National Clothing Retailing Federation of South Africa believe that SHEIN deliberately packed goods in small parcels of low value, making the declared value of the goods lower than the legal requirement, and evading the payment that should have been made. tariffs on imported clothing. The original intention of this law is to facilitate individuals, not businesses.
Meta discontinues Facebook and Instagram support for NFTs.
Meta spokesperson Joshua Gunter confirmed in an email to the technology media The Verge that Meta will stop the function test of issuing and selling NFT on Instagram in the next few weeks, and close the function of sharing NFT on Facebook and Instagram. The focus of the market in 2023 will undoubtedly be on ChatGPT. Concepts such as artificial intelligence, metaverse, and NFT, which were popular in 2022, are gradually cooling down.
“Dark Glory” tops Netflix’s global TV show list.
According to media reports on March 14, the revenge drama “Dark Glory” starring Song Hye Kyo topped the global TV program rankings of the video service platform Netflix on the 13th, only three days after its second season was launched. The plot of revenge for victims of school violence is widely favored by audiences around the world, and the ratings continue to rise. In terms of countries and regions, the show ranked first in 38 countries including South Korea and Japan, second in 21 countries including France and Canada, and third in 13 countries including the United States and the United Kingdom.
Japanese excavator company Komatsu plans to cut production in China.
Komatsu plans to restructure its China operations, merging its two subsidiaries in Shandong and Jiangsu into one, and cut production capacity in China by nearly 40 percent this year. Komatsu is the world’s second-largest construction machinery maker, with about 11 percent of the global market share. Usually after the Spring Festival, the construction site starts, and the hours of excavation work will increase significantly. In 2023, the growth rate of operating hours will be the lowest in five years.
Volkswagen announced an investment of 180 billion euros over the next five years.
Volkswagen announced plans to invest 180 billion euros (about 1.32 trillion yuan) in the business direction with the most lucrative profit potential from 2023 to 2027, including advancing the group’s battery strategy, expanding business in North America, and strengthening digital strength in China and product competitiveness, as well as continue to develop the Group’s leading product portfolio. More than two-thirds of the funds will be invested in future fields related to digitization and electrification.
China has resumed visa processing for foreigners, and the number of international flights is still low.
According to the Consular Express, from 00:00 on March 15, China resumed the examination and issuance of various types of visas for foreigners to go to China, and various types of port visas and visa-free policies were also restored. Since January 8, the National Immigration Administration has optimized immigration management policies and measures, and the current exchange of Chinese and foreign personnel is expected to gradually return to the normal state before 2020. However, the capacity of international flights has yet to be restored. According to data from Fei Changzhun and the U.S. Department of Transportation, the number of flights between China and the United States is growing slowly. Air China only applied for one new flight between Beijing and New York every week. China Eastern Airlines, Xiamen Airlines, and China Southern Airlines failed to increase the number of flights.
Uber and Lyft are supported by the court without having to bear huge labor protection costs.
Ride-sharing platforms such as Uber and Lyft can continue to treat drivers as independent contractors, a California appeals court ruled March 13, overturning an earlier lower court ruling on Proposition 22. The ride-sharing platform can thus prevent its drivers from being judged as employees of the company, thereby saving corresponding costs. In 2020, California voters approved Proposition 22, a referendum proposal that would allow companies such as Uber and Lyft to continue classifying drivers as independent contractors rather than employees.
The new energy vehicle market is expanding rapidly, and complaints are also rising.
As the “315” consumer rights day approached, the State Administration for Market Regulation released “Ten Features of Consumer Complaints and Reports in 2022”. It specifically pointed out that 16,000 new energy vehicle complaints and reports will be received in 2022, a year-on-year increase of 62.84%. The demands of car owners focus on issues such as car quality, after-sales service guarantee, and unfair agreements. A total of 6.887 million new energy vehicles were sold in China last year. Although the proportion of complaints seems to be small, the frequently searched new energy car owners’ rights protection incidents also reflect that the industry still has a long way to go.
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