Stocks in Asia rose, following a US tech rally and fresh economic data that rekindled hopes for US interest rate cuts.
The MSCI Asia Pacific Index gained the most in a month, with benchmarks from Hong Kong to Japan and South Korea all in the green. The region’s chip-related stocks tracked the strength in their American peers. US and European futures also advanced.
The Australian dollar climbed 0.5% versus a broadly weaker greenback after a hot inflation print pointed to sticky local price pressures and reinforced the case for the central bank to hold rates at a 12-year high. The South Korean won led the gains in Asian currencies. Treasuries were largely steady. In addition to the strong performance of the US tech giants, weakness in measures of business activity in the world’s largest economy also helped keep alive forecasts for Federal Reserve policy easing this year. Like on Wall Street, the focus is also on tech earnings in Asia as the region has entered its busiest week for corporate results. The S&P 500 notched its best back-to-back rally in two months. Nvidia Corp., the poster child of the artificial-intelligence boom, led a surge in chipmakers. Texas Instruments Inc. gave a bullish revenue forecast — a good sign for the chip industry that may help lift Asian producers on Wednesday. Oil held a gain as an industry report showed shrinking US crude stockpiles and traders tracked progress toward fresh sanctions against Iran. Gold edged higher.
Elsewhere, the yen remained a whisker away from the key 155 level to the dollar, with a former top Japanese foreign exchange official warning the country is on the brink of currency intervention. In the corporate world, Silchester International Investors disclosed it has taken a stake in Nikon Corp., pushing the shares up by the most in almost three years. Trading in SenseTime shares was halted after a 36% surge in Hong Kong, following the Chinese tech firm’s launch of its upgraded AI model. In late US hours, Tesla Inc. soared as the electric-vehicle giant struck an upbeat tone despite a sales miss, the first of the “Magnificent Seven” megacaps to report. The stock halted a seven-day plunge, climbing alongside other members of the group. Morgan Stanley’s Mike Wilson said the bar is high for US firms to deliver on earnings, particularly for megacap technology names, which face tough comparisons from the growth they showed last year. Besides Tesla, Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. are also due to report earnings this week. Profits for the “Magnificent Seven” group — which also includes Apple Inc., Amazon.com Inc. and Nvidia Corp. — are forecast to rise about 40% in the first quarter from a year ago, according to Bloomberg Intelligence data. The group of tech megacaps is crucial to the S&P 500 since the companies carry the heaviest weightings in the benchmark. After this year’s advance, valuations have gotten lofty. After the latest selloff, the Magnificent Seven still traded at a combined 31 times forward earnings, according to data compiled by Bloomberg. US After Hours TSLA +9.9%, TXN +6.5%, LRN +6.1%, CSGP +3.2%, V +2.7%, STLD +2.3%, STX +1.2% higher on earnings; MANH -7%, ENPH -6.1% lower on earnings
Nikkei +2.18% Hang Seng +2.10% CSI +0.27% Shanghai +0.52% Shenzen +0.85%
Eur$ 1.0704 CNH 7.2601 CNY 7.2456 JPY 154.86 GBP 1.2453 CHF 0.9119 RUB 93.2083 TRY 32.5725 WTI$ 83.48 +0.14% Gold 2,325 +0.15% BTC 66,857 +0.75% ETH 3,260 +1.59%
S&P +0.40% Nasdaq +0.75% EuroStoxx +0.50% FTSE +0.63% Dax +0.47% SMI +0.06%
Macro :
- Corporate Bonds and Stocks to Continue to Split, JPMorgan Says
- US Senate Passes Ukraine Aid, Arms Shipments to Resume in Days
-
Keep an eye on :
Keep an eye on :
- AIR FP : Airbus CEO Faury and China NDRC Vice Chairman Talked Cooperation
- AI FP : Air Liquide 1Q Revenue Misses Estimates
- AKRBP NO : Aker BP 1Q Revenue Meets Estimates
- ALLFG NA : Allfunds Is Said to Abandon Discussions About Potential Sale
- APPS SM : Applus Services Offer Condition Has Been Fulfilled
- ARG FP : Argan Offers €150m New Shares in Capital Increase
- ASMI NA : ASMI 1Q Orders Beats Estimates
- ASMI NA : ASMI Orders Ahead, Guidance Beats Expectations: Street Wrap
- ASM NA : ASM Orders Beat Estimates as Chinese Demand Remains Strong
- BIC FP : BIC 1Q Adjusted Ebit Misses Estimates
- BILL SS : Billerud 1Q Adjusted Ebitda Beats Estimates
- BMW GY : VW, BMW Out to Prove They’re Not a Spent Force at China Car Show
- BA US : Boeing Cash Burn a Concern Amid 35% Stock Plunge: Preview
- BA US : Boeing to Pay Spirit AeroSystems $425m Advance Payment Under MOA
- BT/A LN : UK Broadband, Mobile Provider Promotions Mask April Price Hikes
- BONAVA SS : Bonava 1Q Operating Loss SEK22M
- BRG NO : Borregaard 1Q Ebitda Meets Estimates
- COOR SS : Coor 1Q Ebit Beats Estimates
- COV FP : Covivio Fuller Offices, Hotel Deals May Lift EPS Guidance: React
- COV FP : Covivio Delivers Positive Operational Performance: Street Wrap
- DB1 GY : Deutsche Boerse 1Q Ebitda Beats Estimates
- DSV DC : DSV 1Q Adjusted Net Income Misses Estimates
- EPROB SS : Electrolux Professional 1Q Ebit Beats Estimates
- ENI IM : Ithaca Energy to Pay About £750 Million for Eni’s UK Business
- ENI IM : Eni 1Q Adjusted Net Meets Estimates, Sees FY Adj Ebit Over €14b
- ERF FP : Eurofins Scientific 1Q Revenue Misses Estimates
- EVT GY : Evotec SE FY Adjusted Ebitda Misses Estimates
- GALD SW : Galderma 1Q Sales at Constant Exchange Rates +12.4%
- SHBA SS : Handelsbanken 1Q Net Interest Income Misses Estimates
- HEIA NA : Heineken 1Q Org. Beer Volume Beats Estimates
- HUSQB SS : Husqvarna 1Q Operating Profit Beats Estimates
- INTRUM SS : Intrum 1Q Revenue Misses Estimates, Intrum 1Q Revenue Misses; Reviews Debt Capital Structure
- IPN FP : Ipsen 1Q Sales Beats Estimates
- ITH LN : Ithaca Energy to Pay About £750 Million for Eni’s UK Business
- KAMBI SS : Kambi 1Q Ebit Beats Estimates
- KINDSDB SS : Kindred 1Q Adjusted Ebitda GBP59.3M
- KNEBV FH : Kone 1Q Orders Meets Estimates
- LMT US : Australia Invests A$500M in Air Missile Defence Pact
- MMT FP : M6 1Q Revenue Beats Estimates
- MELE BB : Melexis FY Revenue Forecast Meets Estimates
- MTGB SS : MTG Launches New SEK100m Share Buyback Program
- MTGB SS : MTG Sees FY Adjusted Ebitda Margin 26% to 29%
- NEX FP : Nexans 1Q Revenue Meets Estimates
- NOD NO : Nordic Semiconductor 2Q Revenue Forecast Beats Estimates
- NHY NO : Norsk Hydro 1Q Adjusted Ebitda Beats Estimates
- NOVN SW : UK’s NICE Recommends Novartis Drug Combination for Brain Cancer
- ORA FP : Orange 1Q Revenue Misses Estimates
- ORA FP : Orange Sales Rise Less Than Forecast on Declines in Europe
- PUIG IPO : Puig Advised by Banks to Increase IPO Price: Cinco Dias
- REC IM : CVC Said to Explore Options for €11 Billion Drugmaker Recordati
- RKT LN : Reckitt 1Q Like-for-Like Sales Beats Estimates
- ROG SW : Roche 1Q Avastin Sales Beats Estimates
- ROG SW : Roche 1Q Sales Misses Estimates, Confirms FY Outlook
- SHOT SS : Scandic 1Q Net Sales Misses Estimates
- SCF IM : Salcef Holders, Morgan Stanley Infrastructure Bid at €26.55/Shr
- SAN FP : Sanofi Is Said to Ask Banks to Pitch for $20 Billion OTC Spinoff
- SCANFL FH : Scanfil 1Q EPS Misses Estimates
- SEBA SS : SEB 1Q Net Interest Income Misses Estimates
- TEMN SW : Temenos Names Jean-Pierre Brulard as CEO
- TEMN SW : Temenos 1Q Non-IFRS Ebit Margin Beats Estimates
- TSLA US : Tesla Allows China Consumers to Buy Model 3 With No Down Payment
- TSLA US : Tesla Cuts Price of Model 3, Model Y in Japan by 300,000 Yen
- TSLA US : Tesla’s Musk Warns Wall Street Autonomous Future Is Main Goal
- TKO FP : Tikehau AuM Reach €44.4B at End-March, Up 12% Y/Y
- UBXN SW : U-blox 1Q Revenue CHF56.0M
- UBSG SW : Appaloosa Sues Credit Suisse Over $17 Billion AT1 Bond Wipeout
- VERX US : Vertex Said to Offer 0.75%-1.25% Coupon for $250M Convertibles
- V US : Visa Profit Surges 17% as Consumer Card Spending Climbs (1)
- VTY LN : Vistry Shares Gains After Betaville Issues ‘Uncooked Alert’
- VTY LN : Vistry Shares Gains After Betaville Issues ‘Uncooked Alert’
- VOD LN : Bharti Says Not in Talks With Vodafone to Buy Indus Towers Stake
- VOLVB SS : Volvo Car 1Q Operating Income Misses Estimates
- VPK NA : Vopak Boosts FY Adjusted Ebitda Forecast, Beats Estimates
- VOW GY : VW, BMW Out to Prove They’re Not a Spent Force at China Car Show
- VOW GY : Volkswagen China Price, Cost Challenge to Retain Top Spot: React
- WHA NA : Wereldhave 1Q EPS EU0.41 Vs. EU0.46 Y/y
- XXL NO : XXL 1Q Gross Margin 38.8%
>>> Up
* Adidas Raised to Buy at Stifel; PT 250 euros
* AFRY Raised to Buy at Nordea; PT 196 kronor
* Airbnb Raised to Buy at Mizuho Securities; PT $200
* Akzo Nobel Raised to Neutral at JPMorgan; PT 70 euros
* Boliden Raised to Buy at ABG; PT 390 kronor
* Byggmax Raised to Hold at SEB Equities; PT 34 kronor
* CM Raised to Outperform at Oddo BHF; PT 10 euros
* Enento Group Raised to Buy at SEB Equities; PT 19 euros
* Epiroc Raised to Buy at Nordea; PT 230 kronor
* eQ Raised to Accumulate at Inderes; PT 14 euros
* Galp Raised to Outperform at RBC; PT 25 euros
* Galp Raised to Outperform at RBC; PT 25 euros
* Getinge Raised to Buy at DNB Markets; PT 255 kronor
* Hemnet Raised to Buy at Pareto Securities; PT 350 kronor
* Kojamo Raised to Overweight at JPMorgan; PT 12.50 euros
* Novonesis Raised to Buy at DNB Markets; PT 440 kroner
* Randstad Raised to Hold at Jefferies; PT 42 euros
* Randstad Raised to Neutral at Oddo BHF; PT 41 euros
* Reddit Raised to Hold at Hedgeye
* Spotify PT Raised to $400 from $350 at KeyBanc
>>> Down
>>> Down
* AB InBev ADRs Cut to Sell at Hedgeye
* Mobico Group Cut to Hold at Peel Hunt; PT 70 pence
* Nyfosa Cut to Hold at DNB Markets; PT 100 kronor
* Nyfosa Cut to Hold at DNB Markets; PT 100 kronor
* UBS Cut to Neutral at Citi; PT 27 Swiss francs
* UPS Cut to Hold at Punto Casa de Bolsa; PT $146
>>> Initiation
>>> Initiation
* ARM US Rated New Buy at President Capital Management; PT $118
* Halozyme Rated New Buy at Baptista Research; PT $48.50
* Halozyme Rated New Buy at Baptista Research; PT $48.50
* Super Micro Computer Rated New Sector Weight at KeyBanc
>>> Call
>>> Call
* Corporate Bonds and Stocks to Continue to Split, JPMorgan Says
* Morgan Stanley’s Wilson Avoids Bold S&P Calls: Financials Wrap
* Morgan Stanley’s Wilson Avoids Bold S&P Calls: Financials Wrap
* Randstad Upgraded at Jefferies, Risks Now Appear Balanced
Tianqi Lithium Shares Dive After Warning of Wider Losses
Tianqi cited a “substantial decline” in the sale prices of lithium products, and a big decrease in their gross profit
Tianqi Lithium 002466 -9.99%decrease; red down pointing triangle shares fell sharply after the Chinese lithium producer warned of widening losses caused by weak product prices and a tax dispute in Chile.
The lithium producer’s Hong Kong-listed shares fell 19% to 28.40 Hong Kong dollars (US$3.62) in early trade Wednesday, on track of their largest one-day percentage loss on record. Its Shenzhen-listed shares fell 10%, the daily limit, to 40.63 yuan.
The declines came after the company said late Tuesday that it expected to post a first-quarter loss of between CNY3.60 billion (US$497 million) and CNY4.30 billion, compared with CNY4.88 billion in profit a year ago and a widening from a CNY801 million net loss in the fourth quarter.
Tianqi cited a “substantial decline” in the sale prices of lithium products, and a big decrease in their gross profit, the same pressures it mentioned during fourth-quarter results. It also cited the effects of an associate company’s tax dispute in Chile, noting that the associate expects the case to reduce net profit in the first quarter by about US$1.1 billion.
Lithium carbonate prices, a key raw material for EV batteries, have dropped about 60% from their peak in July last year, mostly on slowing demand for electric vehicles in China.
The Shenzhen Stock Exchange issued a warning letter to Tianqi Lithium following the guidance, asking it to analyze why losses widened and whether it is at risk for further losses. It also asked for a report on the company’s Chilean investment, requesting that it respond publicly on all counts by Friday.
Nomura analysts led by Ethan Zhang said in a research note that the wider loss was worse than expected, “considering that lithium prices have stabilized of late” and the benefits of a new pricing mechanism for its Greenbushes mine in Australia this year.
The latter change is expected to reduce production costs at the world’s largest hardrock lithium mine in operation.
Nomura kept a buy rating on the shares with a target price of CNY50.
How a Monaco hedge fund boss got tied up with an indebted English town
Lee Robinson’s advice was ‘like having Lionel Messi on your team’. Now his relationship with Warrington is under scrutiny
In March 2021, an official at Warrington Borough Council in the north of England listened to a pitch to invest in a commercial building 75 miles away in Birmingham. Warrington invested £10mn. The stake is now worth £1.3mn.
The matchmaker for the troubled deal between the real estate firm behind the scheme M7 Real Estate and the local authority was Lee Robinson, a Monaco-based financier whose interests have become unusually entwined with the Labour-run council.
The 54-year-old former derivatives trader was present at Warrington’s 2021 meeting with M7, had introduced the two parties, and was also an investor in the property outfit’s funds. The Birmingham building, called Mailbox, last year defaulted on a loan, threatening to wipe out the council’s stake.
The deal was just one of £120mn worth of investments Warrington has made since 2017 that have links to Robinson, who one council officer likened to star footballer Lionel Messi.
Those investments include a heavily impaired £30mn stake in a challenger bank, more than £40mn in property funds managed by M7 and a further £47mn in often-opaque investment vehicles at Robinson’s own firm.
Robinson’s relationship with Warrington is facing growing scrutiny from opposition councillors, who have struggled to fully understand the financial risks of the council’s dealings with him.
“Conservative councillors, including myself, have been asking for relatively straightforward information about these investments for some time now,” said Tory group leader Nigel Balding. He added they were “usually fobbed off” by the council.
Warrington is part of a swath of UK local authorities that have ploughed money into speculative ventures over the past decade by taking on huge debts in response to severe centrally imposed funding cuts.
The town of 211,000 people, sandwiched between Liverpool and Manchester, is by one measure the most highly leveraged council in the country, according to the most recent government data, with borrowings of nearly £2bn. It has investments of about £1.5bn.
Warrington’s precarious finances drove the Department of Levelling Up, Housing and Communities to commission an external review in 2023, which it has not released to the public.
The local authority’s auditor, Grant Thornton, has struggled to audit its books and only this month completed the 2018-19 financial year. The firm concluded that the council did not have proper arrangements to deliver value for money for the second year running.
As Warrington’s debt has grown, so too have its links with a financier based 1,000 miles away on the French Riviera.
Among the Warrington investments that Grant Thornton has flagged as problematic is a stake in the holding company of challenger bank Redwood, where Robinson is a non-executive director and investor. The local authority’s investment in Redwood in 2017 was Warrington’s first introduction to Robinson, according to the council.
Warrington’s stake in Redwood had been “materially overstated”, resulting in a “significant impairment” that saw a £30.4mn investment written down to just £4.3mn by March 2019 after a third-party valuation, Grant Thornton said this month. The council, meanwhile, said it was “satisfied with the bank’s performance despite the ongoing economic challenges and depressed banking market”.
After Warrington invested in Redwood, it put £47mn into funds managed by Robinson’s investment firm Altana Wealth. Robinson set up the firm in 2010 using cash from the sale of a stake in his previous hedge fund to Goldman Sachs months before Lehman Brothers collapsed in 2008.
The Australian-born Robinson began trading derivatives in the early 1990s, first at investment banks and then at hedge funds. At the height of the eurozone sovereign debt crisis, he was a prominent commentator on the woes afflicting indebted nations around the world.
Robinson has said he founded Altana “to do interesting things with higher returns”, after traditional markets became increasingly commoditised. His firm has since claimed to devise trading strategies for assets ranging from bitcoin to Bordeaux wine.
At a January audit meeting, Warrington’s finance officer Danny Mather defended Altana’s expertise. Access to the skill of the firm’s “star fund managers” was “like having Lionel Messi or something on your football team”, Mather said.
Robinson and other Altana executives have met Warrington’s officers 17 times since 2018, according to a Freedom of Information response, not including meetings with Mather that the council refused to disclose.
Among the money Warrington has invested with Robinson’s firm was £10mn into an Altana corporate bond fund in 2018. Tory councillors have argued it was not made clear to them that the fund invested in junk-rated debt.
The council has since withdrawn the investment, but retains £37mn in other Altana funds, many of which Warrington simply describes as “managed accounts” with little to no detail on the underlying investments.
Robinson told the Financial Times that Altana was unable to comment on “any client or their investments” as it is “legally bound by client confidentiality”.
Warrington also established a joint venture with Altana in 2019 to invest in “projects with long-lasting social impact”.
Warrington took a 49 per cent stake, made a £20mn investment in the Altana Social Impact Fund, and introduced the investment opportunity to several other local authorities such as Wirral, in Merseyside.
Last November, Warrington council’s audit committee was told that the fund was expected to provide a 6-8 per cent annual return. Wirral told the FT in March that its investment to date had returned just 0.6 per cent.
The fund this year agreed to hand back a chunk of investors’ money after failing to deploy all of the capital it raised in the allotted time. Warrington’s latest financial figures show that it has not suffered losses on its £47mn of Altana investments.
But the Birmingham property deal is the most visible example of how Warrington’s other dealings with Robinson have at times led to losses.
Since 2020, Warrington has invested more than £40mn with M7, including £10mn in the Birmingham Mailbox building and the rest in other property funds managed by the London-based real estate firm.
Warrington began these investments in 2020 after an introduction to M7 by Robinson, who is also an investor in the firm’s funds, according to a person close to M7. Robinson did not comment on whether he was an investor in M7’s funds, while M7 declined to comment on the matter, citing client confidentiality.
In documents filed with US securities regulators, M7 listed Robinson as a “marketer” for several of its funds, including one that Warrington invested in focused on retail warehouses.
Warrington confirmed to the FT that “initial contact with M7 was made via Mr Robinson”, but said it had “received assurances from Mr Robinson that he is not a marketeer for any M7 funds”.
It added that the March 2021 meeting with then-finance officer Julie Hall had been “made and arranged” by M7’s then-chair Richard Croft.
“Mr Robinson did not present and was there in his own private capacity as a potential future investor,” it added. The council said in response to a FOI request it had no notes, agenda items or minutes for the meeting.
Robinson told the FT he had “never pitched Mailbox to anybody”, adding that he was not a marketer for M7 and had “never pitched any investment to anyone other than Altana investments”.
After the FT sent him a copy of M7’s regulatory filings, Robinson said he was “surprised” to see his name on the form. He said M7 “will correct and resubmit” the form.
M7 told the FT that Robinson introduced the firm to Warrington “but was not involved in the subsequent marketing of any specific investment vehicles”. It added that the US filing in question specified that “introducers” should be listed in the “marketer” section.
“Having spoken to Mr Robinson, we are taking specific legal advice [ . . .] and will make any corrections if deemed appropriate,” M7 said.
Mailbox looks set to cause another difficulty for Warrington: a slumping property valuation triggered a default by Mailbox on a £103mn loan secured against the building in April 2023.
Warrington invested in the building through an investment trust that was listed on a specialist property exchange. In September, Mailbox announced that the exchange was shutting down, making Warrington’s investment an unlisted asset and harder to sell.
A November update by the council’s finance officers to Warrington’s audit committee made no mention of the default and continued to forecast a positive return on its investment.
A report to the same committee earlier this month noted Mailbox’s default and delisting. It also disclosed the property’s valuation had fallen to just £113mn at the end of last year from £181mn at listing in 2021.
Warrington’s report said the property was now being marketed to new buyers but that this would cause a “large impairment to the council”. It added that an “alternative restructuring option” was also being considered.
Warrington told the FT that Mailbox “continues to perform at record levels of rent and occupancy”. The council added its other M7 investments had “performed very well”.
Why China’s market slump is far from a crisis
Investors should not write off the country’s growth potential
China’s stock market has certainly been battered recently, rattling both consumer and investor confidence. But we shouldn’t be too quick to categorise this disappointing phase as a crisis.
Investors should tread cautiously, of course, given that Chinese consumers remain nervous about a still-shaky property market and high youth unemployment. But rather than completely writing off the growth potential of China’s domestic market — one arguably too big to ignore — here are some points to consider.
The constructive summit between Presidents Joe Biden and Xi Jinping in California last year achieved some semblance of comfort over geopolitical tensions. And Xi’s recent meeting in Beijing with US business executives, including Apple CEO Tim Cook, discussing topics such as artificial intelligence, could bode well for stabilising relations.
We’ve been encouraged by China’s private investment in AI, which is second only to the US. China has also made impressive progress with industrial robot installations, which have now outpaced those of the rest of the world combined. Its innovators comprise nearly half of all global patent applications filed — greater than that of the US, Japan, South Korea or Germany.
And among the recent measures China has taken to stabilise its market and restore investor confidence is a tightening of the rules related to short selling in the market.
We are already beginning to see encouraging co-ordination between China’s fiscal and monetary policy. Following central bank moves at the start of this year that lowered the reserve requirement ratio (RRR) for financial institutions, regulators in March noted “ample” room for further cuts, which may enable substantial liquidity to be injected into the economy. And this year, Beijing is expected to provide at least $137bn in low-cost financing to help public housing programmes.
China’s remarkable development over the last few decades gave birth to a middle-class population of 500mn people who have now tasted prosperity. From 2017 to 2021, its luxury market tripled in size and should be supported by another projected 80mn middle-income earners joining the ranks of potential customers by the end of this decade. But this extraordinary pace of economic growth was always bound to hit some speed bumps and it’s important to remember that China is still undergoing a major transition from export-led growth to a more sustainable model that is increasingly driven by consumption and services.
China’s passenger vehicle exports, and particularly its electric vehicle sales, are other key areas of progress to watch. Last year, China nearly surpassed Japan as the world’s largest car exporter and in January, domestic retail passenger car sales were also up 57 per cent year-over-year. China has been the envy and fear of global electric-vehicle manufacturers. With great government support, Chinese upstart automakers have eclipsed foreign rivals to develop electric cars faster and develop new smart tech features.
Partly because of China’s increasing demographic troubles, there’s been much fanfare over whether India is ‘the next China’. India’s more youthful population switched places with China in April 2023 to become the world’s biggest nation. In September last year, India’s manufacturing and services PMI — already long in expansion mode — strengthened to a 13-year high, indicating a substantial rise in new business orders and improving business confidence. Notable technological and infrastructure developments were also achieved last year.
However, we should also keep in mind that India is a quite different economy from China, with its own distinct merits and challenges. Unlike China, India is a noisy democracy with still-high barriers to trade. In 2022, India had one of the highest import duties globally, according to the World Trade Organization.
So, perhaps only China is “the next China”. While investors do not expect a swift rebound in China’s market, some are seeing alluringly cheap valuations as an attractive entry point to the world’s second-largest economy. As of the end of February, the FTSE China RIC Capped Index was trading at a price/earnings ratio of just 9.44 times and price/book ratio of 1.15 times.
Further afield, China has endeavoured in recent years to increase its influence in Latin America. Trade agreements, foreign direct investment and loans have played an important role in strengthening ties with the region. All of which means that the sheer extent of China’s global influence should not be overlooked.
Rodolphe Saadé, shipping boss who sailed into France’s business elite
Head of CMA CGM has been on a €35bn deal spree and followed fellow billionaires buying up media assets
The small group of billionaires at the pinnacle of French business that includes LVMH boss Bernard Arnault and corporate raider Vincent Bolloré has lately had to make room for a new kid on the block: shipping tycoon Rodolphe Saadé.
The head of family-owned CMA CGM, the world’s third-biggest container shipping group, Saadé was little known outside the industry until the pandemic brought billions in windfall profits and he started following in the footsteps of other French industrialists by buying up media assets.
Having acquired business newspaper La Tribune and Marseille-based daily La Provence in the past two years, the reserved 54-year-old recently swooped for television news channel BFM. He plans further media expansion, bringing a new spotlight to the unlisted group and its controlling family.
“LVMH, Bolloré, the Dassaults have their own newspapers,” Saadé said in a rare interview in the company skyscraper built by his father that towers over the port of Marseille, where the Lebanese family put down roots in the 1980s. “I have the means to develop a new activity. I think the media, for a group like ours, makes sense.”
Drawing parallels with Arnault, the world’s richest man, is characteristically bold of Beirut-born Saadé, a canny dealmaker and steely negotiator described by allies and adversaries as having big ambitions and appetite for risk. The pair have other similarities: knowledge of the finest details of their operations and an intermingling of their corporations with their families as they groom the next generation.
Xavier Niel, founder of telecoms group Iliad, lost out to Saadé in their battle to buy La Provence, yet they became unlikely friends.
“He didn’t know the big fortunes of France a few years ago and now he does,” said Niel. Describing Saadé as the new entrant in a billionaire’s club rife with codes, he joked: “Like all of us, you need a private jet, the right suit, the right restaurant, legion d’honneur, and your media organisation.”
Flush with pandemic cash, Saadé has taken CMA CGM on a quick-fire, roughly €35bn acquisition spree, with the aim of diversifying into logistics to cushion the group from shipping’s boom-and-bust cycles. He has snapped up planes for a new air cargo division, ports in Los Angeles, and Bolloré’s logistics business, and even his favourite Lebanese pistachio producer.
He has also developed close ties with French President Emmanuel Macron, whom he often accompanies on overseas trips, while investment bankers who once shunned the group now vie for its business.
Media is a small part of the family’s holdings but it brings new influence and new problems. Just as unions protested last year amid suspicions that Arnault had forced out the editor of business newspaper Les Echos, journalists at La Provence went on strike in March when theirs was suspended over a front page criticising Macron’s visit to Marseille to highlight the fight against drug trafficking.
Jean-Christophe Tortora, who leads CMA CGM’s media business, found the headline gave drugs dealers an unduly sympathetic voice. But after an ensuing firestorm in which politicians complained, staff at La Tribune vowed to strike and worries spread to BFM, the editor was quickly reinstated.
Speaking before the furore, Saadé said he had certain expectations of his media outlets: “I would like to have a nuanced approach to coverage — with no extremes — and I want the outlets the group owns to follow that line of conduct.”
But he acknowledged that CMA CGM and the family could no longer avoid the public glare. Although as a family group, “the less people talk about us, the better off we are”, Saadé said, “I’m not going to hide behind my little finger. I can’t say ‘I’m small, don’t look at me’. I’m here and I’m going to live up to that role.”
For Renaud Muselier, who heads the regional council of the southern Provence-Alpes Côte d’Azur region and is close to the Saadés, a shift came when CMA CGM became the main shirt sponsor of football club Olympique de Marseille.
“Until then they had been known above all in business circles, but not a household name,” Muselier said.
The pandemic brought an unprecedented €40bn in net profit in 2021 and 2022 — and a realisation within government that it was strategically important to have a large maritime transport group.
CMA CGM moved masks and medical equipment, and now transports goods into war zones and crisis hotspots for the foreign ministry and French army. When Houthi rebels started attacking ships in the Red Sea last year, the company stuck with the route longer than competitors because its vessels were escorted by the French navy.
The group is now navigating a severe industry downturn brought on by slowing global trade and overcapacity just as it faces what one top executive described as the “generational challenge” of cutting the fleet’s emissions.
The deal-hungry Saadé has turned prudent, although unlike rivals such as Maersk, no job cuts are planned. Saadé also said he did not want the company to go public because it would curb his agility in a volatile industry.
“In a down cycle, our main priority is to control costs,” he said. “The diversification into logistics also helps because it is less capital-intensive and less cyclical.”
Asked if the acquisition spree was over, he hinted that the pace would slow: “We have a lot of important integration work to do . . . a transformation is never complete.”
Saadé learned about business storms when his father took on too much debt during the 2008 financial crisis and almost lost control of the company, forcing the group to sell a minority stake to a Turkish group and secure a government bailout.
“It was formative for me, and I will do everything in my power to not fall back into a situation like 2008,” he said, recalling a time when “we didn’t have many friends” and when he would blast out rock music to psych himself up for negotiations with creditors.
The rise of the Saadés — now ranked 56th on the Bloomberg billionaires index, with a fortune estimated at $28.7bn — is defined by two events. In the late 1970s late patriarch Jacques Saadé bet that container ships would revolutionise world transport; not long after, the family fled from war-torn Beirut to Marseille.
“Our father brought us over in April 1981. I’ll never forget that date,” said Tanya Saadé Zeenny, Rodolphe’s elder sister who is a high-level executive at CMA CGM. “We lived in a hotel for a year and every day we asked him, are we going back to Lebanon? And we’re still here.”
People close to the Saadés said breaking into French elite circles had not been easy for a provincial group owned by a family with Lebanese roots. Media acquisitions, alongside sponsoring the 2024 Paris Olympics and product placements for CMA CGM containers in the latest James Bond movie, are a way of changing perceptions.
“France is not a melting pot like the US,” said one investment banker. “You cannot minimise what the challenge has been for this family.”
The chosen heir as the elder of two sons, Saadé rose through the ranks of the group and still grills top executives on everything from container pricing to the fill rates of ships in hours-long meetings twice a week.
A certain formality reigns in the tower from which the 620-vessel fleet is tracked — the men usually wear ties and only a handful of veterans of his father’s era call Saadé by the informal tu.
“They work 24 out of 24 hours,” said Muselier. “Business and family, it’s all mixed together and it creates very strong bonds between them.”
Saadé has a reputation for being demanding and impatient, and places a premium on “family values” such as loyalty. Company advisers and insiders recount stories of new hires being fired within days if Saadé felt they would not fit. “There is no point keeping someone if we know quickly that it won’t work,” he told the Financial Times.
Saadé conceded he was not averse to courting fear. On a January trip to Egypt, he quizzed staff on how market share was holding up. “The person in charge told me the decline was 0.13 per cent, which is not a lot but I told him it was enormous and that I was not happy,” he said. “I have to keep people motivated, although the teams do very good work.”
However, Niel described Saadé as “endearing, very family-oriented and humble”, lauding his charitable works in poverty-ridden Marseille, for example with his launch of a tech start-up incubator.
Saadé sees media as a means to ensure the family’s legacy and perhaps attract the next generation to the group. Between himself, Tanya and brother Jacques, who manages CMA CGM real estate, they have five teenagers who are destined to take over.
“After they’ve done their studies and had experiences abroad, I want them to work in the family business,” Saadé said. What if they prefer to go off and be musicians? “That’s fine, it’ll last 10 minutes,” he quipped. “You have to give them a choice, but there are five of them, and we don’t need an orchestra.”
Why Nissan needs more than a gamble on solid-state batteries
Japanese carmaker has fallen behind in electric vehicle race and lacks scale needed to compete globally
Last week, in the shell of a factory that Nissan insists will be churning out solid-state batteries by 2028, an executive of the Japanese carmaker fired back at scepticism about the nascent technology from companies he says are clinging to the past.
“All the battery suppliers want to keep enjoying the liquid-type batteries, which they have now. They’ve already made a big investment so not only CATL, but all the battery suppliers are not so very positive on solid state yet,” said the executive on the sidelines of a tour.
He was responding to claims made recently by the founder and chief executive of CATL, the Chinese company that dominates the electric vehicle battery industry, that the much-hyped solid-state batteries did not work well enough, lacked durability and still had safety problems.
It is not a criticism that Japan’s carmakers take lightly. Toyota led the way on research into solid-state batteries — which avoid the need for liquid electrolyte used in today’s technology and promise more range and better safety for electric vehicles — and they could be the deus ex machina that transforms Japanese carmakers’ growth prospects.
That is why investors and legacy battery makers, are watching, hawk-like, for signs that Japanese companies can make good on claims they will be able to commercialise the tech in the coming years. Toyota is aiming for as early as 2027, Nissan the year after and Honda by the end of the decade.
In response to questions about the CATL chief’s remarks, the Nissan executive claimed the group had cracked some of the critical elements of solid state, in the laboratory at least. He said the company had found new mechanisms that would help with ion transfer within the batteries, minimise the problems of expansion of lithium during charging and discharging, which can reduce battery life, and provide greater safety.
Nissan has not gone into great detail about those mechanisms, which remain “top secret”, according to the executive, but said they had been largely solved in laboratory conditions. That would be a noteworthy milestone but getting the tech out on the roads will be the only test that truly matters.
Uncertainty about how exactly tech develops is entirely normal. The problem for Nissan is just how much it might need this breakthrough. Although Japan’s carmakers can often be lumped together when discussing solid-state advances, they are not all in the same situation.
Now, it’s true that Toyota’s share price has risen along with hopes that it can crack the technology. But it also remains the world’s biggest carmaker by sales and is raking in record profits while taking advantage of renewed demand for its existing products, such as hybrids.
Nissan, meanwhile, is struggling, having fallen behind in the EV race and lacking the scale needed to compete globally. Just last week, on the heels of its solid-state factory tour, Nissan cut its full-year sales and operating profit forecasts, knocking its shares. The pain might have been worse had analysts not already factored in the risk of a miss to existing guidance — never a good look.
The company has responded to the pessimism, recently announcing a new midterm plan to boost sales and launch 30 new models, half of which will be electrified or hybrid. Nissan wants to forge new partnerships, after scaling back its alliance with France’s Renault, and is planning a tie-up with Honda to develop electric cars.
And at the same solid-state factory tour, Nissan also showcased how it would employ gigacasting — a manufacturing technique pioneered by Tesla that uses casting machines to force molten metal into moulds under high pressure to produce large aluminium body parts — to make cheaper electric vehicles. Nissan hopes those EVs are the same ones that will carry the next-generation batteries.
Investors, however, are still feeling a distinct lack of enthusiasm. “They just don’t move the needle . . . If I want to take a view on Japanese carmakers, I am going for Toyota,” said one fund manager in Tokyo.
That could change if Nissan did manage to fulfil its solid-state ambitions — but having so much of the narrative relying on that breakthrough seems risky. After all, no carmaker has yet managed to achieve mass production and Nissan’s solid-state factory remains home to hopes rather than actual machinery.