FT : BP to book $700mn windfall due to pension tax changes

BP to book $700mn windfall due to pension tax changes
Oil major says balance sheet will benefit from upcoming reduction to pension surplus tax charge

BP is set to book a $700mn windfall due to tax changes aimed at boosting corporate pension fund investment in the economy.

Last year, chancellor Jeremy Hunt announced plans to relax the tax charge on surplus funds extracted by employers from company pension plans, with the changes to come into effect in April.

In its annual results, this week BP, which has amassed a $7.9bn surplus in its giant pension plans, noted the change was expected to help its tax liabilities by about $700mn.

“In November 2023, the UK government announced a reduction in the authorised surplus payments charge applicable to defined benefit pension schemes from 35 per cent to 25 per cent,” the oil major said. “The legislation has not yet been enacted or substantively enacted, but is expected to be effective from 6 April 2024.”

“The change is expected to reduce deferred tax liabilities by around $0.7 billion with the related gain recognised in other comprehensive income when the legislation is substantively enacted.”

Heather Self, consultant at Blick Rothenberg, a tax advisory firm, described the development as “a windfall [for BP], but only inasmuch as it is a reduction in a tax rate” as the booking of the $700mn gain was “an accounting requirement”.

BP is expected to provide more detail about the treatment of the tax liability change in its next annual report due to be published in March. The group said it did not currently intend to extract surplus from its pension.

The pension tax change is expected to be closely watched by other corporate sponsors of “defined benefit” plans against the backdrop of much-improved funding positions.

Thousands of company pension plans in the UK have amassed surpluses over the past 18 months, thanks to interest rate rises driving down the cost of pension promises.

Meanwhile, pension experts said the tax changes, and broader efforts by the UK government to incentivise pension investment in areas that can help the economy, were having an impact in the boardroom, with some now looking to extract pension surplus.

The government believes that well-funded pension plans could potentially generate more surplus, for use by employers and to benefit members, by investing in return-seeking assets that also help the UK economy.

“There’s a recognition of the potential upside value from future [pension] surplus for both members and employers,” said Stewart Hastie, partner at Isio, a pension consultancy.

“Companies are exploring avenues such as merging group schemes to maximise the benefits of surplus funds and schemes are establishing frameworks outlining agreed terms for distributing future surplus above a certain threshold.”

FT : Ski industry navigates new terrain to fend off threat of climate change

Ski industry navigates new terrain to fend off threat of climate change
Mountain resorts are diversifying as the top US and Europe trails become unusable even in peak season

At a small ski repair shop on the banks of Lake Tahoe in northern California, staff were turning away customers anxious to patch up their blades for the winter season.

“I could take your money and work on them,” said an employee at Tahoe Dave’s, turning a pair of dented skis over at the end of last year. “But what’s the point because you’re just going to hit a bunch of rocks tomorrow. I’d bring them back when there’s snow.”

Across the US and Europe, climate change is forcing the ski industry to adapt. As global temperatures hit new records, lower snowfall and melting snowpack are forcing the multibillion-dollar industry to rethink how they can keep consumers paying for expensive lift tickets, equipment and hospitality.

While a recent flurry of snowfall has allowed many of Tahoe’s trails to reopen, closures are becoming more frequent during the peak of the western US season — which runs from late November to early April. Many open trails are strewn with small rocks and ice, making them navigable for only the most skilled skiers. 

In the US, the leading operators are expanding into ever-higher terrain and across different regions and ranges — and diversifying away from skiing. Vail Resorts and Alterra, the two US ski companies with the biggest number of resorts, now own large portfolios of hotels and are advertising their mountain playgrounds as places where people can enjoy outdoor activities all year round.

“These resorts aren’t just these little towns that nobody goes to in the off-season — mountain biking is huge now,” said Darcie Renn, Alterra’s vice-president of sustainability. “We’re doing more to extend the season — people can go hiking, climb ropes, do family adventure camps.”

Alterra is still “very much in the ski business, but it is becoming the mountain resort business”, she added.


Unlike in the US, where big companies run entire resorts, in Europe cable car operators typically oversee the lifts and ski slopes, while restaurants and accommodation are often owned by separate businesses.  

But across the Alps and Italy’s Apennines, businesses also facing lower snowfall are taking the same approach by adding summer activities such as hiking and mountain biking, as well as building children’s play areas that make use of the mountainous landscapes.

Lift operators at leading Italian resorts such as Monte Cimone have spent big on snow-making facilities, churning out the “gun powder” that can save a day of skiing. About 90 per cent of Italy’s slopes rely on artificial snow, compared with 54 per cent in Switzerland and 40 per cent in France, according to the Cableways Association of Switzerland.

Despite these efforts, Apennine resorts are still feeling the pressure. “They are not having a wonderful season, but it is not as bad as it was last year,” Valeria Ghezzi, president at Anef, the association of Italian ski lift operators.


US resorts, even in high-altitude ski areas, are also boosting their snow-making capacity.

Jackson Hole Mountain Resort, close to the annual retreat for monetary policymakers in Teton County, Wyoming, has invested “heavily” in snow-making over the past decade. The resort can now supply snow to around a third of its trails.

Yet JHMR was forced to call off its annual extreme ski and snowboarding competition — usually held in a steep, narrow chute at the top of the mountain called Corbet’s Couloir — last month. The trail did not have the depth of snow needed to run the event, staff said.

“It’s been a tough year for the majority of the ski industry,” said Andrew Way, JHMR spokesperson. 

Despite the weather challenges, a record 65.4mn visits to US slopes by skiers or snowboarders were recorded for 2022-23, according to the National Ski Areas Association, up 6.6 per cent from the previous season.


Vail and Alterra both offer an upfront season pass that allows access to all the companies’ ski runs for discount rates, providing the businesses with reliable revenue and a steady stream of visitors even when low snowfall prevents skiing on some routes.

With 2.4mn guests “pre-committed” to its 41 resorts across the US, Europe and Australia this season, a Vail spokesperson said its pre-season pass was a bid to “change the dynamic” of being “ruled by the weather”.

Alterra’s Renn added: “We can lean in on this pre-season revenue. It gives us a little bit more good feeling that someone will be at some of our resorts somewhere.” 

Vail is expanding its portfolio in Europe. In November, the company bought the operator of the Crans-Montana resort in the Swiss Alps, following an acquisition of another Swiss resort in 2022. 

But Europe is unlikely to provide the US companies with a safe haven from climate change. Average temperatures in Alpine regions have risen almost 2C from pre-industrial levels, the Research Center for Alpine Ecosystems estimated, well above the long-term global figure of at least 1.1C.

Some US ski companies admit that rising temperatures will eventually render even the most aggressive snow-making operations obsolete.

At Aspen Snowmass in Colorado, the resort’s executives lobby aggressively for pro-climate legislation. Two years ago, the company installed a sculpture of a cable car at the top of one of its lifts, and it leaves copies of its call to climate action in every hotel room, said Auden Schendler, senior vice-president of sustainability.

Calling for sweeping measures such as a carbon tax regime in the US, he said the ski industry had been fixated on their own emissions and “misunderstanding climate change as something that can be fixed by changing the lightbulbs”.

FT : Investors pile into psychedelic drug start-ups tackling mental health

Investors pile into psychedelic drug start-ups tackling mental health
Sovereign wealth funds Temasek and Mubadala in talks to fund biotech groups harnessing mind-altering substances

Biotechnology start-ups seeking to use psychedelic drugs to treat mental health disorders are raising hundreds of millions of dollars, as investors are tempted back to the sector by watershed clinical data and regulatory approvals expected this year.

Groups seeking to harness mind-altering substances including MDMA, psilocybin mushrooms and 5-MeO-DMT, a hallucinogen found in desert toad secretions, raised at least $163mn across five deals in January, according to PitchBook and company data.

It is the second-highest month of fundraising ever recorded, after March 2021. Multiple people who work in the sector said they expected more backing for psychedelics groups, as promising scientific data and positive signals from regulators attract high-profile investors.

Singapore’s $300bn investment fund Temasek and the venture capital arm of one of Abu Dhabi’s largest sovereign investors, Mubadala, have held talks with biotechs to fund development of psychedelic mental health treatments and clinics, according to three people familiar with discussions.

The funds both have a history of investing in biotechs but are bankrolled by countries that have some of the world’s most restrictive laws on drug possession; Singapore has executed at least 15 people for drug-related offences in the past two years.

Temasek declined to comment. Mubadala said it was “continuously evaluating all possible clinical and therapeutic prospects to address significant unmet needs”.


Once considered a relic of the 1960s counterculture, psychedelic drugs have experienced a renaissance both in society and healthcare research in the past two decades, such as the rise of “microdosing” by Silicon Valley tech executives.

While many of the early studies into the effect of psychoactive substances on mental health were funded by philanthropy, billionaire evangelists for the drugs like tech entrepreneur Peter Thiel, German financier Christian Angermayer and crypto investor Mike Novogratz became pioneers in funding over the past decade by deploying their personal wealth as institutional investors remained wary.

“Psychedelics have already arrived in society as an accepted fact,” said Angermayer, who started investing in psychedelics when he became convinced of their efficacy after using them around a decade ago, despite a lifetime abstaining from drugs and alcohol. “I always try to ask myself: ‘is it just my circle’, but . . . the demand is so high and the current treatments are so bad.”

The investor interest in businesses developing psychedelics comes as the broader biotech sector enjoys a revival. A Nasdaq index of small cap biotech stocks has rallied by more than 40 per cent in the past three months as investors bet on an end to interest rate rises.

Even so, the drugs have remained in a legal grey area in many countries, with concerns about a rise in illicit recreational use following the uptick in their clinical acceptance. Most common psychedelics remain controlled substances in the US, although this does not prevent state-by-state decriminalisation and is not considered a barrier to FDA approval.

By this summer, London-based Compass Pathways, a Nasdaq-listed group backed by Thiel and Atai Life Sciences, a biotech group that Angermayer founded, is expected to publish data from a “phase 3” trial of 800 human subjects who have taken synthetic psilocybin to treat treatment-resistant depression.

These will be the first results from a study designed around landmark US Food and Drug Administration guidelines for researching psychedelics that were outlined last year, a decision that encouraged investors that formal approval of the drugs would soon follow.

“Much of the stigma in investing circles has started to dissipate,” said Kabir Nath, Compass chief executive, who said the FDA’s move to issue guidance had “made it a lot more straightforward” for investors.

Lykos Therapeutics, a corporate offshoot of the non-profit Multidisciplinary Association for Psychedelic Studies, is also awaiting a decision from the FDA on its MDMA-assisted therapy for post-traumatic stress disorder expected by the third quarter of 2024.

The decision could lead to the schedule-1 controlled substance being reclassified for use as a mental health treatment, the first time such a reclassification will have taken place.

According to three people close to the company, a funding round worth more than $100mn last month from a group of 10 investors including the charitable foundation run by hedge fund billionaire Steven Cohen and his wife Alexandra, was oversubscribed. As a result, Lykos is considering raising more money by the end of this year.

“There’s a lot of biotech investors and big pharmaceutical companies sitting on the sidelines . . . they want to see what the commercial rollout looks like,” said Tim Schlidt, co-founder of Palo Santo, a Chicago-based venture capital fund that invests exclusively in psychedelics healthcare. “There’s going to be a lot of change based on whether [Lykos] comes through and gets approval.”

Spravato, a nasal spray based on a molecule from the psychedelic drug ketamine used to treat depression, already ranks as Johnson & Johnson’s fastest-growing product. Analysts project it will achieve more than $1bn in sales this year, and become a so-called “blockbuster” drug.

That clinical distribution of Spravato has laid the groundwork for future drugs. “The emerging commercial infrastructure is giving investors great comfort,” said Greg Mayes, chief executive of Reunion Neuroscience, a Canadian group developing psilocybin treatment for post-partum depression in women. “Data, regulatory and commercial [progress are] all converging in an area where there is a giant unmet medical need.”


More than 50 psychedelic companies have gone public in the US and currently have a combined valuation of more than $2bn, which is predicted by analysts to reach $12bn by 2030.

In July, the American Medical Association released the first CPT codes — reimbursement codes used for healthcare billing — for psychedelic therapies, which created a pathway for the drugs to be integrated into the US healthcare system.

“We have demonstrated . . . that it’s possible to take the psychedelic experience and work within highly regulated protocols and still get great results,” said Rick Doblin, a psychedelic drug advocate who founded the non-profit Maps in 1986. “The world’s on fire and psychedelics are going to become more essential as a medicine.”

The results of early leading studies into psychedelics made public have been groundbreaking. The first clinical trials by Lykos showed that over 70 per cent of its MDMA-assisted therapy study participants were cured of PTSD after 18 weeks, while Compass Pathways found that it could get a quarter of patients with treatment-resistant depression into remission in 12 weeks, according to data released last year.

The early data helped Compass raise $285mn in a private placement of its shares last August from mainstream biotech funds including $10bn fund RA Capital and Surveyor Capital, an equities business owned by Ken Griffin’s Citadel.

That Compass funding round was “good for the sector overall”, said Doug Drysdale, chief executive of Cybin, a Nasdaq-listed company backed by asset manager Janus Henderson and Cohen’s Point72 hedge fund, as it showed that fundamental pharmaceutical investors were doubling down on the space.

“You don’t have to be a tie-dye wearing investor to think of the psychedelic space as interesting,” said Protik Basu, managing partner of Helena Special Investments, which led the latest investment round in Lykos.

“Investors like investing in inevitabilities: you can’t argue with the absolute crisis of mental health around the world; you cannot argue with the fact that antidepressants and the current suite of tools generally suck.”

FT : US lenders’ debt to shadow banks passes $1tn

US lenders’ debt to shadow banks passes $1tn
Regulators worry growing financial ties between traditional and non-bank groups could pose systemic risks

The amount US financial institutions have loaned to shadow banks such as fintechs and private credit groups has passed $1tn, as regulators warn that growing ties between traditional and alternative lenders could present systemic risks.

The US Federal Reserve reported on Friday that US banks crossed the 13-figure threshold in loans outstanding to non-deposit-taking financial companies at the end of January. These hedge funds, private equity firms, direct lenders and others use the money to leverage investments and increasingly lend it out to a range of risky borrowers that regulators have discouraged banks from lending to directly.

That amount is up 12 per cent in the past year, making it one of banking’s fastest-growing businesses when overall loans growth has been sluggish, up just 2 per cent.


The rapid rise in loans to shadow banks concerns regulators because there is very little information or oversight regarding the risks being taken by those groups. Last month, EU regulators said they would dig deeper into the ties between traditional lenders and shadow banks.

Acting head of the Office of the Comptroller of the Currency Michael Hsu, one of the top US bank regulators, recently told the Financial Times that he thought the lightly regulated lenders were pushing banks into lower-quality and higher-risk loans.

“We need to solve for the race to the bottom,” said Hsu. “And I think part of the way to solve it is to put due attention on those non-banks.”

Recently, a number of banks have sought closer ties to non-bank lenders. Last month, Citigroup said it was partnering with an outside alternative investment manager, LuminArx, to provide “innovative leverage solutions” to its $2bn loan fund. Citi was also a leader on a $310mn loan to Sunbit, a buy-now, pay-later company that specialises in auto repair shops and dentist offices.

Last year, Wells Fargo signed a deal to lend billions to a new credit fund run by Centerbridge, a $40bn private equity firm that led the buyouts of restaurant chain P.F. Chang’s and business technology provider Computer Sciences Inc.

In 2010, when banks were first required to break out their lending to non-banks, the loans totalled just over $50bn for the entire banking sector. JPMorgan alone now has twice that in loans to non-banks.

For all banks, shadow bank financing now makes up more than 6 per cent of all loans, putting it just above auto loans at 5 per cent, and just below credit cards, which crossed $1tn for the first time just last year, at 7 per cent.

Late last year, the Federal Deposit Insurance Corporation proposed requiring banks to disclose more data on what types of shadow banks they are lending to.

Rather than reporting one category of non-deposit-taking financial groups, banks could soon have to say how much in total they have lent to private equity firms, credit funds and other consumer lenders.

Comments on the proposal are due at the end of this month. If enacted, banks could have to start reporting the more detailed information starting next quarter.

“We need more granularity,” said Gerard Cassidy, a bank analyst at RBC Capital Markets.

“There has been a lot of leveraged lending that has gone on in financial markets and this area could be one area where there is hidden exposure that investors might need to watch.”

FT : Trump says Russia can do what it wants to Nato allies who pay too little

Trump says Russia can do what it wants to Nato allies who pay too little
Likely Republican presidential nominee renews fears for fate of western alliance if he is re-elected

Donald Trump said he had warned Nato allies that he would encourage Russia to do “whatever the hell they want” if alliance members failed to meet defence spending targets, highlighting the risk to the military pact if he wins a new term in the White House.

Trump’s comments came during a campaign rally ahead of the Republican presidential primary in South Carolina this month, which could help him to seal his party’s nomination to contest the November election against Joe Biden.

The former US president, who has long been a critic of Nato and who had warm relations with Russian president Vladimir Putin, told his supporters that “Nato was busted until I came along”. He said that during his term in office he had insisted to European allies that “everybody’s going to pay”.

Trump recalled that one president of a Nato member country had asked him if the US would defend it in the event of a Russian attack.

“I would not protect you,” Trump said he responded. “In fact, I would encourage them to do whatever the hell they want. You’ve got to pay. You’ve got to pay your bills,” he remembered saying.

Trump’s comments are a signal that, if elected president again, he might threaten the commitment to mutual defence that lies at the heart of the Nato alliance, at a time when fears of Russia have sharply increased in the wake of its war against Ukraine. The former president has recently pressed Congress to oppose the approval of new aid to Kyiv, which would be crucial on the battlefield.

Trump is the overwhelming favourite to win the Republican presidential nomination after victories in the Iowa caucus and the New Hampshire primary last month, and the Nevada caucus this week.

During the South Carolina rally, Trump also mocked the husband of Nikki Haley, his top rival for the Republican nomination. Michael Haley, a member of the Army National Guard, is currently deployed in Africa.

“What happened to her husband? What happened to her husband? Where is he? He’s gone,” Trump said.

Trump’s bombastic warning to Nato members, and his barb aimed at a member of the military deployed overseas, are a reminder of the divisive rhetoric that is fuelling his campaign and energising the Republican base, but could be damaging with independent and swing voters.

Haley, who has sharpened her criticisms of Trump in recent weeks, said during a campaign stop in Lexington, South Carolina: “Donald, if you have something to say, don’t say it behind my back. Get on a debate stage and say it to my face.”

“If you mock the service of a combat veteran, you don’t deserve a driver’s licence, let alone to be president of the United States,” she added. Haley did not address Trump’s comments about Nato.

A White House spokesman said: “Encouraging invasions of our closest allies by murderous regimes is appalling and unhinged — and it endangers American national security, global stability, and our economy at home.”

Trump. who is 77, has a slight edge in national polling averages measuring a head-to-head match-up against Biden, who is 81. The president’s re-election bid was rocked this week by the release of a report by special counsel Robert Hur on his handling of classified documents while he was vice-president under Barack Obama.

Hur did not issue any charges against Biden but cited the president’s “poor memory’, triggering new concerns about the president’s age and mental fitness.

On Saturday Jill Biden, the first lady, came to her husband’s defence in an email to supporters.

“Joe is 81, that’s true, but he’s 81 doing more in an hour than most people do in a day. Joe has wisdom, empathy, and vision,” she wrote.

FT : Inside European finance’s most secretive society

Inside European finance’s most secretive society
‘This is not like Davos, where anyone can buy their way in. This really is exclusive’

In late October more than 40 of Europe’s most powerful bankers convened at the palatial Dolder Grand hotel overlooking Zurich for three days of discussions about the state of their industry.

Attendees were given the chance to quiz Switzerland’s finance minister Karin Keller-Sutter and central bank governor Thomas Jordan, just over six months after the pair played key roles in the rescue of Credit Suisse by its rival UBS.

The talks, which were not publicly disclosed, were arranged by a highly influential organisation whose existence is barely known outside its rarefied membership.

The Institut International d’Etudes Bancaires is the most exclusive and secretive networking club in European finance, where bank bosses rub shoulders with guests from presidents and prime ministers to royalty and central bankers.

“This is not like Davos, where anyone can buy their way in,” one longtime member told the Financial Times. “This really is exclusive.”

While the IIEB was set up to foster closer ties between banks at a time of geopolitical tension and challenges to financial stability across Europe, its secretive, lavish get-togethers risk looking out of step with modern expectations for transparency.

“We were members for decades when the organisation served a purpose to bring European banks closer together,” Pär Boman, chair of Swedish bank Handelsbanken, told the FT. “But after the financial crisis we felt its extravagance and lack of transparency did not fit our values.”

For 73 years the IIEB has brought together the heads of Europe’s biggest banks twice a year at luxury hotels and royal palaces across the continent to discuss sensitive subjects such as M&A deals and global policymaking.

The group has no website and its membership, meeting agendas and minutes are not made public. Members are discouraged from sharing details of the discussions, several told the FT under the condition of anonymity.


As well as being a forum for exchanging ideas between Europe’s most connected financiers, the IIEB is an elite social club where, over three days, the bankers’ partners enjoy gala dinners, private tours of historic landmarks and high-end shopping trips.

As Europe’s lenders come under pressure to improve their lacklustre valuations — having fallen far behind their US rivals on profitability in recent years — and with the continent bracing for a long-heralded wave of cross-border dealmaking, the IIEB is entering one of its most important periods since it was set up in the aftermath of the second world war.

The IIEB was founded in Paris in 1950 by the heads of four lenders from across the continent — Crédit Industriel et Commercial, Union Bank of Switzerland, Société Générale de Belgique and Amsterdamsche Bank — with the aim of holding regular top-level discussions on developments in the banking sector, as well as the economy and monetary system.

It was part of a raft of cross-border institutions set up during that period to encourage closer ties between organisations from countries that had recently been at war with one another.

The IIEB’s initial aim was to improve international capital movements and combat currency controls in the face of greater interference from national governments in the financial system.

The heads of 30 European banks came together at its first meeting in Paris in April 1951. British banks did not attend as the Bank of England had initially blocked their membership.

Ilaria Pasotti, a researcher who has studied the organisation’s early archives, said the topics under discussion reflected the concerns of European bankers throughout the second half of the 20th century.

While in the 1950s there was much discussion about the formation of subsidiaries in former colonies, by the 1960s attention had turned to the international role of the dollar, problems with the Bretton Woods system of fixed exchange rates and the threat of American takeovers of European banks.

Towards the end of the century, the IIEB talks were more concerned with the impact of the euro, the growing derivatives market and M&A deals between big banks.

“There are only a small number of photos from the gatherings in the archives, which are mainly from dinners, cocktails evenings and visits to museums and palaces,” said Pasotti. “That underlines the confidential nature of the meetings.”

There are just 18 photographs within Italian lender Intesa Sanpaolo’s archives of the early years of IIEB events.

The club’s desire for secrecy makes some members sensitive that it is perceived from the outside as a cartel. They insist the banks are still commercial competitors.

In one of the few publicly disclosed speeches given to the IIEB, European Central Bank vice-president Lucas Papademos began addressing the October 2006 IIEB meeting in Athens by quoting Adam Smith’s warning against collusion from The Wealth of Nations: “People of the same trade seldom meet together even for merriment and diversion, but on those occasions when they meet the conversation ends in a conspiracy against the public or some contrivance to raise prices”.

Papademos continued: “If he could have seen this gathering of top bankers from across Europe, would he have expressed such an opinion, which would also be a cause of alarm for a central banker because of the potential ‘contrivance to raise prices’? I very much doubt it.”

The Swiss finance ministry and national bank confirmed, respectively, Keller-Sutter’s and Jordan’s attendance at October’s Zurich meeting after being contacted by the FT. They also provided details about what they discussed.

During Keller-Sutter’s speech, she blamed the collapse of Credit Suisse on its management, while Jordan also discussed the fallen bank as part of comments on financial stability.

Despite the importance of the topics under discussion, there has been almost no press coverage of the IIEB’s activities during its more than seven decades — apart from one meeting in May 2010.

Boman, who was then chief executive of Handelsbanken, quit the IIEB on the eve of a three-day get-together his bank was co-hosting in protest at the group’s lack of transparency and the costs of hosting such a meeting at the height of the eurozone debt crisis.

Host banks at IIEB meetings are expected to pay for accommodation and entertainment, while attendees’ employers pick up the bill for travel. The Stockholm event had included accommodation for more than 40 bank CEOs and their partners at the five-star Grand Hôtel, dinner at the city’s opera house and an exclusive shopping trip for spouses.

“We were not against having a meeting in Stockholm to discuss bank matters,” Boman recalled to the FT. “But the circumstances of the meeting — it being held in secret and having an extravagant participant programme with wives and husbands — we felt it was as far as you can get from Handelsbanken’s culture.”

Among the other leisure activities offered to spouses at IIEB meetups were motorbiking over ice fields during talks in Reykjavik in 2007 and a private tour of Lisbon’s hilltop São Jorge Castle in 2019 complete with tuk-tuk rides and pastel de nata tasting

High-profile guests are a staple of IIEB gatherings. In 2000 and again in 2009, the group was hosted by Prince Andrew, first at St James’s Palace and then Buckingham Palace.

At the IIEB’s first meeting in Russia, in St Petersburg in 2013, it received a speech from former president Dmitry Medvedev, while the club welcomed Recep Tayyip Erdoğan, now Turkey’s president, at a gathering in Istanbul when he was still the country’s prime minister.

In a rare public photograph from an IIEB event, Italian president Sergio Mattarella can be seen at Rome’s opulent Quirinal Palace in 2015 addressing a room of bank CEOs including Sergio Ermotti of UBS and former Lloyds Banking Group boss António Horta-Osório.

Dealmaking between banks is a common topic of conversation on the sidelines of official business, according to members, although most of the talk is hypothetical. But one of Europe’s biggest ever bank M&A deals was sealed at an IIEB meeting at the Brussels Hilton in 1997.

There, Swiss Bank Corporation chief executive Marcel Ospel and his counterpart at Union Bank of Switzerland, Mathis Cabiallavetta, agreed to the $29.3bn all-stock merger of Switzerland’s second and third biggest banks to form UBS.

Since then, Switzerland has always had three seats at the IIEB for the CEOs of UBS, Credit Suisse and Lombard Odier. Credit Suisse’s collapse last year has left a place free that Julius Baer’s chief executive will take at the institute’s next meeting, due to take place in Dublin in May.

Philipp Rickenbacher, who had planned to attend, quit the Swiss wealth manager last week after it wrote off SFr606mn of loans to beleaguered Austrian property group Signa.

But it is not only bank business that is discussed. One member recalled receiving a phone call from Eddy Wauters, the long-term general secretary of the IIEB who had been chair of KBC Bank.

Wauters was a former professional footballer, who had represented Belgium and befriended Marilyn Monroe while playing in the US in the 1950s. He went on to become manager and later chair of Royal Antwerp football club.

Wauters was calling because Royal Antwerp were negotiating the sale of a player to a club in the bank CEO’s home country and he wanted to know whether the buying club had any financial difficulties and if it was likely to pay the agreed fee in full.

The inquiry showed the IIEB was meeting its main aims, according to the CEO. “This is a very special organisation,” they said. “It is all about information sharing and promoting friendship among CEOs.”

FT : How the UK’s electricity networks are shaping up for net zero

How the UK’s electricity networks are shaping up for net zero
Companies must balance rewarding investors while trying to keep energy bills affordable

Prime Minister Rishi Sunak managed last year to get the electricity grid around his North Yorkshire home reinforced to help heat his private outdoor swimming pool.

While the 43-year-old picked up the tab himself, the task gave him an indication of one of the biggest projects facing the UK: upgrading the nation’s electricity system in the transition to net zero.

The government estimates £170bn-£210bn must be invested by 2050 on expanding and reinforcing the onshore cables and pylons that carry electricity to people’s homes and businesses from the country’s power stations.

The upgrades are needed so the networks can cope with the planned switch from fossil fuels to clean electricity, which will see households using battery cars and heat pumps reliant on electricity generated by wind and solar farms.

The UK government’s Climate Change Committee forecasts electricity demand could double by 2050, the target date for net zero carbon emissions.

But the large investments required, more than the £150bn the Energy Networks Association estimates has been spent since privatisation of the system in 1990, underline the challenge for the companies that own and run those networks.


The FTSE 100 companies National Grid and SSE, and Scottish Power, controlled by Iberdrola, own the main transmission networks and some of the regional distribution networks they feed into, which take electricity on to households.

The other regional distribution networks are UK Power Networks, part owned by billionaire tycoon Li Ka-shing’s CK Infrastructure Holdings; Northern Powergrid, owned by Warren Buffett’s Berkshire Hathaway Energy; and Electricity North West, owned by a consortium led by Kansai Electric Power.

Regulators face the balancing act of trying to keep investors happy for the financing necessary to upgrade and maintain them while at the same time ensuring energy bills are affordable.

“The challenge is striking a balance between incentivising investment with rates of return that reflect company risk and performance, while ensuring that consumers do not pay more than is necessary to make future networks fit for purpose,” said Julia Prescot, deputy chair of the National Infrastructure Commission, which has been asked by the government to prepare a report on making the regional networks ready for net zero.

The Department for Energy Security and Net Zero said it was “driving forward the biggest reforms to our electricity grid since the 1950s” and had “announced measures to transform our grid network — bringing forward £90bn of investment over the next 10 years”.

The balance between bills and investment has already proved a problem for energy regulator Ofgem, which was criticised in 2020 by the National Audit Office, the UK spending watchdog, for allowing owners to make too high returns.

Think-tank Common Wealth said the distribution networks paid out £3.6bn to their owners between 2017 and 2021. UK Power Networks, with about 8mn consumers in London and south-east England, has paid out £434mn over the past two years for a total of £2.4bn in dividends since 2010.

North-east network Northern Powergrid, which serves an estimated 4mn homes and businesses, paid Buffett’s Berkshire Hathaway Energy £200mn in dividends in 2023 for a total of £351.5mn since 2004.

The sector’s appeal to investors has been underlined by merger and acquisition activity over the past few years.

National Grid paid £7.8bn in 2021 to buy Western Power Distribution, a regional group, from US company PPL.

The deal was followed in 2022 by the Ontario Teachers’ Pension Plan paying £1.5bn for a 25 per cent stake in the transmission lines owned by SSE in Scotland.

Both price tags were well above the companies’ regulated asset value.  

Yet, despite return concerns, Ofgem is mindful that money is needed to finance network upgrades and pay for repairs and maintenance as the economy moves to clean power.

This means making sure they are attractive to investors for equity fundraising.


As a result, Ofgem is considering assessing companies’ “investability” in the next set of price controls for the transmission networks — National Grid in England and Wales and Scottish Power and SSE in Scotland — to determine acceptable levels of returns to ensure bills do not soar. 

The plans for the “investability” metric follows lobbying from the sector, which has warned about “unprecedented demand for new equity financing” in the shift to net zero, according to Ofgem consultation papers.

The regulator added that its price controls are “designed to ensure that networks have access to the funding they need to deliver energy at least cost to consumers and meet net zero targets”.

However critics, such as Citizens Advice, fear Ofgem’s plans could contribute to unfairly high bills for consumers.

“We don’t really understand why you would need to introduce an additional criteria of ‘investability’,” said Andy Manning, principal economic regulation specialist at Citizens Advice.

Customers have been hit with record high energy payments over the past few years, with costs for electricity and gas networks partly responsible as they account for about 20 per cent of the typical household bill.

“We feel the tone [from Ofgem] is there are concerns that these [networks] won’t be attractive enough [to investors] — but we have yet to see any evidence of this,” Manning added. 

High levels of debt are also a concern for some, with the potential for credit rating downgrades that could affect a company’s ability to raise money for investment.

Ofgem is looking at whether any further financial resilience measures are needed for the regional distribution companies, such as strengthening reporting requirements on debt structures.

Lawrence Slade, chief executive of the Energy Networks Association that represents the network owners, stressed the importance of attracting investment in the run-up to net zero.

Policy and regulation “need[s] to be bold in order to support the government’s ambitious goals while providing the stability and clarity required to efficiently secure the level of investment needed”, he said.

Manning warned that setting returns too low might fail to attract investment, but setting them too high risks damaging public confidence in the shift to a green economy. 

“It’s not a one-way argument. Without public confidence, net zero won’t be delivered,” he added.

Le Figaro : Romanée-Conti, Pierre Overnoy, Château Rayas

Romanée-Conti, Pierre Overnoy, Château Rayas... Ces 10 hypermarchés français dont les caves rivalisent avec celles des grands collectionneurs

En rase campagne ou en plein centre-ville, autour de Paris et jusqu'en Corse, ces hypermarchés, dont les adresses s'échangent entre spécialistes, abritent de véritables trésors à moindre prix.

Il y a quelques années, au détour d'une conversation avec une consœur critique de vin pour un grand magazine hebdomadaire, nous découvrions avec stupéfaction l'existence d'un rayon vin extraordinaire… dans un centre Leclerc. «J'achète tous mes vins là-bas, par caddies entiers. On y trouve même des grands crus de 1945», nous avait confié l'amatrice exigeante, non sans une once de provocation. «Et je suis loin d'être la seule. Je croise aussi là-bas de grands journalistes vin, restaurateurs et sommeliers», avait-elle poursuivi. Il n'en fallait pas davantage pour piquer notre curiosité.

Pensant avoir affaire à une lubie d'ancien sommelier de table étoilée reconverti en chef de rayon, il aura suffi de mener l'enquête aux quatre coins de l'hexagone pour réaliser qu'il ne s'agissait nullement d'un cas isolé. En centre-ville, en banlieue et dans les zones les plus reculées de France, nous avons déniché plus d'une dizaine de super et hypermarchés dont les adresses se passent sous le manteau, abritant des caves à faire défaillir les plus fins collectionneurs : vieux millésimes de la Romanée-Conti, Château Lafite-Rothschild, Pierre Overnoy, Jean-François Ganevat, Château Rayas, Grange des Pères, etc., souvent à des prix défiant toute concurrence, notamment en période de Foire aux vins. Voici nos dix incontournables.

1.E. Leclerc de Pierry, en Champagne

Au cœur du vignoble champenois, dans un petit village situé à quelques encâblures d'Épernay, on trouve un centre Leclerc dont la profondeur de cave nous a laissés pantois.. Aux commandes, non moins de quatre cavistes, dont le jovial M. Chéreau, qui tente de minimiser son mérite : «Nous appartenons à un groupe qui croit dur comme fer à un projet global autour des vins, ce qui implique de gros moyens, et nous avons la chance d'être situés en lisière de la Côte des Bar, avec une clientèle dotée d'un fort pouvoir d'achat», analyse-t-il. En rayons, de véritables trésors de guerre, parmi lesquels toutes les étiquettes de la Romanée-Conti et d'Armand Rousseau, l'intégralité des grands crus classés bordelais – Petrus, Château Cheval Blanc, etc. –, mais aussi les plus spéculatifs Grange des Pères, Pierre Overnoy, Château Rayas et Clos Rougeard. Le tout à des prix bien moindres que ceux pratiqués en centre-ville. « Nous n'avons pas les mêmes charges, et nous contentons de vendre au prix de la cote. On n'est pas là pour faire un musée ! », poursuit M. Chéreau. Détail amusant : très peu de champagnes ont droit de cité, les clients champenois favorisant les achats en direct auprès de leur maison de cœur. Ce qui n'empêchera personne de s'offrir un superbe flacon de champagne Salon avant de passer en caisse.

2. Super U Le Russey, en Bourgogne-Franche-Comté

En lisière de la frontière suisse, dans une petite commune du Doubs, le Super U a vu se succéder six générations d'une même famille de commerçants, avec aujourd'hui à sa tête Pierre-Alain Fesselet et sa sœur aînée, auxquels le père a donné en héritage la passion des vins d'émotion. Avec une sœur cadette maître de chai à Châteauneuf-du-Pape, leurs connaissances – et leur réseau – ne semblent avoir aucune limite, avec pour coquet avantage d'être situés au cœur d'une région non-viticole peuplée de riches amateurs transfrontaliers. «Nos clients ont un fort pouvoir d'achat, et reçoivent énormément chez eux, pour des tablées de 40 à 60 personnes, qui boivent dans des proportions peu raisonnables», s'amuse le gérant. Avec non moins de 600 références en rayon, dont 10% de grands formats, il se défend de mettre en avant les grands crus bordelais et bourguignons, au profit de vraies pépites à l'excellent rapport qualité-prix : domaine Jean-Pierre Maldant en Aloxe-Corton, l'Ermite d'Auzan en Costières-de-Nîmes, domaine Rolet à Arbois… À l'occasion de la Foire aux vins d'automne, aux côtés des 20 000 bouteilles glanées en direct auprès des producteurs, il organise chaque année une soirée «VIP» extrêmement courue dans la région, afin de faire découvrir quatre domaines sur un accord mets-vins en quatre étapes. Une âme de dénicheur, qui admet volontiers que «contrairement aux supermarchés de centres-villes, je n'ai pas la pression de l'étiquette».

3. Leclerc So Ouest Levallois-Perret, en Ile de France

Sans nul doute la cave d'hypermarché la plus mythique de cette sélection, et la plus connue des amateurs de grands crus millésimés, avec non moins de 5000 références exposées dans un rayon vin transformé en espace boutique, adossé à un entrepôt climatisé où reposent plus de 60 000 bouteilles supplémentaires. Un travail de longue haleine, entrepris il y a près de deux décennies par David Thibault, autrefois directeur du magasin, et son caviste Christophe Cocoynacq. Au gré des rayons, une enfilade de prestigieuses appellations représentées par leurs plus grandes étiquettes, ainsi que des références plus nichées : Chaillés de l'Enfer du Domaine Vernay, à Condrieu, champagnes des maisons Ruppert-Leroy, Bruno Paillard ou Krug, Chambolle-Musigny du domaine Leroy, Mercurey du domaine de Villaine, Morgon de Marcel Lapierre, cuvées rarissimes de Jean-François Ganevat, dans le Jura, millésimes des années 1930 du Château d'Yquem, etc. Sans grande surprise, c'est bien ici que les professionnels du vin parisiens s'encanaillent en banlieue afin de remettre leurs stocks personnels à niveau.

4. Super U de Truchtersheim, en Alsace

Une cave née de la volonté d'un certain Michel Nopper il y a plus de 30 ans, au départ adossée à une petite épicerie. En 1995, il s'offre les services du sommelier étoilé alsacien Ivan Gerber afin de composer une cave de plus de 1000 références, avec pour ligne de conduite «des moyens illimités, se souvient Nicolas Bulot, l'actuel caviste. Les deux hommes ont tout de suite ressenti le potentiel du lieu, près de l'un des villages les plus riches de France, où la grande majorité paie l'ISF». En cave, une sélection à vous donner des envies d'évasion fiscale : l'intégralité des grands crus classés bordelais achetés en primeur, parmi lesquels Petrus, Château Le Pin, Château Ausone, Château Cheval Blanc – dont certains sur des millésimes remontant à 1985 – ; la fine fleur bourguignonne : Domaine de la Romanée-Conti, rares montrachets de Louis Latour ; en vallée du Rhône, de sublimes côtes-rôties de Guigal et autre Vieux-Télégraphe et Château Rayas à Châteauneuf-du-Pape ; du côté de la Loire, la Coulée de Serrant, Grange Tiphaine et le confidentiel Clos de Nell ; en Languedoc, quelques Grange des Pères, Montcalmès et Pierre Vaïsse ; rarissimes flacons du domaine du Pélican dans le Jura ; grands bandols et vieux millésimes de Château Simone à Palette ; sans oublier l'Alsace, où l'on retrouve l'éternel Clos Sainte-Hune du domaine Trimbach, de grands rieslings des domaines Weinbach, Muré et Marcel Deiss… Auxquels viennent s'ajouter de nombreuses références étrangères, de l'Italie – Masseto, Gaïa, grands barolos – au Liban – Château Musart, domaine Massaya –, enfin de véritables raretés en matière de liqueurs et spiritueux : Chivas de 25 ans d'âges, chartreuses VEP, cognacs XO de Tesseron, rhums Clément, whiskies Octomore, etc. Le tout sans prêter le flanc à la spéculation. «Je m'aligne aux prix des domaines, sans appliquer des marges de caviste. Je veux que le travail du vigneron et des maisons soit respecté», conclut Nicolas Bulot avec sagesse.

5. E. Leclerc Avermes de Moulins, en Auvergne-Rhône-Alpes

Il faut imaginer une allée de 30 mètres de long sur 6 mètres de haut, intégralement remplie de casiers où reposent des milliers de bouteilles. Ouvert en février 2016 dans l'un des derniers centres Leclerc construits sur le territoire national, l'espace cave affiche un volume des plus impressionnants, et tourne à plein régime tout au long de l'année : chaque semaine, deux à trois palettes sont réceptionnées, et jusqu'à sept en période de Foire aux vins. La force du lieu : le réseau de vignerons sur lequel les cavistes peuvent compter pour des achats en direct, leur permettant de proposer de véritables pépites en appliquant des marges relativement basses. On y retrouve notamment tous les grands crus bordelais dégustés en primeur – Château Latour, Château Cheval Blanc –, de rares meursaults, ainsi qu'une sélection de vins étrangers triée sur le volet, tel que l'australien Penfolds. La ligne de conduite en termes de choix et de budget : une liberté totale…

6. Hyper U les Arcs sur Argens, en Provence-Alpes-Côte d'Azur

En plein cœur du vignoble varois, en Provence-Alpes-Côtes d'Azur, l'Hyper U des Arcs remporte la palme du sourcing local. «La cave est au centre du magasin, nous confie son caviste Pierre-Olivier Bernier, ce qui témoigne de son importance. Nous travaillons avec plus de 75 domaines en direct, principalement de la région et de ses alentours, sur plus de 1500 références». Parmi les fleurons de la maison, les grands rouges du Château Beaucastel, à Châteauneuf du Pape, la cuvée Garrus de Château d'Esclans, en Côtes-de-Provence, mais aussi des domaine plus nichés du Sud-Ouest, de Bourgogne ou du bordelais. Avis aux amateurs en quête de perfectionnement, la cave organise aussi des soirées ventes privées, sessions de dégustation et cours d'œnologie.

7. E. Leclerc de Roques sur Garonne, en Occitanie

Une cave de 1000 m2 directement accessible depuis le parking, abritant près de 4300 références – et plus de 200 000 bouteilles en stock en période de Foire aux vins. Des chiffres à donner le tournis, avec une sélection de grands flacons élégamment allongés en vitrine : champagnes Dom Pérignon, Bollinger, Krug, Roederer, grands crus classés bordelais, parmi lesquels Petrus, Château Lafleur, Château Haut-Brion, Château Angélus, Château Smith Haut Laffite ou Cos d'Estournel ; en Bourgogne, domaine de la Romanée Conti, meursaults du domaine Rougeot ; en vallée du Rhône, côtes-rôties de Guigal et Paul Jaboulet Ainé, hermitages de M. Chapoutier ; à l'étranger, domaine de Pingus en Espagne, grands rouges italiens de la famille Antinori, Shiraz de l'australien Penfolds, etc. Et pour les amateurs de mousse, le lieu pousse le vice jusqu'à brasser sa propre bière.

8. Super U le Port Marly, en Ile-de-France

Créée en 2013, la cave de ce Super U des Yvelines aura bénéficié de la solide expérience de son directeur Jérôme Prunet, grand passionné de vin autrefois à la tête de l'enseigne éponyme de Vaucresson, dans les Hauts-de-Seine. «Nous avons une clientèle exigeante, de vrais connaisseurs, notamment en raison de notre proximité avec Saint-Germain-en-Laye et les autres villes des alentours», analyse le directeur. Plus de 600 références en rayon, avec nécessairement le tout-venant, enseigne nationale oblige, mais aussi de nombreux trésors. Côté Languedoc, un line-up de haute voltige, où l'on retrouve la Grange des Pères, forcément, mais aussi les domaines Montcalmès, Daumas Gassac, Gauby, Mas Jullien, Peyre-Rose, des Creisses, d'Aigues Belles, château de l'Engarran ou encore le Clos des fées. A Bordeaux, tous les grands crus classés répondent à l'appel, mais aussi des trésors plus confidentiels, tels que Clos Puy Arnaud, domaine de l'Aurage, ou encore château Haut Condissas. Sans compter une cave secrète où reposent toutes les cuvées spéculatives : «J'ai beaucoup de vins cachés dans notre chai de conservation, réservés à nos très bons clients : château Rayas, Bergerie de l'Arcade, Dagueneau… ». De quoi donner à certains des envies de déménager dans le 7-8.

9. E. Leclerc de Saint-Médard en Jalles, en Nouvelle-Aquitaine

Face à l'immense cave climatisée vitrée qui renferme des milliers de caisses de grands crus, difficiles de ne pas se ruer sur l'une des sélections les plus pointues de la région bordelaise. Sur les 2 500 références, 80 % sont certes locales, avec tous les grands crus classés – château Pontet-Canet, château Lynch Bages, château Mouton-Rothschild, etc. –, mais les 20 % restants sont aussi également à se damner : en Champagne, la cuvée Clos des Goisses de Philipponnat, Grand Siècle de Laurent Perrier, Cristal de Roederer, de jolis millésimes de Krug et Dom Pérignon ; ailleurs en France, château Beaucastel et son «Hommage à Jacques Perrin», domaine Guigal, domaine Chapoutier et Vieux Télégraphe en vallée du Rhône, la Grange des Pères en Languedoc, enfin les cuvées très convoitées du domaine mythique Vega Sicilia, en Espagne…

10. E. Leclerc d'Ajaccio, en Corse

Il faut s'aventurer à Baléone, en banlieue ajaccienne, pour découvrir cet hypermarché de 9000 m2, dont la cave s'avère sans conteste l'une des plus fournies de l'Île de Beauté. Sous une cave-vitrine dernier cri, un alignement de grands crus classés bordelais, dont de vieux millésimes de Petrus, mais aussi de prestigieux domaines corses – Gentile et Santamaria à Patrimonio, notamment –, ainsi qu'une somptueuse collection de spiritueux : cognac l'Or de Jean Martell, anciens rhums VSOP de Chamarel, whiskies Nikkei et Aberlour, vodka Beluga… Plus singulier, l'hypermarché abrite également une vertigineuse cave… à eaux !

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: National pharmacy chains have become an endangered species in the US

Cover:
-National pharmacy chains have become an endangered species in the US, having grown from 18,600 in 1990 to over 22,500 in 2010. They had some success, squeezing out independent pharmacies and increasing the share prices of Walgreens Boots Alliance and CVS Health. However, their business model is under pressure, with Rite Aid's bankruptcy filing, CVS's share price down over 30%, and unrest among chain pharmacists. The biggest problem is declining reimbursement rates for prescription drugs, which are unlikely to disappear.

Interview:
-Alesia Haas, Coinbase's chief financial officer, has been a key figure in the company's financial struggles, despite the company's stock price rising nearly 400% last year. Haas joined Coinbase in 2018 after a career in traditional finance at companies like General Electric, Merrill Lynch, California's OneWest Bank, and Och Ziff Capital Management. Despite the company's painful results during the crypto winter of 2022-23, the company's fortunes and shares rebounded, driven by the anticipated launch of spot Bitcoin ETFs. Coinbase's biggest vulnerability could be its legal battle with the Securities and Exchange Commission, which charged the company last year with operating an unauthorized exchange. Coinbase denies the allegations and has vowed to fight the SEC in court, a battle that could prove existential for the company and all of crypto.

Tech Trader:
-Walt Disney, Fox, and Warner Bros. Discovery have announced a sports-only streaming joint venture that will offer viewers content from major college and pro sports networks. The deal could shake the U.S. television market, shifting TV from evolution to revolution. The companies are building a sports-based version of services like YouTube TV and Sling TV, offering digital alternatives to old-school cable, removing news and entertainment programming from the cable bundle.

The Trader:
-McDonald's' recent earnings report has boosted its stock and created an opportunity for investors to buy shares in the fast-food giant. The company's long-term returns have been 15% annualized over the past decade, including reinvested dividends, outpacing the S&P 500's 13%. The company's fourth-quarter earnings beat expectations even if sales narrowly missed, causing a 3.7% drop in the stock. Still, McDonald's' overall business remained strong, with total sales growing 8% to $6.41B, driven by higher menu prices. Cost inflation brought a lower gross margin, but the company was able to spend less on other items, resulting in a profit of $2.95 a share.
-The South Korean stock market has been struggling in recent years, with the Kospi Composite Index dropping an annualized 4.5% over the past three years. This is below the S&P 500's 10% return and the MSCI World Index's 7.6%. Despite moderate GDP growth and exciting companies like Samsung Electronics, few investors want to own stocks in a country with a price/book ratio of just 0.2 times, making companies worth less than their total net assets. Regulatory changes could potentially boost the market and make it a more attractive investment destination.

Features:
-Microsoft has surpassed the previous record set by Apple, which reached $3.09T in July, with a market cap of $2.916T. The company's market value surpassed the previous record set by Apple, which reached $3.09T in July. Microsoft is the first US Company to close with a market cap greater than $3.1T. Over the past 12 months, shares have soared 60% due to enthusiasm about its artificial intelligence software. Microsoft reported quarterly revenue and profit ahead of Wall Street's forecasts, and CEO Satya Nadella highlighted the company's AI gains.
-Tesla stock closed higher for a fourth consecutive day on Friday, offering relief for investors who have held it as it has slid to start 2024. However, the recent trading action is not what shareholders should want. Tesla stock closed up 2.1% at $193.57, while the S&P 500 and Nasdaq Composite were up 0.6% and 1.3%, respectively. New Street Research analyst Pierre Ferragu predicts that Tesla will ship 8.4M vehicles in 2030, implying an average annual growth of about 25% for the coming seven years. Ferragu expects a lower-priced Tesla to be launched in 2025 and sell around 5M units a year by the end of the decade.

Europe:
-Arm Holdings has become one of the most popular artificial-intelligence stocks in the US market, with shares down 3.1% to $110.38. The company's success validates its decision to take the chip designer public last year at a high valuation. Despite initial skepticism about the company's potential benefits from AI spending, Arm's focus on licensing designs for CPUs and exposure to the smartphone market has changed. Premium smartphones now have AI capabilities, increasing the royalty rates Arm receives. The company is also making progress in cloud servers and the automotive sector.

Emerging Markets:
-No update this week

Commodities:
-Indonesia's population has seen a significant increase in annual GDP per capita over the past 30 years, with Greater Jakarta becoming the world's second most populous metropolis. President Joko Widodo (aka Jokowi, as he’s known), who is set to end his 10-year term, has been instrumental in this progress, overseeing the rollout of Jakarta's metro and Southeast Asia's first high-speed rail line. However, his lack of accomplishments may impact Indonesia's business dynamism, as he has not significantly reduced the influence of a self-dealing elite. Indonesia's president, Jokowi, has failed to diversify from China, losing out to more nimble neighbors. Instead, Jokowi has focused on leveraging nickel, a key element in the current generation of electric-vehicle batteries. Indonesia produces over half of the world's raw nickel, and the president forbade export to force smelters and battery makers onto his shores. However, this strategy won't yield the same "human capital spillover" as Vietnam-style investment into electronics and other manufacturing. The outgoing leader has also failed to address Jakarta's environmental peril, instead focusing on building a new capital at Nusantara.

Streetwise:
- Uranium prices have dropped after reaching their highest level in 16 years, with lithium, the lightest metal, multiplying more than five times in price in less than a year after CME Group launched a futures contract in 2021. Uranium doubled in price since summer to $106 per pound before dipping to just below $100. Two niche exchange-traded funds, Global X Uranium and Sprott Uranium Miners, took in over $1B in fresh investor cash over the past year, with assets under management swelling to a combined $5B. Bulls predict the uranium market will be undersupplied for decades, while bears are few. Two key events have affected uranium prices: the 2011 Fukushima nuclear plant tsunami and Russia's invasion in 2022. The latter led to a nuclear power revival, with life extensions, reactor refurbishments, and the call for new builds. In markets like the US, companies are experimenting with small reactors using factory components.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-Democratic allies have backed Joe Biden, despite a special counsel report describing him as a "well-meaning, elderly man with a poor memory." Lawmakers believe Biden is the best candidate to lead the Democrats into November's election, despite concerns about his mental acuity and whether he should step aside. Pennsylvania senator John Fetterman argues that the choice between order, truth, and virtue is a core national choice.
-Bit Brother, a Chinese tea retailer with a market value of less than $2M, has seen an average of 572M shares traded daily in the US stock market over the past two months. This is more than Tesla, the largest corporate American company, and is part of a trading boom in "penny stocks," which accounted for nearly 20% of overall stock market volumes in December and January.
-The European Commission granted farmers temporary exemptions from rules for nature conservation and partially reversed a 2021 decision to allow free agricultural imports from Ukraine. Under pressure from EU leaders and conservative political groups, President Ursula von der Leyen dumped parts of her Green Deal climate law, scrapping a proposal to halve pesticide use and cutting a target for reducing agricultural emissions from its 2040 climate plan.
-The EU has agreed to a delayed fiscal rule reform, allowing annual targets for cutting public debt and limits for public spending. This compromise allows countries to reduce excess debt at a slower pace over four to seven years, and allows for a more gradual tightening of the public purse. The deal follows the suspension of the Stability and Growth Pact.
-The EU has agreed to a delayed fiscal rule reform, allowing annual targets for cutting public debt and limits for public spending. This compromise allows countries to reduce excess debt at a slower pace over four to seven years, and allows for a more gradual tightening of the public purse. The deal follows the suspension of the Stability and Growth Pact.
-The Carlyle Group is demanding early repayment of a £125M loan made to London's Heathrow Airport in 2021, despite multiple attempts to resolve the conflict with the airport's London-listed owner, Esken. Esken chair David Shearer believes Carlyle's motives are to acquire the potentially valuable airport at a knockdown price, as the airport's real value is expected to increase in the coming years.
-Elon Musk has moved his brain-implant company Neuralink from Delaware to Nevada, a move that deepened a rift with Delaware, where a judge voided his $56bn pay package from Tesla. The move follows a judge's decision to void Musk's unprecedented pay package. Musk has advised against incorporating in Delaware and recommends Nevada or Texas for shareholders to decide matters. Subscribers can share up to 20 articles per month using the gift article service.
-Israeli Prime Minister Benjamin Netanyahu has ordered the military to create a "combined plan" to expand its Gaza offensive into Rafah and evacuate its civilian population, despite US and UN pleas not to mount a major offensive. Rafah is home to over 1 million people, forced from their homes by Israel's offensive. The US and UN have both deemed a military operation in Rafah a disaster.

THE NEW YORK TIMES
-Moody's has downgraded Israel's creditworthiness from A1 to A2, citing the prolonged war with Hamas and its impact on the country's finances. The rating, one of three major rating agencies, lowered Israel's rating from D or C to AAA or Aaa for the most pristine borrowers. The agency cited the negative outlook for Israel due to social, political, and economic risks from the conflict with Hamas. Both S&P and Fitch began reassessing Israel's credit rating in November but have not taken any action.
-Jon Finer, a Biden aide, acknowledged the administration's mistakes in its response to the Gaza war, stating he had no confidence in Israel's willingness to take meaningful steps towards Palestinian statehood. Finer's remarks came after months of public and private admonitions from the Biden administration for Israel to take a more surgical approach. He pledged that the administration would do better and expressed regret for the "missteps" made in the initial response to the Hamas attack.
-The $95B emergency national security package for Ukraine and Israel is back on track in the Senate, but Republican senators are slowing progress on proposed revisions, particularly concerning border security. They have voted to kill a bipartisan deal to crack down on immigration, allowing the aid to move forward without immigration restrictions. The demands are seen as an exercise in political face-saving, as Republicans previously stated they would never approve funds to help Ukraine fight off a Russian invasion.
-In a two-hour interview with former Fox News host Tucker Carlson, Russian President Vladimir V. Putin repeatedly mentioned that Russia wants to negotiate a peace deal in Ukraine, albeit on Kremlin's terms. This message seemed aimed at the American right and Republicans in Congress, but the day after the interview, it seemed lost in the muddle. Experts and some of Putin's allies were also puzzled over why he gave short shrift to his main ideological commonality with Carlson's followers: opposition to L.G.B.T.Q. rights and other liberal social causes.
-White House officials have criticized a special counsel's report on President Biden's handling of classified material, claiming it was politically motivated. Vice President Kamala Harris criticized the report as a political attack, while White House Counsel's Office spokesperson Ian Sams called it "inappropriate" and "troubling." The report, released on Thursday, found no criminal charges warranted, but the report's description of Biden as elderly and forgetful led to further criticism. The statement comes as the White House seeks to discredit the report.
-A lawyer for former President Donald Trump's co-defendants in the Georgia election case has suggested that the two prosecutors leading the case had lied about the start of their romantic relationship. The defense lawyer, Ashleigh Merchant, is seeking a witness to testify that the relationship between district attorney Fani T. Willis and special prosecutor Nathan J. Wade began before Willis hired Wade. This contradicts Wade's affidavit, which states that his relationship with Willis began in 2022 after his hiring. Terrence Bradley, a former lawyer, is identified as the witness.
-Finland's presidential election is in its second and final round, marking the first since joining the North Atlantic Treaty Organization in 2017. The election is crucial for Finland's foreign policy and commander in chief, as it faces challenges on its 830-mile border with Russia, the longest with any NATO country.
-President Biden and German Chancellor Olaf Scholz met at the Oval Office to pressure Congress to pass billions more in aid for Ukraine, as legislative dysfunction and opposition among some Republicans have left the critical package in limbo. Scholz hoped Congress would follow their lead and make a decision on providing necessary support, while Biden criticized the congressional gridlock as "close to criminal neglect." The joint pressure amounted to another maneuver in the high-stakes battle over funding for Ukraine as it fights off Russia's invasion.
-Israeli Prime Minister Benjamin Netanyahu has ordered the military to create a "combined plan" to expand its Gaza offensive into Rafah and evacuate its civilian population, despite US and UN pleas not to mount a major offensive. Rafah is home to over 1 million people, forced from their homes by Israel's offensive. The US and UN have both deemed a military operation in Rafah a disaster.

THE NEW YORK POST
-A 15-year-old Venezuelan migrant, Jesus Alejandro Rivas-Figueroa, was arrested by the US Marshals Joint Regional Fugitive Task Force and the NYPD after a robbery in Times Square. Rivas-Figueroa was found in Yonkers, wearing a dark T-shirt, jeans, and a gold necklace. The suspect was taken into custody at a relative's home, where he was found crying and committing adult acts. NYPD spokesman Carlos Nieves said Rivas-Figueroa was brought out in handcuffs crying.
-New York Attorney General Letitia James has expanded her lawsuit against Digital Currency Group and other cryptocurrency defendants, claiming they caused over $1B of losses by misleading investors about the Gemini Earn program. James claims that the scam also ensnared investors who sent money directly to Genesis and were falsely assured their money was safe. She is seeking over $3B of restitution for over 230,000 investors she believes were defrauded.