FT : China pledges support to tech companies after market rout

China pledges support to tech companies after market rout
Beijing’s top economic official holds meetings with executives and industry experts on Tuesday

China’s top economic official met dozens of executives and industry experts on Tuesday, pledging “support” for technology companies amid a deepening economic slump.

Liu He, a vice-premier and President Xi Jinping’s closest economic adviser, said China “must support the platform economy, and sustain the healthy development of the private economy”.

He added that China should better “balance the relationship between the government and the market, and support digital companies to list on domestic and foreign exchanges”, according to state media.

Video footage from state broadcaster CCTV showed Baidu founder Robin Li and Qihoo 360 founder Zhou Hongyi at the meeting.

Markets were closely watching news of the meeting put on by China’s top political consultative body in the hope it could signal an end to Beijing’s regulatory crackdown on internet companies.

But in remarks aired by the state broadcaster on Tuesday evening, Liu made pledges similar to those he had made two months ago, when he first intervened to urge a quick conclusion of China’s tech crackdown and pledged to boost the ailing economy.

Shares of Chinese companies such as Alibaba and Pinduoduo were up more than 5 per cent in early trading in New York.

Since Liu’s March 16 remarks, little public progress has been made on resolving the national security investigation into ride-hailing giant Didi or the restructuring of Jack Ma’s fintech company Ant Group.

Didi’s apps have been stripped from online stores for nearly 11 months. The company will next week hold a vote on delisting from the New York Stock Exchange, a step the company said was necessary to wrap up the government probe, while its Hong Kong IPO is also on hold.

China’s top political consultative body, the Chinese People’s Political Consultative Conference, routinely holds meetings to bring together leaders in the private sector, religious and academic spheres who serve on the ceremonial body. Tuesday’s meeting focused on China’s digital economy, a reference to the tech sector.

Amid the economic downturn caused by Xi’s zero-Covid policy and regulatory tightening, China’s state media and leaders have used pledges of support for the economy to boost market confidence.

“It’s not accurate to say the crackdown is going to ‘end’, how can it end?” said an investment manager at a leading Chinese tech company, adding that Liu’s remarks served only to stabilise market expectations.

Larry Hu, chief China economist at Macquarie, said that “what’s more important is the meeting itself as a gesture, in order to boost the confidence among investors and corporate”.

Wang Yang, a member of the politburo standing committee, told the conference the tech sector should study Xi’s words on the digital economy and balance the need for “development and security”. 

FT : ENI defies Brussels by opening rouble account for Russian gas payments

ENI defies Brussels by opening rouble account for Russian gas payments
EU reiterates move would breach bloc’s sanctions against Moscow

Eni is to open a rouble account with Gazprombank to comply with Russian demands for gas sales, a move that puts the Italian energy group on a collision course with Brussels over EU sanctions against Moscow.

Eni’s announcement comes days before it is due to make its next payments for Russian gas from state-owned supplier Gazprom. Russian gas accounts for nearly 40 per cent of Italy’s total gas imports.

Russian President Vladimir Putin in April issued a decree requiring companies from countries deemed “unfriendly” to pay in roubles for gas, by opening one account in euros and another in roubles at Gazprombank, the financial arm of Gazprom.

The European Commission responded that the revised terms were an attempt to force European companies to circumvent sanctions on the Russian central bank, imposed in retaliation for Moscow’s invasion of Ukraine in February.

After Poland and Bulgaria decided not to comply with Russia’s decree, Gazprom halted gas supplies to both countries. But other companies and countries have sought a workaround to keep gas flowing and protect their economies, heralding possible clashes between the commission and the 27 member states, which enforce sanctions.

Commission spokesperson Eric Mamer reiterated on Tuesday that the opening of a rouble-denominated account at Gazprombank would be a breach of the bloc’s sanctions.

“Anything that goes beyond the guidance given to member states — opening an account in the currency foreseen in the contract, paying in that currency and making a statement that the payment is concluded once that gas delivery is paid in that currency — is in breach of the sanctions,” Mamer said, adding: “Opening a second account, in roubles, is going beyond the guidance we gave member states, indeed.”

Eni said it had discussed its plan with “Italian institutions” and disputed it would breach EU sanctions.

“The company is going to temporarily open the two accounts without prejudice to its contractual rights, which still envisage payment in euros. This explicit conditionality will be included in the payment procedure,” it said in a statement.

The company, which is 32 per cent owned by the Italian state, said it would receive invoices and make its payments in euros — the currency agreed in its long-term gas purchase contract — by depositing them into the euro account.

Within 48 hours of payment, an agent operating from the Moscow Stock Exchange will convert the euros into roubles without involving Russia’s central bank, it said.

It had clarified with Gazprom that its payment obligations would be considered fulfilled once its payment in euros was received, it added. “The new procedure should be neutral in both cost and risk and not incompatible with the existing sanctions.”

However, Eni said that it was still in talks with Gazprom to ensure that any foreign currency risk involved in the system would fall to Gazprom — which the commission had said was a big issue when assessing sanctions violations.

In the event that it does not receive “complete, exhaustive and contractually grounded answers” from Gazprom, Eni will pursue international arbitration against the Russian energy company.

The looming clash between Eni and Brussels would put Italy’s prime minister Mario Draghi in a delicate position: the former European Central Bank president has been one of the architects of the sanctions against Russia’s central bank and its government is the legal enforcer of sanctions in Italy. Brussels could take legal action against Rome if it determined Italy had failed to enforce the sanctions, a process that could take years.

Other European companies are finalising plans to make upcoming gas payments. French utility Engie declined to disclose details of its agreement with Gazprom, including whether it had opened an account in roubles ahead of an “imminent” payment deadline.

“We have today line of sight for a solution that will allow us to pay using the currency for the contract, which seems to be acceptable for Gazprom and which is in compliance with the EU sanctions,” chief executive Catherine MacGregor said on Tuesday.

Germany’s Uniper, which has payments due at the end of the month, also said it expected to pay for gas in a manner that would respect sanctions and Russia’s requirements. “Uniper will continue to pay in euros,” a spokesperson said, adding that it was in talks with Gazprom about modalities in “close consultation with the German government”.

RWE said: “We are prepared for payment in euros and have also opened a corresponding account. We are thus acting in accordance with European and German regulation.”

Germany’s economy ministry, in a Twitter message, sought to defuse suggestions that sanctions were “being loosened and energy payments in roubles are to be made possible”.

“The German economy ministry knows nothing about this and in our opinion all companies are continuing to pay in dollars and euros, according to their contracts,” it added.

FT : EU prepares to sell more carbon permits to pay for exit from Russian gas

EU prepares to sell more carbon permits to pay for exit from Russian gas
Plan risks pushing up emissions by making it easier to use other fossil fuels

Brussels wants to raise €20bn to fund the EU’s exit from Russian energy by selling surplus carbon emissions permits — a move that risks hitting the bloc’s climate goals by making it cheaper to burn fossil fuels.

The European Commission is looking at auctioning off part of a stock of Emissions Trading Scheme certificates, EU officials and diplomats told the Financial Times. The permits allow their users to emit more carbon.

The commission has a plan for Europe to invest around €200bn by the end of the decade to try to shift away from its dependence on Russian energy, by investing in new infrastructure and alternative supplies.

However one effect of pushing more certificates into the market would be to drive down the carbon price, which will be contentious among some EU member states because it would lower the cost of using coal, oil and gas. That would hit the emissions reduction goals in Europe’s so-called Fit for 55 plan.

“Flooding the market with ETS certificates will only raise emissions and makes the Fit for 55 targets even more difficult to reach. It is bad climate politics,” said one EU diplomat.

Brussels’s RepowerEU energy blueprint, which is due to be published on Wednesday and which could still be changed, says renewables are the best way to fight climate change and achieve energy independence but that the EU will also need fresh sources of fossil fuels to reduce its reliance on Russia.

The commission strategy will also set out measures to save energy, diversify fuel supplies from Russia, and bolster investment in clean energy as part of a drive towards greater self-sufficiency.

The EU wants to phase out Russian fossil fuels by 2027, but the drive is proving politically divisive and difficult to engineer. Efforts to impose an oil embargo on Russia are stalled because member states cannot agree. Landlocked countries such as Hungary want more time to cut their need for Russian oil.

The commission’s plan would involve selling between 200mn and 250mn ETS certificates from a so-called Market Stability Reserve. The reserve has grown since the ETS was established in 2009 because renewable energy was deployed more quickly than expected and slow growth damped industrial activity and therefore emissions.

The commission has not sold the certificates to avoid depressing the price of emissions and now has 2.6bn in the reserve.

Brussels believes it replacing Russian gas will require temporary use of alternatives such as LNG and coal, which have higher carbon footprints. Brussels says it can still hit its target to reduce emissions by 55 per cent of 1990 levels by 2030.

“You can be certain that when this commission proposes such a measure it is done after very thorough analysis and in full respect of the necessary emissions reductions that are set in the Climate Law,” said a commission official.

Some member states may push the commission to guarantee that fewer certificates are issued in future to ensure the binding climate targets are hit.

Claude Turmes, Luxembourg’s energy minister, said: “We cannot go back to more fossil fuels. You need to make sure we don’t slip on the total carbon budget between now and 2030.

“We should use the current crisis to speed up our work on renewables and energy efficiency to keep on track for our climate goals.”

Matthias Buck, Europe director of campaign group Agora Energiewende, said that the plan would lead to more emissions. “These are emissions that would never have happened without this plan. It is good news for Polish and German coal-fired power plants, which can operate for longer.”

The commission declined to comment.

>>> Glenview Capital (Larry Robbins and Mark Horowitz) disclosed updated portfol

Glenview Capital (Larry Robbins and Mark Horowitz) disclosed updated portfolio positions in 13F filing: New VVV BLI LVS positions, Exited DNB WTW AMGN

Highlights from 2022 Q1 filing as compared to Q4 2021:
  • New positions in: VVV (~1.74 mln shares), BLI (~1.19 mln), LVS (~1.02 mln), RPID (~0.67 mln), URI (~0.12 mln), FB (~0.08 mln), CTKB (~0.06 mln), BKNG (~0.01 mln)
  • Increased positions in: IS (to ~7.01 mln shares from ~1.97 mln shares), USFD (to ~4.42 mln from ~1.62 mln), DXC (to ~7.55 mln from ~4.99 mln), BKD (to ~12.59 mln from ~10.21 mln), FISV (to ~2.14 mln from ~0.5 mln), FLEX (to ~2.47 mln from ~1 mln), UBER (to ~3.84 mln from ~2.53 mln) MTOR (to ~3.54 mln from ~2.73 mln), EVLV (to ~1.5 mln from ~0.75 mln), ESI (to ~3.07 mln from ~2.34 mln)
  • Maintained positions in: BAX (~2.21 mln shares), DD (~1.54 mln)
  • Closed positions in: DNB (from ~0.73 mln shares), WTW (from ~0.36 mln), AMGN (from ~0.13 mln), HUM (from ~0.05 mln)
  • Decreased positions in: BHC (to ~9.26 mln shares from ~12.5 mln shares), ENDP (to ~1.13 mln from ~2.18 mln), THC (to ~6.38 mln from ~7.33 mln), SABR (to ~3.13 mln from ~3.93 mln), CTVA (to ~1.53 mln from ~2.28 mln), MCK (to ~0.94 mln from ~1.54 mln), FMC (to ~0.36 mln from ~0.77 mln), DVA (to ~0.13 mln from ~0.53 mln)

WWD Louis Vuitton, Nike to Offer Virgil Abloh-designed Sneakers

Louis Vuitton, Nike to Offer Virgil Abloh-designed Sneakers
The luxury fashion house next month will launch nine editions of the coveted Louis Vuitton and Nike “Air Force 1” by Virgil Abloh.

The luxury fashion house next month will launch nine editions of the coveted Louis Vuitton and Nike “Air Force 1” by Abloh and is currently accepting preorders ahead of the shoe’s release. Prior to the launch, Vuitton is mounting an exhibition from May 20 through May 31 at Greenpoint Terminal Warehouse in New York City dedicated to the partnership, with Abloh’s recurring themes and touches serving as a backdrop for the 47 bespoke editions on view. The opening party on May 20 will include a performance by 21 Savage and a DJ set by Jamie xx.

The nine editions that Louis Vuitton selected for in-store release, including all-white, two-tone, black suede, metallic gold and multicolor mid-top and low-top silhouettes, were manufactured in Venice, Italy, in Fiesso d’Artico with the house’s leather, materials and insignia. The editions will retail for 2,000 euro and 2,500 euro in sizes 3.5 to 18.

The editions first debuted last June at the men’s spring 2022 show in Paris. The collection is rooted around the “Amen Break,” a drum break in the 1969 song by The Winstons that would be one of the most recognized samples in hip-hop and jungle music. Abloh compared the now ubiquitous drum break to the Air Force 1 sneaker, a style first introduced in 1982 amid New York City’s bourgeoning hip-hop culture and breakdancing. The sneaker had been immortalized on DJ E-Z Rock’s 1988 album “It Takes Two,” where he wore the style with the Swoosh adorned with a Louis Vuitton monogram as altered by Harlem haberdasher Dapper Dan, one of the first to bridge the gap between luxury fashion and sportswear.

“The Air Force 1 is a sample like the ‘Amen Break,'” Abloh said in a quote provided by Louis Vuitton said. “A T-shirt is an ‘Amen Break,’ a suit is an ‘Amen Break.’ We’re all iterating on the same ideas. But, in my canon, the Air Force 1 puts the edge on the blade. This object happened way before me, but to get to a context where it’s adjacent to the T-shirt and the suit, its logic has been 40 years in the making.”

Two-hundred exclusive pairs were sold at auction at Sotheby’s in February to benefit the Virgil Abloh “Post-Modern” Scholarship Fund and raised $25.3 million, far eclipsing the $3 million estimate for the lot.

“The total number of bids and individual bids set a world record and most importantly they had never had that from that many countries,” said Michael Burke, chairman and chief executive officer of Louis Vuitton.

“What individual can create a charity that can create these kinds of prices from all over the world?” Burke asked. “What individual today can create a global feeling of togetherness? Is there an elected official that can draw that kind of interest and engagement? It’s the first time they had that deep interest for that.”

The collaboration speaks to so much about Abloh’s legacy. It serves as a culmination of a proposition that goes back several years before Louis Vuitton and Nike could be considered a reality beyond sneaker customizers.

For many years, Abloh showed pop culture that it’s possible to bridge seemingly unrelated worlds. What does luxury fashion have to do with sportswear? Athlete and entrepreneur David Beckham may have proven that luxury fashion and athletes can coexist, but Abloh proposed mixing subcultures and genres throughout most of his career.

RSVP Gallery, the Chicago store he opened with streetwear designer Don C, offered luxury and contemporary fashion and art with streetwear brands. Abloh was trained as an architect, but had deep ties to the music, skate and streetwear scenes. He also brought his love of skateboarding to Louis Vuitton, introducing the house’s first skate shoe and signing the brand’s first skater, Lucien Clarke.

“Many people were expecting this in Virgil’s first show,” Burke said about the Louis Vuitton and Nike collaboration. “I remember some people being disappointed there wasn’t a big action put on sneakers for his first show. Virgil had always said he didn’t want to rush into it. He didn’t want to pander to the clientele that’s primed for it. He wanted to start with fashion and ready-to-wear, draping, cuts, fabrics, and wanted to find out more about leather.”

Abloh and Nike were in partnership since 2016, led by the design project “The Ten,” where Abloh put his signature design touches on Nike Air Max 90 and 97, Air Force 1 Low, Blazer Mid, Air Presto, Air VaporMax, React, Hyperdunk 2017, Air Jordan 1 and Converse Chuck Taylor. The designer also reworked the Nike Air Zoom Fly Mercurial Fly Knit, Air Jordan 2, 4 and 5 sneakers, all of which were chronicled and immortalized in books like “Icons” that released in 2020.

In 2018, LVMH Moët Hennessy Louis Vuitton appointed Abloh as Vuitton’s men’s artistic director, succeeding Kim Jones who famously orchestrated a collaboration collection between Louis Vuitton and Supreme. That project opened the door for more collaborations to come, and with Abloh stepping in at Vuitton with several Nike projects under his belt, it was just a matter of time.

“We knew we were going to do it,” Burke reiterated. “He has a very special relationship with Nike. We knew we were going to do it and the timing was his. When you have Virgil and his history with Nike, it’s obvious that it’ll be the link of two icons. He’s the godfather and that’s what is interesting.”

The project also was a wink to the past. “For the Nike x Louis Vuitton Air Force One project, Virgil wanted to reference the customized versions that popped up in the late ’80s and early ’90s, which often incorporated Louis Vuitton fabrics repurposed and applied to the Swooshes and uppers of the shoes,” said Fraser Cooke, head of special projects at Nike.

“The idea of sampling ran through Virgil’s work, so to take the AF1 and create it officially with LV — finally making this clash of icons legitimate — was a uniquely personal and culturally inspiring initiative,” he added. “You only have to look at the show in which he debuted the Nike x Louis Vuitton Air Force One to see how much of an expansive homage that was to sampling and to hip-hop cultural iconography.”

But again, Abloh introducing these into his collection was a matter of time. “He was really expecting to create eternity through the sneaker,” Burke said. “Eternity is something we strive for and designers benefit because they could achieve it. ‘Icon’ is an overused word, but it’s something that lasts longer than us and compared to our short lives, it’s an eternity. You cannot force that. That has to happen when everything aligns and it’s not a formula you can replicate. We talked often about that. This should happen when we’re ready, when Nike is ready and when the people are ready for it.”

Burke explained that Abloh and the house produced 47 bespoke sneakers for select people, which will be the ones on show in New York City.

The expansive showcase will be open to the public; the 47 editions will be displayed in a dreamlike space that hearkens to the Vuitton men’s runway shows under Abloh’s direction. The venue will be wrapped in a vivid orange adorned with a logo that fuses the Louis Vuitton and Nike logos, and when guests enter the exhibit, they will see walls painted with clouds, reminiscent of a few of Abloh’s shows, a giant version of the logo reflected in a mirrored ceiling and will be surrounded by Abloh’s signature 3D-printed statues.

The upper room is a treehouse created as a tribute to Abloh’s affinity for the childlike mind and furnished like the Louis Vuitton studio and atelier he created on Rue du Pont-Neuf in Paris. The editions are exhibited in motion on magnetized walls in holographic displays that hearken to breakdancing.

In addition, large glass boxes will be placed around New York City at Domino Park, Grand Central Terminal, South Street Seaport, Astor Place, Columbus Circle, Flatiron Plaza and Gansevoort Plaza displaying graphic globe sculptures tied to themes of the showcase.

“For me, that’s a little wink to Virgil,” Burke said. “It summarizes ‘Virgil was here.’ He was everywhere at the same time and I hope we can recreate that. That represents Virgil more than anything I’ve said. His mere presence changed lives.”

Burke explained that the exhibition is an amalgamation of all of Abloh’s shows, beginning with spring 2019 up to his eighth collection shown in January 2022. “He was very adamant that one show would not render the last show irrelevant,” he explained.

The men’s fall 2022 show was also a dreamlike setting, much like the exhibition, and shares a blue hue with the “Truman Show”-esque fall 2020 show set that had clouds motifs also seen in the exhibition as well. Also, the 3D-printed statues appeared at several Louis Vuitton men’s pop-up shops in cities like Chicago, New York City, Los Angeles and Seoul, among others. The statues appeared in bright, monochromatic colors like green for the Lower East Side temporary store, neon orange in Chicago, and in gradient patterns.

A rainbow gradient statue of Abloh was made for the Miami show in December 2021.

“He didn’t want the creative ideas to be overwhelmed by what comes after them,” Burke said. “He announced the future that referenced the last collection and that’s what you’ll see in the sneakers. This is a tribute to Virgil and it wasn’t planned that way, just like the Miami show wasn’t planned. In a way, what we’re doing with the sneaker exhibition mimics what we did with the ready-to-wear in his passing. He would’ve loved to see it himself.”

Burke used the words “icon” and “eternity” when explaining the Louis Vuitton and Nike sneakers and Abloh’s collections for the luxury house. Though the launch and exhibition showcases Abloh’s legacy as a designer for the house and in his many collaboration projects, Burke does not see this as the end.

“At the end of every show, he left many doors semi open,” Burke added. “He left possibilities for the future show, which is why the January show felt like he was there every second from the point of view, the smoke, the dancers and orchestra. Anybody could take his work and work upon it.”

Burke revealed that there is room for more bespoke sneakers after these 47 editions — “There is no finality,” he said — and the house is developing a book that chronicles Abloh’s tenure at the house.

“The editor said this is the book and there should be an end and I said, ‘I would like you to not show a bookend,’” he said. “’You have to show it in a way where eight leads you back to one, a continuation of something that happened before, and I think Virgil would want that. He knew his medical situation and wanted finality. In four short years, the arc that he drew was absolutely amazing. The first collection was from someone beginning and by the eighth he was a master.”

He concluded, “Physicists have tried to find a very unifying force and Virgil had it actually. They were looking in all of the wrong places.”