WSJ : China Air Crash Report Gives Few New Clues on Boeing 737’s Fatal Nosedive

China Air Crash Report Gives Few New Clues on Boeing 737’s Fatal Nosedive
Preliminary findings show no problems found with plane or flying conditions, while data from black boxes is still being retrieved

HONG KONG—China’s initial report into what led a China Eastern Airlines Boeing 737-800 to nosedive into a mountain last month, killing all 132 people on board, offers few new clues to help solve the mystery behind the nation’s worst air disaster in almost three decades, a summary of the findings shows.

There were no problems found in the maintenance records or flying conditions at the time of the disaster, the Civil Aviation Administration of China said in a statement Wednesday summarizing its findings. As lead investigator, CAAC is required to submit a preliminary report to the International Civil Aviation Organization and involved parties—including the U.S., where the Boeing was manufactured—within 30 days of the March 21 crash.

Investigators are now focusing on the painstaking process of piecing together evidence explaining why the jet pitched toward the ground, with a last-recorded speed of 1,010 kilometers per hour (628 miles an hour) before disintegrating on impact. The CAAC said it had so far found nothing abnormal with the operation of the flight before the crash.

Data from the aircraft’s severely damaged flight recorders—best known as black boxes—is still being recovered and analyzed, the statement said. The National Transportation Safety Board, the U.S. agency that investigates transportation accidents and is participating in the probe, has helped download information from the two recorders in its lab in Washington, D.C.

The preliminary report, which the CAAC said contains no analysis or conclusion about the cause of the crash, hasn’t been made public. According to the ICAO’s rules, China can decide to keep it confidential, although countries are encouraged to produce a publicly available final report within 12 months of a crash—after which they should provide annual updates.

International accident investigations typically take longer than two years, Li Yong, deputy director of the CAAC’s Aviation Safety Office, told state-owned Xinhua News Agency in an interview published Thursday.

“When any important new progress is made in the investigation, it will be announced to the public in a timely fashion,” he said.

The Boeing jetliner had been approved to fly and its flight crew were qualified, the statement said. Radio communications between the pilots and air-traffic controllers on the flight from Kunming to the southern metropolis of Guangzhou had been normal before radar warned of a deviation in the plane’s cruising altitude at 2:20 p.m., just four minutes after the last exchange with ground control.

Air-traffic controllers immediately hailed the jet but received no response, the summary said.

Wreckage found at the crash site included parts from the engines, horizontal and vertical stabilizers, the rudder and cockpit. A section of the right winglet was discovered about 12 kilometers from the crash point, according to the summary. The impact created a 45-square-meter (484-square-foot) pit that was nearly three meters deep, it said.

China Eastern said earlier this week that it had resumed flights of its Boeing 737-800 model aircraft involved in the crash. They were grounded for nearly a month to run tests and examine airworthiness data. The airline said it was still conducting assessments related to maintenance. Aviation experts have said the 737-800’s return to service suggests the immediate or known issues around the crash may not be with the aircraft.

The ICAO didn’t immediately respond to a request asking whether they had received the report, which wasn’t made clear in the Chinese authority’s statement. The NTSB said it has received the report, and Boeing declined to comment, beyond referring queries to the CAAC.

The NTSB tweeted in late March that its team wouldn’t release any information about the investigation because that right belongs to the Chinese government. A spokesman said the team sent early in April to join the probe returned to the U.S. on Thursday.

FT : Bill Ackman sells entire Netflix stake at roughly $400mn loss

Bill Ackman sells entire Netflix stake at roughly $400mn loss
Move comes three months after billionaire took position with pledge to focus on ‘long-term horizon’

Bill Ackman has sold his stake in Netflix at a roughly $400mn loss just months after acquiring the position, in the latest blow to the streaming company that saw its market value collapse on Wednesday following a decline in subscribers.

Ackman’s decision to exit the world’s largest streaming platform came three months after he amassed a stake worth $1.1bn — making his Pershing Square vehicle a top-20 shareholder in Netflix — and pledged to focus on the “long-term horizon”.

The move by Ackman capped a painful 24 hours for Netflix, which lost close to 40 per cent of its market value, a decline of almost $60bn, after it revealed that its once-blistering subscriber growth had gone into reverse.

The New York billionaire investor bought 3.1mn shares in Netflix over the course of a few days in late January at roughly $360 per share. At the time, he said many of Pershing Square’s best investments had “emerged when other investors, whose time horizons are short term, discard great companies”. Netflix closed at $226.19 a share on Wednesday.

But in a letter to investors, Ackman said Pershing Square had “lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty”. He cited planned changes to Netflix’s business model such as launching an advertising-supported service and clamping down on account sharing.

Pershing Square declined to comment.

Ackman said the loss on the Netflix investment had translated to a 4 percentage point fall in returns for the Pershing Square Funds this year, leaving the funds down about 2 per cent overall over the same period.

Netflix has lost two-thirds of its market value in the past six months, falling from a peak of almost $310bn in October to $100bn on Wednesday.

The company has been contending with saturation in some of its markets as well as stiff competition from the likes of Disney, Apple and Warner Media, which have spent billions of dollars to break into the streaming market that Netflix pioneered.

Ackman’s U-turn on Netflix also came weeks after he said he would abandon the aggressive activist campaigns that were a hallmark of his investment career in favour of a more “cordial, constructive” approach.

In his letter announcing the Netflix share sale on Wednesday, he wrote: “Based on management’s track record, we would not be surprised to see Netflix continue to be a highly successful company and an excellent investment from its current market value.”

FT : Foreign investors ditch Chinese debt at record pace as US yields soar

Foreign investors ditch Chinese debt at record pace as US yields soar
Outflow of onshore bonds hits $18bn on concerns about Beijing’s economic outlook

Foreign investors ditched a record $18bn worth of renminbi-denominated debt last month, with selling accelerating as soaring US bond yields dulled the allure of holding Chinese debt.

Offshore investors sold a net Rmb113bn ($17.6bn) worth of Chinese onshore bonds in March, according to Financial Times calculations based on data from Hong Kong’s Bond Connect investment programme. That took outflows over the past two months to Rmb193bn as concerns mounted over China’s economic growth outlook and the debt’s diminishing yield advantage over bonds denominated in US dollars.

“These are by far the greatest outflows since China began opening up its domestic bond market,” said Becky Liu, head of China macro strategy at Standard Chartered, adding that when combined with net selling of stocks, foreign investors had dumped a total of about Rmb234bn in Chinese securities over the past two months. She said the bank expected “persistent outflows” in the second quarter.

Overseas investors have turned to the Chinese bond market for years as a source of juicy fixed-income returns while western economies embraced quantitative easing and record-low borrowing costs. That dynamic is now reversing, as western central banks raise rates and China seeks to mitigate the economic disruption of lockdowns to contain worsening Covid-19 outbreaks.

Expectations of rate rises from the Federal Reserve as it combats surging inflation have pushed up the 10-year US Treasury yield to 2.9 per cent this week, while anticipated easing by the People’s Bank of China has kept the Chinese 10-year yield anchored at about 2.8 per cent in recent sessions. US yields have not exceeded those provided by holding riskier Chinese sovereign debt in 12 years.

The divergence in policy is also hitting China’s currency, with the renminbi falling on Wednesday to its lowest point against the dollar since October 2021.


Jason Pang, a senior portfolio manager at JPMorgan Asset Management in Hong Kong, said recent selling was in part spurred by global investors locking in profits after a year in which Chinese bonds’ relative outperformance made holding them “pretty much required” for many investors hoping to deliver better-than-benchmark returns.

“I wouldn’t be surprised if we see more profit-taking on [Chinese government bonds],” he added.

Investors and strategists said that while renminbi debt’s yield advantage had been squeezed, payouts on Chinese bonds still offered a substantial premium over their US counterparts when adjusting for inflation.

“The big, longer-term picture is not changing at all,” said Jean-Charles Sambor, head of emerging market debt at BNP Paribas Asset Management, adding that renminbi bonds still offered returns that did not correlate with other big economies. “It’s a no-brainer to me that the diversification benefits remain extremely strong.”

Liu at StanChart said that despite the recent bout of selling, she expected the pace of outflows may have already peaked and that net inflows would return in the second half of the year. But she added that the gap between Chinese and US bond yields could limit the options available to policymakers in Beijing as they grapple with slowing growth.

Despite a wave of severe and economically disruptive lockdowns to contain China’s worst Covid-19 outbreak in two years, the PBoC has remained cautious in its approach to stimulus, stopping short of a dramatic loosening in policy that could push yields even lower.

Aninda Mitra, head of Asia macro and investment strategy at BNY Mellon Investment Management, suggested the central bank may have become “wary” about the sharp rising of interest rate differentials, given buoyant rates in the US, because it could encourage greater outflows in pursuit of higher yields.

“The attraction of foreign investors in the Chinese bond market has arguably been reduced,” he said, with capital account pressures becoming “more of a plausible risk”.

>>> US After Hours Summary: UAL +7.7%, TSLA +5.6% trade higher on earnings; SNBR

After Hours Summary: UAL +7.7%, TSLA +5.6% trade higher on earnings; SNBR -5.8%, CVNA -5.4%, EFX -5.2%, AA -5.1%, LRCX -2.1% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: UAL +7.7%, TSLA +5.6%, CNS +5%, LBRT +4.1%, LSTR +3.8%, CSX +2.8%, STLD +0.6%, SLG +0.4%, BDN +0.3%, THC +0.1%

Companies trading higher in after hours in reaction to news: NRGV +4.8% (CFO to step down), ENDP +4.6% (court orders recusal of trial court judge and vacates default judgment), RF +1.6% (authorizes $2.5 bln stock repurchase program), NVVE +1.3% (selected as collaboration partner with Dept of Energy to accelerate V2G technology), HE +1.1% (CFO to depart), GOOG +0.4% (MNDT discloses receipt of request for additional info from DOJ in connection with GOOG merger)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SNBR -5.8%, CVNA -5.4% (also announces $1 bln stock offering), EFX -5.2%, AA -5.1%, CCI -3.3%, KALU -3.3%, LRCX -2.1%, KNX -0.8%, GL -0.7%, RLI -0.2%, KMI -0.1% (also increases dividend), SEIC -0.1%, VMI -0.1% (also increases dividend by 10%)

Companies trading lower in after hours in reaction to news: MNDT -2.4% (MNDT discloses receipt of request for additional info from DOJ in connection with GOOG merger), VRM -1.8% (in symapthy with CVNA), AZN -0.9% (Evusheld shown to reduce the risk of developing symptomatic COVID-19 by 77%), PFE -0.1% (will begin including certain expenses in non-GAAP adjusted income)

>>> US Close Dow +0,71% S&P -0,06% Nasdaq -1,22% Russell +0,37%

Closing Stock Market Summary

The S&P 500 decreased 0.1% on Wednesday, as the market did a good job mitigating the huge earnings disappointment in Netflix (NFLX 226.19, -122.42, -35.1%). The Dow Jones Industrial Average (+0.7%) and Russell 2000 (+0.4%) outperformed in positive territory, while the Nasdaq Composite fell 1.2%. 

Briefly, shares of Netflix tanked 35% after the company lost 200,000 global paid subscribers in the first quarter and projected it would lose another 2 million subscribers in the second quarter. Investors questioned Netflix's growth story and braced for similar disappointments in streaming competitors and other former high-flyers like Meta Platforms (FB 200.42, -16.89, -7.8%).

The S&P 500 communication services sector (-4.1%) dropped 4% amid weakness in NFLX and FB, followed by smaller declines in the consumer discretionary (-1.4%) and information technology (-0.1%) sectors. The Vanguard Mega Cap Growth ETF (MGK 222.21, -2.79) fell 1.2%. 

The broader market, though, held up impressively well, evident by the gains in eight of the 11 S&P 500 sectors, the roughly 2-to-1 advantage for advancing issues over declining issues at the NYSE, and the 0.6% gain in the Invesco S&P 500 Equal Weight ETF (RSP 158.96, +1.01). 

Granted, a closer look reveals a defensive bias with the real estate (+1.9%), consumer staples (+1.5%), health care (+1.3%), and utilities (+0.8%) sectors atop the sector standings. The Treasury market also saw some relief. 

Procter & Gamble (PG 463.65, +4.24, +2.7%), Abbott Labs (ABT 122.64, +2.66, +2.2%), and Anthem (ANTM 529.84, +12.80, +2.5%) supported the consumer staples and health care sectors following their better-than-expected earnings reports. IBM (IBM 138.32, +9.17, +7.1%) jumped 7% after it, too, exceeded earnings expectations. 

The defensive tilt might have also been attributed to a recognition that the S&P 500 remained below its 200-day moving average (4497), a reminder that economic activity is moderating as denoted in the April Beige Book, and reports indicating that NYC could soon up its COVID-19 alert level to medium risk. 

In the Treasury market, the 2-yr yield decreased one basis point to 2.57%, and the 10-yr yield decreased seven basis points to 2.84%. The U.S. Dollar Index fell 0.6% to 100.31. WTI crude futures increased 0.3%, or $0.33, to $102.40/bbl. 

Separately, the strength of the Dow Jones Transportation Average (+1.7%) was largely due to a 12% gain in its highest-priced component, Avis Budget (CAR 319.42, +34.07, +11.9%). CAR was upgraded to Equal Weight from Underweight at Barclays. 

Reviewing Wednesday's economic data:

  • Existing home sales decreased 2.7% month-over-month in March to a seasonally adjusted annual rate of 5.77 million ( consensus 6.20 million) versus a downwardly revised 5.93 million (from 6.02 million) in February. Total sales in March were down 4.5% from a year ago.
    • The key takeaway from the report is that the supply of available homes for sale remains extremely tight, yet higher mortgage rates and higher inflation are contributing to a slowdown in demand rooted in affordability pressures that are expected to persist.
  • The weekly MBA Mortgage Applications Index decreased 5.0% following a 1.3% decline in the prior week.

Looking ahead, investors will receive weekly Initial and Continuing Claims, the Philadelphia Fed Index for April, and the Leading Economic Index for March on Thursday.

  • Dow Jones Industrial Average -3.2% YTD
  • S&P 500 -6.4% YTD
  • Russell 2000 -9.2% YTD
  • Nasdaq Composite -14.0% YTD

WWD : Farfetch Goes Big on Beauty

Farfetch Goes Big on Beauty
Following its acquisition of Violet Grey earlier this year, the digital platform is rewriting the beauty retail playbook.

Farfetch has made many investments and acquisitions on its quest to dominate luxury fashion, and now it’s doing the same in beauty.

Hot on the heels of its acquisition of specialty retailer Violet Grey in January (and following the minority stake it took in Neiman Marcus Group this month), the platform will launch beauty on Wednesday with an assortment of over 100 prestige brands.

Simultaneously, Off White, which is owned by Farfetch, will launch four fragrances with the retailer, while Browns Fashion, the London-based luxury retailer, is also launching a limited beauty assortment online and in its two brick-and-mortar doors.

The battle for the prestige beauty shopper has reached a fever pitch in the past two years. Mass players like Kohl’s and Target have gone deeper into the category via partnerships with Sephora and Ulta Beauty, respectively, while digital players like Net-a-porter and Ssense have gone deeper into the category.

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Farfetch is looking to differentiate itself with a gender-neutral assortment in an approach it is calling “Beauty Beyond Boundaries.”

Confirmed brands include African Botanics, Augustinus Bader, Chanel, Chantecaille, Charlotte Tilbury, Christophe Robin, Cle de Peau, Dr. Barbara Sturm, Frédéric Malle, Gucci, Joanna Vargas, Kjaer Weis, La Mer, Maison Margiela, Nécessaire, Olaplex, Prada, RMS Beauty, Sam McKnight, Sisley Paris, Susanne Kaufmann, Tom Ford, Vintner’s Daughter, Westman Atelier, Yves Durif and Yves Saint Laurent Beauté.

“All of us have a wide variety of products in our cabinets, from indie brands to established brands, and we wanted a similar approach,” said Holli Rogers, chief brand officer at Farfetch. “We’re trying to be conscious of the fact that we have this really diverse audience of pre-existing clients, and we expect to have a huge influx of new customers.”

It isn’t Farfetch’s first time eyeing the category for expansion. In 2016 it partnered with Space NK on a limited offering available online, which posed a slew of logistical challenges. “We realized it was way more complex because of the intricacies of shipping, and we decided that if we were going to do beauty, we needed to do it right,” Rogers said. “We’ve got a lot of stakeholders, and this is a natural next move.”

To that end, Rogers said expectations were high. “It’s going to be smaller than our fashion business, but we still anticipate it to be quite a significant piece of the business as we move forward,” she said, declining to quantify sales expectations. As reported by WWD, Farfetch’s gross merchandise volume exceeded $4.2 billion last year, almost double pre-pandemic levels.

While Violet Grey and Browns will lean into small, curated assortments, Farfetch will fulfill orders with inventory from the two retailers, as well as its own buy. “The amplification that Farfetch as a marketplace brings to Violet Grey, Browns and Off White is massive,” Rogers said. “Everything comes back to the destination of Farfetch being a marketplace, and there’s a whole ecosystem that’s being built around beauty as a category and as a way of life for people. We’re having this 360-degree approach for our proposition across channels.”

Digital activations will range from Roblox to The Sims 4, wherein content creators will create their own beauty avatars. Farfetch’s website will also include virtual try-on for makeup, starting with lipstick and later extending to complexion products.

With a heavy focus on content, Rogers is also taking pages out of the Violet Grey playbook. In addition to a campaign called “Your Choice. Your Beauty. Your Farfetch,” it is inaugurating the Global Beauty Collective, a committee that will aim to “educate, inspire and build a sense of community,” according to the company.

Founding members range from entrepreneurs and professionals to dermatologists and performers, and include Cassandra Grey, founder of Violet Grey; makeup artists Erin Parsons and Isamaya Ffrench; hairstylist Jawara; style director Mia Kong; dermatologist Michelle Henry; cosmetic chemist Michelle Wong; actor Nico Hiraga, and drag queen Violet Chachki. A curator-in-chief will be named at a later date.

“One of the things we’ve been great at for quite a while is bringing together curators, creators and content makers in the fashion space. This transcends into beauty as well,” Rogers said. “That idea is to drive a stronger emotional connection and have a forum for people to interact in, to have multiway conversations.”

The collective is similar to Violet Grey’s own committee of experts who vet each new product. Grey said that the collective would serve a different purpose than Violet Grey’s. “It’s a small group, and it was underway before we joined the team,” she said.

Grey will continue to operate her company as a stand-alone business. When Farfetch acquired the business earlier this year for an undisclosed sum, it gave Grey the infrastructure and opportunity to focus on scaling internationally.

“We only shipped to the U.S. and we were 38 people. We were operating without enough capital and with a lot of pain points in operational efficiency,” Grey said. “Immediately, Farfetch is bringing this technology and infrastructure and management to our operation. It’s enabled us to be so much more nimble and focused on what we really want.”

The businesses are separate, but Farfetch is still benefiting from Violet Grey’s credibility with consumers. “At our core, we are pretty laser focused on strengthening our relationship with the most discerning customer, and everything else falls into place. Violet Grey is essentially a seal of approval that enables customers to feel more confident in their purchase decision, with curation at our core,” Grey said. “We’ve always thought about retail and e-commerce as a convenience that we provide our customers and community. So, it’s adding this huge global infrastructure and e-commerce platform.”

Since Violet Grey currently only distributes in the U.S., there’s not much overlap between its customers and those who shop on Farfetch. “The Farfetch customer is global, and a lot of them have not shopped on Violet Grey before,” Grey said.

Many of brands that are on Violet Grey will be on Farfetch, sometimes with a fuller assortment.

“We had a very successful relationship with Violet Grey, where we became a top seller in eight months,” said Charles Rosier, chief executive officer of Augustinus Bader. “We always had a close partnership with them, and it’s natural for us to keep that partnership going. In some ways we’re dealing with the Violet Grey team, but within the bigger framework.”

While Augustinus Bader was quick to gain buzz — and customers — since its 2018 launch, Rosier still sees runway to expand internationally. “We are a growing brand, and we have this growth happening globally. To benefit from the potential distribution power of our partners, and those partners becoming stronger or having a stronger network, is always going to be a positive thing,” he said.

“Being exposed on a new platform is going to create more brand awareness. People looking into our story, and who are intrigued by it, are now seeing it again,” he continued.

As WWD reported, Augustinus Bader was said to do over $150 million in retail sales in 2021.

That rationale was similar for Randi Christiansen, cofounder and CEO of premium body care brand Nécessaire. “It really started with our partnership we had with Violet Grey,” Christiansen said. “When you think about Farfetch, they are both tastemakers in the lifestyle space, and in fashion and beauty. What they both do is have a strong point of view. We also recognize that Farfetch has a tremendous opportunity to reach new customers with that same rigor, point of view and brand expression that Violet Grey embodies.”

Part of the advantages includes bringing fresh customers to Nécessaire. “Our brand is three and a half years old, and it’s still early in its journey of meeting people,” Christiansen said. “Any distribution partner you partner with is a brand equity choice, it’s an expression of your brand. I think about it as brand awareness, people continuing to see the brand and create excitement in a curated and content-smart way. That’s what we love about Violet Grey, and it’s what we believe Farfetch will bring.”

Betaville : BOOM LN - UNCOOKED ALERT: Audioboom Group said to have attract inter

BOOM LN - UNCOOKED ALERT: Audioboom Group said to ... - Part 5

Wednesday, 20 April 2022, 3:19 pm
Audioboom, the Aim-listed podcasting company, is said to have attracted interest from one of France's largest media groups.

People following the situation have heard rumours Vivendi has been holding talks with Aaqua, the Dutch social networking group, about creating a joint venture that could be used to launch a fresh takeover bid for Audioboom, the London-listed podcasting company.

Aaqua is one of the largest shareholders in Audioboom and is backed by All Active Asset Capital (AAA), which last year tried to buy Audioboom for £12.00 a share.

However, it's not clear how far the talks between Aaqua and Vivendi have progressed and whether they have submitted a formal offer for Audioboom.

Audioboom's chairman, Michael Tobin, has consistently been buying shares in the company since the beginning of the year, suggesting there were no formal talks taking place with potential acquirers.

Recently, though, Mr Tobin hasn't purchased any Audioboom shares, adding weight to speculation the company may have received a formal approach.

According to the regulatory news service Tobin's last purchase of Audioboom shares was on March 25 when he bought 815 ordinary shares in at a price of £18.30 a share, taking the size of his stake in the business to 4.2pc.

Readers should be aware Betaville first reported takeover interest from in Audioboom in December last year, with people following the situation suggesting a large US technology company was circling was business.

Those reports were subsequently followed up by Sky News, which claimed Amazon was working with JP Morgan on a possible offer for Audioboom.

Sky News also claimed Spotify was also looking at Audioboom.

Since Betaville's first report Audioboom's shares have risen around 60pc, so readers should be aware some of the takeover speculation may already be priced into the stock.

Aaqua and Vivendi both declined to comment when contacted by Betaville.