Buisness Of Fashion : How Long Can LVMH Keep Up Its Winning Streak?

How Long Can LVMH Keep Up Its Winning Streak?
This week, everyone will be talking about LVMH’s latest results, the return of Coachella and an important US inflation gauge.

Inflated Expectations

  • LVMH reports first-quarter results on April 12
  • The Louis Vuitton and Dior owner has reported a series of blockbuster quarterly sales and profits
  • Maintaining that pace of growth will be harder now that the comparison is to last year rather than the early phase of the pandemic

LVMH has a problem most companies would gladly take on: the luxury giant has grown so quickly for so long that an otherwise excellent quarter might look so-so by recent standards. LVMH’s sales grew 44 percent last year, an unusual figure for a company of its size (though sales were also up an impressive 20 percent from 2019). The conglomerate is unlikely to maintain that pace.

That doesn’t mean Louis Vuitton or Dior are showing any signs of slowing momentum, though future growth will depend partially on Celine following through on LVMH’s plans to make it the next anointed megabrand. One test is whether Sephora and the conglomerate’s travel retail empire are ready to take off. DFS continues to lose money for its parent, and while the sector is innovating around the pandemic disruptions, including new online services and a big investment by DFS in Hainan, there’s little else to be done but wait until tourists return to airports in their pre-pandemic numbers. Sephora is more clearly on a path to recovery, though LVMH said in January sales had yet to reach 2019 levels.

The Bottom Line: One of the perks of being a category-spanning colossus is that there’s always some new growth lever to pull.

>>> Ukraine adviser and negotiator Podolyak: Meeting between Pres Zelensky and P

Ukraine adviser and negotiator Podolyak: Meeting between Pres Zelensky and Pres Putin will take place after Ukraine wins war battles; It might take 2 or 3 weeks
- Ukraine is already ready for big battles, Ukraine must win these battles, including in the Donbas, after which Ukraine will receive a more substantial negotiating position, from which it can dictate certain conditions; After that, the presidents will meet

>>> Weekend Papers Summary

(US) Weekend Papers Summary


NEW YORK TIMES
-Russia has appointed a new general to unify its campaign. The move comes as Russia persists with its push in southeastern Ukraine, where residents continued to flee on Saturday a day after a missile strike on a train station there killed at least 52 people. In a strategic shift, Moscow assigned Gen. Aleksandr V. Dvornikov, whose forces were accused of targeting civilians in Syria, to lead its operation.
-Prime Minister Boris Johnson of Britain promised more aid in an unannounced trip to Kiev. Residents continued fleeing eastern Ukraine.
-Citizens are denouncing one another, illustrating how the war is feeding paranoia and polarization in Russian society.
-As record numbers of migrants have surged to the US-Mexico border, the White House has furiously debated how — and whether — to unravel Trump-era policies.
-The Manhattan district attorney Alvin Bragg has had an uncommonly tumultuous first three months on the job, drawing criticism from all over the political spectrum.
-The Parliament of Pakistan has ousted Prime Minister Imran Khan. The country will now face early elections after days of brinkmanship in which Mr. Khan tried to dissolve Parliament to head off the no-confidence vote.
-Many cities and counties sin Michigan say that shoring up local public health systems is crucial to recovering from the pandemic and addressing health disparities.
-Evidence suggests that survivors of Covid have higher chances of developing cardiovascular disease. But experts say there are ways to minimize the risk.
-President Emmanuel Macron’s advantage over the far-right candidate Marine Le Pen has evaporated over the past month as his failure to engage has irked voters.
-The French are choosing their president in April, an election that is crucial for France and key for Europe. President Emmanuel Macron is favored to win, but the race has gotten closer.
-The State Department could not compile a list of gifts for 2020, making it difficult to determine whether officials did anything improper.

THE FINANCIAL TIMES
-The UK and the EU have pledged more financial support to help Ukraine defend itself against Russia and rebuild after the conflict, as British Prime Minister Boris Johnson met Volodymyr Zelensky in Kiev.
-The FT, based on local sources, alleges that the last Russian troops in Bucha found themselves cornered by advancing Ukrainian forces in late March and began shooting civilians.
-The airline industry dismissed the idea the pandemic and climate worries would permanently change the way people moved around the world, and that decades of near-continuous growth were at an end. Now, there is growing evidence it was right.
-As petrol and food prices steadily increased, voters started to realize that Putin’s war in Ukraine was not just a humanitarian and geopolitical disaster, but one that would have an impact on their daily lives in France. One candidate understood this better than all the others: the “far-right” politician Marine Le Pen.
-Italian Prime Minister Mario Draghi will visit Algeria on Monday to sign a new gas supply deal, as Rome strives to reduce its dependence on Russian fuel following the invasion of Ukraine.
It is the latest in a series of moves made by European countries to secure alternative fuel sources as they seek to cut Russia off from the global economy in punishment for the war.
-Market turmoil driven by Russia’s invasion of Ukraine and rising inflation has sharply divided the hedge fund industry, with macro hedge funds celebrating one of their best-ever starts to a year while technology and growth funds rack up double-digit losses.
-As outrage over the war in Ukraine grows, European leaders are under mounting pressure to expand sanctions against Russia and end the EU’s decades-long dependence on the country’s oil and gas once and for all.
But an analysis of the top 10 global producers shows just how difficult it would be to remove Russian gas from the European energy mix without imposing stringent curbs on industrial consumption that could crush economic growth.
-Imran Khan was voted out as Pakistan’s prime minister early on Sunday, ending weeks of political uncertainty that had fueled a devaluation of the rupee, dragged down the country’s stock market and forced the central bank to raise interest rates.
-Russia’s central bank cut interest rates on Friday in a bid to cushion the economy from the impact of western sanctions, saying the recent rebound in the ruble had eased inflationary pressures.
-The German government has announced an aid package to support companies hit by the fallout of the Ukraine war and the sanctions against Russia, the leading energy supplier to the Eurozone’s biggest economy.
The measures include a new €100B program of short-term loans from state-owned KfW development bank for energy companies struggling to cover the vastly increased cost of insuring themselves against higher oil and gas prices.
-French president Emmanuel Macron and Marine Le Pen, the far-right leader who is challenging him for the presidency, traded insults and accusations on the final day of an increasingly bitter election campaign ahead of the first round of voting on Sunday.
-The White House’s top Asia official is preparing to travel to the Solomon Islands in a rare high-level visit that underscores alarm in Washington over the Pacific nation’s security pact with China. Kurt Campbell will fly to the Solomon Islands this month, according to four people familiar with the plan. He is expected to travel with Daniel Kritenbrink, the top state department Asia official. Their visit comes as the small Pacific nation emerges as a strategic battleground between the US and China.
-The expected appointment of John Lee, 64, as Hong Kong’s fifth chief executive since the former British colony reverted to Chinese sovereignty in 1997 was all but assured this week after the incumbent, Carrie Lam, announced that she would not seek a second five-year term. Even before Lee confirmed his desire to replace her, the Chinese Communist party’s representatives in the territory instructed a 1,500-seat, “patriots only” election committee to back him in the May 8 vote.

THE NEW YORK POST
-A government watchdog is demanding the US Attorney probing Hunter Biden in Delaware investigate tens of millions in anonymous donations from China to the University of Pennsylvania, where an academic center is named for his father, President Biden.
-Hunter Biden’s access to lucrative financial opportunities also came with expectations — including kicking back as much as 50% of his earnings to his dad, text messages on his old laptop show. “I hope you all can do what I did and pay for everything for this entire family for 30 years,” Hunter Biden groused to daughter Naomi in January 2019. “It’s really hard. But don’t worry, unlike pop, I won’t make you give me half your salary.” Pop is Joe Biden.
-Amazon on Friday called for a re-run of an election after workers at a Staten Island warehouse voted to create the company’s first US union, claiming in a statement that actions by the US labor board and worker-organizers suppressed the vote and denied staff their voice.

>>> Barrons

Barron’s Weekend Summary: organized retail crime has been growing for years—with tens of billions of dollars of stolen merchandise reported in 2019


Cover Story:
While organized retail crime has been growing for years—with tens of billions of dollars of stolen merchandise reported in 2019—the massive swing toward online shopping during the Covid-19 pandemic has made it easier than ever to resell stolen merchandise on such platforms as Amazon.com, eBay, and Facebook Marketplace. Retail thefts, both in total numbers and dollar amounts, are now up roughly 30% since the onset of the pandemic, according to the Coalition of Law Enforcement and Retail (CLEAR).

Interview:
Barron’s interviews TS Lombard global macro strategist Dario Perkins. He answers questions related to the reopening from Covid-19 and Russia’s invasion of Ukraine, and how he interprets the global economy. One of the key questions concerns the possibility of recession in Europe: “The European economy is probably contracting right now, because inflation is hitting 7% to 8% and wages are going up 1%. People are getting very squeezed by this and we’re not yet seeing it in the data because it’s too early.”

Tech Trader:
This past week, Berkshire disclosed an 11.4% stake in the PC and printer company HP, which is not to be confused with Hewlett Packard Enterprise , the server, networking, and storage company from which it split in 2014. “You could argue that Berkshire is a little late here. HP’s PC business soared during the pandemic, driving growth to the highest level since the company was split in two; HP’s stock price has doubled since 2019. Meanwhile, there are signs that PC demand is going to slow from here as the stay-at-home trend fades.”

The Trader:
Michael Darda, chief economist at MKM Partners, warns against excessive concerns of recession. “The growth scare is so last cycle, an artifact of an environment where growth had trouble getting to trend and inflation couldn’t even sniff the Fed’s 2% target. When the stock market would sell off, as it did in 2013 or 2015, credit spreads would blow out, bond yields would fall, and inflation expectations would sink, all signs that investors were pricing in a weakening economy.’
-Defense stocks jumped when Russia invaded Ukraine—the Invesco Aerospace & Defense exchange-traded fund gained 9.6% from Feb. 23 through March 7—but have been fairly rangebound ever since. The dynamic has been even more apparent in the big defense stocks. General Dynamics gained 14% but then fell 1.4%, while Lockheed Martin rallied 20% before dipping 0.3%, and Northrop Grumman surged 24% before declining 1.8%. Russia’s actions, however, demonstrate that more money will need to be spent on the military, if only to prevent what’s happening in Ukraine from happening elsewhere.

Features:
The Covid-19 pandemic is not over. But many of the pandemic assistance programs associated with it are done, or soon will be. Mortgage forbearance, which began after passage of the Cares Act, is a case in point. Throughout the pandemic, federal and private programs have allowed borrowers to stay in their homes and stop mortgage payments for up 18 months with no negative impact on their credit scores.
-As we consider how the war in Ukraine will end, we must first understand how it began. Russia invaded for geostrategic reasons—having Ukraine as a buffer state safeguards Moscow from invasion from the west—and for economic reasons, which have often gone overlooked. The transition from the Soviet Union to the Russian Federation wasn’t exactly lucrative. It may have increased total wealth, but Russia remains a poor country. Its gross domestic product ranks just behind South Korea’s, a respectable placement but hardly where a superpower should be. In terms of per capita GDP, Russia ranks 85th, nestled between Bulgaria and Malaysia.
-Semiconductor stocks like Nvidia have soared over the last few quarters, driven higher by robust demand for chips amid a global supply shortage.
But the tide may be turning for semiconductor manufacturers, warned Truist analyst William Stein. As a result, Stein adjusted his price targets for several key semiconductor stocks, including Advanced Micro Devices, Intel, and Nvidia.

European Trader:
-Russia’s invasion of Ukraine surprised Europe and the world. But as the war grinds beyond the six-week mark, one thing is clear: Europe will never be the same. Before the invasion, Europe had been proceeding at a, well, European pace. The continent was changing, particularly when it came to energy, but the economy was set to grow again after a brief energy-induced hiccup, and nothing seemed too pressing.

Emerging Markets:
European Union leaders declared after a summit at Versailles last month that “Ukraine belongs to our European family.” That was a rather obvious observation from the 27 member states, considering the popular outpouring for Ukraine across the continent, and their own provision of arms and sanctions to help it fight Russia. The prospect of EU membership could be key to an eventual peace process, giving Kiev and Volodymyr Zelensky a win to offset any concessions to Moscow.

Commodities:
Oil prices go up and down—like most anything else. Now, they’re well below their peak of last month and they probably won’t be hitting that high again any time soon. WTI crude is down about 25%, to just under $97 a barrel, from a multiyear peak of $130 hit on March 8, the day that the U.S. banned Russian oil imports and the U.K. promised a phase-out. The price is still higher than the $89 level on Feb. 10, just before Russia made clear that it would invade Ukraine. The war started on Feb. 24.

Streetwise:
America’s worst airline (sic) (JetBlue Airways) made a surprise bid for the second-worst one (sic), topping an offer by the third-worst. Regulators are expected to object to the deal in the name of preserving customer choice. Jack Hough has no particular complaints about JetBlue Airways, and He says, he’s never flown Spirit Airlines or Frontier Group. But he bases his opinion on a recent ranking by The Wall Street Journal, part of the same company as Barron’s. It’s based on fine details like whether the flights customers pay for occur anywhere near the agreed-upon time, and whether the luggage comes along for the ride.

WSJ : Why Stocks Are Rallying in the Midst of a War and Soaring Inflation

Why Stocks Are Rallying in the Midst of a War and Soaring Inflation
The S&P 500 has rebounded 7.6% from its 2022 low in March, cutting its losses for the year to about 6%

Investors are confronting one of the most uncertain periods of their lifetimes. Stocks are rallying anyway.

The S&P 500 has rebounded 7.6% from its 2022 low on March 8, cutting its losses for the year to about 6%—roughly half of what they were weeks ago. In many ways, investors say, the rebound has been as broad as it has been impressive, lifting everything from travel stocks to utilities to unprofitable technology companies.

A month ago, Russia’s war in Ukraine was intensifying, sending oil prices surging to $130 a barrel and stocks sharply lower. Covid-19 cases began surging again in China. Inflation data showed that pricing pressures weren’t abating. And in the midst of all of it, the Federal Reserve kicked off a rate-hiking cycle for the first time since 2018.

Not much has changed, except stocks are now back on the upswing. Many investors are trying to discern whether the rebound is the start of a sustainable rally or merely a temporary respite. The broad stock market index pulled back 1.3% last week, snapping a three-week winning streak that marked its best performance since November 2020.

Here are six reasons for the rebound.

  • History Suggests Stocks Have More Room to Run
The anticipation of the Fed’s March rate increase stirred volatility for months as investors braced for the unwinding of stimulus that helped turbocharge stocks. But history shows that stocks typically rise after the central bank starts raising interest rates.

In the five rate-hiking cycles since 1990, the S&P 500 tumbled a month after the first rate increase but typically recouped those gains to rally six months later. After one year, the S&P 500 and Nasdaq Composite were up 80% of the time, according to Dow Jones Market Data.

“The early stages of Fed tightening should not be seen as a negative for stocks, as equities tended to make new highs after the initial volatility,” a team of JPMorgan Chase & Co. strategists led by Marko Kolanovic wrote in a note to clients Monday.

Still, recession fears are growing. Deutsche Bank’s chief U.S. economist warned about a recession this year, fueled by aggressive tightening from the Fed. Jeremy Grantham, co-founder of Boston money manager GMO LLC, said Wednesday that oil price spikes like the one this year “have always preceded or triggered recession.”

Yet some investors aren’t willing to cash out of the market to time a downturn.

“The market can go up a lot before you get to the recession,” said Mark Stoeckle, chief executive of investment firm Adams Funds. “That’s a lot of risk that you’re taking on if you’re going to begin to reposition your portfolio for an impending recession.”

Mr. Stoeckle said that, so far, the economic data he has seen doesn’t point to a recession in the near future.

To be sure, rate-hiking cycles don’t always end well for stocks. According to Deutsche Bank analysts, eight of the 11 cycles over the past seven decades have resulted in recessions.

Take, for example, when the Fed began raising rates in the 1970s and the late 1990s. In both cases, major U.S. indexes largely finished the cycles with losses and, soon after, the economy tipped into a recession.

  • The Economy Is Still Strong
Consumers have been sending mixed signals on how they feel about the economy. Economic data suggest things aren’t as bad as many fear.

U.S. job growth remains strong, with the March report showing employers added 431,000 jobs, the 11th straight month with an increase of more than 400,000. That marked the longest streak in records dating back to 1939.

Investors point to other encouraging signs: Wages continue to grow. In March, average hourly earnings for employees on private nonfarm payrolls rose 5.6% from a year before, Labor Department data show.

Meanwhile, American finances look healthy, which could help buoy the economy as inflation flares. Brian Rose, senior U.S. economist at UBS Global Wealth Management, estimates that consumers accumulated excess savings of about $2.5 trillion during the pandemic.

Still, some cracks are starting to emerge: U.S. consumer spending in February slowed sharply from the month before, as inflation—which jumped to an annual 7.9% rate in February—weighed on households and chipped away at wage gains.

  • Real Yields Are Still Negative
Many investors say stocks are still being lifted by one closely watched bond-market metric: real yields.

Real yields are what investors receive on U.S. government bonds after accounting for inflation. Despite the sharp rise in Treasury yields this year, so-called real interest rates are still quite low. For now, investors say, that is providing support for the economy and an incentive for investors to seek returns in riskier assets.

The yield on five-year Treasury inflation-protected securities—a benchmark gauge of real interest rates over the next half-decade—stood Friday at about minus 0.6%, according to Tradeweb. That was up from about minus 1.6% at the end of last year but still well below the 1% level it reached in 2018.

  • Individual Investors Buy the Dip

Individual investors have helped drive the recent surge in meme stocks and shares of unprofitable technology companies, data from Vanda Research show.

Last month, individual investors piled into shares of the ARK Innovation exchange-traded fund, purchasing a net $132 million in shares, the second-highest monthly total on record and nearly three times the monthly 2021 average, according to Vanda data. The fund, which is run by Cathie Wood and trades under the ticker ARKK, is heavily invested in buzzy companies, some of which struggle to turn a profit.

Meanwhile, demand for bullish call options that are “out-of-the-money,” or far from currently paying out, recently hit the highest level since early 2021, Vanda estimates. Bets on meme stocks and tech shares such as Nvidia Corp. , Twitter Inc., Tesla Inc. and Advanced Micro Devices Inc. are particularly popular.
Goldman analysts said in a note to clients in late March that a bump in retail-trading activity helps explain the gains in stocks like nonprofitable technology companies that are typically sensitive to interest-rate increases.

“Sentiment from the most speculative part of the retail community is becoming increasingly optimistic,” Vanda analysts wrote in an April research note.

The activity is in contrast to much of the quarter, when trading by the group subsided. Estimates from Bloomberg Intelligence show that individual investors accounted for about 17% of U.S. stock-trading activity in the first quarter, the lowest level since 2019, before the pandemic triggered a rush of activity.

  • Bets on Corporate Resiliency
First-quarter earnings season will kick off in earnest this week, and many investors expect another period of strong results.
Earnings among companies in the S&P 500 are expected to have increased 4.5% from the year before. Although that result would pale in comparison with the blockbuster growth of recent periods, it is generally in line with the median growth rate since the first quarter of 2012.

Analysts point to one particular bright spot: Many think U.S. companies will be able to navigate soaring inflation by raising prices. The estimated net profit margin for S&P 500 companies is 12.1% for the first quarter, higher than the five-year average of 11.2%, FactSet data show.

“At the moment, there is this relative sweet spot for equities, whereby they feel comfortable with rising inflation—they think that U.S. companies retain pricing power and that it won’t result in margin compression,” said Huw Roberts, head of analytics at Quant Insight.

  • A Technicals Snapback
There are technical factors driving the rebound, too. Many institutional investors appear to have aggressively dumped stocks to start the year, traders and analysts said.

“During the invasion…it felt like [the selloff] was all driven by de-risking,” said Glenn Koh, head of global equities trading at Bank of America.

For example, Bank of America analysts estimate that bearish stock positions among commodity trading advisers, computer-driven funds that try to make money betting on market trends and patterns, surged in March before pulling back on those bets. Recently, Mr. Koh said, some investors might have had to unwind bearish positions, helping drive a rally.

“It felt like it was more short covering,” Mr. Koh said.

FT : Italy lines up gas deal with Algeria in effort to cut dependence on Russia

Italy lines up gas deal with Algeria in effort to cut dependence on Russia
Mario Draghi aims to sign agreement to boost volumes on visit next week

Italian prime minister Mario Draghi will visit Algeria on Monday to sign a new gas supply deal, as Rome strives to reduce its dependence on Russian fuel following the invasion of Ukraine.

It is the latest in a series of moves made by European countries to secure alternative fuel sources as they seek to cut Russia off from the global economy in punishment for the war.

Italy buys about 30bn cubic meters of gas a year from Russia, 40 per cent of its total consumption. Algeria is Italy’s second-largest supplier, providing 21bn cubic metres a year — about 31 per cent of annual consumption.

An Italian government official said the Trans-Mediterranean pipeline — which carries gas from Algeria to Italy via Tunisia — is only operating at two-thirds of its capacity of 33bn cubic meters per year, giving Italy the scope to rapidly step up its purchases from Algeria.

“This can have an immediate impact — you don’t need to build more pipelines or other new infrastructure,” the official said.

A third of the Russian gas supplied to Italy each year could be replaced by quickly increasing imports from Algeria, the Italian official said.

Since the invasion of Ukraine, Draghi has stressed the need for Italy to urgently diversify its energy supplies, especially given the risk that Russia could retaliate against EU sanctions by shutting off the flow of gas to Europe.

“Diversification of our energy supplies is something to aim for regardless of what happens with Russian gas supplies in the immediate future,” Draghi told lawmakers last month. “We cannot be so dependent on the decisions of just one country, as this jeopardises our freedom, not just our prosperity.”

Last week, Lithuania became the first EU country to cut off Russian gas supplies completely, with the two other Baltic states also temporarily stopping its flow.

Recommended
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Germany has said it aims to be “virtually independent” from Russian oil by the end of this year and from gas by mid-2024. Berlin recently signed a long-term agreement with Qatar for the supply of liquefied natural gas (LNG), which Robert Habeck, economy minister, said would reduce its reliance on Russian supplies.

EU leaders last month decided to bulk buy natural gas jointly from other sources.

The Italian delegation led by Draghi on Monday will include foreign minister Luigi Di Maio and Roberto Cingolani, the minister for ecological transition, as well as the head of Eni, the Italian energy company, which has strong ties with Algerian energy company Sonatrach.

The Italian official said the deal would not only pave the way for increased purchases of Algerian gas but would also include an agreement on greater Italian investment in renewable energy in the north African country, which could help it cut down its own gas consumption, freeing up more for export.

Di Maio has visited several energy-producing nations in recent weeks and Cingolani has been working on how to speed up the development of renewable energy sources.

FT : Contrarian fund manager cautions against writing off Russia assets

Contrarian fund manager cautions against writing off Russia assets
Kopernik’s Dave Iben says Gazprom and Sberbank ‘still have a lot of value’

In the weeks after the invasion of Ukraine, most big asset managers rushed to write the value of their Russian holdings down to zero. With the stock market closed and sanctions imposed, investors were told to assume that billions of dollars in Russian assets had become essentially worthless.

Dave Iben, chief investment officer of Kopernik Global Investors, calls that caution a “marketing ploy” that understates Russia’s potential and penalises current investors in hope of juicing future returns.

Kopernik’s $7bn global value-oriented funds had roughly 14 per cent of their holdings in Russian companies before the invasion. Iben’s team has cut their valuation of stocks such as Gazprom, Sberbank and Polyus by an average of 70 per cent, rather than all the way to zero.

“Marking them to zero is unfair because it is likely these companies still have a lot of value,” he said. “If you mark it to zero, new people coming in to a fund get a bargain. Anybody leaving the fund is getting zero for something that probably is worth something,” he said.

His view stands in contrast to the practice at most big asset managers, who have opted to give investors all the potential bad news up front. Morgan Stanley, Goldman Sachs, BlackRock and Franklin Templeton all marked Gazprom shares down from above $4 to less than 10 cents, according to data from FactSet on the pricing of exchange traded funds. Sberbank shares have similarly been written down from $3.60 to no more than 2 cents.

Iben admitted there is a “real possibility” that sanctions or other government action will make it impossible for his investors to realise the value of their Russian equities. But he added: “It’s also highly possible that they’re not permanently lost.”

If the expected value was positive, it was not fair to price it below the expected price, he said. “Maybe it's a good marketing ploy, but it doesn’t seem fair to us,” he said.

Kopernik calculated that the invasion wiped about $700mn off the value of its Russian assets but funds have more than made up the losses through gains on its energy holdings elsewhere.

Challenging the crowd comes naturally to Iben and Kopernik. The fund is named after the Renaissance Polish astronomer better known as Copernicus, who punctured the orthodoxy that the sun orbited the earth.

Florida-based Kopernik looks for companies around the world that it believes are undervalued even after discounts are applied for political and economic instability. Before the invasion of Ukraine, its models applied a 50 per cent discount to Russian corporates and that may increase depending on the conditions under which the country rejoins the global financial system.

Roughly 30 per cent of the funds’ holdings are Canadian and just 4 per cent are American, Iben said. By comparison, its benchmark, MSCI All-World, is 61 per cent US.

“Everybody likes the really good franchises that have oligopolies and sell things people need. You pay a fortune for that in the US, but if you’re willing to own companies in Korea and Brazil, and of course Russia, China, Japan, places like that, you can get these really good companies for bargains.”

While many investors are pressing companies to pull out of Russia on moral grounds, Iben was as impatient with that argument as he is with calls to shun fossil fuels to speed the energy transition.

“Selling Gazprom would not hurt Russia in any way,” he said. “We all want less pollution and we all want peace in the world. Selling stocks mindlessly down 90 per cent is not a way to achieve those goals.”

FT : London house prices rise at fastest rate since 2016

London house prices rise at fastest rate since 2016
Property market bounces back as people return to the city for work and entertainment

The rise in London property prices has accelerated, driven by a shortage of supply and increased demand as people flocked back to offices and the social attractions of the capital.

The Covid pandemic has led to a housing boom across the country, but in London demand has been relatively muted due to reduced migration as home buyers looked for more space outside the city.

However, in the first quarter of this year, London house prices grew at an annual rate of 7.4 per cent, up from 4.8 per cent in the same period last year and the fastest rate since 2016, according to the mortgage provider Nationwide.

While the rate was still below the national average of 12.6 per cent, similar upward trends were reported in house prices compiled by Academetrics, Knight Frank and Halifax.


“The past two years have resulted in a loss of love for city centres such as London,” said Emma Cox, managing director of real estate at Shawbrook Bank.

“But as we see the city centre open their doors to businesses and hospitality . . . [these] hotspots once again are fast becoming an attractive place to be,” she added.

“Over the last few months, London has come back on the radar of buyers as the economy reopened,” said Tom Bill, head of UK residential research at Knight Frank.

The trend is echoed by other economic indicators. The average asking price of a London property up by an annual rate of more than 6 per cent, a reversal of the contraction that began in early 2021, according to the property website Rightmove.

The proportion of surveyors who expect house prices to rise in the capital was its highest since 2014, and greater than the national average for the first time since the crisis began, according to the Royal Institution of Chartered Surveyors, a professional body.


Rising demand has bumped against a shortage of London properties for sale. “The acute supply and demand imbalance across London has driven pricing and competitive bidding on properties,” said Angus Dixon, director of private clients at the property consultants INHOUS.

Activity is strongest among the most expensive properties where “buyers are less exposed to increased costs of living and costs of debt”, said Alec Harragin, a director at the London surveyor company Savills.

While John King, surveyor at Andrew Scott Robertson, confirmed that demand for houses in the £1mn-£2mn range “was the most active sector”.

Despite the pick-up, the London property market has been underperforming the national average since 2016 and still lags behind other regions in the UK.

A lack of foreign buyers still weighs on the capital’s housing market, according to Bill from Knight Frank, despite some improvements, adding that he expected it to underperform the national average in the months ahead.

Many experts warned that affordability was a longer lasting problem in the capital. Like the rest of the country, “concerns about interest rates, the economy and the war in Ukraine will be factors that could well dampen the market”, said Allan Fuller, of Allan Fuller Estate Agents in London.

FT : London house prices rise at fastest rate since 2016

London house prices rise at fastest rate since 2016
Property market bounces back as people return to the city for work and entertainment

The rise in London property prices has accelerated, driven by a shortage of supply and increased demand as people flocked back to offices and the social attractions of the capital.

The Covid pandemic has led to a housing boom across the country, but in London demand has been relatively muted due to reduced migration as home buyers looked for more space outside the city.

However, in the first quarter of this year, London house prices grew at an annual rate of 7.4 per cent, up from 4.8 per cent in the same period last year and the fastest rate since 2016, according to the mortgage provider Nationwide.

While the rate was still below the national average of 12.6 per cent, similar upward trends were reported in house prices compiled by Academetrics, Knight Frank and Halifax.


“The past two years have resulted in a loss of love for city centres such as London,” said Emma Cox, managing director of real estate at Shawbrook Bank.

“But as we see the city centre open their doors to businesses and hospitality . . . [these] hotspots once again are fast becoming an attractive place to be,” she added.

“Over the last few months, London has come back on the radar of buyers as the economy reopened,” said Tom Bill, head of UK residential research at Knight Frank.

The trend is echoed by other economic indicators. The average asking price of a London property up by an annual rate of more than 6 per cent, a reversal of the contraction that began in early 2021, according to the property website Rightmove.

The proportion of surveyors who expect house prices to rise in the capital was its highest since 2014, and greater than the national average for the first time since the crisis began, according to the Royal Institution of Chartered Surveyors, a professional body.


Rising demand has bumped against a shortage of London properties for sale. “The acute supply and demand imbalance across London has driven pricing and competitive bidding on properties,” said Angus Dixon, director of private clients at the property consultants INHOUS.

Activity is strongest among the most expensive properties where “buyers are less exposed to increased costs of living and costs of debt”, said Alec Harragin, a director at the London surveyor company Savills.

While John King, surveyor at Andrew Scott Robertson, confirmed that demand for houses in the £1mn-£2mn range “was the most active sector”.

Despite the pick-up, the London property market has been underperforming the national average since 2016 and still lags behind other regions in the UK.

A lack of foreign buyers still weighs on the capital’s housing market, according to Bill from Knight Frank, despite some improvements, adding that he expected it to underperform the national average in the months ahead.

Many experts warned that affordability was a longer lasting problem in the capital. Like the rest of the country, “concerns about interest rates, the economy and the war in Ukraine will be factors that could well dampen the market”, said Allan Fuller, of Allan Fuller Estate Agents in London.

TechCrunch : Inside Mercedes’ plan to deliver hands-free driving to the masses

Inside Mercedes’ plan to deliver hands-free driving to the masses
When it arrives in 2023, it will be limited.
Abigail Bassett@abigailbassett / 4:00 PM GMT+2•April 9, 2022
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Image Credits: Mercedes-Benz
I’m sitting in the passenger seat of a special Mercedes Benz S-Class on a blindingly bright California spring day, casually watching an autonomous delivery robot roll through a crosswalk on its way to deliver someone’s takeout meal in Santa Monica. The test driver next to me chuckles as we’re about to merge onto the highway for a demonstration of Mercedes’ Drive Pilot system, a conditional Level 3 automated driving system that consumers may be able to order by the end of this year.
Mercedes is aiming to be the first automaker to bring legal Level 3 automated driving off the test track to the masses in its full-size, luxury S-Class vehicles. The question is whether it should, especially considering the Everest-sized challenges that lay ahead — even if the economic opportunities include cornering a piece of the estimated $220.4 billion autonomous driving market.
The stakes are high, too. The Mercedes Level 3 system has to handle multiple tasks all at once, including recording and exchanging vast amounts of data and giving ample time and warnings for the human driver to take back control when something goes sideways. There are the legal risks that Mercedes has pledged it will take on when the system is engaged, and there are even geopolitical ones: Mercedes uses the Russian GLONASS system for its global positioning information in Germany, for instance.

And yet, Mercedes is plowing ahead despite the risks, because the opportunity is just too vast to ignore. While other manufacturers like Tesla claim to have fully autonomous driving systems, Mercedes is the first to pass the required legal hurdles in the U.S. and in Germany to offer the conditional system to consumers. While the timeline is a bit fuzzy because Mercedes is still working through those legal requirements, the system could be in consumers’ hands and their driveways as soon as mid-2023.
The technology

Image Credits: Abigail Bassett

In the trunk of one of the four development vehicles parked in the garage of the Proper Hotel in Santa Monica, sits a huge chassis of computer components. When we arrive, the trunk is open to let the components breathe, according to the test driver. There’s no room for your coveted golf bags or luggage here.
These components register, record, manage and upload as much as 2.87 GB of data per minute when the car is in regular operation. If an incident occurs while the vehicle is underway, say, for example, someone cuts off the development vehicle in traffic and forces a panic stop, the system takes in as much as 33.73 gigabytes of data so that engineers can take a closer look at what happened and improve the system.

Customers who own the S-Class vehicles equipped with the Drive Pilot system will not have to contend with computer components hogging up the trunk space. Instead, the vehicle will still b they will still be present in the cars so that the Level 3 system will work and be able to process and store large amounts of data. Some of that data will be kept on board, while much of it will be uploaded to a secure cloud system.
That data all comes from a variety of sensors around the vehicle, a few of which will be new to future S-Class vehicles that have been ordered with the new Drive Pilot system. While the company wouldn’t disclose specific costs of the system, representatives did say that it will cost as much as their top-of-the-line Burmester audio system. That audio system on the S-Class is a $6,700 option alone, yet requires the addition of a separate $3,800 package, bringing the rough total to around $10,500. That’s getting close to the cost of Tesla’s “Full-Self Driving” system, which currently is a $12,000 option.
The conditional Level 3 Drive Pilot system builds on the hardware and software used by Mercedes’ Level 2 ADAS system known as Distronic. It adds a handful of additional advanced sensors as well as software to support the features. Key hardware systems that will be added to future S-Class vehicles configured with the Drive Pilot upgrade include an advanced LiDAR system developed by Valeo SA, a wetness sensor in the wheel well to determine moisture on the road, rear-facing cameras and microphones to detect emergency vehicles, and a special antenna array located at the rear of the sunroof to help with precise GPS location.
The Valeo LiDAR system is more advanced than what is on the current generation of S-Class, in that it scans at a rate of 25 times per second at a range of 200 meters (approximately 650-plus feet). This is the second generation of the system, according to the Valeo spokesperson at the event. The system sends out lasers which then create points in space to help the AI classify the type of object in and around the path of the vehicle, whether its human, animal, vehicle, tree, or building. From there, the AI uses data from the other sensors around the car, to determine more than 400 different projected paths for both itself and the potential paths for the vehicles, pedestrians, and motorcyclists around it, and choose the safest route through.
The wetness sensor is a small round audio sensor positioned at the rear of the front driver wheel well and it determines how damp the road surface is. When the road is wet, droplets are thrown up against it creating an audible patter. When the system “hears” that patter, Drive Pilot will be disabled and the human in the driver seat will need to take over.
The antenna array on the roof of the S-Class uses a variety of different satellites to pinpoint the exact location of the vehicle within a few centimeters. It is precise enough to recognize which lane the vehicle is in on the highway. Mercedes says it relies on Galileo, and GPS in the U.S., and the Russian GLONASS system for this positioning information in Germany. These precise GPS points are integrated into an HD map which then helps the system navigate the real world.
These sensors are added to those already present in the Distronic system, which includes interior cameras to ensure that the driver is paying attention, as well as radar, ultrasonic, and 3D cameras outside. The added hardware is there to ensure that each system has redundancy and provides a more accurate view of both the interior and exterior of the vehicle as the system navigates the environment and, unlike the Tesla system, ensures that the driver is actually paying attention and not sleeping or watching a movie while operating the system.
There ‘s a reason for all of this precise and specialized equipment. Mercedes-Benz has taken on the responsibility, including the liability, for the safe operation of the system. The legal ramifications could be immense should something go wrong and a crash occur while the system is in use by a consumer.
New rules for Level 3 operation
Mercedes has used vehicles just like this one to test its Drive Pilot on more than 50,000 miles of roads in California and Nevada, where the company currently has conditional licenses to run the system.
Once the legal hurdles are passed, which Mercedes says it expects to happen by the end of the year, the systems will be available on properly equipped S-Class vehicles, when driven in specific conditions. However, it will still be limited.
The system will only be available in states where it’s legal (California, Nevada, and Florida currently). Cross the border into say, Arizona or Utah with an S-Class equipped with Drive Pilot, and the system will not be available. It’s geo-fenced.
In addition to the state location, the system won’t engage unless the vehicle is on clearly marked, divided highways, freeways, or interstates driving in a traveling lane, not in an exit lane. While out on our drive, the test driver moved over to take an exit, and the system turned off and requested that he take over as soon as he indicated that he was changing lanes.
And even when all of these requirements are met, the system is only available up to speeds of 40 mph (60 kmh).
The ride

When DRIVE PILOT is activated, the controls in the steering wheel glow turquoise. Image: Mercedes-Benz

Inside, the vehicle looks almost identical to an S-Class with one key difference: On the steering wheel sits a pair of buttons that fall directly under the driver’s thumbs. These buttons, engraved with the image of the front of a car with the letter ‘A’ over the top, are used to initiate the Level 3 system when the external conditions are met. Lighting around the buttons and on the steering column turns white when the system is available, and green-blue when it is engaged.
Our short ride took us down the 10 freeway in Los Angeles towards downtown LA and back to Santa Monica. Traffic was heavy stop-and-go, and there were plenty of opportunities for the system to fail. Within the first few minutes on the freeway, we encountered various road obstacles like plastic bags, cardboard boxes and more than one oblivious Angeleno making panic stops and randomly cutting into our lane of travel.
In the short periods where the system was available when all conditions were met, its operating appeared to be seamless. The handover was smooth and almost unnoticeable. The driver engaged the system, took his hands and feet off the controls, and let the car drive itself, all while keeping his attention on the road ahead.
The system uses maximum following distance when it’s engaged, so the gap was quite large between the S-class and the car ahead. Surprisingly, and sadly, no one decided to jump into that gap while the system was engaged, so we didn’t get to experience what might happen if a human made a sudden lane change in front of the car while operating the conditional Level 3 system. When the system lost the needed information, say when the lane markers (known sometimes as oreos), became faint, an audible tone would sound, and a message would appear for the driver to take over. At that point, the test driver would take control of the vehicle.
All in, the system was only engaged for maybe 10 minutes in total over our 30-minute ride. Each engagement was relatively short as traffic sped up to over 40 mph, or the system lost the required information to manage the driving. The very short ride along didn’t give us enough time to evaluate the system, but it did offer a glimpse of just how Level 3 autonomy may work in the very near future. The real question, however, is how the system will behave in customers’ hands, and whether or not, even the very well-off, will purchase the technology.