WSJ : These Investors Are Riding the Bitcoin Wave to New Highs

These Investors Are Riding the Bitcoin Wave to New Highs
As the digital currency approaches $20,000, new buyers benefit from their crypto passion

Bitcoin is surging to records, a rally driven in part by the emergence of new investors from passionate individuals to return-starved hedge funds looking to profit from the digital currency’s momentum.

The cryptocurrency rose as high as $19,834.93 on Monday, according to CoinDesk, topping the previous intraday record of $19,783.21 set on Dec. 18, 2017. After trading as low as $3,867 in March, bitcoin has nearly tripled in 2020 and is up 90% since early September. It settled Friday at $18,832.76.

The move is the latest resurrection for the upstart digital currency, which is known for wild bouts of speculative fervor and equally violent crashes.

So far this year, there have been more than 11.9 million transfers of less than $1,000 of bitcoin into personal wallets, according to Chainanalysis, a software company that tracks cryptocurrency transactions. That is up from about 9.1 million in 2017 and suggests more investors are taking part in this year’s rally.

Here are some of bitcoin’s most recent winners:

Trey Harnden, 25, software salesman, Seattle
Trey Harnden says he started taking bitcoin more seriously after watching the price rally back in 2017. Since then, he has invested about a third of his portfolio, more than $3,000, in the digital currency and says he plans to buy more.

His bitcoin investment is up more than 190% this year, he says, while returns on his 401(k) and Roth IRA are nearly flat. The Seattle resident, who first heard about bitcoin from his high school English teacher, says he isn’t buying the digital currency to make a quick buck.

The endorsement of hedge-fund managers such as Paul Tudor Jones has only reaffirmed his conviction. “I don’t think the Paul Tudor Joneses of the world are going to move away from bitcoin,” he said. “I am in it for the long run.”

Mr. Jones told CNBC in May that he put about 1% to 2% of his assets in bitcoin, calling it a “great speculation” that he believes will emerge as a new asset class. Other prominent investors including Stanley Druckenmiller, founder of Duquesne Capital Management, and mutual fund veteran Bill Miller, now chief investment officer of Miller Value Partners, have also said they are betting big on bitcoin.

Adam Nunn, 30, insurance underwriter, Richmond, Va.
Adam Nunn’s investing focus used to be value stocks. Now it is bitcoin.

The Army veteran says he initially disregarded the digital currency. But after hearing more about it from investors he followed online, he started to buy bitcoin consistently at the start of the year. Now, his retirement portfolio is made up of just 10% stocks and 90% bitcoin.

So far that bitcoin investment is up 120%, he says, and he has added to his position over the past month, buying about half of one bitcoin for around $9,000.

“I haven’t approached it like this speculative investment. I think of it more for the long term,” he said. “We’re just at the starting gate right now.”

Before bitcoin, Mr. Nunn had invested in stocks such as Ulta Beauty Inc. and Micron Technologies. Now, the small percentage of Mr. Nunn’s portfolio dedicated to stocks is used mostly to trade put options, which let the owner sell a share at an agreed-upon price. All the extra proceeds from successful options bets are being funneled back into bitcoin purchases, he adds.

Hugo Rios, 19, community college student, Bayonne, N.J.
Hugo Rios says he bought $100 worth of bitcoin at the peak in 2017, not knowing much about the digital currency. He sold it soon after at a loss of more than 50%. Now Mr. Rios has returned to the market with a plan.

Three months ago, the college student started buying more than $600 in shares of the Grayscale Bitcoin Trust, along with about $300 of shares in Riot Blockchain Inc., a company that focuses on “mining” bitcoin, or running software that verifies transactions to win newly minted bitcoins. Those investments are up more than 22% and 51%, respectively, since then.

Grayscale Investments LLC is a private asset manager that offers nine over-the-counter trust funds focused on bitcoin and cryptocurrencies and another more diversified fund. Those funds, along with popular apps like Robinhood that allow investors to buy and sell bitcoin, have made the market more accessible to new players.


Mr. Rios says he has consistently been buying shares of Grayscale when the price dips, a strategy he expects to continue while buying actual bitcoin as well.

“Even though I also invest in stocks, bitcoin is the only thing I’m going long on,” he said.

Marcel Rodgers, 28, police officer, Atlanta
Marcel Rodgers says he bought $100 worth of bitcoin for the first time in May using Square Inc.’s Cash App, an investment that has more than doubled since then. He first heard about the cryptocurrency years ago when hip-hop musician 50 Cent was accepting payment for his 2014 album ‘Animal Ambition’ in bitcoin.

Square’s Cash App has allowed customers to buy and sell bitcoin since 2018. In the third quarter, the app’s bitcoin revenue soared to $1.6 billion from $148 million a year earlier.

“The trick about bitcoin is that the cost of bitcoin is pretty much directly correlated to how many people accept it as a form of currency,” Mr. Rodgers said. “So when people accept it as a form of currency, that’s when the money starts moving. If [Jeff] Bezos put a bitcoin button on Amazon and people were to start using it when buying on Amazon, that would drive the price of bitcoin up.”

Bitcoin has been slow to catch on as a form of payment. A number of companies including Dell Inc. Microsoft Corp. and Expedia Group Inc. at one point experimented with bitcoin for payments but have since stopped.

Vera Krahmal, 41, university professor and bitcoin fund manager, London, U.K.
Vera Krahmal founded Times Three, a hedge fund that invests in bitcoin and other cryptocurrencies, with her brother Andrey Krahmal in January. She currently manages about $10 million, raised from high net worth individuals and family offices. So far, their bitcoin investments have a return of 173% this year and the fund as a whole has risen 215%.

The cryptocurrency’s volatility is a positive because it creates opportunities for trading, Ms. Krahmal said. The fund most recently bought bitcoin when its price was around $18,600. It has since risen about 1.3%.

“We’re really betting on adoption. Bitcoin has a lot of attraction as a store of value and for diversification for portfolios,” she said. “We also believe that it can play an important role in protecting investments against long-term rising inflationary risks, such as loose monetary policy from central banks.”

Barrons : The Renminbi Will Replace the U.S. Dollar as the World’s Reserve Curre

The Renminbi Will Replace the U.S. Dollar as the World’s Reserve Currency, Gavekal’s CEO Says

Louis-VIncent Gave
Chief Executive, Gavekal
Hong Kong
Louis-Vincent Gave, CEO of Gavekal, is a go-to source for institutional investors trying to interpret global macro risks such as the financial implications of China’s rise. Gave, 46, was born in Paris, educated at Duke University, and based in Hong Kong before the pandemic. Gavekal provides independent research and manages $1.7 billion in Asian fixed-income and equities strategies, primarily for European institutions.
Barron’s: What investment trends will be most prominent after the pandemic?
Louis-Vincent Gave: If I ask what the most important development was in 2001, most people would say it was 9/11. With the benefit of hindsight, it was China joining the World Trade Organization, which changed the world for the following 20 years. If I ask about 2007, you’d say it was the start of the subprime crisis. With the benefit of hindsight, it was the launch of the smartphone.

With hindsight, what will people say about 2020?
So far, the Covid response in the U.S. has been a $12,800 increase in debt per capita; in the United Kingdom, it’s $7,000, and in Germany and France, $5,300. In China, it’s $1,200. The Western world responded with massive increases in budget deficits, which could constrain future policy options, while Asia, especially China, hasn’t.
Western policy makers have no choice but to embrace yield-curve controls; they can’t let interest rates go back up. You had Japan and Europe in the yield-curve control gang. The big change now is that the U.S. has joined them. Once the European Central Bank went down this [path], the euro tanked. Once we are on the other side of Covid-19 and it becomes clear the U.S. has no other choice, the dollar will collapse.
What will be the best investment opportunity post-Covid?

Investing in Asian fixed-income markets, in local currencies. Governments there have broadly been more efficient at dealing with Covid-19. Central-bank balance sheets and government spending haven’t grown out of control. Just as water flows downhill, capital is attracted to positive real [inflation adjusted] rates. Today, these are mostly found in Asia.
What is the most pressing public policy issue the U.S. will face?
How to fund runaway debt. For now, everyone’s answer is through modern monetary theory [which posits that governments that control their own currency can spend freely]. Once the debt is monetized by the central bank, there are no historical examples, outside of Japan, where that doesn’t lead to massive and very fast inflation, massive currency debasement, or both.

What does that mean for the dollar’s reserve-currency status?

I look at currencies like computer operating systems. Most Gavekal clients use Microsoft because everyone else uses it. The dollar is Microsoft. Go back to 2005-06, when Apple was trading at nine times earnings and viewed as making a niche product. In 2007, Apple said it would create a parallel system and went straight to the consumer, who took [Apple] not because it was cheaper but because it was easier.
So the renminbi is Apple.
We are seeing the rollout of Chinese fintech solutions across Southeast Asia, the Middle East, and Africa through WePay and Alipay. Then, tack on the digital renminbi and look forward to a future where an Indonesian businessman goes to Singapore and pays for his taxi with Alipay and the transaction isn’t settled through Swift or the dollar but through digital renminbi. The pushback I get is that no one is going to trust the digital RMB—or, who wants the Chinese government to know how and where you spend your money? That’s a big roadblock, but if you told me 10 years ago people would put Alexa in their homes voluntarily….
Aren’t you worried about China’s debt or social instability?

For the past 10 years, I’ve been told that Chinese debt was about to implode and there would be riots in the street. In the past 10 years, we have seen riots in France and the U.S—and in Hong Kong—but China has been remarkably stable. We have been told that the Chinese government would have no choice but to nationalize big parts of the economy and the renminbi would collapse. That scenario has unfolded in Europe and the U.S. [The U.S.] has increased debt by $4.2 trillion, three-quarters of which was funded by the Fed. Meanwhile, the renminbi has been the strongest currency year to date and over 10 years.
What is a key concern for Asia-based investors?
The decoupling of the U.S. and China is a massive change, and Taiwan is an important fault line. Taiwan wasn’t too much of an issue when the U.S. and China got along and all China produced were cheap plastic toys and bicycles. But this year, the market cap of the global semiconductor industry is above that of the energy sector. Taiwan Semiconductor Manufacturing [ticker: TSM] said it is already manufacturing a generation of chips that Intel [INTC] has said it won’t be able to fabricate until as late as 2023. If you think semiconductors matter more than energy, Taiwan Semi is one of the most important companies in the world.
What are the longer-term ramifications of President Xi’s crackdown in Hong Kong?

The core thesis is that Xi is a transformational president—the first imperialist president since the Ming Dynasty. If you are Xi and you hear your companies won’t have access [to U.S. markets], Hong Kong sounds like a great way to internationalize the renminbi and do a digital renminbi. Most Westerners saw the intervention as the death of Hong Kong, but China guaranteed Hong Kong would be China’s capital markets for the foreseeable future. [Xi] has no choice but to make it a success, which is why the Hong Kong dollar is stuck at the high end of its [trading] band.
Chinese internet stocks have been hit by increased regulatory scrutiny, including the scuttling of the oversubscribed planned public offering of Ant Group. Does this mark a turning point for these companies?
Since the [suspension] of the Ant IPO and new antitrust [guidelines], we also had a state-owned coal company default on one billion renminbi, or $150 million. One big issue for China has been a trade surplus of $60 billion and enormous inflows into China tech and bonds driving the renminbi higher.
In the Western world, we would raise rates [to deal with potential bubbles]. In China, they have regulatory weapons. They managed to cool the tech stocks in China and inflows into Chinese bonds. They got their message through.

You have been living in Vancouver during the pandemic. What is the one place on Earth that you’d most like to visit when the pandemic ends?
I have to get back to my Hong Kong and Beijing offices. I miss my colleagues and my friends there.
Thank you.

Barrons : Why Bitcoin Is the Best Investment Opportunity Post-Pandemic—and What

Why Bitcoin Is the Best Investment Opportunity Post-Pandemic—and What Will Drive the Price Higher

NIALL FERGUSON
Senior Fellow, Hoover Institution,
Stanford University
Palo Alto, Calif.
Niall Ferguson, 56, is one of the world’s leading historians, a prolific author, and creator of the TV series The Ascent of Money, which won an International Emmy award. His new book, DOOM: The Politics of Catastrophe, will be published next spring. He is also working on the second volume of his biography of Henry Kissinger. Born in Scotland, Ferguson is now a senior fellow at the Hoover Institution at Stanford University, and founder of Greenmantle, a macroeconomic and geopolitical advisory firm.
Barron’s: What will be the best investment opportunity coming out of the pandemic?
Niall Ferguson: I’m going to go with Bitcoin. It has had a stellar year, up 165% year to date. [It’s now above $19,000.] If, at the beginning of the year, you had said, “The pandemic is coming. It’s going to be very disruptive. Should I choose gold or Bitcoin?” you would have been right to choose Bitcoin because gold is only up 21%. So Bitcoin returns have been an order of magnitude higher.

Why has that happened?
In a pandemic, financial history can be accelerated. We’ve seen that in just the same way that the use of coins as money was accelerated by the Black Death. Payments in kind were yielding to a cash economy in Europe, and this was accelerated in the 1340s. The acceptance of Bitcoin as a digital asset, a quasi-digital gold, has been accelerated by this pandemic. Almost every month, some major figure in the mainstream investment world has said, “OK, now I’ll take Bitcoin seriously.” This process of institutional adoption has further to run.
Many remain cautious or outright bearish on Bitcoin.
You could argue, if you were a skeptic like my old friend Nouriel Roubini, that this is just another bubble. But the adoption of a new financial technology tends to be quite volatile, and each time Bitcoin rallies and then folds, it folds to a higher level than the time before. So you could probably take a little bit of downside risk, but hold Bitcoin for a year to five years and feel pretty good about it.

What might drive Bitcoin higher?
In a new edition of my book, The Ascent of Money, two years ago, I observed that if all the millionaires in the world collectively decided to hold 0.2% of their assets in Bitcoin, the Bitcoin price would be $15,000, which it reached this year. If it was 1%, then the price would be $75,000 per Bitcoin. So, as people adopt this as a new form of asset that has a respectable place in a diversified portfolio, there is still quite a bit of upside.
There are about 18.5 million Bitcoins outstanding, and the total amount is capped at 21 million. That values Bitcoin at $350 billion now, versus about $10 trillion for all the world’s gold. What makes Bitcoin distinctive?

Bitcoin is the only digital asset or token that has scarcity built in. Everything in the internet is defined by a superabundance; Bitcoin is the exception.

PayPal Holdings [ticker: PYPL] and others are allowing people to use Bitcoin to buy stuff. Will that help?
I don’t think Bitcoin is for buying things at Starbucks. It’s a peculiar form of asset, and isn’t highly correlated to other assets. A friend told me to think of Bitcoin as an option on digital gold. I like that formulation, because it has behaved kind of like that. So, I don’t think PayPal is the cure. It is more that, if every millionaire is adding a little bit of Bitcoin, that has a lot of power to bid the price up.
How hard is it to buy and hold Bitcoin?
It’s getting easier. Coinbase, for instance, has made it very easy to trade cryptocurrencies, but quite expensive each time you transact. That will change over time. That again is typical of an early stage of a financial innovation.

What are some key policy issues the U.S. will face in a post-Covid world?
On foreign policy, China is the big issue. The Biden administration can’t simply turn the clock back to 2016 and revert to the late Obama years when the U.S. essentially acquiesced to China’s rise. That is the main challenge for Biden, whose instincts are not especially hawkish on China. But his foreign-policy team will be telling him to stay tough, because public sentiment has changed.
Also, the pandemic revealed that our bureaucracy generally has become sclerotic. You can blame the poor response to Covid on President Trump if you like, but it wasn’t all his fault. The Centers for Disease Control and Prevention completely screwed up testing; HHS [the U.S. Department of Health and Human Services] was clueless about the nature of the challenge it faced. And state governments, not least New York, did abysmally, too. So, the question I would put to Biden’s team is, if that’s how we fail at the pandemic, what other disasters could we fail at on your watch? It isn’t likely that the next disaster will be another pandemic. History never works that way. So, there is a general problem at both the federal and state level. We have dysfunctional bureaucracies, and they don’t handle crises well. This isn’t peculiar to a pandemic. Look back over the past 20 years to [Hurricane] Katrina or even 9/11.
Will fixing the problem require more money or a different approach?

It is definitely not more money. It is about the incentives within the public sector and the curious ways in which federal agencies grow larger and more bureaucratic. Other countries don’t seem to suffer to the same extent. Germany is better run than the U.S., and Taiwan is far better run than the U.S. We need to recognize that there is something wrong in the state of our government.
What can we learn from Taiwan or South Korea?
If you are a government or a country that has reason to be paranoid, whether you are Taiwan next to the People’s Republic of China or South Korea next to North Korea, you are generally anti-fragile. This is a term from Nassim Taleb [the author of The Black Swan]. You are on the lookout for trouble without necessarily putting all your eggs in one basket of preparedness. The flexibility of the Taiwanese and South Korean response tells you something about the way they are set up, with a sort of built-in insecurity. But if you are the No. 1 superpower, you can get complacent about risks. The challenge for any new administration is to try to get away from highly detailed regulatory solutions to problems, which fill pages and pages of the federal register, and instead have a more responsive, flexible attitude toward the multitude of potential crises that we face.
Where would you most like to go when the pandemic ends?

The pandemic has made big cities hazardous places, and I’ve spent most of this year in a rural backwater. So, the place I’d most want to go is London because two of my children live there and I haven’t seen them since February. Also, because I just love the idea of being in a crowded pub in London, preferably just before an Arsenal game at Emirates [the Arsenal soccer club’s home stadium in London], surrounded by fellow Arsenal fans, having a pint and not worrying when somebody coughs in my face. That’s what I am really looking forward to.

Barrons : Airbnb’s IPO Will Be Hot. Why Its Stock Will Be Worth the Price.

Airbnb’s IPO Will Be Hot. Why Its Stock Will Be Worth the Price.

Airbnb could be one of the hottest initial public offerings of the year.

The company has become synonymous with the home-sharing and rental concept that it pioneered more than a decade ago. And despite competition from online travel operators Booking Holdings (ticker: BKNG) and Expedia Group (EXPE), which runs the Vrbo site, it remains the industry leader.

“It’s the Apple of travel,” says James Cordwell, an Atlantic Equities analyst. “Like Apple, Airbnb’s brand-building approach and design of its app have helped foster a sense of community and connection among users.”

During the pandemic, risk-averse travelers have favored private homes over hotels, and that has enabled Airbnb, which will trade under the ticker ABNB, to rebound more quickly than traditional lodging companies. Airbnb reported an after-tax profit of $219 million in the third quarter, compared with a loss of $576 million in the second quarter.

With its asset-light business model and global presence, the company is poised to benefit from a rebound in travel. While the current quarter is expected to be weak amid a worldwide resurgence of Covid-19, investors are looking toward 2021 and 2022, when the world should normalize with widespread vaccinations.

The proposed market value of Airbnb—around $30 billion at the top of the proposed pricing range of $44 to $50 a share—isn’t cheap based on traditional financial measures like earnings and sales.

But its valuation looks reasonable given the company’s market position, scarcity value, brand power, and global opportunity at a time when investors regularly value exciting growth companies at considerably more than 10 times annual sales.

Its IPO, which is due to price on Wednesday, looks digestible at under $3 billion at the top of the pricing range and assuming an offering of roughly 57 million shares. That’s less than 10% of the 601 million shares outstanding. (Another 40 million shares are linked to deep-in-the-money options and soon-to-vest restricted stock.) All this should prompt strong demand, and Airbnb’s share price could end the week appreciably above $50.

Cordwell has already begun coverage, with an Overweight rating and a price target of $75 a share. He projects about $1 billion of earnings before interest, taxes, depreciation, and amortization, or Ebitda, for 2023, when he sees earnings of 40 cents a share. The IPO should benefit from what Cordwell calls a “scarcity of secular growth stories in online travel.”


Airbnb has 5.6 million listings in 100,000 cities in 220 countries and regions, with more than half of its revenue from outside the U.S. Those listings include 3,500 castles, 2,600 tree houses, and 140 igloos, as well as rooms and houses. In 2017, Airbnb paid $200 million for Luxury Retreats, now Airbnb Luxe, which has rentals for as much as a few thousand dollars a night.

The company skews younger than sites geared toward vacation rentals. Millennials account for the bulk of its business, and its average daily rate is around $130 a night.

Scott Galloway, a New York University marketing professor and tech entrepreneur, has said that Airbnb would be worth over $100 billion by the end of 2022, which would translate into a price of over $150 a share. “If Airbnb trades like a story stock, and it will, we could see Tesla-like multiples of 15 times revenues,” he said on his Prof G podcast last month.

At the top of the pricing range of $50 a share, Airbnb would be valued at around seven times estimated 2021 sales of $4.3 billion. Revenue is expected to total $3.3 billion this year, down 31% from 2019, but rise 30% in 2021 and another 40% to $6 billion in 2022, Cordwell estimates.

The Airbnb valuation is above that of lodging leaders Marriott International (MAR) and Hilton Worldwide Holdings (HLT), which are valued at three to four times estimated 2021 sales, but below that of Booking, whose strength is European hotel bookings and is valued at around eight times estimated 2021 sales.

One knock against Airbnb has been that its free-spending ways resulted in a sizable loss last year despite strong revenue growth. Sales rose 33%, to $4.8 billion, in 2019, but the company lost $674 million as it spent heavily on sales and marketing and building its Chinese business.

When the pandemic hit, the company had to borrow $2 billion at a steep average rate of nearly 10% and give its lenders valuable equity warrants now worth $200 million. Yet this has chastened Airbnb, which is now more focused on profitability.

Another worry has been the company’s relationships with local governments that may have concerns about taxes and the quality of life in residential neighborhoods. These issues, however, appear manageable.

Airbnb is now a leaner, better-managed business. Sales and marketing expenses are down by about $1 billion annualized since the pandemic. After the IPO, it is expected to have about $4 billion in net cash.

Its well-timed IPO could be a hit, forcing investors to decide whether they want to pay up for one of the best travel franchises.

FT : Why private equity groups are rushing into football like never before

Why private equity groups are rushing into football like never before
This week in the business of sport: Sabrina Ionescu on basketball’s gender pay gap, Olympic groups’ financial hedge against Games cancellation, and more.

Nothing better shows how the attitude of the world’s financial power brokers has changed towards football than the latest deal in the sport, writes Kaye Wiggins, the FT’s private equity correspondent in a special dispatch for Scoreboard.

The Bundesliga, German football’s top league, is seeking to sell an up to €300m stake in a new company that will sell its international broadcast rights — though not its more valuable domestic TV deals. 

What’s remarkable is that more than 20 private equity firms have expressed interest in the tender. For the full list of companies circling a Bundesliga investment, read the FT’s exclusive report here.

Many buyout groups involved have little or no record of sports deals, but there are exceptions. 

CVC Capital Partners is spending big on rugby and buying into Italy’s Serie A, having previously owned Formula One and MotoGP

Silver Lake helped the US talent agency Endeavor acquire Ultimate Fighting Championship franchise and last year acquired a stake in City Football Group, the parent company of Manchester City.

But further private equity interest is ramping up, for a few reasons. 

Rival dealmakers are looking enviously at how CVC pioneered a strategy of buying the entire competition, not just the clubs (the latter, as Elliott Management’s rocky ownership of AC Milan shows, can be tough to make money from) and want in. Call it football “FOMO”. 

They’re also under pressure to get money out of the door. Years of low interest rates have led investors — pension funds, sovereign wealth funds, rich family offices — to allocate ever higher sums to private equity in the hope of bigger returns. 

Meanwhile, leagues, hit hard by the coronavirus pandemic, are in need of cash. 

“Football always used to be super self-sufficient,” one private equity dealmaker said. “Now everyone’s under pressure and they need liquidity.” 


That is leading leagues to set up structures that, for the first time, private equity groups see as investable. In the case of Serie A and the Bundesliga, they are creating separate companies that control their media rights. 

This trend has its limits. Traditional buyout groups raise money, while charging hefty management fees, by saying they are good at running companies. That’s not the same as buying a small chunk of a league that will continue to be run by others.

“We’re not paid to take minority stakes,” another dealmaker said. “We can do it by exception [but after a while] our LPs will say, you’re supposed to be control investors.”

FT : FTSE Russell drops eight Chinese companies from indices after Trump order

FTSE Russell drops eight Chinese companies from indices after Trump order
Ban on investment by US citizens triggers index reshuffle

The index provider FTSE Russell said it would remove eight companies named by the US government as having ties to the Chinese military from some of its indices, after Donald Trump banned US investors from holding stakes in the businesses.

FTSE Russell said the companies — which include China Railway Construction Corporation, China Communications Construction Company and Hikvision, a maker of surveillance cameras — would be removed from its FTSE global equity indices and the FTSE China A Inclusion index on December 21.

Mr Trump signed an executive order last month preventing US citizens and companies from buying shares in companies connected to the Chinese military from January 11, just days before Joe Biden is to be inaugurated as the next US president. The order gave current investors in affected companies until November 2021 to sell their shares.

Widely held companies such as China Mobile and China National Offshore Oil Corporation did not appear in the list of companies FTSE Russell said it would remove from its indices.

The benchmark operator said it would remove other companies from its indices if the Office of Foreign Assets Control, the Treasury department body that oversees and enforces US sanctions, published an official list of banned companies.

The removals followed a consultation with index subscribers, FTSE Russell said. It has not yet decided the effect the new US sanctions will have on its fixed income indices.

Other index providers are still evaluating Mr Trump’s executive order and the effect it will have on their benchmarks. MSCI, whose emerging markets indices are particularly widely followed by investors, told the Financial Times it could make a decision on removals from its indices as soon as next week. Nasdaq is also evaluating the issue and could publish its conclusion next week

The eight groups to be removed from FTSE indices ranged in market value from $3bn to $66bn. The list also includes: China National Chemical Engineering Company; satellite manufacturer China Spacesat; the China Nuclear Engineering Corporation; computer server maker Dawning Information Industry Group; and locomotive maker CRRC.

The US has taken a more forceful stance with China this year in areas including securities regulation, human rights abuses and cyber espionage.

Congress this week passed legislation that could prompt a wave of Chinese businesses that trade on American exchanges to delist if they do not comply with US accounting standards. Doing so, would be a violation of Chinese law.

FT : Deadline passes for ByteDance to restructure TikTok

Deadline passes for ByteDance to restructure TikTok
Chinese group remains in talks on short video app’s status in the US

A deadline for ByteDance to restructure TikTok’s operations has passed without a deal, as the Chinese company remains in advanced negotiations about the short video app’s status in the US.

The Committee on Foreign Investment in the US, which is reviewing ByteDance’s ownership of TikTok, had not approved a deal by the deadline on Friday, according to two people briefed on the matter. They said Cfius would not grant an extension, after already delaying the deadline twice in recent weeks.

The people added that Cfius was not expected to take any immediate action against ByteDance, as the parties remained in advanced talks about a deal.

ByteDance declined to comment. The US Treasury department, which chairs Cfius, said the committee was “engaging with ByteDance to complete the divestment and other steps necessary to resolve the national security risks arising from the transaction”.

The developments, which were first reported by Reuters, added to the uncertainty surrounding TikTok, as ByteDance works to secure a deal guaranteeing the popular app’s future in the US.

Under an executive order signed by President Donald Trump, Cfius could force ByteDance to sell TikTok’s US operations if the committee had not signed off on a deal by its deadline.

ByteDance has been working for more than a year to satisfy concerns raised by Cfius, an inter-agency body that reviews transactions with foreign investors on national security concerns. The committee’s investigation centred on ByteDance’s acquisition of the short video app Musical.ly, a deal that spurred the growth of TikTok.

The Trump administration alleges TikTok could share American user data with the Chinese government, a claim ByteDance has denied.

In November ByteDance asked that a court review Mr Trump’s executive order forcing the divestment of TikTok in the US. Separately, a federal judge in Pennsylvania has temporarily blocked commerce department rules that would have effectively banned the app in the US last month.

ByteDance said in a legal filing last month it had proposed restructuring TikTok’s US operations as a new entity wholly owned by Oracle, the Silicon Valley tech group, the retailer Walmart and the Chinese group’s US investors. The details of ByteDance’s most recent proposal could not be learned.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: A dozen top investors, economists, and academics share their insights about a post-Covid world

* Cover story: Barron’s interviewed a dozen top investors, economists, and academics to share their insights about what the world will look like now that Covid-19 vaccines are on the horizon; Among their concerns are runaway debt, China’s ascendance, the impact of climate change, and the government’s ability to deal with future crises. 1) Nestlé chief Mark Schneider has encouraged a shift toward higher-margin products and e-commerce, leaving the company better positioned to adapt to consumer habits changed by the pandemic; 2) Louis-Vincent Gave of Gavekal offers insights into global macro risks such as the financial implications of China’s rise; 3) Economist Stephanie Kelton discusses how the pandemic is creating an opportunity to address structural deficiencies in the way society has organized healthcare, global supply chains, and the distribution of income; 4) Historian Niall Ferguson says Bitcoin is the best investment opportunity in a post-pandemic world; 5) Jens Nordvig of Exante Data talks about how to invest in the recoveries of the world’s hardest-hit economies; 6) Marc Lasry, chairman and chief executive of Avenue Capital Group, says that things will return to normal within two years, but that the recovery will be uneven; 7) Historian Adam Tooze argues that there is a huge disproportion between the scale of the pandemic problem and what we spend to resolve it; 8) Karen Karniol-Tambour, director of investment research at Bridgewater Associates, believes China is the biggest investment opportunity for Americans; 9) Afsaneh Mashayekhi Beschloss, the founder and chief executive of RockCreek, discusses why climate change is a major investment opportunity; 10) Nobel Prize-winning behavioral economist Richard Thaler, a co-founder of Fuller & Thaler, says overconfidence could be investors’ biggest mistake in a post-Covid world.

* Tech Trader: +/- DoorDash: The food-delivery startup’s initial public offering, set for this week, should be a blockbuster, but there are concerns—with coronavirus vaccines set to reach the masses in the coming months, people may order in less as they return to restaurants, so the company’s strong metrics are probably as good as they are going to get.

* Trader: Mark Stoeckle, CEO and portfolio manager at Adams Funds, says some of the big growth names that have lagged during the pandemic now look like smarter bets than “reopening” names such as cruise stocks, and he believes reopening “euphoria” will fade; Positive on GS, BK, FITB, TFC, PACW, CMA, CFR: The incoming Biden administration shouldn’t pose a problem for bank stocks—early Biden appointments are less disruptive than feared, and even if Democrats take the Senate, the chances of a financial industry overhaul are minimal.

* Features: 1) Positive on ABNB: The home-sharing startup could hold one of the hottest initial public offerings of the year—with its asset-light business model and global presence, the company is poised to benefit from a rebound in travel, especially by 2021 and 2022, when the world should normalize from widespread vaccinations; 2) Financial planning package offers a checklist to help people successfully manage their money, and a story about how women—who despite their growing economic clout still aren’t managing their money—can best take control of their financial lives.

* Profile: Lisette Cooper, vice chair of Fiduciary Trust International, has long been troubled by the growth in online child exploitation, and made preventing it a part of her professional work years ago, such that she is now taking an activist investor stand at FB, which she hopes will take steps to end criminal use of the platform.

* Emerging Markets: Mexico “has been through tumult over the past two years, with a leftist president taking power, a calamitous collision with Covid-19, then a rally on vaccine-driven optimism,” but among emerging markets, the country is still a magnet for fixed income, and investors should opt for its bonds over its stocks.

* Commodities: “Gold prices have climbed sharply in 2020, but they are still off more than 10 percent from the record high in August. The moves cap a year rocked by a pandemic that led to economic restrictions and fiscal stimulus measures, feeding the precious metal’s appeal as a haven investment.”

* Streetwise: Market timing is hard, and selecting stocks to sell confounds even the best—Michael Hartnett, chief investment strategist at BAC, says investors should be prepared, since vaccines will bring a mirror image of this past March, when investors reached maximum pessimism.