US Treasury seeks reporting of cryptocurrency transfers

WASHINGTON - The Biden administration's tax enforcement proposal would require that cryptocurrency transfers over $10,000 be reported to the Internal Revenue Service and would more than double the IRS workforce over a decade, the US Treasury said on Thursday.

The plans were part of a Treasury report detailing the Biden Administration's proposal to invest some $80 billion into the US tax agency through 2031 to improve compliance an revenue collections.

"As with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on," the Treasury said in the report, which noted that these assets, are likely to grow in importance over the next decade as a part of business income.

Cryptocurrency assets currently have a market capitalization of about $2 trillion.

The Treasury disclosure blunted a rally in the dollar value of bitcoin on Thursday - to a 6% gain from an earlier 10% rise. The gains came a day after bitcoin fell as much as 30% and number two digital currency ether fell 45%.

The Treasury's report said the proposed IRS investments would add a total of more than 86,000 full-time equivalent employees to the agency's ranks over the next decade, reversing a long-term decline and more than doubling the 2019 IRS workforce of 73,554 full-time equivalent positions.

It said the investment plan would allow for the hiring of least 5,000 additional enforcement personnel over the decade.

SHRINK THE GAP

The Treasury said its proposal would shrink by about 10% the "tax gap" that it estimates at about $7 trillion or 3% of US economic output over the next decade, raising some $700 billion in a "conservative" estimate.

The tax gap - the difference between taxes legally owed and those collected by the IRS - was estimated at $584 billion in 2019, according to the policy paper.

By the second decade, it estimated that the investments would yield $1.6 trillion in additional revenue, as revenue agents hired in prior years gain experience in dealing with highly complex tax returns filed by wealthy individuals.

The IRS investment plan also would replace the Treasury's 1960s-era computer architecture with new machine-learning-capable systems that will be better able to detect suspect tax returns. IRS is the only federal agency with computers that run on the antiquated Common Business-Oriented Language (COBOL) system, Treasury said. 

-reuters

More than 200 groups urge G20 to back IMF issuance to help poor countries in pandemic

WASHINGTON - Jubilee USA Network, Oxfam and 215 other civil society groups on Wednesday urged Group of 20 finance officials to back an issuance of $3 trillion of the IMF's own currency, or Special Drawing Rights, to help countries weather the COVID-19 pandemic.

In an open letter to the International Monetary Fund and G20 finance ministers, the groups said a new allocation of SDRs would boost the reserves of all countries and avoid pushing low- and middle-income countries further into debt distress.

G20 finance ministers and central bankers will discuss a possible SDR issuance - a move akin to a central bank printing money - when they meet by video conference on Friday. Proponents note that such a move will not add cost for the IMF members.

Italy, which leads the G20 this year, is pushing for a smaller $500 billion allocation of SDRs, which can be converted to hard currency by IMF members - a move backed by France, Germany and others, but still lacking support from Washington.

The United States had opposed such a move under former President Donald Trump, but has not yet communicated a firm position on a new SDR allocation under President Joe Biden.

Treasury has declined to comment on the issue.

IMF Managing Director Kristalina Georgieva on Wednesday also called for the G20 to take strong policy action to reverse a "dangerous divergence" that she said threatened to leave most developing economies languishing for years.

In a blog ahead of Friday's meeting, Georgieva said a new SDR allocation would substantially boost countries' liquidity without increasing their debt burdens. It would also expand the capacity of donor countries to provide new resources, she said.

Religious groups have also weighed in. On Tuesday, the US Conference of Catholic Bishops and Jubilee USA Network urged President Joe Biden to back a $3 trillion allocation to help poor countries bolster US trade with the developing world.

Anti-poverty group ONE on Wednesday backed an allocation of $650 billion.

-reuters

Dow sinks 1,500 as virus cases rise, deflating optimism

Stocks are falling sharply on Wall Street as coronavirus cases increase again, deflating recent optimism that economy could recover quickly as lockdowns ease. The Dow fell more than 1,500 points and the S&P 500 was on track for its worst day in nearly three months. Many market watchers have been saying that a scorching comeback in the market since late March was overdone and didn’t reflect the dire state of the economy. A day earlier, the Federal Reserve said the road back to recovery would be long. Bond yields fell sharply, a sign of increasing caution among investors.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:


Stocks are down sharply on Wall Street Thursday, pulling the Dow Jones Industrial Average more than 1,500 points lower and placing the S&P 500 on track for its worst day in nearly three months.

The S&P 500 was down 4.7% in afternoon trading, extending its losses into a third straight day. The benchmark index is now on track for its first weekly drop in four weeks.

The selling, which gained momentum as the day went on, comes as recent optimism that the reopening of businesses would drive a relatively quick economic recovery fades amid rising coronavirus cases in many U.S. states and countries.

The pullback marks a reversal for the market, which rallied 44.5% between late March and Monday, a scorching rate that many skeptics said was unsustainable and didn’t reflect the dire condition of the economy. Only a day ago the Nasdaq closed above the 10,000-point mark for the first time.

The Federal Reserve dimmed some of the optimism investors have had about a swift economic rebound Wednesday, warning that the road to recovery from the worst downturn in decades would be long. The central bank also said it doesn’t foresee a rate hike through 2022.

That, coupled with the recent run-up in stock prices, set the stage for the wave of selling Thursday, said Sal Bruno, chief investment officer at IndexIQ.

“It’s not surprising to see a bit of a sell-off, given the furious rally we’ve had coming out of the lows, despite the fact that the economy was not doing great,” Bruno said. “The fact that (the Fed) is talking about keeping interest rates this low through 2022 is a little eye-opening for a lot of folks.”

The Dow was down 1,512 points, or 5.6%, to 25,477. The Nasdaq composite, which was coming off an all-time high, slid 4%. Small company stocks continued to bear the brunt of the selling. The Russell 2000 index was down 5.9%. European and Asian markets also fell.


Nearly all of the companies in the S&P 500 were down. Technology, financial, industrial and health care stocks accounted for much of the market’s broad slide. Energy stocks were the biggest losers as crude oil prices fell sharply. Bond yields fell and the price of gold surged as worried investors shifted money into the traditional safe-haven assets.

Delta Air Lines, Boeing and MGM Resorts International were among the biggest decliners in the S&P 500. Each was down more than 11%.

Emergency rescue efforts by the Fed and Congress helped arrest the market’s staggering 34% skid in February and March. Since then, the market had been riding a wave of investor optimism that the economy will bounce back by the end of the year, if not sooner, as businesses reopen and people go back to work. But confidence in that scenario is waning as infections and fatalities continue to climb in the U.S. and elsewhere.

In the U.S., Texas and Florida were among the states reporting jumps in the number of coronavirus cases after precautions were relaxed last month. The total number of U.S. cases has now surpassed 2 million.

Still, investors are waiting for more data to see whether the spike in COVID-19 cases are a sign of a possible second wave of the infection, said Charlie Ripley, senior investment strategist for Allianz Investment Management.

He’s focusing on updates to job numbers and consumer spending to gauge how well the economy is recovering.

“We think the recovery is largely underway, but there is still some considerable uncertainty on the path we have ahead,” Ripley said. “If we see some more follow-on of people coming back to work and consumer sentiment picking up, that will be a positive sign for a faster recovery.”

Anxious investors shifted more money into government bonds Thursday, sending yields broadly lower. The yield on the 10-year Treasury yield slid to 0.67% from 0.74% late Wednesday, a big move. Last Friday it briefly moved above 0.90%.

Gold for August delivery climbed 1.2% to $1,740.60 an ounce.

Oil prices fell sharply. Benchmark U.S. crude oil for July delivery was down 8.4% at $36.26 a barrel. Brent crude oil for August delivery was off 7.8% at $38.48 a barrel.

Markets in Europe were broadly lower. France’s CAC 40 slid 4.7% and Germany’s DAX dropped 4.5%. Britain’s FTSE 100 fell 4%. Stock markets in Asia closed lower.

The Labor Department said Thursday that about 1.5 million people applied for U.S. unemployment benefits last week, another sign that many Americans are still losing their jobs even as the economy begins to gradually reopen. The latest figure marked the 10th straight weekly decline in applications for jobless aid since they peaked in mid-March when the coronavirus hit hard. Still, the pace of layoffs remains historically high.

Other jobs data have been more encouraging. A report on Friday showed that the U.S. job market surprisingly strengthened last month as employers added 2.5 million workers to their payrolls. Economists had been expecting them instead to slash another 8 million jobs.

That report helped stoke optimism among investors that the economy can climb out of its current hole faster than forecast. But the Fed estimated Wednesday that the economy will shrink 6.5% this year, in line with other forecasts, before expanding 5% in 2021. It also expects the unemployment rate at 9.3%, near the peak of the last recession, by the end of this year. The rate is now 13.3%.

The central bank said it would keep providing support to the economy by buying bonds to maintain low borrowing rates and forecast no rate hike through 2022, which could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.

The Associated Press 

Argentina in default but creditor negotiations continue

Argentina defaulted on Friday for the second time in less than 20 years after failing to pay $500 million of interest on its bond debt, but it continues to negotiate a restructure with creditors, Finance Minister Martin Guzman said.

"There is still a significant distance to go but, more importantly, all sides remain at the table to find a solution," he said.

The default -- Argentina's ninth overall -- was widely expected after the economic ministry announced on Thursday that it was extending, for a second time, talks with international creditors on restructuring $66 billion of its debt. The new deadline is June 2.

President Alberto Fernandez's government is expecting to come to an agreement before Argentina suffers the full effects of its default.

Thursday's announcement of the extension "provides flexibility in case the Republic decides to make modifications in the coming days to ensure a sustainable agreement with our creditors," Guzman said.

The crisis-wracked South American country, which has been in recession for two years, currently owes $324 billion, amounting to around 90 percent of its GDP.


The crisis was aggravated when its economy was hit -- like others all over the world -- by the coronavirus pandemic.

Though it is one of the world leaders in food exports, Argentina has already defaulted eight times in its history, most recently in 2001 when it owed $100 billion.

That triggered a painful social and economic crisis.

- 'Significant losses' -

Ratings agency Moody's said the default would provoke "significant losses for investors."

"Moody's expects that the panorama for the restructure of Argentina's debt will very probably become more complicated," said vice president Gabriel Torres.

Argentina's main group of creditors is demanding "a direct and immediate discussion" on its restructure plans.

"The group is happy to see that Argentina has expressed its intention to work with the creditors, but actions speak louder than words," said the Ad Hoc group made up of investment funds including BlackRock and Fidelity.

"Over the last month, Argentina has communicated virtually nothing of substance to its creditors."

The Merval index on the Buenos Aires Stock Exchange was down 1.03 percent at the close on Friday to 40,962.76 points. Stocks had risen 3.99 percent throughout the week as negotiations between the governor and creditors continued.

Guzman has taken an aggressive stance on debt, in part driven by a need to free up resources to fight the novel coronavirus pandemic.

Argentina asked bondholders for a three-year grace period on debt repayment, a 62 percent reduction on interest amounting to $37.9 billion, and 5.4 percent on capital -- or $3.6 billion.

That was rejected with a counter offer that the government says it is studying.

"If the majority agrees to the exchange, the default will be very short. I don't think there will be a reduction in the letters of credit" that would impede essential imports, economist Marina Dal Poggetto from EcoGo told AFP.

"But if negotiations take a long time, we'll pay dearly."

The International Monetary Fund, which is supporting Argentina in its restructuring plan, says it has been encouraged by the "willingness of both sides to continue discussions to reach a deal," spokesman Gerry Rice said.

But analysts Capital Economics said "there is a growing risk that the restructuring talks drag on into next year."

- 'Waterfall of bad news' -

Yet more bond interest payments are due at the end of June, which could be delayed by a month.

If by then there is no restructuring agreement, "bondholders will probably consider it more convenient to litigate given they think it unlikely that Argentina will be able to reach a short-term agreement," Ignacio Labaqui of Medley Global Advisors told AFP.

If bondholders take Argentina to court in the United States, it would be "a waterfall of bad news for the country," said Sebastian Maril, from the Fin.Guru consultancy.

Now that Argentina has defaulted, it also runs the risk of its debt being bought at a cut-price deal by speculative funds that could then choose to pursue much bigger rewards through litigation.

Such funds, known as "vultures" in Argentina, did so successfully in New York courts in 2014.

Agence France-Presse

Deutsche Bank says results will beat forecasts

Germany's biggest lender Deutsche Bank said it expects to report a net profit of 66 million euros ($71 million) for the first quarter, beating market forecasts.

Turnover is expected to reach 6.4 billion euros while provisions for credit losses should amount to 500 million euros, it said in a statement on its website late Sunday.

The bank's common equity tier 1 ratio, the main bank solvency ratio, was 12.8 percent at the end of the quarter, down from 13.6 percent at the end of 2019, it said.

"In light of the current macroeconomic environment", Deutsche Bank "has made the clear decision to allow capital to fall modestly and temporarily below its target in order to support clients and the broader economy at this time of economic crisis."

The bank is due to release its quarterly results on Wednesday.

"The short-term implications of the COVID-19 pandemic make it difficult for the bank to accurately reflect the timing and the magnitude of changes to its original capital plan," it said.

"Deutsche Bank's priority is to stand by its clients without compromising on capital strength."

The German group lost 5.72 billion euros in 2019, its fifth consecutive net loss, and in July announced a major restructuring plan.

"We're very satisfied that our first-quarter results demonstrate the progress we're making with the transformation of our bank, the operating strength of our business, and our resilience," chief executive Christian Sewing said in the statement.

At the end of January, Sewing said he was optimistic for 2020 and convinced that the radical transformation of the German banking giant would pay off further ahead.

Agence France-Presse

HOW TO SET FINANCIAL GOALS FOR 2020

We are almost through the first month of 2020, and I’m betting you’ve put your money aside while you recovered from the holidays and settled into the new year. But it’s time to start thinking money, so let’s talk about how to set financial goals for 2020.

SETTING FINANCIAL GOALS

Setting financial goals is incredibly important.

Without financial goals, you don’t really know where you’re going, how much money you’ll need and where that money is coming from. You’re essentially driving into the future with no money roadmap.

So, let’s make that roadmap. Let’s set some great financial goals so that you can:

Achieve your goals
Reduce your debt
Up your savings game
And, most importantly, work towards financial freedom.

HOW TO SET FINANCIAL GOALS FOR 2020

FIGURE OUT WHAT’S BEHIND YOUR FINANCIAL DECISIONS

If you read anything by Simon Sinek, you know that knowing your “why” is imperative to success in life and business. And money is no exception.

You can have all the grand financial plans you want to, but if they have no substance behind them—if there’s no “why” then you’ll be unlike to achieve them.

PLAN FOR YOUR FUTURE

When you set financial goals for 2020, you need to think about your future. Not your right now but what happens down the line. For those goals to meet your needs you need to figure out where you’re going and how much money you’ll need.

So, where do you see yourself in one year? How about 2? 5? 10? There’s no wrong answer, but you do need to know what it’s going to be.


SET SOME GOALS

If you know where you’re headed and how much you’re going to cost, you need to set some goals that are related to how you’re going to make your future happen.

Make sure that your goals are meaningful to you, the need to be related to your “why.”  They also need to be goals that you can actually achieve (aim high but not too high) and you need to be able to measure them to know if they’re working or not.

FACE YOUR DEBT

Debt reduction should be one of your top goals, mostly because when it comes down to achieving financial goals your debit is one of the biggest things that stands in your way. You need to aim to reduce debt so that you can pursue other goals.

GET TO KNOW YOUR CREDIT

Your credit score matters, and you don’t have to be afraid of it. If you want to set financial goals for 2020 and be successful, one of those should be getting in touch with your credit and working to improve it.

CREATE A BUDGET

Finally, when it comes time to set financial goals for 2020, you want to put it all together in a fancy little budget. Budgets don’t have to be complex and you don’t need them to be robust enough to pass a board inspection. Go for simple, achievable and do what works for you!

everybodylovesyourmoney.com

Market may climb anew this week

MANILA, Philippines — The stock market may continue to go up this week, sustaining the gains the previous weeks amid the scheduled resumption of US-China trade talks, traders said.

Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp. (RCBC), sees the index’s next resistance at the 8,000 mark.

“The Philippine Stock Exchange Composite index (PSEi) gained for the third week in four weeks by 58.85 points or 0.7 percent to close at 7,992.32, a new one-month high and also among four-month highs and also among 17-month highs,” Ricafort said.


This, he said, is amid improved global risk appetite recently with the scheduled resumption of the trade talks between the US and China by early October and recent gestures by both countries to improve the said trade talks.

“The next resistance is at 8,000, which is a gateway prior to further upside potential in the near future,” Ricafort said.


Earlier, US President Trump deferred by two weeks the scheduled higher tariffs (which would translate to additional five percent duties) on $250 billion US imports from China. Trump deferred this to Oct. 15 from Oct. 1 to improve the US-China trade talks.

Ricafort said this was a positive signal for the global financial markets.

China also agreed to exempt some US imports from tariffs for about a year starting Sept. 17, which Ricafort said was another positive signal for the markets.

“Trump administration plans to ease sanctions on Iran to help secure a meeting with Iranian leader Hassan Rouhani on the sidelines of the UN General Assembly in New York on Sept. 23. The markets are also anticipating the upcoming Fed rate-setting meeting on Sept. 18 amid possible 0.25 rate cut, which is another factor that could support sentiment in the global financial markets in the coming week,” Ricafort said.

source: philstar.com

Asian equities mostly up after US, China tariff moves

HONG KONG, China — Asian investors on Thursday cheered Donald Trump's decision to delay a hike in tariffs on Chinese goods and Beijing's announcement that it would remove a range of US products from its own planned levies.

The moves signal an easing of tensions between the two economic superpowers ahead of a much-anticipated meeting of top-level negotiators next month.

They also provided an extra shot in the arm for investors as they await key announcements from the US and European central banks that are expected to see a further easing of monetary policy.


In a tweet on Wednesday night, Trump said: "We have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th."

He added that the delay was requested by "Vice Premier of China, Liu He, and due to the fact that the People's Republic of China will be celebrating their 70th Anniversary", on October 1.

Earlier in the day, China said it would temporarily exempt 16 categories of US exports from tariff increases in an olive branch to Washington before the talks take place and which Trump described as "a big move".

The more conciliatory tone from both sides -- after months of rancour -- fuelled hopes they can edge towards a solution to their long-running trade war, which has jolted the global economy and stock markets.

The delay "shows Trump doesn't want to increase tariffs before the trade talks in early October and it creates good conditions", said Tommy Xie, an economist at Oversea-Chinese Banking Corp. "It adds to the hope that there'll be good news from the October meeting, and markets will wait and see."

Wednesday's developments were broadly welcomed though Asian markets struggled to hold on to initial rallies owing to profit-taking from a healthy run-up this week.

Central banks in focus

Tokyo ended the morning 0.8 percent higher and Shanghai added 0.2 percent while Sydney climbed 0.5 percent. Wellington and Taipei also rose, as did Jakarta, but Hong Kong dipped 0.2 percent.

Jun Inoue, a senior economist at Mizuho Research Institute, said Trump's move indicates he "can be flexible to get concessions from China and that he’s not trying to punish Beijing at any cost".

The apparent easing of trade tensions boosted oil prices as the prospect of an end to the row revived hopes for demand.

However, the gains followed a sharp drop for both main contracts as traders bet on a possible return of Iranian crude to the market after the firing of Trump's hawkish national security adviser John Bolton eased fears of a conflagration in the Middle East.

Traders are now turning their attention to Frankfurt, where the European Central Bank is expected to unveil economy-boosting stimulus. While the exact measures are unknown observers say it could cut interest rates deeper into negative territory or a new mass bond-buying drive, among other things.

Then, next week the Federal Reserve meets, with speculation rife that it will lower borrowing costs again, which would please Trump, who in a Twitter outburst on Wednesday said they should "BE BROUGHT WAY DOWN".

In share trading, Hong Kong Exchanges and Clearing sank more than three percent after its shock bid of almost US$40 billion for the London Stock Exchange Group on Wednesday.

Reports said the proposal is likely to fail, however, as it is dependent on the LSEG scrapping a planned $27 billion takeover of US financial data provider Refinitiv, which the three-centuries-old exchange said it "remains committed" to buying.

There are also concerns about ongoing unrest in Hong Kong and the influence of China in the group, the Financial Times reported.

source: philstar.com

Color of money: Are brands buying into or cashing in on the LGBT community?

MANILA, Philippines — In July 2016, Smart Communications — the wireless arm of telco giant PLDT, Inc. — came out with a heart-warming TV advertisement targeting a market that had long been ignored by many companies.

In the TV ad, a gay man was debating whether he would accept his father’s friend request on Facebook. As he scrolls through his Facebook profile filled with pictures of him and his partner, the son finally decided to hit the “confirm” button.

“Dad, inaccept na kita (Dad, I’ve accepted you),” read the gay son’s message to his father.

“Anak ako rin (Me too, son),” the father replied. The ad, which went viral on social media, ends with this message: Break barriers for new beginnings.

Five months later, PLDT’s rival Globe Telecom, Inc. released a gay-themed commercial for its international roaming service. The Globe ad features a Pinoy tourist who was smitten by a Thai boy in Bangkok.

With the recent emergence of LGBT-targeted ads in the Philippines, are businesses in Asia’s biggest nominally Catholic nation starting to realize that tapping the gay market makes financial sense?

The ‘pink’ market

Many LGBTs exercise a big role in decision-making in the family, including finances, and some companies in the Philippines are now acknowledging the community’s buying power, which "should never be ignored," said Niño Jose Gonzales, a copywriter at advertising agency BBDO Guerrero.

But Gonzales said businesses in the country “still have a long way to go” especially in creating more LGBT-oriented ads.

In 2015, homegrown fashion brand Bench stirred up controversy when it blacked out the hands of a gay couple for an ad on a billboard on EDSA-Guadalupe, triggering a social media campaign called #PaintTheirHandsBack.

According to reports, Bench later explained that its billboard — which was used to promote the company’s "Love All Kinds of Love" campaign — was not defaced as initially assumed by social media users but censored because the Ad Standards Council "rejected photos of the couple looking lovingly at one another, citing ‘traditional Filipino family values’ as a reason."

Niche market in a conservative country

Meanwhile, many firms don’t see the need to target the LGBT market, arguing that members of the community are already included in the male and female population.

Many corporations are also hesitant to spend millions on ad campaigns targeting a minority sector.

"I think pink money has always been there. As we humans have diverse interests and priorities, members of the LGBT will spend on and distribute their pink money on things that they need and hobbies that interests them. We go to the gym. We spend on groceries. We go on vacation, the list continues," Gonzales, who also teaches marketing and advertising at De La Salle University in Manila, told Philstar.com.

"But to have companies cater exclusively to a niche market, especially in a conservative country like ours, is not yet common," he added.

Results of the “Project Pink” study conducted in 2011 by the Philippine Survey Research Center (PSRC) showed one in 20 Metro Manila residents openly identifies as a member of the LGBT community.

Adding those who are “in the closet,” actual numbers would be higher.

“Interestingly, bisexuals and transgendered individuals have significantly higher purchasing power than straight people,” Andrea Dizon, PSRC associate account director, was quoted as saying in a 2013 article by BusinessWorld. “In fact, awareness for brands is higher among the LGBTs.”

'Most products are biological gender specific'

But for Jade Ilagan, strategy director at independent advertising agency IdeasXMachina, measuring the power of pink money is a difficult task.

"In terms of pink money, I am not so sure about the power it has currently. I don’t think also that there is a way to gauge it as most products, if not all, are still biological gender specific,” Ilagan explained in a separate interview with Philstar.com.

"Take for example sanitary napkins. This product will always benefit from money coming from women, regardless if they are members of the LGBT. I am unaware of products that are sexuality-specific," he added.

"In terms of advertising, I think we are currently doing it. We’ve seen commercials from Bench, Smart, that focus on LGBT-related topics like coming out and acceptance. These forms of advertising could be the ones that encourage purchase from pink money, although it still couldn’t be exclusive," he continued.

Cashing in on Pride month?

LGBT Pride is celebrated in more than 60 countries every year, mostly in June.

This month, companies like Adidas and H&M created rainbow merch to mark the celebration of the Pride movement — a stark contrast to the past when businesses were afraid to associate their brand with LGBT marches and parades.

"I do agree that Philippine companies are now slowly showing their support towards the LGBT community. We see campaigns that foster inclusivity and acceptance towards gay people," BBDO Guerrero's Gonzales said.

"I just hope that these efforts come from well-meaning intentions rather than just a ploy to attract the community for us to support the brands that label themselves as our ally. We know a good soul when we see one," he added.

With big and small businesses wanting a bite of the LGBT market, advocates fear corporations are exploiting a group that has been historically neglected.

Ging Cristobal, project coordinator for Asia at OutRight Action International, said that while LGBT-targeted ads give visibility, companies must tread lightly to avoid perpetuating stereotypes that may further harm the gay community.

Last year's Pride March included statements on the political climate in the Philippines as well as support for workers who were on strike against a condiments giant. With this year's emphasis that Pride is a protest, the community is even more on guard against being used by corporate brands.

A march on Friday to commemorate the 1969 Stonewall riots in New York also put the spotlight on labor contractualization, issues of Philippine sovereignty, and alleged attacks on farming communities, alternative news website Bulatlat.com reports.

The same report quotes "Marky" of LGBTQIA+ group Kasarianlan as saying the community cannot be free until everyone is "because every sector has a member of [the community], be it on the peasants’ sector, fisherfolks, a contractual employee or a student."

Is visibility enough?

The visibility that "pink" ads bring may also not be enough to muster support for legislation that aim to protect the LGBT community, Cristobal also said, adding that it is still up to advocates to convince and educate lawmakers.

In the Philippines, the Senate failed to tackle the anti-discrimination bill before the 17th Congress ended.

The proposed Sexual Orientation, Gender Identity and Expression Equality (SOGIE) bill was meant to address, penalize and prohibit "discrimination, marginalization, and violence on the basis of sexual orientation, or gender identity or expression" and to promote non-discrimination through government programs and initiatives.

According to House Bill 4982, sexual orientation is to whom "emotional, sexual attraction, or conduct" is directed while gender identity is "the personal sense of identity as characterized, among others, by manner of clothing, inclinations, an behavior in relation to masculine or feminine conventions."

Gender expression, meanwhile, is "the communication of gender identity through means such as behavior, clothing, and hairstyles, communication, or body characteristics."

Senators—including Sen. Manny Pacquiao, who is known to base his legislative positions on the Bible—were cool to the idea. Pacquiao argued on the Senate floor in 2017 that "even in the Bible, we can read that women should wear women's clothes and men should wear men's clothes."

He said that not doing so could lead to "fraud" and even put LGBT people in danger, implying that the death of transwoman Jennifer Laude at the hands of US Marine Joseph Scott Pemberton was because she had "fooled" him.

Even President Rodrigo Duterte, who has been quoted as saying LGBT people should not be ashamed of who they are, uses gay as a slur, claiming in February that 40% of communist rebels are gay, and in December 2018 that 90% of priests are.

Had the Senate passed the bill and had it been signed into law, it would have penalized discrimination in, for example, hiring and advancement at work and in refusing services because of a person's SOGIE.

It would also have prohibited and punished "harassment, coercion, or threats from members of institutions involved in law enforcement and the protection of rights on the basis of SOGIE" as well as "outing" someone without their consent.

The 19-year-old measure — which hurdled the House of Representatives in 2017 — will have to be re-filed in the next Congress like other pending bills.

More progress has been made on a local level, with Transgender Philippines noting in 2017 that anti-discrimination ordinances have been passed in 15 cities and one town—including Quezon City and the regional centers of Baguio City, Cebu City, and Davao City.

At the provincial level, Agusan del Norte, Batangas, Cavite, Dinagat Islands, and Iloilo have similar ordinances.

Good intentions, not-so-good execution

Meanwhile, a June 2018 Social Weather Stations survey found that 61% of Filipinos say they will oppose any law that will allow civil union of same-sex couples.

"Capitalism and the ads that businesses create can give visibility. But the question is: What kind of visibility? Do they perpetuate and maintain the stereotypes or do they go beyond the stereotypes and help LGBT activism — maybe show balanced information, balanced messaging?" Cristobal told Philstar.com in a mix of English and Filipino.

"Sometimes, businesses and capitalists don’t know better... Their intention is good but the execution is not that good because they are unwittingly perpetuating stereotypes, thereby causing further discrimination and abuse," Cristobal added.

"The right move is for businesses to engage with activists so they’ll know what will help the community... Advertising agencies should also engage with activists and attend workshops on SOGIE so we can influence how they will execute the campaign of that particular company," Cristobal also said.

source: philstar.com

G20 frets over global economy amid US-China trade war

FUKOUKA, Japan —The world's top finance policymakers Sunday weighed the impact of ballooning trade tensions on the global economy amid differences over the extent to which they are dragging on growth.

Finance ministers and central bank chiefs from the G20 group of the world's top economies are expected to note the "downside risks" to the global economy from trade battles, notably between the top economic superpowers China and the US.

Japanese Finance Minister Taro Aso, who is hosting the talks, told reporters as the first day of talks wrapped up on Saturday that the world economy should "firm" in the second half of the year but "downside risks still remain."

Aso said "market confidence could be eroded" if there were no rapid resolution to the ongoing trade war between Beijing and Washington, which has seen the world's top two economies impose billions of dollars of tit-fir-tat tariffs and threaten even tougher action.

IMF chief Christine Lagarde singled out trade tensions as the "major" headwind facing the global economy, adding that it was a "significant risk on the horizon," in an interview with Japan's Nikkei daily on Sunday.

Lagarde has previously described the trade wars as a "self-inflicted wound" and warned that US-China tariffs so far imposed and threatened could trim 0.5 percentage points off global GDP growth next year -- an amount $455 billion larger than the entire South African economy.

Meanwhile, French Finance Minister Bruno Le Maire said there was a "real risk" that "this global economic slowdown could turn into a global economic crisis due to trade tensions."

"A worsening of the international climate and a real trade war would lead to an even more marked slowdown in global growth, with a direct impact on our jobs, companies, factories and sectors," Le Maire told AFP in an interview on the sidelines of the meeting.

A Japanese official who declined to be named briefed reporters that "very many countries voiced concerns that escalation of the trade friction is a very significant downside risk to the world economy. That is a fact."

'Big economic opportunity' 

However, the treasury secretary from the US, which continues to threaten more tariffs on China if there is no trade deal, played down the risk of a global economic conflagration.

"Clearly there is a slowdown in Europe, there's a slowdown in China, there's a slowdown in other parts. I don't believe that's as a result of trade tensions. That slowdown has gone on for the last year," Steven Mnuchin told reporters on Saturday.

He acknowledged that other policymakers had voiced concerns over the economic impact of a prolonged trade war but pointed to a potential boon for other countries.

As companies move out of China in order to avoid US tariffs, "there's going to be a big economic opportunity for a lot of other countries," he said.

"There will be winners and losers," he predicted.

Nevertheless, Mnuchin also pointed to the positive boost to the world economy that could result from a breakthrough in trade talks, likely to be the main focus of a meeting between the US and Chinese leaders at a G20 summit later this month.

"I think if we get a deal, it's a very positive thing for economic growth, for us, for China, for Europe, for the rest of the world. The opening of these economies tends to lead, in my mind, to more growth on both sides," said Mnuchin.

source: philstar.com

Market may trade sideways this week

MANILA, Philippines — The stock market this week may be characterised by follow through buying on Chinese New Year ahead of the release of the January inflation numbers, according to First Metro Investment Corp. vice president Cristina Ulang.

Ulang said investors would closely monitor the corporate earnings report, noting that outperformance versus estimates would hold the key to sustained foreign buying.

Christopher Mangun, head of Eagle Equities, said that there may be lower trading volumes this week.


“This week is the first trading week of February and with only four days of trading we are going to see lower trading volumes as the holiday is in the middle of week and investors may take a break from trading and take the week off,” he said

Thus, he said the market may continue to trade sideways between 8,000 and 8,200.

“The index may end the week lower, but the key is for it to stay above the 8,000 level. If we continue to see heavy foreign inflows, then the market may sustain its current momentum. Local investors have started taking some risk off the table and currently foreign money is supporting the market. With earnings reports set to start coming in this week on top of better inflation numbers for January, we may see the market factor this is and maintain its current trajectory,” he said.

Last week, the market was pulled up by rosy western equities markets which rose after dovish comments from the US Fed.

The main index ended the week 90.96 points higher or 1.13 percent to close at 8,144.16.

In the first three days of trading, there was a pullback, even touching the 7,900 support level.

However, in the last two trading days there was already  a complete reversal, eventually breaking above 8,100 in the afternoon trading session on Friday, Mangun said.

Foreign money flooded the market with net foreign buying at P5.74 billion.

In all, the PSEi ends the month of January 7.3 percent higher which is the market’s best performance since March 2016.

source: philstar.com

Asian stocks mixed as investors await US tariff hike

BEIJING — Asian stocks were mixed Tuesday after Wall Street's gains as investors waited for a new U.S. tariff hike in a trade battle with China.

KEEPING SCORE: The Shanghai Composite Index lost 0.3 percent to 2,661.33, while Tokyo's Nikkei 225 added 1 percent to 22,595.52. Hong Kong's Hang Seng retreated 0.3 percent to 26,538.58 and Sydney's S&P-ASX 200 advanced 0.5 percent to 6,171.00. Seoul's Kospi shed 0.3 percent to 2,281.90, while New Zealand. Benchmarks in Taiwan and Southeast Asia declined.

WALL STREET: U.S. stocks broke a four-day losing streak as industrial companies and retailers rose. Technology companies recovered some of last week's losses. Nike, Home Depot and Walmart all climbed. Microsoft and other technology companies rose, but Apple fell after saying more U.S. tariff hikes could push it to raise prices. The Standard & Poor's 500 index gained 0.2 percent to 2,877.13. The Dow Jones Industrial Average lost 0.2 percent to 25,857.07. The Nasdaq composite rose 0.3 percent to 7,924.16.



TRADE TENSIONS: The Trump administration is due to announce a decision shortly on whether to go ahead with 25 percent tariffs on $200 billion of Chinese imports in a dispute over Beijing's technology policy. The two sides already have raised duties on $50 billion of each other's goods. Trump said Friday that he was considering extending penalties to extending penalties to nearly all Chinese imports to the United States by raising duties on an additional $267 billion of goods.

ANALYST'S TAKE: "Wall Street balanced the tech gloom against the fresh focus on tax cuts on Monday yielding mixed returns," Jinyi Pan of IG said in a report. "The protracted expectation for more bad news to set in with the looming tariffs remains the most important factor weighing on markets currently."

ENERGY: Benchmark U.S. crude gained 4 cents to $67.58 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 21 cents on Monday to close at $67.54. Brent crude, used to price international oils, advanced 11 cents to $77.48 in London. It rose 54 cents the previous session to $77.37.

CURRENCY: The dollar gained to 111.36 yen from Monday's 111.12 yen. The euro edged down to $1.1590 from $1.1595.

source: philstar.com

Why markets are worried about suddenly cold Turkey

NEW YORK — Why are investors around the world so worried about Turkey's economy, when it's smaller than Florida's? Because of the possibility that somebody bigger will be next.

Investors have been pulling out of Turkey's markets, sending its stock market and currency plunging. That's making debt that Turkish companies owe in dollar terms even more expensive to pay back, which only further weakens the country's financial system.

Turkish companies need to pay close to 5.80 lira for each $1 of debt that they owe, for example, up from 3.79 lira at the start of the year.

The big fear, though, is that the distress could spill over into other emerging markets and cause a cascading wave of losses as investors pull out of other countries that borrow heavily in dollars and are dependent on foreign investors. Argentina? Brazil? South Africa?

Such a thing has happened before. A financial crisis that began in 1997 after Thailand devalued its currency eventually sent markets reeling across the region in what became known as the Asian financial crisis.

Stoking the concerns is the rising US dollar and a Federal Reserve that has pledged to continue raising short-term interest rates. Such moves have historically coincided with pain for emerging market stocks. When US rates are higher, investors feel less need to head to emerging markets in search of higher returns.

Many analysts along Wall Street, though, say they don't expect another Asian financial crisis. Turkey has borrowed much more in foreign currencies than any other country, as a percentage of its economy, and investors question how much authority its central bank has to raise interest rates.

Emerging-market economies broadly are also in much better shape than 20 years ago, with stronger currency reserves, say strategists at Wells Fargo Investment Institute.

"Turkey is both more exposed and less able to do something about it than any other country," says Brad McMillan, chief investment officer for Commonwealth Financial Network.

source: philstar.com

Most Asian markets up but trade fears stalk investors

HONG KONG — Asian markets mostly rose Wednesday, building on a positive start to the week as investors are cheered by healthy earnings but uncertainty caused by the US-China trade row is keeping optimism in check.

Wall Street provided another strong lead with the Nasdaq approaching a record high, while energy firms in Asia pressed on with their rally following more gains in oil prices.

Hong Kong was 0.1 percent higher in early trade while Tokyo ended the morning session 0.4 percent up and Sydney edged 0.3 percent ahead. Seoul, Wellington and Taipei all posted gains but Shanghai dipped 0.6 percent.

While the gains are welcome, traders remain on edge for any new developments in the trade saga between the world's top two economies.

On Tuesday the US said Donald Trump's 25 percent tariffs on a further $16 billion of Chinese goods will kick in on August 23. That is on top of the measures imposed on $34 billion of imports last month.

The move had been widely expected but with China lining up retaliatory measures it reinforced worries that the two sides are heading for an all-out trade war that could hammer the global economy. The White House has also lined up another $200 billion to target in future.

The yuan got some support after a Bloomberg News report said the Chinese central bank had emphasised the need for currency stability to the country's lenders as it looks to halt a slide in recent months.

It said officials called on bosses to prevent "herd behaviour" and momentum-chasing moves in the forex markets, fearing a run on the yuan similar to 2015-16, which hammered the unit and sent global markets into a tailspin.

The report comes after Friday's move by the People's Bank of China to make it harder to bet against the currency.

"This move is consistent with what the PBoC did earlier -- it can be considered as preemptive efforts made to slow the yuan’s depreciation, prevent one-sided bets on weakness and avoid a sense of panic," Eddie Cheung, Asia foreign-exchange strategist at Standard Chartered in Hong Kong, told Bloomberg.

Energy firms remain popular as oil prices rise on the back of worries about the trade row and a drop in Saudi Arabian output.

Both main contracts were flat in Asia after clocking up big gains on Tuesday.

Prices also got support from the US reimposing a first round of sanctions on Tehran after leaving the nuclear deal, with an embargo on the country's crude exports in November.

Trump warned other countries against doing business with Iran in the face of the sanctions, saying they would be refused from trading with the United States.

"The entreaty of the Americans that anyone who will do business with them (Iran) won't be able to do business in the US is something to watch," said Greg McKenna, chief markets strategist at AxiTrader.

Key figures at 0230 GMT

Tokyo - Nikkei 225: UP 0.4 percent at 22,750.48 (break)

Hong Kong - Hang Seng: UP 0.1 percent at 28,282.28

Shanghai - Composite: DOWN 0.5 percent at 2,764.45

Euro/dollar: UP at $1.1602 from $1.1597 at 2130 GMT

Pound/dollar: DOWN at $1.2936 from $1.2938

Dollar/yen: UP at 111.40 yen from 111.37 yen

Oil - West Texas Intermediate: UP five cents at $69.22 per barrel

Oil - Brent Crude: DOWN seven cents at $74.58 per barrel

New York - Dow Jones: UP 0.5 percent at 25,628.91 (close)

London - FTSE 100: UP 0.7 percent at 7,718.48 (close)

source: philstar.com

China loses spot as world's No.2 stock market: Bloomberg

SHANGHAI — China's stock market has been overtaken as the world's second-biggest by Japan's, having been swiped this year by the threat of a trade war with the United States and slowing economic growth.

Data from Bloomberg News in intra-day trade on Friday showed the value of equities on the mainland had slipped behind those in their neighbouring country for the first time since taking the number-two spot in 2014.

The figures showed Chinese stocks were worth $6.09 trillion, compared with $6.17 trillion in Japan. The US market is worth $31 trillion.

While global markets have been broadly hit by fears of a trade war between the world's top two economies, Chinese equities are among the worst performers this year, with the benchmark Shanghai Composite Index slumping more than 16 percent since the start of January.

The pressure was ratcheted up this week when the White House said it was considering more than doubling threatened tariffs on a range of Chinese imports worth $200 billion.


Washington has already imposed tariffs on $34 billion worth of goods and is considering hitting another $16 billion in the coming weeks.

"Losing the ranking to Japan is the damage caused by the trade war," Banny Lam, head of research at CEB International Investment in Hong Kong, told Bloomberg News.

"The Japan equity gauge is relatively more stable around the current level but China's market cap has slumped from its peak this year."

Adding to the selling has been a string of data indicating economic growth is slowing, while Beijing has embarked on a drive to cut a worryingly large debt mountain as well as reduce pollution.

Also worrying investors are the yuan's recent losses, with the currency at its lowest level against the dollar for more than a year, while traders have been mostly unmoved by government measures and promises to support the economy.

At the same time, Japanese corporate results have been broadly upbeat, providing some support to markets there, though the Nikkei is still slightly down this year.

"Investors are paying attention to government policies as the US-China trade war will remain uncertain for now," Yoshihiro Okumura, general manager at Chibagin Asset Management, told AFP in Tokyo.

"On the other hand, Japanese companies are showing strong results in general, sustaining share prices on the Tokyo Stock Exchange."

However, he added: "The Tokyo market is not in top form. The country is also subject to the trade war as it is heavily relying on global trade."

Chinese stocks have been on a rollercoaster since taking the second spot in 2014.

Fuelled by risky investing by individual investors looking for a quick profit, the market surged through early 2015 to hit a high of $10 trillion, but then the bubble burst and it went into a downward spiral, with the Shanghai composite crashing about 40 percent.

source: philstar.com

Fed keeps key rate unchanged while signaling future hikes

WASHINGTON — The Federal Reserve on Wednesday (Washington time) left its benchmark interest rate unchanged while signaling further gradual rate hikes in the months ahead as long as the economy stays healthy.

The Fed's widely expected decision kept the central bank's key short-term rate at 1.75 percent to 2 percent — the level hit in June when the Fed boosted the rate for a second time this year.

The Fed projected in June four rate hikes this year, up from three in 2017. Private economists expect the next hike to occur at the September meeting with a fourth rate hike expected in December.

The Fed's statement was upbeat on the economy, pointing to a strengthening labor market, economic activity growing at "a strong rate," and inflation that's reached the central bank's target of 2 percent annual gains.

Analysts saw all the comments about economic strength as a clear signal that the Fed remains on track to raise rates two more times this year.

"All signs still point to a September rate hike," said Greg McBride, chief financial analyst at Bankrate.com. He said consumers should continue to pay down their home equity, credit card and other loans with variable rates that will rise further as the Fed keeps hiking rates.

"Refinance adjustable rate debt into fixed rates to insulate yourself from further rate hikes," McBride recommended.

There was no mention in the statement of what many economists see as one of the biggest risks at the moment: rising tariffs on billions of dollars of U.S. exports and imports that have been imposed as a result of President Donald Trump's new get-tough approach on trade.

The Fed statement also made no reference to criticism Trump has lodged recently against the Fed's continued rate hikes.

The Fed's decision was approved on a unanimous 8-0 vote. The action was not surprising, given that this meeting followed a June session where the Fed took a number of steps including raising rates by another quarter-point and changing its projection for hikes this year from three to four.

The March and June rate hikes followed three hikes in 2017 and one each in 2015 and 2016. The Fed's key policy rate is still at a relatively low level. But it's up from the record low near zero where it remained for seven years as the central bank worked to use ultra-low interest rates to lift the economy out of the Great Recession.

The string of quarter-point rate hikes is intended to prevent the economy from overheating and pushing inflation from climbing too high. But higher rates make borrowing costlier for consumers and businesses and can weigh down stock prices. Trump has made clear he has little patience for the Fed's efforts to restrain the economy to control inflation.

"Tightening now hurts all that we have done," Trump tweeted last month, a day after he said in a television interview that he was "not happy" with the Fed's rate increases.

Over the past quarter-century, presidents have maintained silence in public about Fed actions, believing that lodging complaints would be counter-productive. That's because it could produce even faster rate hikes if the central bank feels the need to convince financial markets that it will not yield to political pressure and allow inflation to rise to worrisome levels.

At the moment, economic growth is strong, rising at an annual rate of 4.1 percent in the April-June quarter, the best showing in nearly four years. Unemployment is at a low 4 percent, and some analysts believe it will fall further when the government releases the July figures on Friday.

But there are worries as well, led by fears of what a Trump-led trade war might do to growth in the United States and around the world.

Many analysts believe that the possible harm from rising tariffs was a key discussion topic this week. While trade was not mentioned in the statement, it likely will show up in the minutes of the Fed's discussion which will be released in three weeks.

Delivering the Fed's semi-annual report to Congress last month, Fed Chairman Jerome Powell refrained from criticizing the Trump administration's effort to use the threat of tariffs to try to lower trade barriers. But Powell noted that the Fed was hearing a "rising chorus of concern" from business contacts about the harm a trade war could cause.

Powell hasn't publicly addressed Trump's criticism of Fed rate hikes. But the chairman had previously said in a radio interview that the central bank has long operated independently in making interest-rate decisions based on what was best for the economy and not in response to political pressure.

source: philstar.com

Asian stocks rise as solid US performance lifts spirits

SINGAPORE — Asian markets climbed higher on Wednesday as a sweep of positive news from Wall Street and beyond boosted confidence in the U.S. economy.

KEEPING SCORE: Japan's benchmark Nikkei 225 gained 1.0 percent to 22,921.20 and South Korea's Kospi added 0.3 percent to 2,304.64. Hong Kong's Hang Seng gained 0.6 percent to 28,351.53. The Shanghai Composite index added 0.4 percent to 2,808.24. Australia's S&P/ASX 200 climbed 0.8 percent to 6,254.20. Shares rose in Taiwan and Southeast Asia.

WALL STREET: U.S indexes rebounded after a weak start on solid gains for retailers, technology and household goods companies. Prescription drug business Johnson & Johnson and financial services company Charles Schwab posted bullish earnings, adding to the largely positive corporate earnings season. The S&P 500 index rose 0.4 percent to 2,809.55. The Dow Jones Industrial Average gained 0.2 percent to 25,119.89. The Nasdaq composite jumped 0.6 percent to 7,855.12, surpassing the record high it set last week. The Russell 2000 index of smaller-company stocks climbed 0.5 percent to 1,687.26.

UPBEAT FED COMMENT: Delivering his twice-a-year report on monetary policy to Congress, Federal Reserve Chairman Jerome Powell said he expects the job market to remain robust and inflation to hover around the Fed's 2 percent target for the next few years. Stocks have fallen after Powell's previous major addresses, but not on Tuesday.

U.S. INDUSTRIAL PRODUCTION: The Fed said U.S. industrial production, including output at factories, mines and utilities, climbed 0.6 percent in June. It fell 0.5 percent in May after a fire disrupted production of Ford Motor's F-series pickup trucks, America's bestselling vehicle. U.S. manufacturing still looks healthy despite trade conflicts with China, Europe and Canada and a rising dollar that makes U.S. products more expensive abroad.

ANALYST VIEWPOINT: "While earnings and the highly-watched testimony to Senate by Fed chair Powell played a part, movements remained largely muted with the likes of the Dow and the S&P 500 index clocking only moderate gains overnight," Jingyi Pan of IG said in a commentary.

ENERGY: Benchmark U.S. crude dropped 34 cents to $67.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract was relatively unchanged at $68.08 in New York on Tuesday. Brent crude, used to price international oils, shed 30 cents to $71.86 per barrel.
CURRENCIES: The dollar rose to 112.95 yen from 112.83 yen late Tuesday. The euro eased to $1.1654 from $1.1664.

source: philstar.com

CRYPTO CURRENCY | Hotly anticipated bitcoin futures surge on debut

NEW YORK/SYDNEY — Bitcoin futures jumped more than 20 percent in their eagerly anticipated U.S. debut, which backers hope will encourage wider use and legitimacy for the world’s largest cryptocurrency even as critics warn of the risk of a bubble and price collapse.

The launch on Sunday night may have caused an early outage of the Chicago-based CBOE Global Markets’ website. The exchange said that due to heavy traffic on the CBOE Global Markets website, the site “may be temporarily unavailable.”

The one-month bitcoin contract <0#XBT:> opened trade at 6 pm (6.00 p.m. ET) at $15,460, dipped briefly and then rose to a high of $18,700.

As of 0430 GMT, it was up 16 percent from the open at $17,940, with 2,211 contracts traded.

On the Luxembourg-based Bitstamp BTC=BTSP, bitcoin prices surged 7 percent to $15,720. It is up more than 1,400 percent so far in 2017, and its gains in the past month have been rapid.


Experts had worried that the risks associated with the currency’s Wild West-like nature could overshadow the futures debut, but so far the price action has been unlike the wild swings seen in the past few weeks. Bitcoin tumbled 20 percent in 10 hours on Friday.

“Even if there is an institution or institutional-sized trader out there, they are going to want to make sure that the mechanics work first, just for the futures,” said Ophir Gottlieb, chief executive officer of Los Angeles-based Capital Market Laboratories.

“I think the excitement will come when the futures market is established. That can take a few days,” Gottlieb added.

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs and brothers Cameron and Tyler Winklevoss.

Market participants said the launch of the futures contract wouldn’t necessarily reduce volatility in the cryptocurrency.

“There are no ways to arbitrage between the market and other exchanges, CBOE cannot settle Bitcoin as far as I know,” said Leonhard Weese, president of the Bitcoin Association of Hong Kong.

“Regular bitcoin traders don’t have access to it, and the trading desks that use the futures market don’t have access to bitcoin.”

Cryptic currency

While bitcoin’s price rise mystifies many, its origins have been the subject of much speculation.

It was set up in 2008 by someone or some group calling themselves Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation difficult if not impossible.

Central bankers and critics of the cryptocurrency have been ringing the alarm bells over the surge in the price and other risks such as whether the opaque market can be used for money laundering.

“It looks remarkably like a bubble forming to me,” the Reserve Bank of New Zealand’s Acting Governor Grant Spencer said on a television program run on Sunday.

“We’ve seen them in the past. Over the centuries we’ve seen bubbles and this appears to be a bit of a classic case,” he said.

Many investors have stood on the sidelines watching its price rocket. However, it is possible to buy bitcoin without having to spend the full price of one coin. Bitcoin’s smallest unit is a Satoshi, named after the elusive creator of the cryptocurrency.

Somebody who invested $1,000 in bitcoin at the start of 2013 and had never sold any of it would now be sitting on around $1.2 million.

Heightened excitement ahead of the launch of the futures has given an extra kick to the cryptocurrency’s scorching run this year.

Controversial move

Bitcoin fans appear excited about the prospect of an exchange-listed and regulated product and the ability to bet on its price swings without having to sign up for a digital wallet.

Others, however, caution that risks remain for investors and possibly even the clearing organizations underpinning the trades.

“You are going to open up the market to a whole lot of people who aren’t currently in bitcoin,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The launch has so far received a mixed reception from big U.S. banks and brokerages, though.

Several online brokerages, including Charles Schwab Corp and TD Ameritrade Holding Corp (AMTD.O), did not allow trading of the new futures immediately.

The Financial Times reported on Friday that JPMorgan Chase & Co, Citigroup Inc would not immediately clear bitcoin trades for clients.

Goldman Sachs Group Inc said on Thursday it was planning to clear such trades for certain clients.

Bitcoin’s manic run-up this year has boosted volatility far in excess of other asset classes. The futures trading may help dampen some of the sharp moves, analysts said.

“Hypothetically, volatility over the long run should drop after institutions get involved,” Gottlieb said. “But there may not be an immediate impact, say in the first month.”

source: interaksyon.com

After roads and railways, China’s Silk Road dealmakers eye financial firms

HONG KONG – After ports and industrial parks, the dealmakers leading China’s trillion-dollar push to build a modern Silk Road are turning to the financial sector, targeting Europe’s banks, insurers and asset managers to tap funds and expertise.

Last week, sources familiar with the matter said two of China’s most acquisitive conglomerates, HNA Group and Anbang Insurance Group, had separately considered bidding for the German insurer Allianz SE.

Neither of the two made an offer, but the talks marked a new level of ambition for China: Allianz is a German stalwart, a pillar for local pensions and a global powerhouse with 1.9 trillion euros ($2.3 trillion) of assets under management.

HNA already owns a stake of just under 10 percent in Deutsche Bank.

Bankers, lawyers and company executives say more financial deals will come, led by state behemoths such as China Life and China Everbright, as well as private firms including Legend Holdings and China Minsheng Financial.

“The message from the regulators is clear – they want these companies to go out and get access to large amount of funds and expertise,” said a financial M&A adviser at a global bank, who works with Chinese regulators and companies.

“They would look very favorably at transactions that have some links to the Belt and Road program, because the country needs to boost its financial muscle,” the banker said. But Beijing “will ensure the excesses of the past couple of years do not happen again.”

The banker, who declined to be named as he was not allowed to speak to the media, said his firm was currently working on several “mid-sized to large” foreign financial takeover deals.

After a deal spree that saw Chinese conglomerates spend billions on everything from landmark property to soccer clubs in a debt-fuelled M&A drive over the past two years, Beijing has sought to rein in some of the excesses.

But Belt and Road deals have been an exception in the crackdown this year – including, most recently, financial deals.China’s outbound M&A volume targeting financials has reached nearly $9 billion as of last week this year, not far from $12 billion in all of 2016, according to Thomson Reuters data. If exceeded, it would be the second best year for such deals since at least the global financial crisis in 2008.

The share of financial transactions in overall outbound deal volume has also risen to 8.2 percent this year, higher than 5.7 percent in the same period last year, while industrial deals, typically the biggest sector for outbound M&A, fell by a third.

EXPANDING FOOTPRINT

Earlier this month, Legend – the top shareholder in the computer maker Lenovo – agreed to buy a 90 percent stake in Banque Internationale a Luxembourg (BIL) for $1.8 billion.

The deal, Legend said, was linked to the Belt and Road initiative, President Xi Jinping’s policy of building a modern Silk Road to expand global trade and influence.

“Our overseas investments will continue to focus on the opportunities that are provided by the Belt and Road national policy,” the company said, in a statement to Reuters, adding it would “actively invest” in other areas of financial services, including insurance, securities and financial technology.

It gave no details, but bankers said Legend has been eyeing banks and insurers in Southeast Asia, Europe and Hong Kong, using its healthy balance sheet and the halo effect of Belt and Road-linked initiatives.

Better financial expertise and depth will help China secure contract guarantees, financing and better insurance.

“We need those overseas financing institutions – buying them can expand our bank assets and boost foreign firms’ participation in our projects abroad,” said Huo Jianguo, vice-chairman of the China Society for WTO Studies, under the Ministry of Commerce.

“China is having a hard time attracting international institutions to get involved” in Belt and Road projects, Huo said. “If that persists it will become an one-man show, which is not sustainable.”

Besides Legend, others eyeing the sector include the insurer China Life, China Minsheng Financial, China Everbright Ltd,part of the state-owned China Everbright Group, and Haitong International Securities.

They are mainly scouting for investment and acquisition targets in Europe and Asia, said bankers and lawyers.

WATCHDOGS

Chinese companies will not be expanding into the financial services sector at will, of course. Acquisitions of stakes in foreign banks – never mind full ownership – are already closely monitored by overseas regulators.

But while banks may be tough targets, bankers and executives say Chinese institutions and conglomerates could instead target asset management, insurance or wealth managers.

China Everbright plans to allocate $1.5 billion of its 2017 spending to the purchase of a fund manager, private bank or insurer overseas to help it raise cash more easily and extend its presence abroad.

China Merchants Bank has been “actively looking” for wealth management firms in Europe, said one person familiar with the matter, adding that not all financial acquisitions in the near term may have clear Belt and Road links.

China Minsheng Financial declined to comment on its plans, while Haitong International said it does not “have any plans at the moment”. China Life, Legend and China Merchants Bank did not respond to requests for comment.

“Finance is definitely an encouraged sector under the recent Chinese outbound investment guideline,” said Christina Lee, a partner at the law firm Baker McKenzie’s capital markets practice in Hong Kong.

“PRC financial institutions are mostly domestically focused,” Lee said. “M&A is a fast way to gain exposure and expertise in the international finance scene.”

source: interaksyon.com

All eyes on first Trump-Putin face-to-face at G20

HAMBURG — U.S. President Donald Trump and Russian President Vladimir Putin are set to size each other up in person for the first time on Friday in what promises to be the most highly anticipated meeting on the sidelines of the G20 summit.

Trump has said he wants to find ways to work with Putin, a goal made more difficult by sharp differences over Russia’s actions in Syria and Ukraine, and allegations Moscow meddled in the 2016 U.S. presidential election.

That means every facial expression and physical gesture will be analyzed as much as any words the two leaders utter as the world tries to read how well Trump, a real estate magnate and former reality television star, gets along with Putin, a former spy.

The fear is that the Republican president, a political novice whose team is still developing its Russia policy, will be less prepared than Putin, who has dealt with the past two U.S. presidents and scores of other world leaders.

“There’s nothing … the Kremlin would like to see more than a (U.S.) president who will settle for a grip and a grin and walk away saying that he had this fabulous meeting with the Kremlin autocrat,” Representative Adam Schiff, the top Democrat on the House of Representatives’ Intelligence Committee, said in an interview on MSNBC.

As investigations at home continue into whether there was any collusion between Trump’s presidential campaign and Russia the U.S. president has come under pressure to take a hard line against the Kremlin.

Moscow has denied any interference and Trump says his campaign did not collude with Russia.

On Thursday, Trump won praise from at least one Republican hawk in the U.S. Congress after his speech in Warsaw in which he urged Russia to stop its “destabilizing activities” and end its support for Syria and Iran.

“This is a great start to an important week of American foreign policy,” said Republican Senator Lindsey Graham, who has often been critical of Trump on security issues.

But earlier in the day, Trump declined to say definitively whether he believed U.S. intelligence officials who have said that Russia interfered in the 2016 election.

“I think it was Russia but I think it was probably other people and/or countries, and I see nothing wrong with that statement. Nobody really knows. Nobody really knows for sure,” Trump said at a news conference, before slamming Democratic former President Barack Obama for not doing more to stop hacking.

Senators’ concerns

Ahead of Trump’s meeting with Putin, three U.S. senators wrote to Trump to express “deep concern” about reports that his administration planned to discuss the return to Russia of diplomatic compounds in Maryland and New York that were seized by the Obama administration last year in response to alleged Russian election meddling.

Republican Senators Johnny Isakson and Marco Rubio and Democratic Senator Jeanne Shaheen said returning the facilities would “embolden” Putin and encourage further efforts by Russia to interfere in Western elections. All three are on the Senate Foreign Relations Committee.

The White House declined to offer details on what Trump would request of Putin and what he might offer in exchange for cooperation.

U.S. Secretary of State Rex Tillerson said Trump wanted to talk about how the two countries can work together to stabilize war-ravaged Syria.

“The United States is prepared to explore the possibility of establishing with Russia joint mechanisms for ensuring stability, including no-fly zones, on-the-ground ceasefire observers, and coordinated delivery of humanitarian assistance,” Tillerson said before leaving the United States to join Trump in Germany.

Trump was also grappling with a response to North Korea’s successful test of an intercontinental ballistic missile, which analysts say had a long enough range to reach Alaska.

Curbing Pyongyang’s nuclear ambitions has been Trump’s most pressing foreign policy priority, and he met with leaders from Japan and South Korea on Thursday evening to discuss it. He is also slated to meet with Chinese President Xi Jinping at the G20.

“I’d like to see the president figure out how to engage Russia on North Korea,” said Representative Francis Rooney, a Republican from Florida who is on the House Foreign Affairs Committee.

“What I suggested to the president here a while back was that since we have all these conflicting issues about Russia right now and we’re still reeling from the fact that they took Crimea, maybe this is an opportunity to reset the Russia relationship in a positive manner,” Rooney said in an interview.

source: interaksyon.com