Connect with us

4 Hours Ago

It’s India’s largest online retailer and in 2018, retail giant Walmart announced its intent to acquire a controlling stake in the company for $16 billion, making this the world’s largest e-commerce acquisition, ever. So what is Flipkart? CNBC’s Tom Chitty explains.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

World

Hong Kong central bank cuts lenders’ cash reserves to support economy

Published

on

The Hong Kong Monetary Authority is displayed outside Two International Finance Centre in Hong Kong on June 19, 2013.

Jerome Favre | Bloomberg | Getty Images

The Hong Kong Monetary Authority (HKMA) has cut the amount of cash that banks must keep as reserves, releasing an extra HK$200-300 billion ($25.50-38.24 billion) into the broader economy which has been hit by months-long protests and the U.S.China trade war.

The central bank late on Monday announced a reduction of the Countercyclical Capital Buffer (CCyB) ratio of banks to 2.0% from 2.5%, with immediate effect, particularly aimed at boosting credit to the struggling small and medium enterprises. It was the first cut in the CCyB ratio since it was introduced in 2015.

“Economic indicators and other relevant evidence have signalled that the economic environment in Hong Kong has deteriorated significantly since June 2019,” HKMA chief executive Eddie Yue said in the statement.

“Lowering the countercyclical capital buffer at this juncture will allow banks to be more supportive to the domestic economy and help mitigate the economic cycle,” Yue added.

Hong Kong, which has been rocked by four months of often huge and violent protests against what is seen as Beijing’s tightening grip on the Chinese-ruled city, is facing its first recession in a decade.

The economy shrank 0.4% in April-June from the previous quarter, revised government data showed on Friday, and conditions have sharply deteriorated since then.

The Asian financial center, which also has one of the world’s busiest ports, was already under intense pressure from the escalating U.S.-China trade war and China’s biggest economic slowdown in decades.

HKMA has recently denied rumors, circulating on social media platforms and messaging apps, which have raised concerns about the monetary and financial stability of Hong Kong.

“We have emphasised many times that Hong Kong’s banking system is robust and sound, with strong capital positions, ample liquidity and good asset quality,” Yue said in his blog on Monday. “It is well positioned to withstand market shocks.”

The CCyB was introduced in line with international standards in 2015, ensuring adequate capital buffer for banks which can be deployed during an economic downturn to boost credit growth.

Source link

Continue Reading

World

Berkshire shareholder sells stake, accusing Buffett of ‘thumb-sucking’

Published

on

Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019.

Scott Morgan | Reuters

David Rolfe, a longtime Berkshire Hathaway shareholder and chief investment officer at Wedgewood Partners, is fed up with Warren Buffett.

Rolfe told clients in a letter he sold the firm’s stake in Berkshire after decades of being shareholders, noting his frustration with the conglomerate’s massive cash hoard, lackluster investments and what he thinks are missed investment opportunities by the Oracle of Omaha and his team during the current bull market.

Berkshire Hathaway shares have lagged the S&P 500 over the current bull run, which started March 2009. In that time, Berkshire’s Class A stock is up 323% while the broad index has gained 334%.

“Thumb-sucking has not cut the Heinz mustard during the Great Bull Market,” Rolfe wrote in the third-quarter letter to clients. “The Great Bull could have been one helluva of an astounding career denouement for Messrs. Buffett and [Vice Chairman Charlie] Munger.”

Not that Buffett will miss Rolfe much, the RiverPark/Wedgewood Fund owned 48,000 shares of the Berkshire B class of stock, amounting to about $10 million. And Rolfe’s performance throughout the bull market has not been the best, either. His fund’s annualized returns, net of fees, are 13.6% over the past 10 years through the second quarter, according to a factsheet found in the Wedgewood Partners website. In that time, the S&P 500 has posted an annualized return of 14.7%.

Berkshire’s cash pile swelled up to more than $120 billion by the end of the second quarter of 2019, a record for the company. In his annual letter to shareholders, Buffet said he wanted to make an “elephant-sized acquisition” but noted prices were “sky-high.” Rolfe thinks so much cash is a “considerable impediment of growth” for the company.

Rolfe also grew frustrated with some of Berkshire’s investments during the current bull market. He highlighted IBM and Kraft Heinz, among others.

Buffett revealed his $10.7 billion IBM stake in the fourth quarter of 2011. But by early 2018, he had sold the entire stake. In that time, IBM shares dropped more than 20%.

Kraft Heinz is another investment that hasn’t panned out for Berkshire, especially since 2018. The stock has lost about two-thirds of its value in that time.

These moves “do not inspire confidence that Buffett & Co. are still at the top of their game,” Rolfe said.

Buffett and Munger are 89 years old and 95 years old, respectively, and questions over who will succeed them have been percolating for years now. At the company’s annual shareholder meeting, Buffett said longtime executives Greg Abel and Ajit Jain could one day join him and Munger on stage to answer questions, hinting at Abel and Jain’s succession potential.

Rolfe also noted Berkshire missed two major opportunities at the start of the bull market by not investing big in credit-card companies Mastercard and Visa. During the bull market, Mastercard has surged more than 1,800% while Visa is up over 1,300%. Berkshire has stakes in both companies, but they make up a tiny portion of the company’s equities portfolio.

“These two stocks should have been layups for Buffett,” Rolfe said.

Subscribe to CNBC on YouTube.

Source link

Continue Reading

World

Pork prices and inflation (CPI, PPI) in September

Published

on

Pigs in their pen at a farm on the outskirts of Chengdu in China’s south west Sichuan province, on August 2, 2005.

Peter Parks | AFP | Getty Images

Pork prices in China jumped 69.3% in September from a year ago as the country continued to battle a shortage of the meat that followed an outbreak of African swine fever.

Last month’s surge in pork prices was higher compared to the 46.7% increase seen in August, according to data from China’s National Bureau of Statistics. That pushed up food prices in China by 11.2% in September, accelerating from the previous month’s 10% gain.

Overall, China’s consumer price index increased 3% year-on-year in September, while producer price index fell by 1.2%, according to Reuters. Economists polled by the news agency had expected consumer prices in China to increase by 2.9% in September, and producer prices to fall by 1.2%.

China is the world’s top producer and consumer of pork. But as much as half of the country’s hog population was estimated to have died from the protracted swine fever outbreak, which was discovered more than a year ago. China’s pig herd could halve by the end of this year, according to a July forecast by analysts at Dutch bank Rabobank.

Chinese authorities have responded with measures such as consolidating pig farms and releasing pork from its strategic reserves, noted analysts from consultancy Capital Economics.

“But there are few signs that these measures have been effective: pigs continue to die in large numbers and pork price inflation is accelerating,” the analysts wrote in a report last week.

— CNBC’s Weizhen Tan contributed to this report.

Source link

Continue Reading

Trending