Baltic Dry Index. 2178 +06 Brent Crude 63.58
Spot Gold 1729
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 29/03/21 World 127,776,580
Deaths 2,796,169
“What me worry?”
Mad Magazine.
The good news, if true, the giant container ship blocking the Suez Canal has been re-floated and the Suez Canal should soon be open for shipping again.
Sorting out all the insurance claims will likely take months or years if any claims must be litigated.
Stranded Suez Canal ship re-floated: Inchcape
March 29, 2021 4:52 AM By Reuters Staff
CAIRO (Reuters) - The stranded container ship blocking the Suez Canal for almost a week was re-floated on Monday and is currently being secured, Inchcape Shipping Services said, raising expectations the vital waterway will soon be reopened.
The ship was successfully re-floated at 4.30 am local time and was being secured at the moment, Inchcape, a global provider of marine services said on Twitter.
Ship-tracking service VesselFinder has changed the ship’s status to under way on its website.
The 400-metre (430-yard) long Ever Given became jammed diagonally across a southern section of the canal in high winds early on Tuesday, halting shipping traffic on the shortest shipping route between Europe and Asia.
At least 369 vessels were waiting to transit the canal, including dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels, SCA Chairman Osama Rabie told Egypt’s Extra News on Sunday.
Egypt’s Leth Agencies tweeted the ship had been partially refloated, pending official confirmation from the Suez Canal Authority.
The Suez Canal Authority had earlier said in a statement that tugging operations to free the ship had resumed. The Suez Canal salvage teams intensified excavation and dredging on Sunday and were hoping a high tide would help them dislodge it.
Crude oil prices fell after news the ship had been re-floated, with Brent crude down by $1 per barrel to $63.67.
The ship’s technical manager Bernhard Schulte Shipmanagement (BSM) did not immediately respond to a request to comment.
Suez Canal Insurance Claims Loom as Ever Given Blocks Shipping
More than $3 billion of liability coverage is in place for the owner of the grounded container ship
March 27, 2021 5:30 am ET
More than $3 billion of insurance is in place for liability claims against the owner of the grounded container ship Ever Given, officials with its insurance program said Friday.
It is unclear whether that will be enough to cover losses that are likely to be claimed by some of the more than 200 ships in the canal as of Friday, plus the owners of the cargo they are carrying, if the vessel continues to block the Suez Canal, industry executives said.
Cargo-delivery delays are where a lot of the economic damage would be expected if the critical waterway doesn’t soon open up again to traffic. Delayed shipments could result in manufacturers’ not receiving parts needed for assembly lines or retailers’ not getting spring merchandise in time to stock shelves. At the same time, shipowners who anticipated using their vessels for other cargo loads lose that opportunity as they sit in the canal.
Some ship and cargo owners could end up filing claims with both their own insurers and Ever Given’s insurer—and ultimately suing the container ship’s owner—to receive compensation.
A total of $3.1 billion of liability coverage is available to the ship’s owner, Japan-based Shoei Kisen Kaisha Ltd., through a longstanding shipping-industry program that relies on 13 so-called Protection & Indemnity Clubs, said Nick Shaw, chief executive of the international association of those clubs, which are not-for-profit mutual insurers.
A spokesman for the Club in the U.K., to which Ever Given belongs, said by email, “P&I insurance would cover the shipowner’s legal liability to the cargo owners.”
Still, Marcus Baker, the insurance broker Marsh’s global head of marine and cargo, said in commenting on the situation that “nothing is certain about that at this stage,” referring to payouts for costs of delays and litigation.
An unknown additional amount of coverage from the world-wide insurance market is also in place through policies taken out by cargo owners and other shipowners. Under industry practice, cargo owners buy their own coverage to protect against risk of damage, rather than relying on a shipowner to provide it.
Standard cargo policies protect against lost or damaged goods, not the costs of delays, said Michael Pellegrini, who oversees the North American marine-insurance practice at Marsh. Many cargo owners forgo the additional, expensive coverage for delays, he said.
---- The insured cargoes held up so far are mostly commodities—coal, steel, rice, grains—coming from South and East Asia, including Malaysia, China and Thailand, he said.
Following disruptions from the Covid-19 pandemic, “It’s another black swan,” he said.
Insurance professionals expect many cargo owners, as well as shipowners with vessels queued up in the canal, to seek to tap into Ever Given’s liability coverage.
More
In other news, it’s getting scary in the stock casinos. What exactly is going on and why? Who else is sitting on massive hidden losses?
When elephants fight, it’s safer to get out of their way.
Nomura flags $2 billion loss, cancels bond issue; shares plummet
March 29, 2021 1:19 AM By Makiko Yamazaki, Stanley White
TOKYO (Reuters) -Nomura Holdings Inc on Monday flagged a possible $2 billion loss at a U.S. subsidiary, prompting Japan’s biggest brokerage and investment bank to shelve a hefty bond issuance and sending its stock tumbling by the most in over a decade.
Nomura’s stock was greeted by a deluge of sell orders at market open, pushing its price down as much 16% in early trade.
The firm in a statement said the $2 billion hit derived from transactions with a U.S. client. It based the estimate on market prices as of March 26 and said it could change depending on the unwinding of the transactions and market fluctuation.
The announcement came after a series of block trades in the United States on Friday that investors said caused drops in the stock prices of numerous companies. The trades were linked to sales of holdings by Archegos Capital Management, a person with knowledge of the matter told Reuters.
Nomura’s loss was related to Archegos’ trades, Bloomberg reported citing people familiar with the matter, one of whom said Archegos was a prime brokerage customer of Nomura.
Reuters’ calls to Archegos’ New York office after hours on Sunday local time went unanswered. Nomura declined to comment on any relationship with Archegos.
CONFIDENCE
Nomura said it is assessing the impact of the potential loss on its consolidated earnings for the year ending March 31 -scheduled for release on April 27 - and would cancel the planned issuance of $3.25 billion in senior notes.
“As long as these losses are one-off in nature, 1H FY3/22 should be the timing of recovery, thus the impact on the longer-term outlook is relatively limited,” Jefferies analysts wrote in a research memo.
Just last month, Nomura expressed confidence in sustaining high earnings after booking a 23% on-year rise in April-December net profit at 308.5 billion yen ($2.82 billion), having reported its best third quarter in 15 years on solid global markets and investment banking.
---- “Nomura Holdings should be able to absorb losses of this size,” one broker told Reuters, declining to be identified as they were not authorised to speak to the media.
“It does raise a question of whether there are losses at other Japanese investment banks that just haven’t been revealed yet, but at this point it looks like this problem only affects Nomura. This is not something that will bring down the entire equity market.”
Chief Cabinet Secretary Katsunobu Kato on Monday said the government would monitor the situation carefully and that the Financial Services Agency would share information on the matter with the Bank of Japan.
Large block trades involved more than $10 billion of stocks sold by Goldman: media
March 27, 2021 5:26 PM By Reuters Staff
(Reuters) - Large block trades on Friday causing a wave of selling in a clutch of companies were driven by sales of more than $10 billion executed by Goldman Sachs Group Inc, media reported on Saturday.
Shares in ViacomCBS and Discovery tumbled around 27% each on Friday, while U.S.-listed shares of China based Baidu and Tencent Music plunged during the week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday’s closing levels.
Eric Handler at MKM Partners, who covers Discovery, on Friday said that large blocks of shares in both Viacom and Discovery companies were put in the market on Friday, likely exacerbating the declines.
An email to clients seen by Bloomberg News said Goldman sold $6.6 billion worth of shares of Baidu Inc, Tencent Music Entertainment Group and Vipshop Holdings Ltd, before the U.S. market opened on Friday, the report on Saturday said. bloom.bg/3lYOrZm
Following this, Goldman sold $3.9 billion worth of shares in ViacomCBS Inc, Discovery Inc, Farfetch Ltd, iQIYI Inc and GSX Techedu Inc, according to the report.
A source familiar with the matter said on Saturday that Goldman was involved in the large block trades.
Goldman Sachs did not immediately respond to a Reuters request for comment.
The Financial Times reported that Morgan Stanley sold $4 billion worth of shares earlier in the day, followed by another $4 billion in the afternoon.
Morgan Stanley declined to comment.
The Financial Times reported that Goldman told counterparties that the sales were prompted by a “forced deleveraging”, citing people with knowledge of the matter.
CNBC reported here that the selling pressure was due to liqudation of positions by family office Archegos Capital Management, citing a source with direct knowledge of the situation. A person at Archegos who answered the phone declined to comment.
Large block trades tied to Archegos raise worries about trading this week
March 28, 2021 10:11 PM By Reuters Staff
(Reuters) - A number of large block trades on Friday, which investors said caused big drops in the stocks of a clutch of companies, were linked to the Archegos Capital investment fund, a source familiar with the situation said, with the moves raising worries about volatile trading in the coming days.
Shares in ViacomCBS and Discovery tumbled around 27% each on Friday, while U.S.-listed shares of China-based Baidu and Tencent Music plunged during the week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday’s closing levels. Baidu was trading slightly lower in Hong Kong at the open.
Investors and analysts cited blocks of Viacom and Discovery shares being put in the market on Friday for likely exacerbating the decline in those stocks. Viacom was also downgraded by Wells Fargo on Friday.
The block trades were linked to sales of holdings by Archegos, a source familiar with the situation said, confirming reports elsewhere. CNBC reported here on Saturday that the selling pressure was due to liquidation of positions by family office Archegos Capital Management, citing a source with direct knowledge of the situation. The link with Archegos was also earlier reported by IPO Edge here.
A person at Archegos who answered the phone on Saturday declined to comment. Archegos was founded by Bill Hwang, who founded and ran Tiger Asia from 2001 to 2012, when he renamed it Archegos Capital and made it a family office, according to a page capture here of the fund's website. Tiger Asia was a Hong Kong-based fund here that sought to profit on bets on securities in Asia.
Prior to starting Tiger Asia, Hwang was an equity analyst for Tiger Management according to Archegos' website here. Tiger Management, run by Julian Robertson, was a hugely successful hedge fund, which returned investor money and shut here in 2000.
Hwang in 2012 settled here insider trading charges by the U.S. Securities and Exchange Commission according to a press release here at the time. He and his firms at the time agreed to pay $44 million to settle, according to the release.
Some market participants said last week’s wild moves were likely to make investors increasingly cautious.
“It’s insane,” said Edward Moya, senior market analyst at OANDA. “When you consider how some of these companies have skyrocketed over the last few months, there will be concerns that we are over-levered.”
Other market participants said potential unwinds would only have a limited impact on broader markets. The Nasdaq Composite and S&P 500 both surged over 1% on Friday despite the sharp selloffs in Viacom and other stocks.
“These stories around fund liquidations happen from time to time,” said Michael Antonelli, market strategist at Baird. “Some of the names where big blocks were traded on Friday might see some near-term volatility as traders wonder whether the selling is complete.”
---- A number of banks were involved in the block sales. A source familiar with the matter said on Saturday that Goldman Sachs Group Inc was involved in the large blocktrades. The Financial Times reported that Morgan Stanley sold $4billion worth of shares early on Friday, followed by another$4 billion in the afternoon.
A source familiar with the matter said Deutsche Bank was involved with the block trades as well. Bloomberg and the Financial Times on Saturday reported thatGoldman liquidated more than $10 billion worth of stocks in the block trades. An email to clients seen by Bloomberg News bloom.bg/3lYOrZm said Goldman sold$6.6 billion worth of shares of Baidu Inc , Tencent Music Entertainment Group and Vipshop Holdings Ltd, before the U.S. market opened on Friday, the Bloomberg report on Saturday said. Following this, Goldman sold $3.9 billion worth of shares inViacomCBS Inc, Discovery Inc, Farfetch Ltd, iQIYI Inc and GSX Techedu Inc, according to the report.
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
Cary Grant. To Catch A Thief.
Covid-19 Corner
This section will continue until it becomes unneeded.
Infections Rise for 5th Week; Philippines Lockdown: Virus Update
Bloomberg News28 March 2021, 23:28 BST Updated on 29 March 2021, 05:50 BST
Global Covid-19 cases rose for a fifth straight week, while the death toll continued to accelerate. More than 3 million people in the U.S. were vaccinated for the third day in a row, as the inoculation drive picks up pace.
The Philippines’ key economic area plunged back into another lockdown as the Southeast Asian nation faces its worst surge and a slow vaccine rollout. Brisbane, Australia’s third most-populous city, will enter a three-day lockdown due to an outbreak of the U.K. strain.
U.S. officials expressed concern about the way a pivotal report examining the origins of the pandemic was crafted, including the possibility that the Chinese government had a hand in writing it. German Chancellor Angela Merkel threatened to assert federal control over measures to stem the pandemic. The EU will block exports of AstraZeneca vaccines if the company fails to deliver doses bought by the region on time.
Key Developments:
- Global Tracker: Cases pass 127 million; deaths exceed 2.7 million
- Vaccine Tracker: More than 535 million shots given worldwide
- New York, London beat Asian finance hubs in race to vaccinate
- Mystery of Italian town’s 29 million shots strains EU-Astra ties
- Covid keeps spreading death where vaccines haven’t reached
- Britons urged to stay safe as England takes step out of lockdown
More
Sinopharm needs trial results to decide if COVID-19 vaccine needs booster shot: executive
March 28, 2021 8:44 By Reuters Staff
BEIJING (Reuters) - China National Pharmaceutical Group (Sinopharm) will need to assess results from overseas Phase III clinical trials to decide whether its two-shot COVID-19 vaccine should be followed by a booster shot, a company executive said on Sunday.
Regulators and vaccine developers are looking at whether booster doses are necessary amid concerns that emerging variants of the new coronavirus might weaken protection of vaccines designed against older strains.
“The preliminary results so far showed that the booster vaccination can effectively increase the neutralizing antibody titer and antibody persistence, and also effectively improve the vaccine’s ability to resist mutations,” Zhang Yuntao, vice president at China National Biotec Group (CNBG), an affiliate of Sinopharm, said on Sunday.
“Is a booster shot needed? When will the booster be given? The answer should be based on the results of future phase III clinical studies,” Zhang said at a news conference.
Antibodies triggered by two COVID-19 vaccine products from Sinopharm both have “pretty good” neutralising effect on variants found in Britain and South Africa as well as a few others, Zhang told a news conference, citing results from lab tests using blood samples taken from clinical trial participants.
Lab testing was ongoing for variants found in Brazil and Zimbabwe, Zhang said.
The effect of antibodies induced by Sinovac Biotech’s vaccine declined against a variant identified in South Africa, while the effect against a variant found in Britain remained similar to that against the older Wuhan variant, Gao Qiang, general manager at Sinovac unit Sinovac Life Sciences, said during the same presser.
More
Night curfew in Maharashtra state after record COVID spike
March 28, 2021 6:34 AM By Shilpa Jamkhandikar, Rupam Jain
MUMBAI/ NEW DELHI (Reuters) - Authorities in India’s western state of Maharashtra imposed night curfews on Sunday to tackle a record surge in COVID-19 cases with the financial capital Mumbai reporting 6,123 new cases, the highest single-day spike since March last year.
“We are seeing a higher COVID positive rate in high-rise residential buildings than in slums...to stop the spread only essential services will be allowed,” said Kishor Pednekar, the mayor of Mumbai adding that hotels, pubs and shopping malls must observe the night curfew rules.
India recorded 62,714 cases of the coronavirus in the last 24 hours, the country’s health ministry said on Sunday, the highest single-day tally since mid-October last year.
With 312 deaths, single-day mortality figures were also at their highest since Christmas, according to ministry data.
Several government hospitals reported they were running out of critical-care beds in Mumbai city.
While Maharashtra leads the surge, several other states - Kerala, Punjab, Karnataka, Gujarat, Tamil Nadu, Haryana and Madhya Pradesh - are also seeing a rise in cases.
Many Indians have started questioning the government’s highly publicised vaccine exports campaign when only a fraction of the country’s population has been inoculated.
India has supplied 61 million vaccine doses to as many as 77 countries as part of both grants and commercial arrangements.
Officials in the health ministry in New Delhi said the government had decided to focus on its domestic vaccination programme following a spike in COVID-19 cases and there will be no immediate expansion of vaccine exports.
Experts said more than 40 million people in India have received at least one dose of a coronavirus vaccine so far, but that is less than 4% of the country’s 1.35 billion population.
Next, some vaccine links kindly sent along from a LIR reader in Canada. The links come from a most informative update from Stanford Hospital in California.
World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Stanford Website. https://racetoacure.stanford.edu/clinical-trials/132
Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus resource centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
Centers for Disease Control Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator Covid-19 data tracker (UK)
https://data.spectator.co.uk/city/national
Technology Update.
With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported.
No update today. Normal service resumes tomorrow.
Henry Hazlitt.
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