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One of the most powerful US bond managers has warned of an “inflation head fake”, where misplaced concerns about a rise in consumer prices cause a jump in bond yields. The comments by Dan Ivascyn, chief investment officer at Pimco, which has $2.2tn under management, come after long-dated US Treasury yields climbed to their highest level in a year. The dramatic move reflects expectations of a robust economic recovery, further fiscal stimulus from Joe Biden’s administration and the willingness of the Federal Reserve to tolerate core inflation running above 2 per cent. “There is a material risk for the bond market of an inflation head fake,” Ivascyn told the Financial Times. “This could be a powerful recovery and we have never gone from locking down an economy to opening it back up with this amount of stimulus.” Pimco expects any inflation pick-up will prove temporary, but “the bond market may not come to that conclusion in the near term”, Ivascyn said. Inflation will remain contained because of long-established trends such as technological innovation cutting costs and the weakness of organised labour, Pimco has argued. Slack will also linger in the labour market due to high unemployment, Ivascyn said. “We still see powerful disinflationary trends. After an initial recovery [from the pandemic] there is likely a world of excess capacity,” he said. As the pandemic hit the global economy last spring, the Fed’s preferred measure of annual core inflation briefly fell below 1 per cent, from 1.65 per cent a month earlier. Even after a rebound it remains below the US central bank’s target of 2 per cent. However, expectations for the average level of inflation over the next decade, as derived from bond prices, have risen to nearly 2.2 per cent, the highest level seen since 2014, reflecting in part surging commodity prices. Inflation erodes the value of the interest payments on bonds, and dents the debt’s value, so these nerves have tipped global government bond markets into their weakest start to a year since 2015. The yield on the benchmark 10-year US Treasury breached 1.4 per cent on Wednesday, having started the year at about 0.9 per cent. Yields rise when prices fall. Yields remain low by historical standards. But the fact they have been so low over the past year has provided a key support for stocks, which have rushed higher over the past 11 months. As they pick up, particularly real yields that are adjusted for inflation, investors fret that some of the frothier corners of the stock markets are left vulnerable. Rising real yields have already been a factor in a 4 per cent drop in the technology-heavy Nasdaq index since mid-February. “The back-up in rates has been healthy,” Ivascyn said. “A further rise in real yields would hit risk assets like equities and see policy adjustments.” He predicted that the Federal Reserve could intervene if the rise in yields accelerates. This would more likely take the form of strong statements designed to hold down long-term rates, rather than policy changes such as buying long-dated bonds to control yields. “I don’t believe yield curve control is around the corner [but] we may get the type of rhetoric that seeks to achieve that policy goal,” he said. A rise in 10-year yields beyond 1.5 per cent would represent a “good buying opportunity for investors”, he added.
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America’s Republicans still matter, because they could easily regain power, dynamiting the world’s arrangements again. Meanwhile, they can hamstring Joe Biden’s presidency. Yet when people ask where the Republican party is now, they get distracted by the entertaining “civil war” between Trumpists and “establishment conservative” officeholders. That focus misses the point. In truth, the party’s two sides differ chiefly on language, etiquette and respective tastes for conspiracy theory. Look at how harmoniously they worked together for four years until January 6, when President Donald Trump’s supporters attacked the Capitol building. Republican officials will soon probably hammer out an internal peace treaty. To understand where they go from here requires understanding what unites them. Republican elites have downgraded Ronald Reagan’s “small government” ideology into something qualitatively different: anti-government. Except during emergencies, most agree they don’t want a federal government any more. Establishment Republicans still place Reagan at the top of their totem pole. But they have binned one of his articles of faith: that the existential duty of the federal government is national defence. For exactly 50 years, from the attack on Pearl Harbor in 1941 to the USSR’s collapse in 1991, Republicans obsessed about foreign enemies. After 9/11, they obsessed about jihadi terrorists. In Reagan’s day, Republicans expected to lead American defence: they held the White House for 20 out of 24 years from 1969 through 1993. Republican interest in defence faded well before Trump. In the nearly 20 years since 9/11, Islamist jihadis have killed 107 people in the US. Awful as that is, it’s only about one hour’s worth of deaths from coronavirus on a moderately bad day this winter. Meanwhile, the Iraq fiasco has made it nearly impossible to send the US military abroad. In any case, who is the enemy now? China, Russia and Iran aren’t going to attack the US. Whatever they do to Taiwan or the Middle East probably won’t affect American wellbeing. The closest to a “homeland security” issue in today’s Republican world view is immigration, but Guatemalan families cannot be made as scary as Soviet nukes. Most Republicans have therefore ceased to consider defence a reason for maintaining a serious federal government. That’s why they stuck with Trump while he savaged US intelligence agencies, war veterans and Nato. Republicans are a lot less keen on government now that they no longer expect to control it: Democrats will have held the White House for 20 of the 32 years from 1993 to 2025, and demographic change is on their side. (For all the hullabaloo about Trump’s unexpected success with Latinos in November’s elections, he only got about 32 per cent of their vote.) In short, Republican officials are now asking themselves: what do we want from a Democratic-run government when defence no longer matters much? Their answer: almost nothing. They didn’t even put together an infrastructure bill under Trump, although the government could get paid for borrowing money. Republicans in Washington and state capitals mostly stood by while Covid-19 killed more than 500,000 Americans. In Texas this month, Republicans couldn’t even lay on power and drinking water, leaving some people to melt snow for water. Only when a catastrophe affects Republican voters will the officeholders suddenly pony up fortunes: after Hurricane Katrina, after the financial crisis and after Covid-19 sank the economy. In George W Bush’s words: “When somebody hurts, government has got to move.” As a governing philosophy, this is like living in a straw house and rebuilding it every time the wolf blows it down. Otherwise, the only branch of federal government the Republicans treasure is the judiciary, because it’s the only one they expect to control, through their advantage in the Senate. Video: Where does the Republican party go after Trump? Their ideology is (in Engels’ phrase) a withering away of the state. But this anti-governmentalism cannot quite speak its name. That’s because large majorities, including many Republican voters, support a European-style social-democratic welfare state. Pollsters have run the numbers. “Taken as a whole, Americans consistently say they want Social Security benefits retained with no cuts,” reports Gallup. Two-thirds or more now back Biden’s Covid-19 relief package, according to Quinnipiac, and the same number are for his measures increasing food stamps and extending the moratorium on evictions, says Morning Consult. Seventy per cent support “Medicare for all that want it”, says the data guru Nate Silver. If Republican officeholders spend most of their time playing culture war, that’s because it’s more popular than their anti-governmentalism. No wonder they were happy to back a cartoon president with almost zero interest in policy beyond tax cuts. Every day, Trump advanced their long-term project of reducing public trust in government. He ran for re-election without a policy platform. By their own lights, most Republican congresspeople were right not to impeach him for encouraging an attempted coup. To them, his attack on their own branch of government wasn’t an outrage. It was a symbolic enactment of their world view. Simon and author Leïla Slimani will discuss “The future of the Fifth Republic: writing and thinking about modern France” at the FT Weekend Digital Festival, March 18-20. For more information and tickets visit ftweekendfestival.com Follow Simon on Twitter @KuperSimon and email him at simon.kuper@ft.com Follow @FTMag on Twitter to find out about our latest stories first. Listen to our podcast, Culture Call, where FT editors and special guests discuss life and art in the time of coronavirus. Subscribe on Apple, Spotify, or wherever you listen
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Xi Jinping has claimed personal responsibility for eradicating poverty in China in an attempt to assert his position as one of the country’s epoch-defining leaders. The Chinese president on Thursday handed out medals and certificates in a ceremony broadcast live from the Great Hall of the People in Beijing that made scant mention of his predecessors, who presided over the bulk of the party’s decades-long efforts to raise incomes. The commemoration followed recent reports in state media extolling Xi’s role in the anti-poverty drive he launched in 2013. The propaganda push comes ahead of the centenary of the founding of the Chinese Communist party in July, with the president seeking to secure his place alongside Mao Zedong and Deng Xiaoping in the pantheon of great leaders. “The master narrative being created is Xi being given personal credit for the eradication of poverty,” Carl Minzner, a professor of Chinese politics and law at Fordham University in New York, said.  The emphasis helped to raise Xi in the party’s “ideological pantheon” of leaders so that he was higher than Deng and nearing Mao, a process that was intimately tied to how much longer he ruled, said Minzner. China’s rubber-stamp legislature in 2018 voted to remove presidential term limits, clearing the way for Xi to rule for life. Analysts expect Xi to stay in power after his second term as general secretary of the party concludes late next year, and forecast the party will probably justify the break in practice by granting the president new accolades, such as the title of party “chairman” or “people’s leader”. Poverty alleviation has been a central goal of the Communist party and an important pillar of its legitimacy since long before Xi took office. About 750m people in China have escaped extreme poverty since 1990. Critics, however, point out that China’s extreme poverty line of about Rmb4,000 ($620) in annual income for 2020 — or $2.60 per day in purchasing power parity terms — remains below the level recommended by the World Bank for lower middle-income countries at $3.20 per day. Xi’s campaign raised the political profile of anti-poverty efforts and added government funding for projects. “Targeted poverty alleviation was the magic weapon for winning the war against poverty,” Xi said at the ceremony, referring to his policy initiative. The People’s Daily, the official newspaper of the Communist party, on Wednesday dedicated almost 23,000 characters to a blow-by-blow account of Xi’s role in leading the fight.  Xi’s statements reveal “the people’s leader’s wholehearted devotion to the people”, the newspaper wrote.
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The head of EY Germany, the longstanding auditor of disgraced payments firm Wirecard, is expected to step down from the role, according to people familiar with the matter. Hubert Barth, who has led EY in Germany since 2016, is expected to take another position within the company, the people said, adding that his departure from the top job could be announced as early as Thursday. The change still needs to be formally signed off at board meetings in Germany on Thursday, the people said. Barth’s expected move comes a day after EY announced a reorganisation of its operations in western Europe that will group together businesses with combined revenues of $4.65bn and 27,000 employees. As Wirecard’s longstanding auditor, EY has been under intense pressure since the payments firm collapsed into insolvency in one of Germany’s largest accounting frauds. EY had previously issued unqualified audits for Wirecard for about a decade. Munich prosecutors last year launched a criminal investigation into the EY partners who were in charge of the Wirecard audits after Germany’s audit watchdog filed a criminal complaint, saying it found evidence that they might have violated their professional duties. EY has denied any wrongdoing. In December it hit back against the audit watchdog, claiming that “in our opinion, we have not been sufficiently granted the legal right to be heard in this case so far”. Under Barth’s leadership, EY made significant inroads into corporate Germany, winning market share from its rivals KPMG and PwC. However, several prestigious clients, including Commerzbank, Deutsche Bank’s asset manager DWS and state-owned lender KfW have walked away from EY in recent months. EY’s global chairman and chief executive Carmine Di Sibio in September expressed “regret” that his firm did not uncover the fraud sooner. He said the Big Four accounting group would “raise the bar significantly” on its vetting work. EY declined to comment. Barth did not respond to FT requests for comment on Thursday morning.
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Anglo American, the owner of diamond company De Beers, enjoyed a strong end to 2020 helped by rising prices for its key commodities and the easing of lockdown restrictions. The FTSE 100 company, which also produces copper, platinum and iron ore, on Thursday announced its best second-half performance since 2011 as its mines returned to almost full operating capacity. The turnround allowed Anglo to report underlying earnings before interest, tax, depreciation and amortisation — the measure of profitability tracked by investors — of $9.8bn for the year to December, down 2 per cent on a year earlier, on revenues of $31bn. Analysts had expected the company to report earnings of $9.4bn.  Anglo stuck with its policy of paying out 40 per cent of earnings to shareholders, declaring a final dividend of 72 cents a share. Mining companies have become one of the biggest sources of income for UK investors over the past year, a trend that it set to continue if raw material prices hold at current levels. Anglo is due to bring a big new copper mine in Peru into production next year. Net debt came in at $5.6bn, down from $7.6bn at the half-year stage, helped by increased cash generation. Anglo suffered a 40 per cent drop in first-half ebitda to $3.35bn, dragged down by falling sales at De Beers, lockdowns that hit production in South Africa and operational setbacks in platinum and coal. Since then commodity prices have soared as demand in China, and more recently the rest of the world, has picked up. Copper traded above $9,000 a tonne this week for the first time since 2011, while iron ore is above $170 a tonne and close to a 10-year high. The diamond industry, which almost came to halt in the first half of the half year, has also sprung back to life, helping to drive the recovery in profits at Anglo. The company, which is led by chief executive Mark Cutifani, has also got to grips with the problems that have plagued its South African platinum unit, although it continues face issues at two big coking coal mines in Australia.  “The resilience of our diversified business, following the operational disruptions of the first half and benefiting from strong metals prices in the latter months, generated underlying ebitda of $9.8bn, “ said Cutifani in a statement.
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The chief executive of Warner Music has called into question the financial sense of some of the high-priced back catalogue acquisitions of recent months, after a string of deals for songs by the likes of Fleetwood Mac and Barry Manilow signalled a modern-day gold rush in music rights.  “Both in 1849 and later in the Yukon, more people went broke than they did make money,” said Steve Cooper, chief executive of Warner, the world’s third-largest music company.  “When you . . . pay north of a certain multiple, you’re beginning to move into the world of finance that lacks a certain amount of discipline,” he told the Financial Times. “I praise the people that can figure out how to make money when they pay 25 times [a song’s historic annual royalties]. God bless.”  A combination of low interest rates and the rise of streaming has spawned a scramble for music rights. London-listed Hipgnosis has raised and spent £1.2bn on the rights to hit songs since it floated in 2018 and has been on a buying spree, having struck deals with Neil Young, Jimmy Iovine and Lindsey Buckingham already this year.  Hipgnosis has on average paid 14.76 times songs’ historic annual income to acquire some of the rights to hits by artists such as Barry Manilow, Fleetwood Mac and Bon Jovi. But founder Merck Mercuriadis has said that for some catalogues he had paid a multiple as high as 22, prompting scorn from some music executives and industry analysts.  “At the moment it’s a very favourable rate environment, and what we see is a lot of people moving money from traditional fixed income to . . . what they believe is fixed-income structure,” said Mr Cooper, referring to the predictable royalty payments that songwriting catalogues generate.  Bidders including private equity groups, specialist buyers and music labels have battled for the catalogues of older established artists, whose music has enjoyed a new lease on life thanks to streaming — effectively doubling the value of music rights over the past decade.  Warner Music itself has benefited from an industry-wide revival in music revenues as people shifted listening to paid subscriptions on Spotify and other audio streamers, generating a new source of income for music owners in a digital era. Mr Cooper’s comments came as Warner Music reported its highest quarterly revenue since the company was spun out of Time Warner in 2004.  The record label behind artists including Lizzo and Ed Sheeran reported that total revenue grew to $1.3bn in the three months to the end of December, up 6 per cent from a year ago. The company posted adjusted net income of $114m, down about 10 per cent, which Warner attributed to unfavourable changes in exchange rates on euro-denominated debt.  Digital revenue in the quarter, which includes streaming on Spotify as well as royalty fees from social media companies, grew 17 per cent from a year ago to $825m.  As streaming on Spotify matures, social media has been cast as the next frontier in how music labels can extract money from their songs. Warner Music in December signed a new licensing deal with TikTok, setting royalty payments when songs from Warner artists are played on the Chinese-owned social media app.
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Bobi Wine, the pop singer campaigning to become Uganda’s president in Thursday’s election, has lost count of the number of times he has been violently harassed since he threw his hat in the electoral ring. “I don’t know how many times I’ve been arrested. But, for the last 69 days, I’ve been arrested almost every day but detained only about 11 times. I’ve been shot at four times. “All this time it is my car that has been shot by live bullets deflating all the tyres. And one of the times the bullets shattered through my windscreen, I am only glad that I’m still alive,” he told the Financial Times as he campaigned in eastern Uganda. At 38, Mr Wine, whose real name is Robert Kyagulanyi, is the main challenger to President Yoweri Museveni, 76, a former rebel fighter who has been in power since 1986 when he overthrew Milton Obote, whose rule followed the brutal dictatorship of Idi Amin. Mr Wine styles himself the “ghetto president” after his tough upbringing in a Kampala slum. Mr Museveni, initially hailed as part of a new generation of leaders on the African continent, is reluctant to give up power, said critics. Already scores of people have been killed in violence ahead of the latest poll — and there are fears that this vote could go down as the most violent in Uganda’s history. Mr Wine said more than 100 people were gunned down by security forces in November. Mr Museveni said that 54 died in “senseless riots”. “Democracy is on trial across east Africa,” said Sarah Bireete, director of the Center for Constitutional Governance in Kampala. She cited John Magufuli’s victory in Tanzania last year, which was disputed by the opposition, adding that Ugandan democracy could “completely take the back seat” when the results are announced later this week. “This has been the most violent election in Uganda’s history because Museveni’s grip on power has been greatly challenged — especially by the young voters,” she said. EU electoral observers will not attend the vote after complaints that their advice has been ignored. Ravina Shamdasani, spokesperson for the UN High Commissioner for Human Rights, has said her office is “deeply concerned by the deteriorating human rights situation” ahead of the vote. On Monday, Facebook shut some Ugandan government accounts for seeking to manipulate public debate ahead of the elections, drawing anger from Mr Museveni’s retinue. “Shame on foreign forces that think they can aid and plant a puppet leadership on Uganda,” his spokesman Don Wanyama wrote on Twitter. “You can take away our platforms, you won’t take away Museveni votes.” Late last month, electoral authorities suspended campaigning in several parts of the country citing coronavirus risks. Mr Wine, who last week urged the International Criminal Court to investigate human rights abuses in the run-up to the vote, was accused of breaking Covid restrictions, and slammed an Ugandan electoral commission for taking Mr Museveni’s “orders”. Mr Museveni tweeted that electoral authorities “bundled us with those violating rules”, stressing his willingness to oblige with the coronavirus rules “no matter how unfair it is to us”. Mr Museveni, who still retains strong support in rural areas, has presided over rapid economic growth, which slashed poverty. His campaign has underlined infrastructure works and a pledge to turn Uganda — whose economy has expanded tenfold since he first took power, propped up by foreign donors and lenders — into a middle-income country. Bobi Wine inside a police van in Luuka district, eastern Uganda: ‘For the last 69 days I’ve been arrested almost every day’ © Abubaker Lubowa/Reuters Riot police detain a supporter in Luuka: Bobi Wine has inspired the young by challenging a gerontocratic ruling elite © Abubaker Lubowa/Reuters Critics say he has taken advantage of incumbency and a strong party machinery to win successive elections, securing 60.8 per cent of the vote in 2016. In 2017, Uganda’s parliament lifted the 75-year age limit for the presidency, allowing him to stand again. Despite having a weaker party structure, Mr Wine, who was elected to parliament by a landslide in 2017, has inspired young people, particularly in urban centres, with a message of standing against a gerontocratic ruling elite. “Uganda is a young country, so it might seem right now that the demographics are in his favour, that may also be another reason why he represents a real threat,” said Jackie Asiimwe, a Kampala-based human rights lawyer, of the singer. More than 75 per cent of Uganda’s population is below the age of 30, with the landlocked country having one of the highest youth unemployment rates in sub-Saharan Africa, at 13.3 per cent, according to the World Bank. With Mr Wine promising more jobs and a return to the rule of law, Mr Museveni’s team has acknowledged his sway with younger voters. “The only people candidate Kyagulanyi was having are the young people who he was promising heaven even when he may be delivering hell,” Emmanuel Dombo, spokesman for Mr Museveni’s party told Uganda’s NBS Television. In the run-up to Thursday’s poll, Mr Wine has been campaigning in a bulletproof vest, starting each day with a prayer and “some shadow boxing to heal from the previous day and to prepare myself physically and mentally for the day ahead”. Last month, one of Mr Wine’s bodyguards died. Mr Wine claimed military police ran him over while the military police said the bodyguard fell from a car. Mr Wine last week sent his family to the US for their safety. Mr Wine’s ragga music — a mix of rap and reggae — often focused on politics. He sang: “Our leaders become misleaders . . . Freedom fighters become dictators.” Now he is calling on Uganda’s almost 18m registered voters “to come out massively to vote. We’re going to vote against the regime. It is going to be a protest vote.”
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US cities are losing their allure for renters, placing early signs of strain on the $1.2tn market in bonds backed by mortgages on apartment blocks. The coronavirus pandemic is still rolling through the global population and working from home remains the norm in many professions, pushing some city residents to pack up and leave. Data company Trepp has identified 50 so-called multifamily loans with a balance of $1.5bn where the occupancy rate of buildings dropped by 15 percentage points cent last year. Investors in commercial mortgage-backed securities, where loans backed by properties like apartment buildings are bundled together to underpin the sale of fresh debt, are watching closely. “Is this the tip of the iceberg?” said Manus Clancy, head of research at Trepp. “Our thought is that the number of loans struggling with low occupancy levels has to go up.” Trepp’s data underscores the risks in the commercial mortgage market. Despite investor exuberance spurred on by the prospect of a widely administered vaccine helping to push CMBS prices higher, it could still be some time before people return to working in office buildings in major cities where rents are steep. “In the big urban cities we are seeing occupancy sinking,” said Mr Clancy. “It is expensive to live in these places and right now you can’t do anything with the available amenities and you are not going to the office. Those were often the reasons people stayed in their apartments. It’s not surprising these things are dwindling.” The occupancy rate of the NEMA luxury San Francisco apartment building that sits opposite Twitter’s corporate headquarters dropped to 70 per cent in 2020. The $200m loan behind it, backing a single-asset CMBS forged in 2019, has recovered in value since the darkest point of the pandemic’s blow to global markets. But it remains well below pre-pandemic levels. The triple B rated tranche of the deal is priced at 95 cents on the dollar, having traded at a premium of more than 115 cents on the dollar early in 2020.  In New York, the 75-unit Chelsea29 apartment building on 29th street, boasting a roof terrace and fitness centre, has seen its occupancy drop to 75 per cent. It makes up just 2 per cent of a $1.3bn CMBS deal from 2019 that trades around 90 cents on the dollar, having clawed back ground since March. The fall in occupancy tracked by Trepp affects only 4 per cent of the loans that had reported numbers by late 2020. Analysts and investors have expected a drop-off in rent payments for some time given the dwindling fiscal stimulus support. But the strain comes alongside early signs that remaining tenants are also beginning to struggle to pay their rent. Analysts at the New York Fed warned of an “eviction cliff” in a white paper last month. The pandemic and related job losses “have limited residential and commercial renters’ ability to pay monthly expenses and landlords’ ability to keep current on mortgages,” the authors Marisa Casellas-Barnes and Jessica Battisto wrote. The National Multifamily Housing Association found that just over 75 per cent of households made a full or partial rent payment for the month by December 6, down almost 8 percentage points compared to the same point in the previous year. It marks the biggest year-on-year drop since the onset of coronavirus. The month ended with just shy of 94 per cent of tenants paying their rent. “A rising number of households are struggling to make ends meet,” said Doug Bibby, president of NMHC. “As the nation enters a winter with increasing Covid-19 case levels and even greater economic distress . . . it is only a matter of time before both renters and housing providers reach the end of their resources.”
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Bank stocks, stuck in investors’ doghouse for years, are back in favour, gaining further support after Senate run-off races last week that flipped control to the Democratic party. The sector suffered a rough 2020 as coronavirus lockdowns threatened to spark a rush of loan defaults, drawing out a period of marked underperformance since long-term interest rates began to fall in 2018, compressing profit margins. But US bank indices have outperformed the wider market by more than 25 percentage points since Pfizer and BioNTech announced on November 9 that their Covid-19 vaccine had proven highly effective. “The banks are going from the land of misfit toys, where they were in the summer, to being an area of interest for investors,” said Charles Peabody of Portales Partners, a research house specialising in banks. “People are picking up the phone when we call.” Investors are now hunting for stocks likely to feel the benefit of the vaccines-led rebound, while the prospect of the Democratic party controlling the White House and both chambers of Congress has also fuelled inflation expectations, triggering a rise in long-term interest rates that bodes well for banks’ profits. On Wednesday, after the Georgia results came in, US bank shares rose by almost 7 per cent, their biggest daily gain since November. The coronavirus crisis made a run of poor performance much worse. The KBW bank index lost a quarter of its value from late 2018 to late 2020, underperforming the S&P 500 by almost 50 percentage points. The valuation of the index, as measured by the price/earnings ratio, is now about half of the wider market’s, Autonomous research points out. Historically, the banks’ discount has averaged 25 per cent. “The underperformance of banks versus the overall market in 2020 was really extreme — we had to go back to 2000 to find something similar, and when that reversed, banks outperformed for eight years,” said Ben Mackovac, portfolio manager for the Strategic Value Bank Partners fund, which invests in community banks. The shift in sentiment is most visible in the attitude towards Wells Fargo, which has not yet recovered from its 2016 fake accounts scandal. Labouring under an asset cap imposed by regulators, the bank lost more than half its value early in 2020. Since November, however, it has received five upgrades from Wall Street analysts, and the shares have rallied almost 40 per cent. Rallies are visible outside the US, too. In Europe, an index tracking bank stocks on the benchmark Stoxx 600 index climbed 30 per cent in November, its best month since 2009. Gregory Perdon, co-chief investment officer at Arbuthnot Latham, said the bullish trade for banks is squarely on in Europe as long as US 10-year government bond yields stay at around 1 per cent or higher. One veteran investor in financials remains sceptical. Dave Ellison, the portfolio manager of Hennessey Funds’ large and small-cap financials funds, said that while banks have enjoyed a relief rally, very low rates and low growth are here to stay. “A 3 per cent cost of funds and a 6 per cent return on a mortgage? Those days aren’t coming back,” he said. “How do you grow customers? Not on price — the cost of capital is already zero. Not on service — you can’t compete with Apple or Google.” His portfolios are dominated by non-bank financial services companies, such as PayPal and Visa. But optimists point to several factors. Some think shareholders are in line to benefit from a rush of share buybacks from banks in the coming months — a step that the US Federal Reserve reopened for lenders in late 2020. Autonomous estimates that large US banks’ excess capital stands, on average, at 18 per cent of their market capitalisation, suggesting they could buy back a meaningful proportion of their own shares. Shares in smaller banks, meanwhile, could benefit from consolidation. In recent years, investors have reacted coolly to bank mergers, balking at the big premiums paid for targets. Increasingly, however, banks are doing low- or no-premium mergers of equals, on the model of the $28bn BB&T-SunTrust deal of 2019, which created Truist. In December, Huntington Bancshares agreed to buy TCF Financial for about $6bn, a small premium, taking the total volume of deals in 2020 to $32bn, in line with recent years’ totals, despite the virus. The final catalyst is rising interest rates and a steepening yield curve — a bigger gap between short and long-term rates. A steeper curve means higher profits, as it increases the difference between banks’ cost of funding and what they earn by lending. Both the release of pent-up economic demand as the pandemic eases, and supportive monetary policy, should in theory lead to a steeper curve. David Konrad, a banks analyst at the broker D.A. Davidson, said that with the economy emerging from the Covid-19 crisis, “it’s hard to imagine that in the back half of next year we don’t have a steepening curve”.  Until recently, analysts and investors say, bank stocks have been seen as a trade rather than a long-term play, except among the small fraternity of investors who specialise in the financial sector. For the group to take another leg up, they argue, requires generalist investors to buy in. For much of the last year, said Mr Konrad, the bank space has been “a knife fight among hedge funds fighting for positioning”. But a recent pick-up in yields on US government bonds has started to interest generalists, he added.
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Even at the moment of maximum uncertainty in March, some companies were prospering. As stock markets plunged, the likes of Moderna, Zoom Video and Peloton rode a wave of enthusiasm for businesses that might help us cope with, or exit, the pandemic. Those remain the winners of 2020. But a rebound in investor appetite means a broader range of stocks also ended the year higher, in spite of crippling lockdowns and huge death tolls. Back in June, we ranked companies based on dollars of equity value added. An updated list of those biggest winners appears in a chart below. That method gives outsized importance to companies that were already huge (not to diminish Apple’s extraordinary feat of adding almost $1tn of market capitalisation in the past 12 months). A ranking based on percentage gains in market value, on the other hand, gives too much weight to smaller companies that had big share price rises. So we have adopted a hybrid for our end-of-year rankings: a percentage gain with a floor of $10bn market value at the start of 2020, using data from S&P Global. Geographically, China outperforms the US, with 36 companies in the list to 30. Sectorally, it is technology heavy but with plenty of variety, from Argentinian ecommerce group MercadoLibre to Swedish private equity firm EQT. Many of the winners are beneficiaries of the pandemic; others look like bubble stocks. Some will turn out to be both. Tom Braithwaite 1. Tesla Sector: Automotive / HQ: Palo Alto, us 787% increase in market value $669bn end-2020 market value Some thought Tesla’s $75bn valuation at the start of 2020 was looking bubbly. By the time it entered the S&P 500 in December it was almost nine times higher — more than the next seven carmakers combined. Whether there is any logic to this is hotly debated. Tesla is expected to have produced about 500,000 cars over the year — half the amount Elon Musk projected in 2016. But it has now recorded a profit in five straight quarters, the industry shift to electric vehicles is unquestioned and investors believe its technology is years ahead of the competition. Patrick McGee in San Francisco 2. Sea Group Sector: home entertainment / HQ: SINGAPORE 446% increase in market value $102bn end-2020 market value South-east Asia’s most valuable company showed Covid resistance in all three of its core businesses: gaming, ecommerce and digital payments. Its Free Fire mobile game won millions of new players in 2020 while its Shopee platform has become the region’s most downloaded ecommerce app. Sea is now moving deeper into finance after recently obtaining a coveted digital banking licence in Singapore. But the company is still struggling to become profitable, with net losses widening in the third quarter. Mercedes Ruehl in Singapore © Athit Perawongmetha/Reuters 3. Zoom Video Sector: video conferencing / HQ: SAN JOSE, us 413% increase in market value $96bn end-2020 market value Zoom became almost synonymous with communication during the pandemic. In the space of a year, the number of customers with at least 10 employees using the service jumped nearly fivefold. It will be a tough act to follow. Big companies such as Google, Microsoft and Cisco have Zoom in their sights, and the large number of small customers on month-to-month contracts has left it vulnerable to a fall-off when the pandemic eases. Richard Waters in San Francisco 4. Pinduoduo SECTOR: ECOMMERCE / HQ: SHANGHAI, CHINA 396% increase in market value $218bn end-2020 market value The ecommerce group’s rise was turbocharged by the pandemic as hundreds of millions of Chinese shoppers turned to their smartphones rather than malls. The economic downturn raised demand for Pinduoduo’s ultra-cheap goods, with revenues up 70 per cent in the first nine months of the year. It also swung closer to profitability as it reined in discounts — and an antitrust investigation into its chief rival Alibaba also helped. Ryan McMorrow in Beijing © China Daily/Reuters 5. BYD SECTOR: AUTOMOTIVE / HQ: SHENZHEN, CHINA 359% increase in market value $78bn end-2020 market value Chinese electric carmaker BYD recovered rapidly from a coronavirus-induced slump in sales after the July release of its sporty Han sedan, a competitor to Tesla’s popular Model 3. It is the first BYD model to use the company’s recently developed “blade” battery, a smaller and more energy-dense power pack. The sales bump has helped the Warren Buffett-backed group, an early frontrunner in the world’s largest electric vehicle market, regain ground lost to Tesla and Chinese start-ups. Christian Shepherd in Beijing. 6. CrowdStrike Sector: cyber security / HQ: Sunnyvale, us 357% increase in market value $47bn end-2020 market value Demand for CrowdStrike’s cyber security software has boomed as companies set up remote workforces and accelerated plans to move data to the cloud. The company, which floated in June 2019, made its name after uncovering Russian hackers inside the servers of the US Democratic National Committee around the 2016 election. Another boost came in December with news of a state-backed hacking campaign targeting US federal agencies and the private sector. The hackers attempted to target CrowdStrike but were unsuccessful, while rival FireEye was compromised. Hannah Murphy in San Francisco 7. Shanxi Xinghuacun Fen Wine Factory Co Sector: BEVERAGES / HQ: SHANXI, china 346% increase in market value $50bn end-2020 market value A Chinese spirits maker known for its broad product line, Xinghuacun Fen benefited from China’s post-coronavirus recovery. The company, once a regional player in the northern province of Shanxi, has also benefited from expanding nationally. In Shanghai, one of the nation’s most competitive liquor markets, Xinghuacun Fen reported a more than 50 per cent jump in revenue in 2020. Sun Yu in Beijing 8. LONGi Green Energy Technology Sector: ENERGY / HQ: XI’AN, CHINA 296% increase in market value $53bn end-2020 market value The world’s largest producer of silicon solar wafers had a strong 2020 on expectations that China will rapidly increase the amount of solar energy installations to meet its climate change commitments. In December, President Xi Jinping said the country would grow the share of non-fossil fuels in its primary energy consumption to 25 per cent by 2030, with a target of more than 1,200 gigawatts of wind and solar capacity — compared with just over 200GW of cumulative solar energy capacity at the end of 2019. Henry Sanderson in London 9. Pinterest Sector: social media / HQ: San Francisco, us 291% increase in market value $41bn end-2020 market value The online pinboard service’s popularity has soared during lockdown as entertainment-starved people turned to its platform, drawing advertisers as brands took advantage of the ecommerce boom. Monthly average users were up nearly 40 per cent year on year in the company’s latest quarter; revenues almost 60 per cent. The world’s most wholesome social media network also managed to steer clear of controversies around hate speech that have plagued rivals such as Facebook and Twitter. Hannah Murphy © Michael Nagle/Bloomberg 10. Twilio Sector: TECHNOLOGY / HQ: San Francisco, us 279% increase in market value $51bn end-2020 market value Twilio’s rapid growth has drawn little public fanfare. The San Francisco-based company’s application programming interfaces, or APIs, plug into the computer code behind popular apps such as Instacart and Uber, allowing them to communicate with customers through text and voice. Demand has risen during the pandemic, leading to 51 per cent revenue growth in the first nine months of 2020 compared with the previous year, though it is still losing hundreds of millions of dollars a year. Miles Kruppa in San Francisco 11. CATL Sector: auto parts / HQ: Ningde, China 271% increase in market value $125bn end-2020 market value A rebound in sales of electric cars in 2020 helped propel Chinese battery maker Contemporary Amperex Technology into the country’s Nasdaq-style ChiNext exchange. CATL supplies lithium-ion batteries to some of the largest car companies in the world, including Daimler and BMW, and has about half of the Chinese battery market. Its batteries were used in some Tesla electric cars made in Shanghai. CATL has its sights on the European market and is building a battery factory in Germany. But it faces stiff competition from Korea’s LG Chem, which overtook CATL last year to become the world’s largest battery maker. Henry Sanderson © Square, Inc 12. Square Sector: DIGITAL PAYMENTS / HQ: SAN FRANCISCO, us 265% increase in market value $98bn end-2020 market value Square’s core business providing point-of-sale tech to small merchants has taken a back seat during the pandemic, with its side hustle Cash App becoming very much the main event. Like PayPal’s Venmo, the app allows for instantaneous transfer of cash between people and businesses. But its additional features — for banking, trading and crypto — have meant that, while it has only half the users of Venmo, analysts estimate Cash App makes a lot more money from each of them. In the third quarter Cash App generated $2.1bn in revenue, a fivefold increase on the same period the previous year and 70 per cent of Square’s $3bn total. Dave Lee in San Francisco 13. China Tourism Group Duty Free SECTOR: CONSUMER DISCRETIONARY / HQ: BEIJING, CHINA 239% increase in market value $84bn end-2020 market value China’s largest operator of duty-free shops has reported a sharp rebound in business since the country’s pandemic was brought under control. It more than doubled net income in the third quarter of 2020 following a loss in the first, as global travel restrictions prompted Chinese tourists to travel domestically. It also profited from a new policy that lifted the buying quota for Chinese duty-free shoppers. Sun Yu © Imaginechina Limited/Alamy 14. WuXi Biologics SECTOR: HEALTHCARE / HQ: WUXI, CHINA 230% increase in market value $54bn end-2020 market value The pharmaceuticals contract research and manufacturing group has benefited from coronavirus-induced shutdowns of competitors outside China and expanded its overseas presence during the pandemic. WuXi Biologics, a unit of the parent group WuXi AppTec, has completed a new manufacturing facility in Ireland and signed leases to operate at least four drug development, testing and manufacturing facilities in Germany and the US. Christian Shepherd in Beijing and Wang Xueqiao in Shanghai 15. Xiaomi Corporation SECTOR: TECHNOLOGY / HQ: BEIJING, CHINA 227% increase in market value $108bn end-2020 market value Huawei’s horrible year has been a windfall for China’s other big smartphone maker. With Washington’s Huawei sanctions spurring Android users around the world to turn to Xiaomi’s low-cost devices, it has risen above Apple to take third place in global smartphone market share. Its stock was added to Hong Kong’s Hang Seng index this summer and it crossed the $100bn market cap mark in December. Ryan McMorrow 16. Snap SECTOR: SOCIAL MEDIA / HQ: SANTA MONICA, US 226% increase in market value $75bn end-2020 market value Snap was hit by a freeze in the digital advertising market when the pandemic first took hold but the social media group has since recovered to post record revenues as users flocked to the service during lockdowns and marketers returned. The company also benefited from an advertiser boycott of larger rival Facebook. Hannah Murphy 17. Chewy Sector: ECOMMERCE / HQ: FLORIDA, US 221% increase in market value $37bn end-2020 market value Surging pet ownership means hungry dogs and cats: more than 70 per cent of Chewy’s sales now come from customers enrolled in automatic replenishment of food and other essentials. Investors see greater opportunity still in the online retailer pushing into the wider pet economy: its tele-health offering, Connect With A Vet, was launched in October. This kind of move, and building out its own delivery logistics, has meant an overall revenue increase — up 45 per cent year on year in the third quarter — was swamped by growing costs. But at 18 per cent market penetration, Chewy still has plenty of pet-loving homes to reach. Dave Lee Jeff Green, chief executive of The Trade Desk © Ann Johansson/FT 18. The Trade Desk SECTOR: TECHNOLOGY / HQ: VENTURA, US 221% increase in market value $38bn end-2020 market value A year ago The Trade Desk was a promising adtech business that was smaller than the large advertising groups it serves. By the end of 2020 its market capitalisation exceeded those of WPP, Omnicom and Publicis combined. The company provides software that acts as a brokerage platform for buyers of digital advertising, taking a cut from transactions and earning fees from supplying data. Analysts estimate it generated a relatively modest $807m in revenue in 2020; investors are betting on a boom in automated digital advertising that spreads to televisions, podcasting and billboards. Alex Barker in London 19. Chongqing Zhifei Biological Products Sector: pharmaceuticals / HQ: Jiangbei, China 211% increase in market value $35bn end-2020 market value In early December, Chongqing Zhifei Biological Products became China’s fourth pharmaceutical group to start final stage safety and efficacy trials for a Covid-19 vaccine. The vaccine — developed by Anhui Zhifei Longcom Biopharmaceutical, a subsidiary of Chongqing Zhifei, jointly with state-run think-tank the Chinese Academy of Sciences — uses part of a protein on the outside of the virus that causes the disease to prime the immune system. Early-stage trial results published in late December, but not yet peer reviewed, found no or mild adverse reactions in most of the 950 participants and antiviral antibodies in more than 95 per cent. Christian Shepherd 20. DocuSign Sector: INFORMATION TECHNOLOGY / HQ: San Francisco, us 212% increase in market value $41bn end-2020 market value A few months of working remotely caused organisations to accelerate their digital plans by up to four years, estimated Dan Springer, chief executive of DocuSign. The e-signature company, which enables users to automate contract management, took advantage of the acceleration by expanding its product range. Its artificial intelligence tools sift through documents to flag risks, and the company will soon offer the ability to notarise transactions entirely over video. “When customers go from paper-based processes to digital agreement processes, they do not go back,” Mr Springer said. Patrick McGee 21. M3 SECTOR: technology / HQ: Tokyo, japan 210% increase in market value $64bn end-2020 market value Sony-backed M3 operates an online portal for medical professionals and is now the 15th most valuable company in Japan, with a $62bn market capitalisation on just $1.3bn in annual revenue. Shares have nearly tripled over the past year as a Covid-19 surge in online healthcare stocks coincided with Japan’s temporary easing of restrictions on remote medical care. M3 started in 2000 with investment from Sony subsidiary So-net. After rejecting calls from activist Daniel Loeb to sell its 34 per cent stake, Sony now has a tie-up with M3 to combat the pandemic. Kana Inagaki in Tokyo © Bloomberg 22. Shopify Sector: Ecommerce / HQ: Ottawa, Canada 201% increase in market value $139bn end-2020 market value Amazon’s stock may be up by almost two-thirds in 2020 but its fast-growing Canadian rival has almost tripled in value to nearly $150bn. More than 1m merchants, from corner shops to Heinz, use Shopify’s technology for online storefronts, checkout systems and connections to Instagram and TikTok. It even managed to show it could make a quarterly profit. Still, investors are encouraging Shopify to keep building its own logistics network and help sellers to match Amazon’s rapid deliveries. Tim Bradshaw in London 23. Meituan SECTOR: ECOMMERCE / HQ: BEIJING, CHINA 194% increase in market value $224bn end-2020 market value China’s “everything app” was hit hard by lockdown, as authorities closed restaurants and consumers shied away from food delivery. But Meituan bounced back in the second half of 2020, with growth at its food delivery business making up for sluggish travel sales. Investors are betting better days lie ahead with the end of the pandemic potentially in sight and Meituan continuing to take food delivery share from Alibaba’s Ele.me. It now boasts 477m annual users. Ryan McMorrow MercadoLibre has rapidly grown to become Latin America’s biggest company © Jonne Roriz/Bloomberg 24. MercadoLibre Sector: ECOMMERCE / HQ: BUENOS AIRES, ARGENTINA 194% increase in market value $84bn end-2020 market value Thanks to the burst in online shopping since the outbreak of Covid-19, MercadoLibre (or “free market” in Spanish), has become the biggest company in Latin America. The region’s answer to China’s Alibaba is now worth $83bn on Nasdaq having more than doubled its value over the past year. Chief executive and founder Marcos Galperín told the FT that his company would keep growing for at least another decade, given that the digital transformation of retail is at an early stage in Latin America. Benedict Mander in Buenos Aires 25. Adyen SECTOR: PAYMENTS / HQ: AMSTERDAM, NETHERLANDS 189% increase in market value $71bn end-2020 market value It would be easy to put Adyen’s 2020 success down to rival Wirecard’s demise. But that would ignore the €55bn Dutch payment processor’s continued rise in one of capitalism’s most hotly contested spaces. Its technology, which allows customers such as Nike to use one payment platform across all their global storefronts, has led to rapid top-line growth and 60 per cent ebitda margins — a rare combination in a world of lossmaking tech hopefuls. Jamie Powell in London © Imaginechina Limited/Alamy 26. Alibaba Health Information Technology Sector: healthcare / HQ: Hong Kong, china 186% increase in market value $40bn end-2020 market value Selling pills online has increased Ali Health’s annual shopper count to 65m and brought year-on-year sales growth of more than 70 per cent for several quarters. In the six months to September 30, revenue grew 74 per cent to Rmb7.1bn. The pharmaceutical arm of Alibaba’s business has also benefited from returning customers buying more frequently and an expansion of its stock of medicines. Ryan McMorrow 27. Samsung SDI Sector: electronics / HQ: yongin, South Korea 182% increase in market value $39bn end-2020 market value Booming demand for TVs, tablets and other mobile devices has boosted this specialist maker of electronics for semiconductors and display panels. Samsung SDI also makes batteries for electric vehicles as well as mobile devices and has reported growing orders for EV batteries. Its EV market share rose from 3.7 per cent in 2019 to 6.2 per cent in the first nine months of 2020. Operating profit was up more than 60 per cent in the July-September period on a year earlier. Song Jung-a in Seoul © SeongJoon Cho/Bloomberg 28. Kakao Sector: technology / HQ: jeju, South Korea 182% increase in market value $31bn end-2020 market value As operator of South Korea’s most popular chat app, Kakao has done well from surging demand for mobile shopping, games, and other online entertainment during the pandemic. Operating profits rose nearly 50 per cent in the January-September period from a year earlier and its large user base has facilitated expansion into markets including online finance and mobility. Song Jung-a 29. Luzhou Laojiao Sector: CONSUMER STAPLES / HQ: LUZHOU, CHINA 178% increase in market value $51bn end-2020 market value Among China’s biggest makers of premium liquor, Luzhou Laojiao’s history stretches back more than four centuries. Helped by the nation’s post-pandemic economic recovery, the company enjoyed a 14.5 per cent rise in revenue in the third quarter of 2020 following a drop in the first. Stronger demand for high-end baijiu, a must-have firewater at business banquets, lifted average prices of the distiller’s flagship Guojiao 1573 brand by almost a fifth. Sun Yu 30. LG Chem Sector: chemicals / HQ: Seoul, South Korea 174% $55bn increase in market value LG Chem controls about a quarter of the electric vehicle battery market, up from 10 per cent in 2019. It supplies many of the global automakers and has overtaken China’s CATL to become the top EV battery maker by market share. Its stock is trading near a record high, up about 250 per cent from a three-year low in March. Song Jung-a 31. East Money Information SECTOR: FINANCIAL SERVICES / HQ: SHANGHAI, CHINA 169% increase in market value $41bn end-2020 market value A surge in online trading following China’s post-pandemic market boom has given a lift to the nation’s leading digital investment platform. East Money Information more than doubled its revenue and tripled its net income in the third quarter of 2020 from a year before, as China’s equity market rally boosted commission income for stock trading and mutual funds. Sun Yu 32. Aier Eye Hospital Group  SECTOR: HEALTHCARE / HQ: CHANGSHA, CHINA 169% increase in market value $47bn end-2020 market value Aier Eye Hospital, the operator of China’s largest network of private ophthalmic clinics, has tapped into the country’s growing demand for eye surgery due to an ageing population and a government campaign to reduce short-sightedness in schoolchildren. These trends have brought the group, which mainly provides corrective laser surgery, eye checks and cataract operations from its more than 600 hospitals, steady revenue growth and stable profit margins since 2015. Christian Shepherd in Beijing and Wang Xueqiao in Shanghai 33. Datadog Sector: technology / HQ: new york, us 168% increase in market value $30bn end-2020 market value Fast-growing software company Datadog, which offers monitoring and analytics tools for the cloud, emerged from relative obscurity to become one of the top-performing IPOs of 2019. In 2020 it reached new heights, thanks to an investor push into cloud-based software companies. It has touted new partnerships with Google and Microsoft, two of the largest cloud data storage providers. Datadog’s next challenge: showing it can keep up its 61 per cent year-on-year revenue growth while becoming profitable. Miles Kruppa 34. Kingsoft SECTOR: TECHNOLOGY / HQ: Beijing, china 167% increase in market value $29bn end-2020 market value While Microsoft and Google have been fighting for share in the overseas office software market, China has strived to create homegrown champions. Under Beijing’s drive to ensure all software used in critical infrastructure is “autonomous and controllable”, Kingsoft has become the default provider for government offices, state-owned enterprises and banks. The company recently launched more online collaboration tools, taking full advantage of Google’s absence from the Chinese market. Yuan Yang in Beijing 35. Roku Sector: technology / HQ: San Jose, US 167% increase in market value $42bn end-2020 market value This maker of video dongles and connected TV software was already having a good year as people found themselves at home and looking for entertainment. But November’s results silenced any remaining doubters. Even as Netflix’s growth waned in the third quarter, Roku accelerated, logging 14.8bn streaming hours, up 54 per cent year on year. A deal with AT&T in December to carry HBOMax will bring Wonder Woman into Roku’s 46m living rooms. Investors who bought at March lows of below $60 will have quintupled their money. Tim Bradshaw © Roy Liu/Bloomberg 36. JD.com SECTOR: ECOMMERCE / HQ: BEIJING, CHINA  165% increase in market value $136bn end-2020 market value When China’s lockdown hit, JD.com was the only ecommerce group reliably delivering packages, bringing hordes of new shoppers to its platform. It has since built on that lead, while expanding into far-flung cities and villages with ultra-cheap shopping app Jingxi. Already listed in the US, the company added a Hong Kong listing this summer and unlocked value by spinning off a number of businesses. JD Health, first to list, is now valued at roughly $60bn in Hong Kong. The coming year may bring the IPOs of JD Digits and JD Logistics. Ryan McMorrow 37. SF Holding SECTOR: DELIVERY LOGISTICS / HQ: SHENZHEN, CHINA 160% increase in market value $61bn end-2020 market value China’s second-largest courier company is among the biggest beneficiaries of an online shopping boom that has persisted even after lockdowns lifted. Fierce price wars among the country’s logistics groups have forced it to lower fees and offer more low-cost services but revenues still grew more than a third to Rmb109bn in the first three quarters of 2020. In November, when the country’s “Singles Day” online shopping festival takes place, SF Express delivered more than 900m packages, up almost 60 per cent on the year before. Yuan Yang 38. Rongsheng Petrochemical Sector: INDUSTRIALS / HQ: HANGZHOU, CHINA 155% increase in market value $29bn end-2020 market value Rongsheng is the listed arm of Zhejiang Rongsheng Holding Group, one of the biggest players in China’s petrochemical industry. The company is a major buyer in the crude oil market, where prices have collapsed in 2020. It is also the majority owner of Zhejiang Petrochemical, a vast complex that was built in 2019 and combines refining and petrochemicals. In 2019, Saudi Aramco signed an agreement to acquire a stake in the company. The shares of Rongsheng are up 101 per cent year to date. Thomas Hale in Hong Kong 39. Shenzhen Mindray Bio-Medical Electronics SECTOR: HEALTHCARE / HQ: SHENZHEN, CHINA 150% increase in market value $79bn end-2020 market value The medical monitors, ventilators and virus reagents that Mindray produces have been in high demand during the pandemic, prompting a steep rise in profit. But after the world returns to normal, will the company keep growing? It has been developing new businesses and in October established an animal-medicine subsidiary to produce veterinary equipment. Qianer Liu in Shenzhen and Nian Liu and Yuan Yang in Beijing 40. T-Mobile US SECTOR: TELECOMS / HQ: Bellevue, us  150% increase in market value $167bn end-2020 market value Despite a turbulent year in which flamboyant chief executive John Legere left after sealing a $59bn merger with rival Sprint, and with SoftBank quickly selling down its large Sprint stake, critics’ predictions that T-Mobile would lose market share were confounded. Third-quarter results in November revealed it had pushed its customer base above 100m and that it was about a year ahead of schedule in integrating Sprint. New chief executive Mike Sievert argued the company was “profitably outpacing” rivals in the 5G race. Nic Fildes in London 41. Vestas Wind Systems SECTOR: ENERGY / HQ: AARHUS, DENMARK 142% increase in market value $48bn end-2020 market value Clean energy had a great year in 2020, and Vestas, the world’s largest maker of wind turbines, has seen revenues and profits rise. The Danish manufacturer’s revenues have grown 50 per cent over the past two years as volumes increased, even though the price of wind turbines fell. The growth has put Vestas in expansion mode: the company recently retook control of its offshore wind subsidiary (which had been spun out as a joint venture in 2013), and is expanding its work in project development. Leslie Hook in London 42. Fortescue Metals Group Sector: mining / HQ: Perth, Australia 141% increase in market value $56bn end-2020 market value One of the year’s biggest beneficiaries of the soaring iron ore price, which hit a nine-year high in December, has been Fortescue Metals Group — and its founder and chairman Andrew Forrest. Huge Chinese demand for the steelmaking ingredient has turbocharged profits at the Australian miner, allowing it to pay $3.7bn dividends and adding to the already considerable fortune of Mr Forrest, who owns 36 per cent of the company. Neil Hume in London 43. Foshan Haitian Flavouring and Food SECTOR: CONSUMER STAPLES / HQ: FOSHAN, CHINA 139% increase in market value $100bn end-2020 market value China’s largest soy sauce maker profited from the nation’s post-lockdown consumption recovery, with net income up more than 20 per cent from the year before in both the second and third quarters of 2020. The strong performance was helped by Haitian’s nationwide distribution network, which covers more than 90 per cent of China’s 2,000 counties. Sun Yu 44. EDP Renewables SECTOR: ENERGY / HQ: MADRID; SPAIN 138% increase in market value $24bn end-2020 market value As one of the world’s leading renewable energy companies, EDPR is primed to benefit from both US president-elect Joe Biden’s $2tn climate plan and the EU’s Green Deal. EDPR stands out as a “pure play” renewables group with 11.5 gigawatts of installed wind and solar capacity in the US, Europe and Brazil. Energias de Portugal, its parent company, has invested more than €20bn in renewables since 2006 and plans to lift green energy generation from below 70 per cent of its total capacity to 90 per cent by 2030. Peter Wise in Lisbon 45. Okta Sector: technology / HQ: San Francisco, US 135% increase in market value $33bn end-2020 market value The maker of cloud-based security and identity management technology has more than doubled its share price in 2020 and beaten Wall Street forecasts for three quarters in a row since the pandemic began. News this month of one of the biggest and most sophisticated hacking campaigns ever — which exploited widely used software to spy on governments and businesses around the world — will have only reminded IT managers that good access management tools are vital. Tim Bradshaw 46. StoneCo SECTOR: PAYMENTS / HQ: Sao Paulo, brazil 134% increase in market value $26bn end-2020 market value As Wirecard collapsed, payments upstart StoneCo was flying as it shrugged off the Covid-19 turmoil to almost double its market capitalisation in 2020 to $26bn. Founded in 2012, the start-up floated on Nasdaq six years later with backing from investors including Warren Buffett. Focusing on small and medium-sized retailers in Brazil, Stone has thrown down the gauntlet to the country’s big banks by expanding into other services such as credit. Michael Pooler in São Paulo 47. Wuliangye Yibin SECTOR: consumer staples / HQ: yibin, china 134% increase in market value $174bn end-2020 market value This Chinese liquor maker managed to maintain double-digit revenue growth throughout the pandemic, weathering the external shock by expanding its group buying business and online sales. Wuliangye’s strong brand awareness among China’s business community, the main source of demand for the country’s spirit of choice, baijiu, helped sales recover faster than many of lesser-known rivals following the end of nationwide lockdowns. Sun Yu 48. RingCentral Sector: technology / HQ: Belmont, us 134% increase in market value $34bn end-2020 market value Zoom became a verb in 2020 and millennials prefer texting, but RingCentral shows that businesses still need telephones — even if only in the cloud. RingCentral’s main product turns a physical phone into an app, though its video and corporate messaging tools have also been updated. Founded in 1999, RingCentral is now enjoying the latest round of dotcom mania: working from home. Though it remains unprofitable, its shares have doubled this past year, thanks to a $1bn-a-year subscription business that is growing at nearly 30 per cent a year. Beating analyst estimates in November reassured shareholders there would be life after Zoom. Tim Bradshaw 49. BeiGene SECTOR: PHARMACEUTICALS / HQ: BEIJING, CHINA 132% increase in market value $23bn end-2020 market value The cancer treatment specialist is likely to become the first Chinese pharmaceutical company with three listings — in New York, Hong Kong and soon, if approved, Shanghai. Established a decade ago, BeiGene achieved total revenue of $209m for the first three quarters of 2020 after two self-developed products hit the market. And despite never reporting a profit, its global development footprint and bounteous research and development lines have made the company a hot stock. Yuan Yang 50. Siemens Gamesa SECTOR: RENEWABLE ENERGY / HQ: BILBAO, SPAIN 132% increase in market value $28bn end-2020 market value The world-leading wind turbine manufacturer enjoyed a steady climb during the pandemic, benefiting from governments’ plans to focus economic recovery plans on renewable energy. Following several legal disputes between the main shareholders, Siemens in February cemented control of the business, buying out Iberdrola’s 8.1 per cent stake for €1.1bn to take its own holding to 67 per cent. Daniel Dombey in Madrid 51. Nexon Sector: technology / HQ: Tokyo, japan 130% increase in market value $27bn end-2020 market value The South Korean gaming group founded by billionaire Kim Jung-ju has benefited from global lockdowns and school closures. Downloads of KartRider Rush+, the mobile version of its hit racing game, have topped 20m since its mid-May launch. Despite a delay to the mobile launch of another popular title Dungeon & Fighter in China, Nexon churned out record revenues of ¥79.4bn ($766m) for the third quarter. Sales in South Korea increased 114 per cent from a year earlier. The stock has also been supported by plans for a ¥100bn share buyback over the next three years. Kana Inagaki 52. Jiangsu Yanghe Brewery SECTOR: CONSUMER STAPLES / HQ: Suqian, CHINA 127% increase in market value $54bn end-2020 market value The Chinese liquor maker has made significant progress in moving up the value chain following its successful launch of several middle- to high-end products in the second half of 2020. The efforts helped raise the company’s revenue 8 per cent in the third quarter of following four consecutive quarters of decline. Sun Yu 53. Zalando Sector: ECOMMERCE / HQ: BERLIN, GERMANY 125% increase in market value $28bn end-2020 market value From locked-down fashion mavens to shoppers avoiding crowds, pandemic-era retail was such a boon for Zalando that it raised its profit forecast twice in 2020. Europe’s largest online fashion retailer now expects full-year earnings before interest and tax to be more than double the €166m it reported previously. The Berlin-based group is investing €50m, including waiving commissions until March, in an effort to triple the number of brands that sell across its platform in the coming year. Erika Solomon in Berlin  54. Nvidia Sector: technology / HQ: Santa Clara, us 125% increase in market value $323bn end-2020 market value Nvidia capped a banner year, rising to become the world’s most valuable chipmaker by market value, by agreeing the industry’s biggest-ever takeover. The pandemic provided a tailwind for some of Nvidia’s businesses, though others — such as sales to carmakers — were hit. Demand for high-end video gaming chips held up, while the cloud computing boom touched off by the pandemic led to sustained data centre investments by its customers all year. The acquisition of chip designer Arm Holdings, scheduled to close within a year, was questioned by some on Wall Street but could provide the foundation for Nvidia’s next phase of growth. Richard Waters 55. Spotify Sector: MEDIA / HQ: STOCKHOLM, SWEDEN 123% increase in market value $60bn end-2020 market value Instrumental meditation, Michelle Obama and a buzzy year-end marketing campaign. This was the recipe for Spotify’s rip-roaring year on the stock market. As the pandemic took hold, the company said users opted for “wellness” podcasts and instrumental music to counteract the stress of the coronavirus crisis. It added 20m subscribers from the start of the year to the end of September, reaching 144m paying customers globally. It also unveiled exclusive podcast deals with stars including Joe Rogan and Mrs Obama, fuelling optimism about its future. Anna Nicolaou in New York 56. EQT Sector: FINANCIAL SERVICES / HQ: Stockholm, Sweden 121% increase in market value $24bn end-2020 market value The private equity group spent 2020 snapping up businesses while many rivals remained cautious. A fall in performance fee revenue as the pandemic hit its companies spooked shareholders in August. But assets under management, which determine steady management-fee income, hit €46.5bn in the third quarter, up €6bn on a year earlier. Investors are betting the fast-paced dealmaking at EQT, which listed in 2019, will lead it to raise larger funds. Kaye Wiggins in London 57. Sany Heavy Industry SECTOR: INDUSTRIALS / HQ: changsha, CHINA 120% increase in market value $45bn end-2020 market value China’s infrastructure boom, a product of Beijing’s pandemic relief stimulus, has enriched Sany Heavy Industry. The nation’s leading construction machinery maker reported a 57 per cent jump in profits in the third quarter of 2020 following a 33 per cent slump in the first quarter. It has also benefited from equipment upgrades as a large number of construction machines near the end of their useful life. Sun Yu 58. Zijin Mining Sector: MINING / HQ: LONGYAN, CHINA 118% increase in market value $34bn end-2020 market value Rising copper and gold prices have improved the fortunes of China’s Zijin Mining. Both metals are up more than a fifth due to China’s economic recovery and investors seeking a haven. Zijin also resolved a dispute with the government of Papua New Guinea that will allow the Hong Kong and Shanghai-listed company to reopen the Porgera gold mine with its joint venture partner Barrick Gold. It also owns a 40 per cent stake in the Kamoa-Kakula copper project in the Democratic Republic of Congo, which is set to become the world’s second-largest copper mine. Henry Sanderson 59. Viatris Sector: pharmaceuticals / HQ: Pittsburgh, us 117% increase in market value $22bn end-2020 market value The drugmaker is a new kid on the block rather than a winner that has been around all year. It was formed in November from a combination of Mylan and Pfizer’s Upjohn unit, creating a large company focused on selling generics, particularly outside the US. The new company intends to cut $1bn of costs in four years, with a restructuring plan that includes closing or divesting up to 15 factories, and cutting the 45,000-strong workforce by 20 per cent. Hannah Kuchler in New York 60. PayPal Sector: ONLINE PAYMENTS / HQ: SAN JOSE, CALIFORNIA 116% increase in market value $274bn end-2020 market value At risk of being outflanked by Square, PayPal announced in November that it too would allow users to buy, sell and manage bitcoin on its service. The move sent PayPal’s stock to an all-time high and gave bitcoin a huge boost too, given that the volatile currency could now be used to buy things directly from PayPal’s almost 30m merchants. But even before then, PayPal had enjoyed strong growth with record levels of processed payments; the company reported $247bn in total payment volume during the third quarter. Its cash transfer app Venmo continued to be a highlight. Increased competition appears to have reawakened PayPal’s innovative side. Dave Lee 61. Sartorius Stedim Biotech Sector: Pharmaceuticals / HQ: Aubagne, France 116% increase in market value $33bn end-2020 market value The French company was born out of a merger of Stedim and Sartorius AG’s biotech division in 2007. Like its parent company, it had a bumper year in 2020. Customers stockpiled the lab equipment it makes and sales were pushed higher by surging demand related to Covid-19 vaccines, treatment and testing. Since March, its share price has more than doubled. Donato Paolo Mancini in Rome 62. Yonyou sector: technology / HQ: Beijing, china 115% increase in market value $22bn end-2020 market value China’s answer to Salesforce and SAP is booming thanks to business demand for software during the homeworking era. Despite a 7.8 per cent drop in revenue and a Rmb15m ($2.3m) net loss for the company as a whole, Yonyou’s cloud-based software sales grew 76.4 per cent in the first three quarters of 2020. To further tickle investor excitement, Yonyou also plans to spin off a unit that serves the car industry and list it in Shanghai. Yuan Yang 63. Celltrion Sector: healthcare / HQ: Incheon, South Korea 115% increase in market value $45bn end-2020 market value The company is developing an antiviral antibody treatment for Covid-19. South Korea’s health authorities have allowed the CT-P59 treatment to be used for Covid-19 patients with life-threatening complications although the new drug is still undergoing clinical trials. Investors are upbeat about the company’s acquisition of a business previously owned by Japanese rival Takeda, and a touted merger of three Celltrion affiliates. Song Jung-a 64. Luxshare Precision Industry SECTOR: TECHNOLOGY / HQ: DONGGUAN, CHINA 114% increase in market value $60bn end-2020 market value Headed by a former factory worker from Taiwanese rival Foxconn, Luxshare has had 60-fold sales growth since listing in 2010 thanks to a string of supply contracts with the likes of Apple. A maker of the US group’s AirPod wireless earbuds since 2017, the company in August became the first Chinese assembler of iPhones. With other clients including Huawei and Tesla, Luxshare is seen as part of China’s “red supply chain” — companies that win orders from big global businesses with government help. Yuan Yang 65. Changchun High & New Technology Industry SECTOR: Healthcare / HQ: changchun, china 114% increase in market value $28bn end-2020 market value This state-owned drugmaker based in China’s industrial north-east has recorded steady profit margin growth in 2020, in large part because of the popularity of its growth hormones that help children gain extra inches. The group, whose products range from the latest pharmaceuticals to traditional Chinese medicine, received a boost in March with the approval of its new nasal spray influenza vaccine. Christian Shepherd 66. Advanced Micro Devices Sector: tech manufacturing / HQ: Santa Clara, US 112% increase in market value $110bn end-2020 market value The revival of chipmaker AMD is proof that fallen tech stars sometimes have impressive second acts. AMD’s latest generation of personal computer and server chips have given it a clear lead over longtime rival Intel. It is also benefiting from a decision a decade ago to stop making its own chips and focus on design instead. With Intel struggling with its own advanced manufacturing efforts, the decision to outsource to TSMC has left AMD with a further edge. A $35bn all-stock purchase of Xilinx late in the year marked an effort to broaden AMD’s product range and reinforce its newfound position. Richard Waters 67. Nippon Paint Holdings SECTOR: manufacturing / HQ: osaka, japan 111% increase in market value $35bn end-2020 market value Masaaki Tanaka, chief executive of Nippon Paint Holdings since early 2020, engineered a complex $12bn deal in the middle of the pandemic with the company’s largest shareholder Wuthelam Holdings, a private business founded by one of Singapore’s richest billionaires. The combined group, which brings together two of Asia’s biggest paints and coatings businesses, considers the crisis as a chance to pursue further acquisitions across the fragmented $150bn industry. Kana Inagaki 68. Worldline Sector: PAYMENTS / HQ: PARIS, FRANCE 110% increase in market value $27bn end-2020 market value Worldline’s jump in value since the start of the pandemic could be a little deceiving since the French payment services business bought its rival Ingenico earlier in 2020 in a €7.8bn deal to create a European champion. But it has still prospered in its own right as customers eschewed the use of cash, turning instead to online purchases and contactless payments in shops. Chief executive Gilles Grapinet said there had been “a more permanent shift in the way we do shopping in general in the western world”. David Keohane in Paris 69. Neste Sector: ENERGY / HQ: ESPOO, FINLAND 110% increase in market value $56bn end-2020 market value Finnish group Neste was long known as an oil refiner but in recent years has pivoted decisively to renewable fuel. The company, in which the Finnish state still has a 36 per cent stake, is now the world's largest producer of renewable diesel. Neste is in the process of making its biggest investment ever by expanding its refinery in Singapore, which turns cooking oil and other waste and fat into renewable fuels. Richard Milne in Oslo 70. Offcn Education Technology SECTOR: consumer discretionary / HQ: BEIJING, CHINA 109% increase in market value $33bn end-2020 market value A tutoring company known for prepping would-be civil servants for their exams, Offcn’s services have been in high demand as surging unemployment prompted jobseekers to seek secure jobs at government agencies. But it has also made progress in branching into other areas, with its civil service exam preparation business accounting for 53 per cent of its total revenue in the first half of 2020, down from 64 per cent a year earlier. Sun Yu © Bloomberg 71. Delivery Hero Sector: FOOD DELIVERY / HQ: BERLIN, GERMANY 109% increase in market value $31bn end-2020 market value Despite never having made a profit, a surge in takeaway food orders during the pandemic propelled Berlin-based Delivery Hero into the blue-chip Dax index in 2020. Founded just nine years ago, the start-up now operates in almost 50 countries. It has pursued rapid growth via acquisitions and by moving into so called “q-commerce” — the delivery of groceries and household staples. Entry into less-developed markets, such as Iraq and Venezuela, seems to be paying off — in November, the company delivered a record 5m orders in a single day. Joe Miller in Frankfurt 72. Sartorius AG Sector: Pharmaceuticals / HQ: Gottingen, Germany 107% increase in market value $29bn end-2020 market value The German company that makes equipment for biopharma and pharmaceutical companies enjoyed a bumper year thanks to demand related to Covid-19 tests, therapeutics and vaccines. For the first nine months of 2020, its sales grew a quarter and its order intake almost 40 per cent. Deutsche Bank analysts say the company “has become a textbook example of how to under-promise and over-deliver on guidance”. Since the pandemic was declared in March, its share price has more than doubled. Donato Paolo Mancini in Rome 73. Samsung Biologics Sector: healthcare / HQ: Incheon, South Korea 102% increase in market value $50bn end-2020 market value This subsidiary of Samsung that makes biopharmaceuticals on a contract basis is expanding capacity to meet surging demand from global drugmakers. In 2020, it won orders worth $1.65bn from customers including GSK and AstraZeneca, up from $265m in 2019. It has also signed deals with Vir Biotechnology to produce Covid-19 antibody products and with Eli Lilly and AstraZeneca to produce Covid-19 treatments. Song Jung-a 74. ServiceNow SECTOR: cloud software / HQ: Santa Clara, us 102% increase in market value $107bn end-2020 market value A platform for automating backroom processes inside large organisations is not the sort of company to catch the headlines. But Wall Street’s love affair with cloud software companies in 2020 has made ServiceNow a clear winner. A fifth of its customers are in industries that have been badly hit by the pandemic, potentially weighing down on growth. But its technology has played a role in helping workers collaborate remotely during the crisis. ServiceNow is also one of the companies set to benefit from the increasing automation of work. Richard Waters 75. LG Electronics SECTOR: CONSUMER DISCRETIONARY / HQ: Seoul, SOUTH KOREA 100% increase in market value $21bn end-2020 market value For much of 2020 LG Electronics benefited from booming consumer and business demand for its appliances and devices. The South Korean tech powerhouse was buoyed further by a decision in December to spin off part of its electric vehicle components business and set up a $1bn joint venture with Canadian group Magna International. The move will help capture the fast-growing global EV parts market. Edward White in Seoul 76. China Feihe SECTOR: CONSUMER STAPLES / HQ: BEIJING, CHINA 99% increase in market value $21bn end-2020 market value The pandemic has done little to keep China’s leading infant formula maker from expanding its footprint as domestic consumer brands continue to climb the value chain. While foreign brands still dominate the infant formula market, local players such as Feihe have played catch-up in small cities thanks to effective marketing campaigns and rapid expansions of distribution networks. Sun Yu 77. Orsted SECTOR: RENEWABLE ENERGY / HQ: Fredericia, Denmark 99% increase in market value $86bn end-2020 market value Renewables had a record-breaking year while the rest of the energy sector floundered, and the world’s largest developer of offshore wind farms was a standout performer, with steady growth in operating profit. The company, whose ambition is to become the world’s first “green energy supermajor”, is waving goodbye to longtime chief executive Henrik Poulsen, with former Lego executive Mads Nipper taking over from January 1. Leslie Hook 78. Freeport-McMoRan Sector: mining / HQ: phoenix, us 99% increase in market value $38bn end-2020 market value Over his long career Richard Adkerson, chief executive of Freeport-McMoRan, the world’s biggest publicly listed copper miner, has seen everything from market crashes to dealmaking booms. But even he must be surprised by the China-driven consumption frenzy that has boosted demand for copper and put a rocket under Freeport’s share price. Production volumes are set to expand next year and the company looks well placed to benefit from surging demand for the copper required to build out the green economy. Swelling profit margins are also likely to lead to a resumption of dividends. Neil Hume 79. Atlassian Sector: CLOUD SOFTWARE / HQ: Sydney, Australia 98% increase in market value $58bn end-2020 market value Atlassian was founded in a nation better known for digging up minerals than developing technology. But the Australian software company is emerging as a global leader in its sector during the pandemic. It sells software that enables developers and IT teams to collaborate, manage and share information and it is growing rapidly. Revenues increased by a third to $1.6bn in the year to the end of June 2020, compared with the previous 12 months. Founded on the strength of a A$10,000 credit card debt in 2002 by Mike Cannon-Brookes and Scott Farquhar, it now serves 182,000 customers. Jamie Smyth in Sydney 80. Veeva Systems SECTOR: cloud software / HQ: pleasanton, us 97% increase in market value $41bn end-2020 market value As one of the first specialised cloud companies to sell to a single industry — in its case, pharmaceuticals and life sciences — Veeva has become the most visible exponent of one of the software industry’s most promising new trends. Recent acquisitions were hurt by the crisis: both Crossix, a service for holding patients’ data, and Physicians World, a speakers bureau for healthcare professionals, have suffered more than other parts of Veeva’s business. But the company also said the pandemic had accelerated the uptake of its digital communications and remote working tools. Richard Waters 81. Slack Technologies SECTOR: ENTERPRISE SOFTWARE / HQ: SAN FRANCISCO, US 97% increase in market value $24bn end-2020 market value The messaging system was at risk of missing the stock market’s work-from-home boom in 2020. Much of the soaring demand for video conferencing and other communication services passed it by, putting Slack’s more complex set of collaboration tools in the shade. But a $27.7bn cash-and-stock takeover offer from Salesforce late in the year, partly buoyed by that company’s surging share price, turned 2020 into a landmark year for Slack investors after all. Richard Waters 82. Cadence Design Systems SECTOR: semiconductors / HQ: San Jose, us 96% increase in market value $38bn end-2020 market value A surge in orders from chipmakers in China made it a strong year for Cadence, which, along with Synopsys, dominates the market for the tools used to design chips. It was unclear whether customers were bringing forward purchases to beat tighter export restrictions, as Washington clamps down on a key part of the technology China needs to build a domestic chip industry. But even if sales there slip, Wall Street believes the need for new chip designs to feed the AI and cloud computing boom will continue to lift the company. Richard Waters 83. Ocado Group SECTOR: retail / HQ: Hatfield, UK 95% increase in market value $23bn end-2020 market value UK online grocer Ocado has been turning customers away because it will not have enough warehouse capacity to serve them until well into 2021. Its investors are unperturbed; bigger order sizes have boosted the efficiency and profitability of its existing operation, run as a joint venture with Marks and Spencer. Chief executive Tim Steiner thinks the increased popularity of online food shopping will increase demand for the technology and knowhow that Ocado licenses to others, and that is the real driver of its share price. Jonathan Eley in London 84. Haidilao International Sector: Food & Beverage / HQ: Beijing, china 92% increase in market value $41bn end-2020 market value China’s Haidilao chain of restaurants sells hot pot, a spicy broth associated with the country’s southern Sichuan province. It closed its venues at the end of January but began reopening in March. Despite the pandemic, the company opened 173 restaurants in the first half, taking its total to 935 and allowing it to win market share from smaller competitors. The majority of its restaurants are in mainland China but it also has an international presence. Thomas Hale in Hong Kong 85. Align Technology Sector: medical devices / HQ: San Jose, us 92% increase in market value $42bn end-2020 market value The company behind the “invisalign” teeth-straightening brand is planning global expansion, targeting countries including Brazil, Russia, Turkey, and India. The digital orthodontics pioneer sells the iTero scanner to help clinicians map mouths. While business was knocked by the lockdowns, the stock soared as the company beat expectations in the third quarter. Lured by marketing campaigns including social media influencers to target teens, people returned to the orthodontist. Hannah Kuchler 86. Idexx Laboratories Sector: animal health / HQ: portland, us 90% increase in market value $43bn end-2020 market value The animal health company enjoyed strong growth in diagnostics for pets and livestock but it also ventured into tests to detect if humans have Sars-Cov-2, the virus that causes Covid-19. Idexx said in October that the animal health market had experienced a “V-shaped recovery”. People had rescheduled postponed clinic visits for their pets, while tests for swine and poultry soared in Asia-Pacific. Revenue rose 19 per cent to $722m in the third quarter, with Covid-19 tests contributing 1 percentage point of growth. Hannah Kuchler 87. Synopsys SECTOR: semiconductors / HQ: mountain view, us 89% increase in market value $40bn end-2020 market value An explosion in new types of chips — from those used in cars and other everyday objects that make up the “internet of things”, to specialised processors for AI and cloud data centres — lifted revenue growth at Synopsys into the double digits. Like rival Cadence, it is facing a possible hangover this year after a one-off jump in sales to China. But the prospect that its chip design tools will still be required to create new processors for a wide range of uses has left investors hopeful for 2021. Richard Waters 88. West Pharmaceutical Services Sector: pharmaceuticals / HQ: Exton, PA, US 88% increase in market value $21bn end-2020 market value The almost 100-year-old medical supplies company is a specialist in the equipment that so many Covid-19 drug and vaccine makers need, including vials and syringes. It produces about 40bn devices and components each year at 25 manufacturing sites. In October, it raised its full-year guidance to net sales of about $2.1bn. Hannah Kuchler 89. Geely Automobile Sector: automotive / HQ: Hong Kong, china 87% increase in market value $34bn end-2020 market value China has been the sole bright spot on a bleak auto map, with premium sales faring particularly strongly and a sharp rise in electric car demand. Geely, whose parent company owns Volvo, has ridden both waves. It plans to raise extra funds for the electric performance brand Polestar, and to formally merge with Volvo next year. A new listing in Shanghai, bringing the company onto the newly formed Star Market for technology companies, gave shares a late boost. Peter Campbell in London 90. Hengli Petrochemical SECTOR: CHEMICALS / HQ: DALIAN, CHINA 85% increase in market value $30bn end-2020 market value Hengli enjoyed a banner year increasing revenue 35 per cent year on year in the first nine months as demand for its petrochemical products rose. Hengli is China’s largest producer of PTA, a chemical that goes into polyester, and brought new production capacity online during the year. The company was also able to maintain high capacity in its refining business while oil prices were low. Still, risks could lie ahead for Hengli — its majority shareholder has pledged about a quarter of its shares as collateral for loans. Ryan McMorrow 91. Delta Electronics sector: TECHNOLOGY / hq: Taipei, Taiwan 85% increase in market value $24bn end-2020 market value The maker of power and thermal management products has not had a straightforward year. Forced to delay its factory building in India because of the pandemic, Delta also cited US-China tensions in flagging a further reduction to the 65 per cent share of its manufacturing done in China. But as a big supplier of electric and hybrid vehicle components, including charging systems, the rise of new-energy cars has driven a sales boom. Yuan Yang 92. Genmab Sector: Biotech / HQ: Copenhagen, Denmark 84% increase in market value $27bn end-2020 market value Danish biotech Genmab surged in 2020 after advancement in the development of its antibody-based epcoritamab blood cancer treatment showed investors it could replicate initial success in this field. It also agreed a deal worth up to $3.9bn with US company AbbVie to develop that drug and two other molecules. Crucially, the deal gives Genmab access to the US market. Investors have taken notice, with shares more than doubling from lows in March. Donato Paolo Mancini in Rome 93. Midea sector: electrical appliances / hq: Beijiao, china 82% increase in market value $105bn end-2020 market value The resilience of Chinese white-goods company Midea’s business model has been credited with enabling it to withstand the pandemic. Stronger online sales and diversification of production helped the group deal with the closure of bricks-and-mortar stores during lockdown. The company also recovered from a more personal crisis, with Chinese police disclosing in July that billionaire founder He Xiangjian had been rescued from a break-in at his home. Ravi Mattu in Hong Kong 94. Polyus Sector: mining / HQ: Moscow, rUSsia 82% increase in market value $28bn end-2020 market value As Russia’s biggest gold miner, it is not difficult to increase your value when prices surge on investor fears. But a sharp rise in the share price in 2020 is also thanks to a flow of positive news from its upcoming mega mine, which the company said will be the world’s largest. Sukhoi Log, a remote deposit in eastern Siberia, is estimated to hold 40m ounces of gold, roughly a quarter of Russia’s unmined reserves. Some savvy dealmaking led to Polyus accelerating the buyout of the deposit’s minority shareholder, leaving it sole owner of the $2.5bn project. Henry Foy in Moscow 95. Nidec Sector: manufacturing / HQ: kyoto, japan 81% increase in market value $74bn end-2020 market value The world’s largest manufacturer of motors used in everything from Apple iPhones to Sony PlayStation games consoles and automatic sliding doors has a five-year plan to spend up to $9.7bn on development for electric vehicles. The company’s billionaire founder Shigenobu Nagamori has forecast that 2025 will be a “watershed moment” for its ambitions to boost the sale of motors used in electric vehicles. The stock is one of the top brokerage picks for 2021 for its expected role in the transition to EVs. Kana Inagaki 96. Kweichow Moutai Sector: Beverages / HQ: ZUNYI, CHINA 80% increase in market value $384bn end-2020 market value The maker of China’s best-known distilled spirit, which is often used to seal business deals, maintained its status as an investor favourite. Revenues grew at their slowest rate in five years in the fourth quarter but the company benefited from the country’s strong economic recovery from coronavirus, with shares ending the year at a record high. Ravi Mattu 97. Henan Shuanghui Investment & Development Sector: Food & Beverage / HQ: LUOhe, china 80% increase in market value $25bn end-2020 market value Henan Shuanghui is the China subsidiary of Hong Kong-listed WH Group, the world’s largest pork producer, which owns more than 70 per cent of the business. An outbreak of African swine fever in 2018 led to the culling of millions of animals and rising pork prices; in July, they were up 86 per cent compared with a year earlier. In the nine months to the end of September, net profits were 23 per cent higher year on year. Thomas Hale 98. Marvell Technology SECTOR: data infrastructure / HQ: Santa Clara, US 79% increase in market value $32bn end-2020 market value Amid a rapidly consolidating chip sector, Marvell has used deals to carve out a bigger potential market and stake its claim to being one of the survivors. Late in the year, the $10bn purchase of data centre networking company Inphi left it with a broader set of products for cloud-computing customers. That matched an earlier networking acquisition that pushed it deeper into 5G wireless communications infrastructure, and has strengthened its position in two of the biggest growth markets for chips. Richard Waters 99. MediaTek SECTOR: SEMICONDUCTORS / HQ: HSINCHU, TAIWAN 79% increase in market value $42bn end-2020 market value MediaTek designs the chips powering smart TVs and smartphones, placing it in a quarter of homes globally and one-third of mobile devices. In 2020 it benefited from the ongoing 5G upgrade and locked down consumers buying TVs and other electronics. Revenue was up 45 per cent in the third quarter and analysts forecast continued growth as shoppers buy low cost 5G smartphones, many of which run on MediaTek’s affordable chips. Ryan McMorrow 100. Amazon SECTOR: ecommerce / hq: seattle, us 79% increase in market value $1.6tn end-2020 market value At some point in the year’s third quarter, the number of people working at Amazon surpassed 1m, the result of a series of unprecedented hiring sprees throughout the year, first to handle pandemic panic, then the Christmas rush. By pushing its Prime Day sales event back, from July to October, Amazon was able to lengthen the holiday shopping period, reducing the strain on its delivery network and providing an added sales boost in its fourth quarter. As a result, revenues may exceed $100bn for the first time in the company’s history. But it has been costly. Amazon’s profits have been kept strong by the dependable cloud, and a rapidly growing online advertising business that should give Google and Facebook serious pause for thought in 2021. Dave Lee
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This holiday’s biggest blockbuster was not a film. Wonder Woman 1984, the superhero sequel which might have dominated box offices in any other year, made less than $17m in US cinemas over its opening weekend — half what last year’s Star Wars film made in its first day.  Instead, as Covid-wary audiences chose couches over cinemas, the buzz was stolen by a carnal costume drama released to the nearly 200m Netflix subscribers whose binge-watching during the pandemic has lifted the streaming service’s market value to $240bn.  In Bridgerton, a Regency romp based on Julia Quinn’s novels, corseted debutantes circle eligible bachelors. Rakes smoulder, gossips meddle and bosoms heave. It is a genre as hoary as the hospital drama, and it was propelled to the top of Netflix’s most-watched list by Shonda Rhimes, the executive producer who made the medical soap Grey’s Anatomy the biggest hit on Disney’s ABC network.  Yet she and showrunner Chris van Dusen, her one-time assistant, have turned a period drama into a contemporary conversation piece: Bridgerton is a modern-scored, feminist reimagining of 19th-century England and several of its stars are black. The contrast with the pale-faced casts of previous romance adaptations turns a piece of froth into something more subversive.  The series is the first Rhimes production to appear since she signed a reported $150m deal with Netflix in 2017, and lands at a pivotal moment in her career. At 50, she has become one of television’s most bankable talents, and with each hit series — Private Practice, Scandal, How To Get Away with Murder — the qualifiers have fallen away. She is no longer just one of her industry’s most successful women or African-American producers: she is, as she defiantly declared in 2018, “the highest paid showrunner in television”.  Estimates of Ms Rhimes’ wealth congregate around $140m, though Shondaland, her production company, discloses no figures and she says the details of her Netflix contract were misreported. Tellingly, though, she made her boast after Netflix struck a reported $300m deal with Ryan Murphy, who made Glee for Fox.  The defections of two of television’s most prolific producers sent shudders through the networks, as they showed how aggressively streaming services were competing for content. Ms Rhimes had been chafing over creative freedom at ABC, and the last straw was when a Disney executive baulked at giving one of her sisters a pass to one of its theme parks, reportedly asking her, “Don’t you have enough?”  Ted Sarandos, co-CEO and chief content officer of Netflix, had good reason for offering her a freer rein as television’s streaming wars are becoming more intense — and expensive. The likes of Disney+, HBO Max and Peacock now challenge Netflix, Amazon Prime and Apple TV+, and the money being poured into production has rocketed.  Only the biggest shows stand much chance of cutting through, making reliable hitmakers increasingly valuable. While promoting Bridgerton, Ms Rhimes is completing Inventing Anna, the story she adapted of a fake heiress swindling her way through New York’s elites, and working on an adaptation of Recursion, Blake Crouch’s sci-fi thriller.  The Netflix relationship is just one aspect of Ms Rhimes’ quest for scale. She is producing podcasts with iHeartMedia and writing lessons with MasterClass; she has launched partnerships with Dove, Microsoft and Peloton. Her website brims with empowering blog posts. (“If you don't like your story, rewrite it.”)  The self-described introvert who had been “horrified” to hear that she would be sitting with Barack and Michelle Obama at an event in 2013, admitted to Oprah Winfrey three years ago that her characters lived much more exciting lives than hers. But she is now creating a multimedia empire that the older entrepreneur would recognise.  Ms Rhimes started rewriting her story in 2014 when, stung by a sibling’s observation that she was constantly turning down invitations, she resolved to spend a year saying “yes” to “the stuff that terrifies me”, from public speaking engagements to shelving work to play with her three adopted children.  By the end of her “year of yes”, the Democratic donor had befriended the Obamas and given a barnstorming graduation speech at Dartmouth, her alma mater. Commencement speakers usually advise graduates to follow their dreams, she told her audience, but “I think that’s crap”. Dreams do not come true on their own, she said: “It's hard work that creates change.” Since holding colour-blind casting calls for Grey’s Anatomy, Ms Rhimes has been working to change television by making it look more like the diverse world she knew growing up as the sixth child of two academics in a middle-class Chicago suburb. Speaking in 2018, she said her “sweat and tears” meant that she “no longer needed to battle men to get to the top of a mountain” but she still needed to set an example. Shondaland’s landmark deal will be up for renewal this year. Netflix needs hitmakers like Ms Rhimes, but its history of ending shows abruptly if the numbers are not working suggests that nothing is guaranteed. So a lot is riding on the escapist fluff of Bridgerton. The market for the kind of talent that can offer an advantage in the streaming wars is every bit as unpredictable as the marriage market in Regency England.  andrew.edgecliffe-johnson@ft.com
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Léone Meyer vividly remembers the first time she saw her father’s cherished painting — Bergère rentrant des moutons (‘Shepherdess Bringing in Sheep’) by the Impressionist painter Camille Pissarro — in the basement of the Musée d’Orsay in Paris.  It was four years ago, and the painting, which had been looted by the Nazis during the second world war from her Jewish adoptive parents, had finally been returned to France by a museum in Oklahoma.  “The tears came into my eyes,” said Ms Meyer, now 81. “I almost saw the silhouette of my parents before me.” Nearly 80 years after her biological mother, brother, aunt and grandmother were deported and murdered at Auschwitz, the Nazi concentration camp in Poland, Ms Meyer has found herself embroiled in the continuing struggle to locate and return looted works of art traded around the world after the war. Two court battles are now under way over the fate of her Pissarro. The court cases in France and the US centre on an unusual agreement struck in 2016 between Ms Meyer and the University of Oklahoma, which previously had the painting on display at its Fred Jones Jr Museum of Art.  In Paris, Ms Meyer is challenging the validity of the deal, which accepted her as the rightful owner but required a rotation of the painting every three years from 2021 between France and Oklahoma in perpetuity. The court’s reasoning was that the Fred Jones museum had been gifted the painting by an owner who bought it in good faith from a New York gallery without knowing it was Nazi war spoil.  The painting on a display screen behind Mike Reynolds, Oklahoma state representative, at a meeting discussing its possession after Léone Meyer had sued for its retrieval © AP Léone Meyer says her wish remains to give the painting in full to the Musée d’Orsay in Paris: ‘It’s very important that this painting returns here’ © Bertrand Rindoff Petroff/Getty Ms Meyer wanted to give the painting to the Musée d’Orsay, but it refused the bequest because it is not allowed to take on perpetual obligations to pay for regular transport overseas. The risk now is that by failing to donate the work of art to an institution in France under the terms of the deal, she will be obliged to hand it to the US state department for its Art in Embassies programme. “Why don’t they just give it to her? She’s in her eighties and a Holocaust survivor,” said her lawyer, Ron Soffer. “Many museums in the world would say, ‘Here, you can have it’. For her it’s a matter of principle.” Ms Meyer worked as a paediatrician but is also a retail heiress rich enough to buy Impressionist paintings if she wants to. The painting belonged to Ms Meyer’s adoptive father, Raoul Meyer, a businessman who joined the French resistance and ran the Galeries Lafayette shopping empire after the war. He was also a musician and art lover who was “very attached” to his small collection of paintings, she said.  The Meyers had hidden their works of art in a safe at a bank in south-western France in 1940, but the Nazis seized the collection and sent it to Switzerland after the Allied landings in 1944. The painting was one of about 100,000 works of art looted from Jews in France during the German occupation. It holds particular significance to Ms Meyer because of the painting’s importance to her adoptive parents, a couple who brought her into their family at the age of seven from a Jewish orphanage outside Paris in 1946. “It’s about respecting the memory of my parents, a desire for justice, and the idea that this period allowed the killing of millions of people in the camps, including my biological family,” she said.  A court in Oklahoma, meanwhile, has ordered Ms Meyer to abide by the 2016 deal, which was validated by US and French courts, and to abandon the legal proceedings in France or be held in contempt of court in the US.  “At the end of the day what the [Oklahoma] museum wants is to have the painting on the wall,” says Olivier de Baecque, the university’s lawyer in Paris. “Mrs Meyer should respect the decisions of the justice system . . . The essence of a settlement is for the parties to make concessions. “When you do a deal like that you need to compromise and if you don’t respect such compromises then there will be no deals in looted art cases.”  Pissarro’s representation of the shepherdess opening a farmyard gate to her sheep, painted in 1886, has had a typically roundabout postwar journey back to France since the war.  Raoul Meyer located it in Switzerland but lost a court case there in 1953 when he tried to reclaim it. It was later acquired by New York art dealer David Findlay, who sold it to a family that gifted it to the Fred Jones museum 20 years ago. Ms Meyer located it there in 2012 and began the process of reclaiming it.  It was only after the so-called Washington Conference in 1998 called for art looted by the Nazis to be identified and ownership resolved that the art world began to look more closely at the issue, said Mr Soffer. “That’s when people started paying attention to provenance, and people started doing due diligence,” he said. “If they [the museum in Oklahoma] had done due diligence they would have been alerted to the fact that the painting is on the French government list of art looted by the Nazis.” Michel Jeannoutot, president of the CIVS, a French commission to indemnify victims of anti-Semitic looting during the occupation of France, said there was “a general movement in Europe and in the US as well to have ‘clean’ museums, in which works of art are exhibited that have clear provenance”. As she awaits the judgment of the two courts, Ms Meyer says her wish remains to give the painting in full to the Musée d’Orsay, which specialises in Impressionism and has similar rural images by Pissarro in its collection. “This painting has been wandering around the world for nearly a century,” she said. “It should stop. It’s very important that this painting returns here.” 
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Donald Trump’s administration has stepped up its long-running trade dispute with the EU over aircraft subsidies, saying it will increase tariffs on aircraft parts and beverages from France and Germany. The move was announced by the Office of the US Trade Representative late on Wednesday and will apply from January 12 — shortly before Joe Biden is sworn in as US president. The USTR said it would raise the levies on the grounds that the EU had improperly applied tariffs on $4bn worth of American products last month by calculating them based on trade volumes since the coronavirus pandemic erupted this year. The EU measures were authorised by the World Trade Organization. Washington said Brussels had therefore imposed duties on “substantially more products” than it would have if the tariffs had been calculated based on a “normal period”. The $4bn in tariffs imposed by the EU followed the US targeting of $7.5bn in EU goods from October 2019, which was permitted by the WTO as a penalty for subsidies to European aircraft maker Airbus. The EU tariffs, in turn, were authorised in response to US subsidies benefiting Airbus rival Boeing. Both the Trump administration and the EU have said they want to resolve the dispute but the two sides have failed to reach an agreement, which will form one of the biggest tests of rapprochement between Washington and Brussels on trade under Mr Biden. The European Commission said it regretted the Trump administration's move, warning that it “unilaterally disrupts the ongoing negotiation between the commission and USTR to find a settlement to the long lasting aircraft disputes”. “The EU will engage with the new US Administration at the earliest possible moment to continue these negotiations and find a lasting solution to the dispute,” the commission said in a statement on Thursday. The products targeted for higher tariffs in Washington’s latest move include “aircraft manufacturing parts” as well as “certain non-sparkling wine” and “certain cognac and other grape brandies”. The higher tariffs will only apply to French and German products. The fight over aircraft subsidies has simmered for years but escalated sharply during Mr Trump’s presidency alongside tensions on digital taxes introduced in the EU, metals tariffs imposed by the US and car levies threatened by Washington. Airbus said the US tariffs were “counterproductive in every way” and hoped that “Europe will respond appropriately to defend its interests and the interests of all European companies and sectors, including Airbus”. Video: US foreign policy: Joe Biden's priorities in 2021
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Argentina’s economy minister played down the prospects of an early deal with the IMF to repay a controversial $44bn loan, as the country’s year-old leftist government tries to build a domestic consensus on how to end its economic crisis.  After successfully restructuring $65bn of foreign debt with private creditors in August, the government’s attention has turned to talks with the IMF, which began this month. Markets hope this will lead to a new programme that could help to reverse a crisis of confidence that has stoked fears of an imminent devaluation of the peso. “We are fine. We have the instruments to maintain [exchange rate stability],” insisted Martín Guzmán, economy minister, in an interview with the Financial Times. He argued that there was no need for Argentina to seek further help from China, after the central bank renewed a currency swap deal with the Asian country for $19bn in August for another three years, to bolster alarmingly low foreign exchange reserves. “The most important aspect is to get [the new programme] right. We want to move at a solid pace but require common understanding and legitimacy. We are not going to rush this,” added the 38-year-old economist. A deal by March or April “would certainly be acceptable”, he said. “That doesn’t mean it won’t come before that, but there are no guarantees.” The negotiations with the IMF come as Argentina seeks a way out of a three-year long recession. That downturn began after a currency crisis in 2018 that prompted the fund to come to the rescue with a record-breaking $57bn programme — making Argentina the institution’s biggest debtor by far. The recession was made worse by the coronavirus crisis, which prompted the government of President Alberto Fernández to implement one of the longest and strictest lockdowns in the world. Mr Guzmán spoke from his offices opposite the presidential palace in Buenos Aires over the din of tens of thousands of rowdy Argentines who had gathered to pay their respects to Diego Maradona, the legendary footballer who died on Wednesday. The economy minister played down calls from independent economists for Argentina to seek further cheap financing from the fund. “We have to be very careful when borrowing in foreign currency,” he said, warning that exports had been weak over the past seven years, a key factor in the sustainability of Argentina’s debt. But some say the alternatives are worse: unable to borrow on the international capital markets, Argentina is forced instead to resort to covering the bulk of its expenditure through new money printed by the central bank, which pushed the monthly inflation rate up to 3.8 per cent in October.  Nevertheless, Mr Guzmán said that it would be “beneficial” to secure more funding from other multilateral institutions such as the World Bank and the Inter-American Development Bank, especially to finance public infrastructure projects.  As Argentina prepares to embark on its 22nd programme with the IMF over the past six decades, Mr Guzmán insisted that austerity — the linchpin of most of those programmes — was not the answer to the economy’s woes.  “The 2018 programme was based on that same tenet and it didn’t work. The evidence is overwhelming that fiscal adjustments in recessions don’t work — and it’s not what we’re doing,” he said. Mr Guzmán insisted that restoring order to Argentina’s fiscal accounts did not mean reducing spending. In fact, Argentina was increasing spending in real terms in high-impact areas, he said. Similarly, Mr Guzmán pledged that a devaluation was not on the cards, although he admitted that the gap between the official and parallel exchange rates was a problem. “It will take time [to fix], as we can’t remove capital controls [yet],” he said, pointing to the need to accumulate foreign exchange reserves first.  “When you look at the trade numbers, the official exchange rate is at the right level . . . the situation with the [parallel exchange rate] is to do with financial flows that have nothing to do with the real economy,” he said, adding that “the IMF understands that a devaluation would have destabilising consequences at an economic and social level”. Mr Guzmán also rejected accusations by some analysts of inconsistencies in economic policy, which they say are caused by contrasting priorities among the ruling coalition that ranges from pragmatic centrists to more ideologically driven members on the hard left.  Recent overtures to the private sector by Mr Guzmán — based on an understanding that sustained economic growth requires private investment — conflict with anti-business moves from other players in the coalition, notably the country’s Congress. Critics point to a law aimed at preventing shortages, a wealth tax going through Congress and a scathing letter sent to the IMF by a group of senators loyal to Cristina Fernández de Kirchner, the powerful vice-president. “It all goes in the same direction,” insisted Mr Guzmán. “In a crisis in the context of a pandemic, the state plays an important role to protect the most vulnerable and co-ordinate actions to maintain stability — but that is a role that will no longer be necessary in an economy that has restored macroeconomic stability,” he said. Achieving sustained economic growth in the longer term once the economy has been stabilised is perhaps Argentina’s greatest challenge, however. Mr Guzmán highlights the importance of developing domestic capital markets in order to allow greater saving. That would in turn allow greater investment by the private sector, which he hopes will become “a fundamental engine for the economy”.
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Americans were splashing out billions of dollars from their smartphones and laptops on Black Friday as those who have never shopped online before fuel a boom in ecommerce, leaving shopping malls deserted. Despite good weather across much of the US, mall watchers reported sharply lower footfall than usual on what is traditionally the busiest shopping day of the year. “It’s a very sad Black Friday” for bricks and mortar, said David Bassuk, co-head of retail at AlixPartners. Amazon, Walmart and Target were on track to be among the biggest corporate winners from a surge in digital spending, consolidating their lead over struggling rivals as shoppers who are new to online purchasing turn to retailers with the strongest digital offerings. By mid-morning on the east coast, online sales were set to increase between about 20 and 40 per cent from 2019 levels on Black Friday, according to estimates from Adobe, although the analytics group pared back earlier forecasts for an even bigger jump. It recorded $5.1bn worth of ecommerce orders on Thanksgiving — almost half from smartphones. Retailers including Walmart have sought to spread demand over a much longer period than usual, offering promotions as far back as October, reducing sales on the day itself. While shoppers were able to pick up bargains in person, and chains including Best Buy opened stores as early as 5am, most promotions were also available online. Several retailers were taking customer temperatures at the door and some were asking them to provide personal details for track and trace. Stores in Los Angeles, Chicago and other cities were limited to 25 per cent capacity. With coronavirus case numbers spiking, health authorities urged restraint. The Centers for Disease Control and Prevention classified shopping in crowded areas as a “higher risk activity” that helps spread Covid-19. About 9 per cent of online sales so far this week have come from customers who are new to internet shopping, according to Taylor Schreiner, director of Adobe Digital Insights, who said that such consumers “tended to skew older and hailed from rural parts of the country”. The ecommerce surge is the latest sign that, despite the reluctance to shop in person, a sizeable section of the population — those who have remained in work and been able to save money from staying at home — is willing to spend. Chess boards were proving particularly popular, thanks to the hit Netflix mini-series The Queen’s Gambit, as was the PlayStation 5, which has been in short supply. But retailers are nervous about the economic outlook as the pandemic drags on. “Consumers still face uncertainty with rising Covid cases and high unemployment,” said Sonia Syngal, chief executive of Gap, the clothing retailer, this week. Converting additional shoppers to ecommerce threatens to cause more lasting damage for clothing chains, department stores and other bricks-and-mortar operators already ravaged by the crisis. In New York, shopping centres that are usually bustling were a “ghost town” on Black Friday, Mr Bassuk said. “There are definitely a lot of people in New York. They’re just staying put.” He added: “The second wave [of coronavirus] couldn’t have come at a worse time for retailers. It’s really hitting hard right now. Consumers want to be healthy for the holiday and they’re just being overly cautious.” Bricks-and-mortar footfall in the run-up to the peak shopping season was sharply lower than usual levels, down 31 per cent year on year in the third week of November, according to RetailNext. Initial figures indicated that Amazon, together with those bricks-and-mortar based retailers with the strongest online offerings, were increasing their lead over weaker operators. In the week leading up to Black Friday, digital sales at Amazon jumped 65 per cent from 2019, Edison Trends figures showed. At Walmart and Target, two of the strongest bricks-and-mortar operators, they rose 167 per cent and 80 per cent, respectively. Ecommerce business at other companies has also risen sharply, but from a lower base and at a less dramatic pace. Online sales rose 19 per cent at Nordstrom, 23 per cent at JCPenney and 54 per cent at Macy’s.
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Load new posts Total Covid-19 cases View charts and maps World Confirmed 59,022,157 Deaths 1,387,694 Updated at 11/24/2020, 4:07:30 PM BST 11/24/2020, 11:40:27 PM Texas shatters record for daily new cases Peter Wells Texas on Tuesday shattered its record for daily cases, reporting nearly 14,000 new infections. A further 13,998 new cases were revealed by the health department this afternoon, up from 6,576 on Monday. That soared past the previous record of 12,597 set on Saturday. Texas has now averaged more than 10,000 cases a day over the past week, a threshold it never exceeded during its surge alongside other sunbelt states during the summer. While an increase in testing volumes may explain some of the increase in daily cases, a rise in hospitalistions and deaths over recent weeks suggest coronavirus has reestablished itself in the state. There are currently 8,495 people in Texas hospitals receiving treatment for Covid-19, the most since August 4 and representing an increase of 142 over the past 24 hours. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/24/2020, 11:15:20 PM Hong Kong shuts bars and clubs for 3rd time Hong Kong will close bars and nightclubs for the third time this year to curb a surge of Covid-19 cases. More than 180 infections have emerged in recent days at dancing clubs and dance studios, but authorities declined to shut those venues down. “All bars or pubs, bath-houses, clubs or nightclubs must be closed,” the government said in a statement on Wednesday. Hong Kong recorded 80 more cases on Tuesday, 54 of them linked to the dance club cluster. “There have been several days with multiple cases of untraceable sources, and almost one-third of infected people were asymptomatic,” said Sophia Chan, food and health secretary. Bars in the Chinese city were first closed in April for a month, and again from mid-July to mid-September. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/24/2020, 11:13:51 PM Canada signs Covid-19 therapy deal with Eli Lilly The Canadian government on Tuesday signed a deal with US drugmaker Eli Lilly for 26,000 doses of its Covid-19 monoclonal antibody therapy. Under the agreement, deliveries of Bamlanivimab will begin in December and be completed in February 2021. Canada would have the option to purchase more. Eli Lilly co-developed the therapy with AbCellera Biologics, a Vancouver-based biotechnology company. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/24/2020, 11:08:55 PM Chicago to extend Covid-19 relief measures Chicago said on Tuesday it would extend regulatory relief to businesses affected by the pandemic, as the US city’s mayor warned against Thanksgiving get-togethers that could spread the Covid-19 virus further. The city said it would extend temporary relief efforts such as licence renewals, while allowing restaurants and cafés to expand outdoor dining. Mayor Lori Lightfoot said she did not want the city to share the fate of neighbouring Canada, where cases surged after its Thanksgiving holiday last month. “Canada celebrated Thanksgiving on October 12,” Ms Lightfoot wrote on Twitter. “What happened shortly after is what we want to avoid. It's not too late to change your traditional Thanksgiving plans to protect the people you love.” Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/24/2020, 11:08:29 PM New Zealand probes airline crew member in China New Zealand is investigating a possible coronavirus infection in a staff member of the country’s flag carrier in China. The health ministry said Air New Zealand informed the government of the potential infection on Monday after the crew member tested positive. The crew are remaining in Shanghai for tests, which have all been negative so far for other members. “The ministry is continuing to investigate the circumstances of this possible case,” officials said in a statement. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/24/2020, 11:06:05 PM Vaccine cements Oxford’s place as Covid-19 leader Clive Cookson The UK’s University of Oxford has emerged as a global leader in the scientific battle against coronavirus — a bright spot in Britain’s generally less than stellar record in handling the pandemic. The university was in the spotlight on Monday for the vaccine that reported encouraging efficacy results, but it also runs the world’s biggest clinical trial of Covid-19 treatments and leads academic analysis of infections for the UK’s Office for National Statistics, among other coronavirus projects. No other university anywhere can match what Oxford has achieved, said Peter Hale, executive director of the Foundation for Vaccine Research in Washington DC. “They were first out of the gate on coronavirus research back in January and have kept their frontrunner status,” he said. “I consider them ‘the little engine that could’.” Read more here Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/24/2020, 11:04:31 PM News you might have missed … Business travellers coming into England for trips of up to three days could be exempt from the quarantine system under plans floated on Tuesday. A government task force said in a report that the exemption could be introduced in early 2021, although the visitors would be banned from socialising while in England. The makers of Russia’s flagship Covid-19 vaccine said on Tuesday that interim results from phase 3 trials showed efficacy rates outperforming western vaccines. The state-run Gamaleya Institute said data showed the vaccine’s efficacy was 91.4 per cent 28 days after the first shot, rising beyond 95 per cent after 42 days. The UK government has approached telecoms operators in a bid to ensure almost 50 coronavirus vaccination centres for healthcare workers in England have fast broadband connections so they can be up and running within a week. The biggest providers, BT and Virgin Media, are among companies asked to assess 47 locations. Oil prices touched their highest level since March on Tuesday, rising above $47 a barrel after a raft of positive vaccine news sparked a comeback in one of the sectors hardest hit by the pandemic. Brent crude, the international benchmark, gained more than 3 per cent to reach as high as $47.82 a barrel. International retail chains were on Tuesday counting the cost of the collapse in world travel, as Abercrombie & Fitch said it would speed up closure of flagship stores and Tiffany said sales fell sharply in Europe and the Americas. Other retailers lamenting the tourism slump include Macy’s. Accor, Europe’s largest hotel company, is merging a quarter of its brands into a new $1bn company with the owner of the Hoxton hotel chain in a bid to move away from a traditional overnight accommodation model that was already being shaken up before the pandemic. The new entity will operate under the Ennismore name. JD Sports has emerged as the last remaining bidder for Debenhams, as the historic department store chain’s battle for survival nears its conclusion. An agreement on the business’s future is likely to be reached within days, and failure to secure a deal would be likely to result in the liquidation of the company. Compass has warned it expects office workers to continue working from home even after the pandemic subsides, creating a long-term challenge for the catering group. Dominic Blakemore, chief executive, said he expects white-collar workers to work from home half the week, which would depress its annual sales by 5 per cent. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window)
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The writer is president of Queens’ College, Cambridge university, and adviser to Allianz and Gramercy As US president-elect Joe Biden contemplates his first 100 days in office, he should consider what can be done over time to reduce the extreme codependency that developed between his predecessor and the US stock market. Mr Biden is unlikely to put this very high up on the list of challenges he faces. However, the longer he delays in deciding and communicating his approach, the greater the likelihood that he will confront the same dilemma the current leaders of the US Federal Reserve and European Central Bank faced early in their tenures. He might wish to do one thing and be forced into the opposite course of action. Donald Trump believed, and repeatedly stated publicly that the stock market validated his policies as president. The more the market rose, the greater the affirmation of his “Make America Great Again” agenda. The president’s approach was music to investors’ ears. They saw it as supporting, both directly and indirectly, the notion that policymakers needed asset prices to head ever higher. It reinforced the longstanding belief of a “Fed put” — shorthand for the view that the Fed will always step in to rescue the markets — to such an extent that investor conditioning changed markedly. With so much political backing and Fed support for rising markets, pullbacks became a buying opportunity regardless of their cause. The more often this scenario played out, the deeper the Fomo — the fear of missing out on yet another remunerative opportunity — and the more market participants it affected. The result was a notable and widening disconnect between markets and the real economy. This has led to collateral damage risks and unintended consequences. The pattern encourages excessive and increasingly irresponsible risk taking, fuelling the risk of future financial instability. It encourages the misallocation of resources throughout the economy. By aggravating inequality, it amplifies the “Wall Street versus Main Street” divide that slowly but surely eats away the integrity and credibility of economic and financial institutions. Concerned about this disconnect, Jay Powell as Federal Reserve chairman and Christine Lagarde as European Central Bank president each tried to draw a line early in their tenures by putting limits on how much they would support the markets. In both cases, they were forced quickly into highly-visible U-turns. The “Powell Put” has become the latest iteration of one of the market’s favourite beliefs. It started with Alan Greenspan and was also inadvertently deepened by Ben Bernanke and Janet Yellen. Over in Europe, Ms Lagarde has now shouldered her predecessor Mario Draghi’s burden of having promised to do “whatever it takes”. Video: Why it is a good time to be bullish on stocks The path of least resistance for Mr Biden is keep following the path set by central bankers that was taken to an extreme by Mr Trump. He would avoid having to deal with financial volatility in addition to a health crisis, social divisions, a slowing economy, and the worrisome surge in inequalities of income, wealth and opportunity. However, this easy path would also be the wrong one. Right at the outset of his presidency, Mr Biden needs to establish that he will not be held hostage by stock markets that have already drifted too far away from their original purpose of efficiently mobilising and allocating investible funds to spur growth. On regulatory matters, he should signal his administration’s determination to better understand and supervise the migration of risk from the banking system to other financial institutions that as yet are not comprehensively regulated. In his approach to Fed appointments — and he has some to make before deciding next year whether to give Mr Powell a second term — he should favour people willing to restore the central bank’s traditional role as a leader of financial markets and not a follower. US presidential election 2020: You tell us How do you feel now the election is over? Are you happy with the winner? Do you feel the election process was fair? How do you see the outlook for America? Do you feel positive about the incoming president or uncertain? Share your thoughts with us. None of this is easy, nor is it risk free. But, over his entire tenure this approach would be less problematic than continuing to enable and empower markets that are too reliant on policy support. As vice-president, Mr Biden dealt with the fallout of the 2008 global financial crisis. He knows all too well how hard it is to protect living standards and the economy when financially unsustainable practices reach the breaking point as a result of financial accidents due to irresponsible risk-taking. Mr Biden needs to pivot rapidly away from Mr Trump’s approach. This change would also be in the longer-term interest of investors and well-functioning markets.  
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A raging pandemic and precarious economy hardly seem like the most promising backdrop for consumer spending. Yet Americans are forecast to open their wallets this holiday shopping season — even if they will be doing much of it online instead of in stores. Over the 75-day period leading up to Christmas, total US retail sales are predicted to increase 2.4 per cent from the same period a year ago, according to Mastercard SpendingPulse, helped by an expected one-third jump in ecommerce revenues. The season traditionally gets into full swing on Black Friday, the shopping bonanza after Thanksgiving, although the one-day event has long been fading in importance and this year, more than usual, retailers are extending their promotions over several weeks. Walmart, for instance, is offering special deals across at least six different days this month. About a third of shoppers will have completed holiday shopping before Black Friday, predicts Adobe. The season is being elongated partly because of health concerns: a rush to stores on particular days would increase the threat of coronavirus transmission. Online, meanwhile, the level of demand is such that retailers run the risk that delivery networks will be unable to cope unless it is stretched over a longer period. Amazon moved its Prime Day from July to October, spurring the rest of the sector to offer promotional holiday offers earlier in the season. With health concerns still top of mind, and some jurisdictions including New Mexico implementing restrictions on non-essential business as coronavirus cases rise, even more spending is expected to shift online. Adobe forecasts online holiday spend will jump 33 per cent year-on-year to $189bn, driven by a 55 per cent rise in orders from smartphones. E-commerce’s share of overall retail sales during the season is set to rise from 14 per cent in 2019 to more than 20 per cent this year, according to Mastercard. Toys are in particular demand as parents look for new ways to keep housebound children entertained, while sporting goods and electronics are also proving popular. Big-box chain Target said this week that sales of electronics had jumped 50 per cent in its third quarter, led by portable devices and video games. Homeware, meanwhile, is booming as consumers who are now spending more time indoors try to make their surroundings more appealing. Shopping mall stalwart Bath & Body Works this week reported a 55 per cent year-on-year surge in third-quarter sales, fuelled by demand for candles and air freshener as well as soaps. Millions of Americans are in the mood to spend despite the coronavirus crisis, said Ken Perkins, president of the Retail Metrics consultancy. “You’ve got one slice of the population that is really suffering — they’ve lost their jobs and have run out of unemployment benefits in some instances — but you’ve got this bifurcation going on. “Homeowners are really seeing a boon from rising home prices, and equity markets are up. That group is going to feel relatively comfortable, and they’re probably going to spend a bit more this year.” Latest coronavirus news Follow FT's live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here. Household budgets were being diverted to retail — or at least parts of it — from other sectors of the economy, added Neil Saunders, retail managing director of the GlobalData consultancy. “People are saving a stack of money on gas and commuting. They’re also saving on foreign vacations and travel.” That is of scant comfort to hard-hit bricks-and-mortar chains that have been at the wrong end of huge shifts in consumer habits during the pandemic. Clothing and department stores in shopping malls have lost ground to big-box competitors whose mix of value and convenience has proved especially popular. Figures this week showed third-quarter revenues dropped 23 per cent at Macy’s and 14 per cent at Victoria’s Secret. Overall sales at clothing and department stores slid about 12 per cent year-on-year in October. “Covid is surging again across the country and that continues to impede our recovery,” said Adrian Mitchell, Macy’s chief financial officer. The department store group has had to close an outlet in El Paso, Texas, where coronavirus case numbers have surged, but is pushing for authorities elsewhere to allow it to remain open during the holiday period. Even if widespread shutdowns are averted, customers remain reluctant to visit. Bricks-and-mortar store footfall was almost a third lower in the second week of November compared with the same period last year, according to RetailNext, a data analytics group. That is partly because shoppers are consolidating trips. Walmart this week said Americans were making fewer visits to stores, pushing US transaction volumes down 14 per cent in the third quarter, but were loading up with more goods on each trip, and average spending per visit rose 24 per cent. The disruption to spending patterns is such that few executives, even at the more successful operators, are willing to predict how the season will ultimately pan out. Michael Fiddelke, Target’s chief financial officer, said it was particularly hard to read how electronics and toys would sell in the weeks ahead, given the company had already “seen dramatically stronger sales” so far in the pandemic. It was clear, though, that consumers remain reluctant venture to shopping malls as the holiday season approaches, said Charlie O’Shea, senior retail analyst at Moody’s. “It’s not whether they’ll be leery,” he said. “It’s how leery they’ll be.”
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Panasonic is making a significant push into Europe with plans to set up its first battery factory in Norway, as the Japanese group tries to leverage its success supplying Tesla in the US to win more business from European carmakers. The group intends to team up with Norwegian state-controlled oil and gas major Equinor and aluminium company Norsk Hydro for a feasibility study on expanding its battery business in Europe to be completed within six months. Despite running the world’s largest battery factory with Tesla in Nevada, Panasonic has only a small presence in Europe, where a number of companies including Swedish upstart Northvolt and Tesla itself are building plants. Demand for batteries is set to increase rapidly as electric car sales take off, with their share of the European market forecast to climb to 15 per cent next year, according to policy group Transport & Environment. The Tesla Gigafactory near Sparks, Nevada, is about to be upgraded to 38 gigawatt hours a year © REUTERS “Europe is quite a premature market. It is still growing and there’s a lot to happen. It could be colossal,” Allan Swan, the head of Panasonic’s US battery manufacturing unit, told the Financial Times. European carmakers are likely to lead the switch to electric vehicles by aiming to be the most “progressive” in the industry, he added. The size of any factory in Norway would depend on the outcome of the study, Mr Swan added, but it could be “in the ballpark” of the Nevada gigafactory, which is about to be upgraded to 38 gigawatt hours a year.  The factory owned by Northvolt, which is backed by Volkswagen, BMW, Ikea and Goldman Sachs, in the Swedish Arctic is due to have at least 34GWh of capacity by 2024 and could be upgraded to 40GWh. Peter Carlsson, Northvolt’s chief executive, told the FT last year that Europe was expected to have about 600GWh of capacity by 2030. Panasonic has previously supplied batteries to European carmakers such as Volkswagen and Peugeot, but not the cylindrical lithium-ion type it makes for Tesla.  Its expansion into Europe, where the group generates about $7bn in revenue, also comes as Tesla has recently announced plans to build its own battery cells, making it more critical for Panasonic to expand its client base.  Mr Swan said the Norway plant could be “of interest” to Tesla as well, given carmakers are under pressure to pursue partnerships to secure future supply even if they have plans to produce batteries in-house.  Norway presents several advantages as the Scandinavian country produces nearly all its electricity from renewable hydroelectric power, while its market for electric vehicles is the most developed in the world. In September, almost two-thirds of new car sales were for fully electric vehicles, while just one in 10 cars were petrol-only with the rest hybrids. Al Cook, head of global strategy and business development at Equinor, said the electric battery partnership demonstrated that the oil and gas group was committed to boosting its renewable energy business, which faces challenges related to intermittency, when, for example, the wind drops. “It’s a recognition of how more and more governments in Europe are focused on net zero by 2050 or earlier. And we want to be on the right side of history,” he said, adding that three big industrial names would have more credibility than some more “immature” companies. All three companies said they wanted to have a partnership that went beyond a single factory. “We have to reach the conclusion that this is very scalable. We’re not doing this to build a battery factory together and that’s the end of it,” said Mr Cook.  Arvid Moss, head of energy and corporate development at Hydro, said the companies would study the “whole supply chain” including the possibility to source raw materials such as cobalt and lithium from Europe. Several mining projects for cobalt and lithium are under way in Sweden and Finland, but it is not yet clear how big they will be.
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Shanghai is launching a challenge to London’s dominance in metals trading by issuing a new futures contract for copper that analysts say has the potential to become a global benchmark. The Shanghai International Energy Exchange (INE) will start trading monthly copper futures denominated in renminbi on Thursday, in contracts based on the metal to be delivered into warehouses in China. The launch provides the country’s first copper-linked product available directly to overseas investors — following similar initiatives in recent years for crude, iron ore and other commodities. Analysts said the new copper contract would help Beijing increase its influence on pricing in a market that is critically important to its economy, and also assist efforts to expand the use of its currency in the global financial system. “China does not want its economy or markets to be shaken by international markets,” said June Zuo, president at Huatai Financial in the US, which is part of the Chinese securities group. China’s dominant status as a buyer of the industrial metal, used in everything from household wiring to wind turbines, has been the crucial driver of the market’s rebound from the coronavirus sell-off. Copper hit a two-year high of $7,179 a tonne on Monday on the back of strong demand, reflecting the recovery of the world’s second-largest economy from the pandemic.  Chinese policymakers are increasingly keen to reduce the negative impact of downturns elsewhere, market participants say. The experience of crude futures has given them “the imperative to list the new copper products”, said Ms Zuo, a former employee of the INE. Shanghai launched its international crude oil contract two years ago, fulfilling a long-held ambition of regulators to “gradually strengthen China’s pricing power in international markets”. The market faced a stress test in April, when coronavirus and the oil price war sent US crude prices plummeting below zero for the first time ever. China’s contract, by contrast, stayed in the region of $30 a barrel. That premium led to a flood of shipments into China, as traders took advantage of the ability to store oil through the exchange. In the space of a week, the amount of oil held in the exchange’s facilities doubled. Some have pointed to the gap between the regional markers as signalling a decoupled market. Researchers at the Oxford Institute for Energy Studies have flagged the participation of retail investors in China driving this “anomaly”, rather than the strength of local demand for oil. But they note that the crude futures contract benefited, as capacity and liquidity were drawn to the exchange. This helped repair the global market, said John Browning, founder of Shanghai-based brokerage Bands Financial. When ships headed to Shanghai to offload oil, he said, “commodities started to flow, and international prices started to rise”. It was a case, he added, of “theory made real”. A copper contract could make an even bigger mark on global markets because China is the largest consumer of the industrial metal by a large margin, buying more than 50 per cent of global mined supply. Some in the industry think it could eventually challenge the London Metal Exchange’s role as the global price-setter of the metal. While China already has a copper futures contract listed on the Shanghai Futures Exchange, foreigners need to set up a local company to use it. The INE’s copper contract will allow foreign entities direct access, and its price will not bake in value added tax, making it similar to international prices. The metal is piled up in so-called bonded warehouses, which are outside the customs area, so free from import duties and taxes. Because the London Metal Exchange — which is owned by Hong Kong Exchanges and Clearing — has no warehouses on the mainland, the INE’s contract could provide a compelling alternative, Mr Browning said. “If it takes off, there is no reason why producers and consumers in the region could not use it as their benchmark.” Colin Hamilton, an analyst at BMO Capital Markets, said the contract had a “high chance of being extremely successful”, given that more than 70 per cent of copper consumption takes place across Asia. China was now the “market of last resort for purchasers”, assuming they can stomach the currency risk, he added. “[We] expect this may become the international copper market benchmark over time.” The LME said it would not comment on business conducted on other exchanges, but added that it welcomed “all initiatives that may boost trade flow and provide more arbitrage opportunities for market participants”. The new launch forms part of a relaxation of the rules governing foreign investments into China’s domestic capital markets. This month China also loosened its qualified foreign institutional investor, or QFII, rules, to ease access to domestic futures, including for commodities. The copper futures contract will make life easier for domestic traders to hedge international price exposure in their own currency, commodity experts say. And it should help towards Beijing’s goal to promote the use of the renminbi overseas, said Richard Fu, a metals analyst.  “It will mitigate the dollar influence in the global market,” he said. “That’s the key thing they are trying to develop — to internationalise the currency and also have more influence in the global market pricing system. China consumes almost half of the world’s commodities, so it is happening.” 
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For almost a week, the world has waited for Donald Trump to acknowledge the results of the November 3 election and his rival Joe Biden’s victory. On Friday, the sitting president came closest yet. Speaking at an event in the White House Rose Garden, Mr Trump appeared to recognise that a different administration would be in charge in January, and that it would get to decide whether or not to push for a lockdown to counter the rapid spread of Covid-19. “This administration will not be going to a lockdown. Hopefully the . . . ,” Mr Trump said before catching himself. “Whatever happens in the future, who knows which administration it will be, I guess time will tell.” It was the only moment during the half-hour press conference — his first set of public remarks since Mr Biden was declared the victor — that the president appeared to accept reality. He used the remainder of the time to tout his administration’s handling of the virus and its project to speed up the development of a vaccine, while also targeting rivals — such as Andrew Cuomo, the New York governor, and Pfizer, the pharmaceuticals company. He said Pfizer had made an “unfortunate mistake” when it said it had not accepted funding from Operation Warp Speed, the Trump administration’s public-private partnership to find a vaccine. And he threatened to withhold the vaccine from New York state, after Mr Cuomo recently questioned the safety of a jab that had the imprimatur of the Trump administration. But it was the verbal slip that garnered the most attention, after a week during which the president took to Twitter to make a flurry of baseless claims alleging the Democrats had stolen the election by perpetuating mass voter fraud. The slip was one of several signs that he may be slowly if grudgingly edging towards acknowledging his defeat, even if he never formally concedes. Geraldo Rivera, a correspondent-at-large for the conservative outlet Fox News, said that he had had a “heartfelt phone call” with the president on Friday morning and suggested Mr Trump was coming to grips with the fact he would soon be leaving office. In the phone call, Mr Trump acknowledged he was a “realist” and would do the “right thing”, but remained “committed to fighting for every vote” and waiting to see whether states would certify the results, Mr Rivera said in a Twitter thread. “He seemed like a heavyweight champion who is behind in points leading into the final round, but determined to fight on, knowing all the refs have scored the fight for the other guy,” Mr Rivera said. “Still, he’s going to answer the final bell, looking for the knockout he knows is a long shot,” added Mr Rivera, who has called on Mr Trump to leave the White House with “grace” and “dignity”. In recent days, a growing number of Republicans have either congratulated Mr Biden or urged the Trump administration to co-operate more with the president-elect’s transition team to ensure he receives the necessary intelligence briefings to prepare for office. On Friday, John Kelly, the president’s former chief of staff, warned that the Trump administration’s refusal to fully co-operate in the transition process could harm US national security. “You lose a lot if the transition is delayed because the new people are not allowed to get their head in the game,” Mr Kelly told Politico. Mr Kelly added: “The president, with all due respect, does not have to concede. But it’s about the nation. It hurts our national security.” Mr Biden and other Democratic leaders have signalled they are ready to work with Republicans, particularly if the GOP holds on to control of the Senate. Jen Psaki, an adviser to the Biden transition team, told reporters on Friday that Mr Biden had been reaching out to Republicans in recent days but had yet to speak to Mitch McConnell, the Senate majority leader. She said Mr Biden would use the next week “to engage with Democrats and Republican leaders of both parties, inside and outside of Washington”. Nancy Pelosi, the House speaker, said she, Mr Biden and Chuck Schumer — the Senate minority leader — had spoken this week to discuss areas where they might be able to co-operate with Republicans, such as infrastructure and clean energy. And Ms Pelosi said she was “optimistic” that Congress would reach a bipartisan agreement to continue funding the government and a Covid stimulus package. However, it was time, she said, for Republicans to accept Mr Biden as the election’s winner. “They’re trying to distract and divide the country as they refuse to accept the election results. The election is over. Joe Biden is the president-elect, elected with a mandate of over 78 million votes,” Ms Pelosi said.
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Palantir, the data analytics company known for its work for the US defence and national security establishment, beat Wall Street forecasts with its first quarterly earnings since becoming a public company and raised its revenue guidance for the rest of the year. The company’s revenue growth accelerated to almost 50 per cent in the first nine months of this year, double the rate of 2019, thanks to new contracts with the US army following a successful court battle to gain more access to military spending. Palantir’s shares rose 1.4 per cent in after-market trading on Thursday, continuing their strong gains in recent days. The shares had risen more than 40 per cent since the US election last week, despite worries in some quarters that its heavy dependence on defence spending and close ties to the Republican administration would hurt Palantir in the event of a Democratic victory. On Thursday the company said it had reduced its dependence on a small number of big customers — one of Wall Street’s main concerns about Palantir — with the proportion of its revenue from the 20 biggest customers falling to 61 per cent so far this year, from 69 per cent in the same period in 2019. For the three months to the end of September, Palantir’s revenue climbed 52 per cent, to $289.4m. It reported a net loss of $861m, or 94 cents a share, $847m of which was due to employee stock expenses following its direct listing in September. Adjusting for the compensation costs and charges associated with the listing, it reported a profit of $73m, or about 8 cents a share, compared to a loss of $92m the year before. Wall Street had been expecting adjusted earnings per share of 2 cents, with revenue of $279m. The company’s contribution margin, which the company claims is the best measure of its underlying profitability, rose to 51 per cent in the quarter. This margin — based on gross profits minus sales and marketing costs, with stock-based compensation costs added back in — had already jumped to 48 per cent in the first half of the year, from 21 per cent in all of 2019, largely as a result of lower sales and marketing costs. Palantir has said this reflected a change in its business model, as it faced fewer up-front costs with new contracts, though it had also benefited from lower travel costs resulting from the pandemic.
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He fired his defence secretary, installed a conspiracy-minded loyalist as chief counsel at an intelligence agency, and tapped a retired army colonel who backed martial law on the Mexican border for a top Pentagon job. And all this within days of being declared the loser of a presidential election — a result Donald Trump has declared fraudulent. “If we saw this in any other country, a president refusing to accept the results and then firing the secretary of defence, you could imagine [journalists] writing that this is an attempted coup,” said Anne-Marie Slaughter, a former senior state department official. Mr Trump’s decision to overhaul the senior ranks of the defence and parts of the intelligence establishment — including sacking defence secretary Mark Esper — in the immediate aftermath of his failed re-election campaign has gripped Washington’s political classes. The reshuffle has sparked concern that the norm-bending president could well shatter the most sacred of democratic standards: the peaceful transfer of power. Yet many believe Mr Trump’s post-election skulduggery is for more pedestrian reasons, such as an eleventh-hour change in military posture overseas. “The firing of Secretary Esper is most worrisome as it removes a man who has resisted the effort to misuse and abuse our military for political purposes,” said William Cohen, a former defence secretary under Bill Clinton. “Installing functionaries who are likely to be supplicants for the remainder of his term should be of concern to all who worry about national security issues.” To be sure, Mr Trump has not violated any laws. The 18th-century US constitution and decades-old legal reforms make the formal certification of a new president a slow and complicated process, which means a sitting commander-in-chief has free rein to overhaul the government as they see fit for almost three months after election day. “We do have to remember that the election is not certified,” Ms Slaughter told the FT Global Boardroom conference on Wednesday. “So when [Senate Republican majority leader] Mitch McConnell says Trump is completely within his rights, he is right.” But there are also signs Mr Trump has targeted the process of confirming the election itself. Bill Barr, US attorney-general, a chief enforcer of Mr Trump’s more controversial legal forays, has authorised federal prosecutors to investigate possible election crimes before the results are certified. And the president may not yet be done with his overhaul. Washington is awash with talk that the directors of the CIA and the Federal Bureau of Investigation — two of the few high-level positions that normally carry over from one administration to another — are next on the chopping block. “There will be a smooth transition to a second Trump administration,” secretary of state Mike Pompeo said on Tuesday, a line delivered with a half smile that still sent shivers down the spine of many Democrats in Washington. US presidential election 2020: You tell us How do you feel now the election is over? Are you happy with the winner? Do you feel the election process was fair? How do you see the outlook for America? Do you feel positive about the incoming president or uncertain? Share your thoughts with us. Even Mr Trump’s harshest critics note, however, that there are significant safeguards to prevent any attempt by the president to subvert the constitutional order — most importantly the uniformed military, where officers have made clear their loyalty is to the nation rather than the current president. General Mark Milley, the chairman of the joint chiefs of staff, has sent not-so-subtle messages to Congress that he is prepared to stand up to any extrajudicial measures taken by Mr Trump. Gen Milley has made those protestations after coming under intense criticism over the summer for joining the US president while in uniform on a walk to a church near the White House after peaceful protesters had been dispersed with tear gas. The general apologised over the incident. Other Pentagon analysts believe there are probably more mundane reasons for Mr Trump’s latest manoeuvres. Some think the president is merely being vindictive against officials deemed insufficiently loyal. Others reckon Mr Trump wants to remove obstacles to ordering the withdrawal of troops from Afghanistan. That view has been bolstered by the hiring of Douglas Macgregor, a retired army colonel who backs withdrawing from the country, as a Pentagon adviser. Other figures have privately raised concerns that the president might be considering military action, such as giving Israel the green light to attack Iran, and is seeking to remove officials likely to object. James Stavridis, a retired US admiral who served as the Supreme Allied Commander at Nato and remains in regular contact with Pentagon officials, was doubtful the moves were related to Iran. “I would say the firings at the Pentagon are a pretty good example of ‘Occam’s razor’, that the simple explanation is the best,” Mr Stavridis said. “He was frustrated with the senior leadership who he felt were insufficiently supportive in the months before the election and that led to an act of vengeance and petulance.” For most of his tenure, Mr Esper was referred to as “Yesper”, reflecting the view that he was unwilling to stand up to Mr Trump. But he fell out of favour with the president over the summer when he opposed Mr Trump’s push to invoke the Insurrection Act to deploy active-duty soldiers in American streets to respond to anti-racism protests. Ms Slaughter said many retired defence secretaries, including Jim Mattis, and former chairmen of the joint chiefs had sent the strongest message they could that officers’ loyalty lies with the constitution. “If Donald Trump disobeys the constitution, or really subverts constitutional norms, they will not respond [to his orders],” Ms Slaughter added. Follow Demetri Sevastopulo on Twitter  Video: Will Donald Trump ever accept defeat? | DC diary
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Load new posts Total Covid-19 cases View charts and maps World Confirmed 51,332,976 Deaths 1,264,892 Updated at 11/11/2020, 1:13:43 PM BST 11/11/2020, 11:33:12 PM Ohio warns of tougher rules to come as Midwest battles outbreaks Matthew Rocco in New York Ohio governor Mike DeWine warned that the state may impose stricter measures aimed at slowing the spread of coronavirus, as new infections and hospitalisations continued to trend higher in the Midwest. Mr DeWine, in an address on Wednesday evening, urged residents to stay home as much as possible and avoid hosting parties, saying current data trends could lead officials to close restaurants, bars and gyms. “We will look at this one week from tomorrow,” Mr DeWine said. The governor plans to tighten rules related to wearing masks by forming a compliance unit to oversee enforcement in retail outlets. A separate measure will require face coverings for patrons in restaurants when they are not eating. Mr DeWine, who described the current outbreak as a third spike, warned of the strain on hospital resources. “This surge is much more intense, widespread and dangerous,” he said. There were 5,874 new cases in Ohio, the state’s second-highest figure on record. Over the past week, Ohio has averaged a record 5,307 new cases per day. Ohio also reported 76 further deaths attributed to the virus, bringing its overall count to 5,623 since the pandemic began. States across the Midwest — which were largely spared early in the pandemic — and other US regions have faced a surge in new coronavirus cases in the autumn. While part of the increase can be attributed to expanded testing capacity, hospitalisations and the rate of tests coming back positive have also trended upward. Illinois added 12,657 new cases to its overall tally, edging past its previous record set on Tuesday, while hospitalisations climbed above 5,000 for the first time since April. The state also reported its highest one-day count for deaths with 153, for a total of 10,798. “In our current situation, with a rising prevalence of the virus, attending even small gatherings that mix households, or traveling to areas that are experiencing high rates of positivity, is not advised and is potentially dangerous,” the Illinois health department said in its daily report. In Wisconsin, where governor Tony Evers signed an order on Tuesday asking residents to stay home whenever possible, the number of new infections came in above 7,000 for the third time in five days. The state has 2,457 confirmed deaths attributed to coronavirus, an increase of 62 from a day earlier. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/11/2020, 10:29:30 PM Italy's coronavirus case count tops 1m Miles Johnson in Rome The total number of coronavirus infections in Italy has surpassed 1m diagnosed cases as the country registered 32,961 new infections over the past 24 hours. The Italian health ministry said that 623 people had died from Covid-19 on Wednesday, while a total of 3,081 people are currently fighting the virus in intensive care, up by 110 from Tuesday. The total number of diagnosed cases in Italy since the outbreak began now stands at 1,028,424 after the 32,961 increase on Wednesday. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/11/2020, 10:29:04 PM Arizona, California hospital admissions for Covid-19 tick up Matthew Rocco Arizona and California reported an increase in current hospital admissions for Covid-19, as the states grapple with an autumn resurgence of coronavirus. There were 1,360 patients being treated for Covid-19 in Arizona as of Wednesday, the highest level since August, according to data from the state's health department. Arizona has registered an average of 2,076 new infections each day over the past week, which is also the highest mark since August, and has tallied 265,000 cases since the start of the pandemic. In California, the number of active hospital admissions rose to 3,224 from 3,083, with the metric sitting at levels last seen in September. At 6,382, California's seven-day average of new cases is at its highest mark since August. Its cumulative number of cases has risen to more than 984,000. Both states have faced a new rise in daily infections since bringing outbreaks under control over the summer, coinciding with the increased spread of coronavirus across other US regions in recent weeks. Part of the increase can be attributed to expanded testing capacity. The US has regularly processed more than 1m tests per day and set records of more than 1.5m early in November. However, hospital admissions and the rate of tests coming back positive have also trended upward. California's positivity rate over the past week was 4.3 per cent, up from 2.6 per cent one month ago. The state reported 69 additional deaths attributed to Covid-19, compared with a seven-day average of 45. That brought its total to 18,070. Arizona, which added 36 new fatalities for an overall tally of 6,228, has averaged 24 deaths per day in the last week. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 11/11/2020, 10:28:23 PM News you might have missed New York will cap indoor gatherings and impose a curfew on restaurants and bars in a new round of coronavirus-related restrictions just two weeks before the Thanksgiving holiday. Moderna will begin looking at results from its phase 3 vaccine trials within a week, according to the US's leading infectious disease expert. Quick "lateral flow tests" for Covid-19 are accurate and sensitive enough for general use in the community, clinical evaluation by Public Health England and the University of Oxford has shown. Texas became the first US state to report more than 1m cases on Wednesday as the virus continues its spread across the Lone Star state. A further 12,337 people tested positive on November 10, taking the state's total to 1,010,364. Pfizer chief executive Albert Bourla sold $5.6m worth of his shares in the company on the same day the drugmaker said the Covid-19 vaccine it is developing with Germany's BioNTech showed 90 per cent efficacy in interim phase 3 data. Covid-19 monthly deaths in England have risen 33 times in two months, demonstrating how swiftly the disease has ripped through especially the north of the country. Brazil's health regulator has authorised the resumption of late-stage trials of a China-developed vaccine, just two days after suspending them. The discovery of a potential vaccine means stock markets will power higher in the coming years, Goldman Sachs has predicted. Ukraine has ordered people to stay at home, closed non-essential stores and banned dining out at weekends as Kyiv seeks to weaken the surge in infections. Pakistan is considering sending schoolchildren and students home early for the winter break and recommends cinemas and theatres close immediately. The head of GlaxoSmithKline's vaccine division said the company would not profit from supplying boosters for a potential Covid-19 drug. Pressure is mounting on the government of Hassan Rouhani to enforce a lockdown for at least two weeks in Iran. Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window)
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SoftBank Group posted a loss of $1.3bn on its unexpected diversification into trading of listed technology stocks using a war chest amassed in a pandemic-driven flurry of asset sales. However, the Japanese conglomerate turned a $6bn net profit for the July to September quarter, helped by fresh signs of recovery at its $100bn Vision Fund since the WeWork debacle. Monday’s results were SoftBank’s first since the Financial Times revealed in early September that the technology group led by Masayoshi Son was the “Nasdaq whale” behind the purchase of billions of dollars’ worth of US equity derivatives that stoked a rally in big US tech stocks.  Its loss on publicly traded tech shares came even as SoftBank said that as of the end of September, the Vision Fund’s $75bn investment in 83 start-ups was worth $76.4bn.  The gain was driven partly by the fund’s investment in KE Holdings, the owner of online property platform Beike Zhaofang, which raised about $2bn in August in the biggest Chinese listing in the US in two years. Its share price has since risen 278 per cent from its initial public offering price.  For the three months through September, SoftBank Group posted a net profit of ¥627.5bn ($6bn), well above analyst forecasts of a net profit of ¥150.3bn, according to S&P Global Market Intelligence, helped by a global rally in tech stocks. It compared with a net loss of ¥700.2bn a year earlier and a profit of ¥1.25tn in the previous quarter. Since the coronavirus-driven market turmoil in March, SoftBank has sold about $90bn of its holdings including stakes in T-Mobile, Alibaba and its domestic mobile business. That helped boost its cash position to ¥5.1tn as of end-September, from ¥3.3tn at end-March. The group also recently agreed to sell UK chip designer Arm for as much as $40bn to US chip group Nvidia. Using some of that money, which initially was planned to buy back shares and reduce debt, SoftBank has since — through an asset management arm using some of Mr Son’s capital — invested $17bn in stocks such as Amazon, Alphabet and Facebook, and about $2.7bn worth in equity derivatives.  Shares in SoftBank rose 5 per cent on Monday ahead of the results, which came out after the Tokyo market closed. The stock is up 48 per cent for the year. However, analysts said SoftBank still trades at a discount to the value of its holdings as investors remain nervous about the hidden risks in its investment strategy.
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Across the road from the Chelsea Football Club’s stadium in west London, the Gfinity Arena is the UK’s first dedicated esports arena. With three separate stages and seats for 240 spectators, it specialises in holding competitions for the world’s most popular video games such as League of Legends. In late October, the arena hosted a very different event — a digital Formula One race that allows the drivers to rev their engines from home. With fans also prevented from attending by the pandemic, the venue had been turned into a production studio that allowed 20 drivers to compete in a virtual Grand Prix that was broadcast live on Sky, the dominant sports broadcaster in the UK.  Popular sports such as football or Formula One once looked on esports as a parallel world — a niche form of entertainment that did not impinge on their own franchises. But they have watched anxiously as esports has grown rapidly into a formidable new force: one that is able to retain the attention of millennials and Generation Z — those born after 1995. Now they are looking to get in on the act. F1, the global racing series owned by US billionaire John Malone’s Liberty Media and the organiser of the event at the Gfinity Arena, is among the established sports groups that are leading a charge into professional video gaming. They are competing for the next wave of consumers, who increasingly look to esports for their entertainment.  At stake are potentially billions of dollars in broadcasting and sponsorship, generated by a growing global audience for competitive gaming. Roughly 443m people watched esports in 2019, a 12 per cent increase on 2018, according to data provider Newzoo, the large majority of whom are under the age of 35. Esports athletes’ exploits are streamed by Amazon’s Twitch and Google’s YouTube, among other platforms, direct to consumers’ phones. Participants compete in the 2017 F1 Esports Pro Series at the Gfinity Arena in London © Joe Brady/Getty Julian Tan, head of esports at F1, says: ‘The very core of why we're doing this [expanding into esports] is really about reaching out to a younger audience’ © Youtube/Formula 1 The pandemic has given traditional sports an even greater incentive to tap the potential of esports. Not only has the absence of fans from stadiums damaged their business models and left them searching for new revenue, but broadcasters such as Sky, which have been deprived of many of the sporting events they usually rely on, have been eager for fresh content.  “One of the biggest barriers to gaming going mainstream has been the reluctance of broadcasters to put it on air. Covid-19 and the lockdown blew this sentiment out of the water,” says John Clarke, chief executive of Gfinity. “If you are a sports rights holder, you have a choice. Embrace the gaming culture and find a way to play in it authentically, or watch your audience get older and older.” That message is echoed by some of the most powerful players in traditional sports. Andrea Agnelli, president of the Italian football club Juventus and chair of the powerful European Club Association, which represents the continent’s top clubs, warned last year that the sport had to evolve in order to compete with video games such as Fortnite. “If we are not progressive, we are simply protecting a system that is no longer there, a system that is made of domestic games that will have little interest for our kids,” he said.  The International Olympic Committee has also established relationships with the esports and gaming industries and has raised the prospect of esports becoming part of the games in the future. Fans cheer at the 2019 Fortnite World Cup in New York. aXiomatic was among the investors which injected $1.25bn into Epic Games, the creator of the game © Johannes Eisele/AFP via Getty With many competitions temporarily brought to a halt by national lockdowns in March, some traditional sports instead began to stage virtual tournaments.  F1 has held virtual Grands Prix featuring former drivers, including 2016 world champion Nico Rosberg, and celebrities such as Liam Payne, a former member of the band One Direction. The English Premier League, the richest domestic football competition in the world, held an esports tournament in April, which was won by Diogo Jota, the real-life striker who now plays for Liverpool. The National Basketball Association, the North American league, hosted its own competition for real players.  Investment is also flooding into esports teams and leagues from wealthy former athletes. Jakob Lund Kristensen, founder and chief commercial officer of Astralis, an esports team that floated on Nasdaq’s exchange for smaller companies in December 2019, disputes the perceived competition between sports and esports. Instead he sees a wider battle that also draws in video streaming companies such as Netflix and music platforms including Spotify. “We’re all fighting for leisure time,” he says. “We went from having cooking shows to MasterChef, we went from having dancing shows to Dancing With the Stars. Everything pinnacles to something competitive.” ‘Investing in generational change’ David Beckham is among the group of sporting stars to have moved from the pitch to the business world. The former England and Manchester United footballer is a part-owner of Inter Miami, the Major League Soccer team, having negotiated an option to buy a franchise for $25m when he joined LA Galaxy as a player in 2007. He is also a 5 per cent shareholder in Guild Esports, a London-based start-up company that floated on the London Stock Exchange in October, raising £20m to fund the recruitment of professional gamers and teams.  Juventus FC president Andrea Agnelli: 'If we are not progressive, we are simply protecting a system that is no longer there, a system that is made of domestic games that will have little interest for our kids' © Miguel Medina/AFP via Getty Players are seen on a TV screen during the 2019 Fortnite World Cup in New York. One of the problems for potential investors in esports is that it is hard to quantify the size of the market © Johannes Eisele/AFP via Getty “[Esports] is a sector I’ve been monitoring for a while,” he said in October. “We are committed to nurturing and encouraging youth talent through our academy systems . . . and we want to be the number one esports team in the business.” Institutional investors also believe in the business. Soros Fund Management, the investment company of billionaire philanthropist George Soros, bought a 3.6 per stake in Guild. Mr Beckham, is the face of the company. Under his “influencer” agreement, he will promote Guild on social media and the company can use his name to build a global following in a deal that could net the ex-player a minimum of £15.25m over five years. “If you have the right pipeline of talent, that brings the tribal loyalty that you have within a team,” said Mr Beckham, explaining his role in the venture.  The idea is that esports teams will build the same level of loyalty among viewers as traditional sports clubs enjoy from their fans to attract revenues from sponsorship, merchandising and broadcasting rights. “This audience is an advertiser’s dream,” says Carleton Curtis, executive chairman of Guild. “It is by far the most concentrated composition of Gen Z and millennials that most brands these days are going after.” Mr Beckham is far from the first former athlete to invest in esports. Michael Jordan, who became a global brand thanks to his exploits leading the Chicago Bulls to six NBA championships in the 1990s, has bought a stake in aXiomatic, which holds a variety of esports investments, including games publishers, teams and coaching businesses.  David Beckham, the former England and Manchester United footballer, says of esports: ‘If you have the right pipeline of talent, that brings the tribal loyalty that you have within a [football] team’ © Lindsey Parnaby/AFP via Getty Michael Jordan during his heyday with the Chicago Bulls. The team's former star has bought a stake in aXiomatic, which holds a variety of esports investments © John Swart/AP Axiomatic’s backers also include Peter Guber, who co-owns the Los Angeles Dodgers baseball team and the Golden State Warriors in basketball, and billionaire Ted Leonsis, who owns the Washington Wizards, a rival NBA team, and the Capitals in the National Hockey League. The company was among investors, including private equity firm KKR, which in 2018 injected $1.25bn into Epic Games, the creator of Fortnite.  Still, revenues remain small compared to sport’s big leagues. Team Liquid’s revenues are in the “double-digit millions”, according to Victor Goossens, co-chief executive of the esports gaming team, who moved to South Korea after finishing high school in 2002, slept on floors and lived on $300 a month to compete professionally in the StarCraft video game.  These days, Liquid is owned by aXiomatic. “To invest in esports. You need to be willing to look a little bit beyond just the fundamentals of a company,” Mr Goossens says. “To invest in esports is to invest in generational change.” ‘Humans are fickle sometimes’ According to F1, the average age of its fans is 40. Only 14 per cent are under the age of 25, with another 30 per cent coming from the 25-34 bracket. “The very core of why we're doing this [expanding into esports] is really about reaching out to a younger audience,” says Julian Tan, head of esports at F1. “The reality is that the younger generation are spending more time gaming.” F1 is “very strategically positioned to exploit certain elements like the blurring of lines with reality”, Mr Tan adds, pointing out that a small number of esports gamers have transitioned into real racing. That cohort includes Igor Fraga, who has raced in esports and in Formula 3, one of the stepping stones towards an F1 career. In October, Fifa, football’s world governing body, outlined plans for esports competitions with $4.4m in prize money up for grabs to “engage deeper with football’s next generation”. The Premier League has continued to arrange virtual tournaments. However, some investors are wary about the rush to invest in esports teams, questioning their ability to build loyalty. Football players hold an exhibition match to promote a new version of the EA Sports Fifa video game in Hollywood, California © Mark Ralston/AFP via Getty Damir Becirovic of Index Ventures, the venture capital firm, says the real prize would be finding the next top game publisher and developer. In esports, unlike the real world, it is possible to own the game itself. “We want to back companies that have technology at the core [and] when we think about a team it’s really humans at the core,” he says. “Humans are fickle sometimes.” Established sports have built their intense followings over decades, proving the investment case in teams and leagues. By contrast, Fortnite, for example, was released just over three years ago. “Will fans permanently transfer their allegiance and their dollars to the virtual teams [or the players who compete in these tournaments]?” asked Nick Train, co-founder of UK fund manager Lindsell Train, a major shareholder in Manchester United and Juventus, in a note to investors in August. “No.” Industry experts believe there is only limited potential in promoting esport versions of traditional sports. According to Remer Rietkerk, head of esports at Newzoo, League of Legends, which is published by Riot Games, along with Counter-Strike: Global Offensive and Dota 2 — both the work of Seattle-based Valve — are the three most watched live competitive esports on YouTube and Twitch, with a combined 845m hours watched in 2019. Fifa 19 languished in 19th with just 8m hours, with Fifa 20 adding just another 3m. Those numbers exclude well over 1bn hours of views for non-competitive gaming. “Fifa is a good game, many people play the game but no hardcore esports fan will tell you, ‘I’ve been watching Fifa for years’,” says Carlos Rodriguez, a former League of Legends gamer and founder of the G2 Esports team, which counts McLaren F1 racing chief Zak Brown as a shareholder. “[Established sports teams] are used to buying LeBron James or Cristiano Ronaldo and automatically selling millions of jerseys,” he says. “They’re not used to having to relate to the people.” Mike Sepso, the esports veteran and co-creator of Major League Gaming, which is now owned by gaming company Activision Blizzard, says that younger fans want different types of content that is more digital and usable on mobile phones. The reliance of sport on television broadcasting is “not going to satisfy the incoming demand . . . for more content,” he adds. Yet, says Doug Harmer, a partner at Oakwell Sports Advisory, it would be a mistake for sports to forget the lessons of the pandemic and cut spending on digital gaming to cope with the economic downturn. He says one of the advantages for traditional sports of investing in digital gaming is that it allows organisations to collect data about their audience that they can use to attract commercial partners. The basketball simulation video game NBA 2K21 © 2K21 Diogo Jota, the real-life striker who now plays for Liverpool, won the English Premier League's esports tournament in April © Premier League “I can definitely see a long-term rationale for keeping up with esports initiatives and the crossover [with] traditional sports . . . whether that actually happens now or not remains to be seen,” says Mr Harmer. One of the problems for potential investors in esports is that it is hard to quantify the size of the market. Some analysts warn that there is an element of hype in some of the statistics that are sometimes used by boosters — such as the claim that League of Legends viewership is bigger than the Super Bowl.  “That was the big, headline-grabbing stat but when you get down to it they were comparing the average audience of the Super Bowl in the US versus total unique viewers of League of Legends around the world,” says Nicole Pike, YouGov’s head of esports and gaming. “It’s just apples to oranges completely.” Newzoo estimates esports’s annual revenues globally at $1bn, but that does not include revenue made by platforms such as Amazon’s Twitch and Google’s YouTube from streaming esports. It is also hard to distinguish publishers’ gaming revenues from esports revenues, making it difficult to properly assess the industry’s size. Esports insiders say some gaming companies run their competitive gaming activities as a marketing cost to sell more titles. Nicolo Laurent, chief executive of Riot Games, says that traditional sports have been too slow to see the potential in esports. He likens it to the so-called “innovator’s dilemma”, a reference to the influential book by Clayton Christensen, who described the risk to incumbents from failing to recognise threats to their established products. “The incumbent is a little bit arrogant towards the newcomer, the insurgent,” he says. “When you realise the insurgent is actually doing something great, it’s too late.”
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