Investment

Chinese Investment in Europe Up By a Third Last Year: Report – BNN

Published

2 years ago

April 27, 2022

(Bloomberg) — Chinese investment into Europe in 2021 increased by a third from a record low seen in the first year of the pandemic, driven by a combination of acquisitions and greenfield transactions.

Completed Chinese foreign direct investment in Europe last year increased to 10.6 billion euros ($11.3 billion), Rhodium Group and the Mercator Institute for China Studies said in a report. While that compared with 7.9 billion euros in 2020, it remained well below the peak seen in 2016 as tight capital controls in China and additional European investment screening slowed deals.

Chinese mergers-and-acquisitions accounted for nearly 70% of the total investment. The largest such deal in Europe was Hong Kong-based private equity firm Hillhouse Capital’s purchase of Royal Philips NV’s home appliance business for 3.7 billion euros, according to the report.

Greenfield investment reached a record 3.3 billion euros and has seen a rapid increase over the past two years, the report said. Examples include Chinese companies such as Contemporary Amperex Technology Co. Ltd. building electric battery plants in countries including Germany, France and the U.K., and TikTok owner ByteDance Ltd.’s data center in Ireland.

“Greenfield investment is typically subject to fewer screening measures by national governments and tends to be more welcome locally, for example as a channel to create local jobs and contribute to local tax revenue,” the report’s authors wrote.

Chinese venture capital investments in Europe more than doubled year-on-year in 2021 to a record of about 1.2 billion euros.

“Beijing cracked down heavily on edtech, crypto and gaming as well as big tech giants more generally, which curtailed domestic opportunities and likely pushed Chinese investors to pursue VC opportunities abroad,” they said.

China’s global outbound investment has fallen since Beijing tightened capital controls and increased scrutiny of overseas deal-making to limit devaluation of its currency at the end of 2016. European countries have also tightened investment screening due to geopolitical tensions between Brussels and Beijing, which derailed the ratification of an investment treaty agreed by European Union and Chinese leaders at the end of 2020.

Those tensions have increased in recent months following Russia’s invasion of Ukraine, with Beijing remaining close to Moscow.

“The war has already triggered intense debates on critical infrastructure and resilience in Europe, which could in turn increase scrutiny of Chinese investment in a number of sectors including infrastructure, transport and energy,” the authors said.

The “era of massive Chinese investment seems over for now,” they wrote. “In 2022, we expect China’s FDI flows into the EU to remain at the current low levels.”

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

6 days ago

September 6, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets also higher

Published

2 weeks ago

August 29, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

Published

1 month ago

August 5, 2024

Harry Miller

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.