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Big Tobacco’s divestment from Quebec’s Medicago ‘a step in the right direction’ for its COVID vaccine

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Tobacco company Philip Morris International has divested all of its shares from Medicago, a Canadian vaccine collaborator whose plant-based COVID-19 vaccine, Covifenz, was initially rejected by the World Health Organization over its ties with Big Tobacco.

In a statement on Thursday, Philip Morris spokesperson David Fraser said the company decided to divest its stake in Medicago and that it’s “the most appropriate way forward.”

“We have long believed in the public health potential of Medicago’s innovative approach for developing new plant-based vaccines and we hope this potential is realized for the benefit of global public health,” Fraser said in an email.

Medicago, whose headquarters is in Quebec, is now 100 per cent owned by Mitsubishi Tanabe Pharma. Before the decision, Philip Morris, which produces Marlboro cigarettes, owned 21 per cent of the company’s shares.

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In an email to CBC News, the Quebec company said the divestment is “the most appropriate way forward.” A spokesperson for Medicago said this ensures its “future growth and ability to achieve its mission,” which is to “create and deliver effective responses to emerging global health challenges.”

Covifenz can now reach international markets

In 2020, the federal government gave Medicago $173 million to develop its vaccine, build a new production facility and purchase 76 million doses. In February, Health Canada approved Covifenz for adults 18 to 64 years old — making it the first plant-based vaccine to be approved for use in Canada.

But in March, the World Health Organization (WHO) said it’s not accepting Medicago’s request for Covifenz’s emergency use, due to the company’s “linkage with the tobacco industry.”

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François-Philippe Champagne, Canada’s minister of innovation, science and industry, says Ottawa has been working with Medicago and its shareholders to ‘find a solution that supports the growth of the company.’ (Justin Tang/The Canadian Press)

WHO said the decision was put on hold, which temporarily kept Covifenz out of COVAX, an international COVID-19 vaccine-sharing initiative.

François-Philippe Champagne, Canada’s minister of innovation, science and industry, said the federal government has been working with Medicago and its shareholders to “find a solution that supports the growth of the company.”

“This transaction is a step in the right direction, and we will continue to follow this matter very closely,” Champagne said in an email.

Dr. Scott Halperin, director of the Canadian Centre for Vaccinology at Dalhousie University in Halifax, said the decision now allows Medicago to distribute its vaccine internationally if it reapplies with WHO.

“It’s important because it allows Medicago to play on the international stage … so I think it could be very good news,” Halperin said.

“One would have to hypothesize that if Medicago was no longer able to have any type of global vaccine market that they would be a horrible investment for anybody.”

Quebec-based Medicago produced Covifenz, the first plant-based COVID-19 vaccine to be approved for use in Canada. In 2020, the federal government gave Medicago $173 million to develop its vaccine, build a new production facility and purchase 76 million doses. (Turgut Yeter/CBC)

Public Services and Procurement Canada didn’t answer CBC’s questions on when the 76 million doses of Covifenz are expected to be delivered from Medicago.

In a statement, the department said negotiations between Ottawa and Medicago “are ongoing.”

Decision applauded by tobacco critic

Les Hagen, executive director of Action on Smoking and Health, a charity advocating for tobacco control, reduction and prevention, said he’s “relieved” that Canada is no longer collaborating with a multinational tobacco company.

“It’s good news,” he said. “Hopefully this vaccine can get another review by the World Health Organization.”

Hagen criticized the government’s decision to collaborate with Medicago in the first place, stating that public funds could have been better invested in other Canadian companies that aren’t backed by Big Tobacco, which he accuses of trying to “whitewash” its image.

Les Hagen, executive director of Action on Smoking and Health, says public funds could have been better invested in other Canadian companies that aren’t backed by Big Tobacco. (Colin Hall/CBC)

“We felt that it was highly unethical. It’s actually a contravention of a legally binding treaty: the Framework Convention on Tobacco Control,” he said.

The framework, which is managed by WHO, commits to protect public health policies “from the commercial and other vested interests of the tobacco industry.” Canada signed it in 2005.

Earlier this year, a spokesperson for the Public Health Agency of Canada said the federal government “studied the matter of its investment in Medicago carefully” and believes it is still “compliant with its treaty obligations related to tobacco control” with WHO.

‘We need that capacity in Canada’

Halperin of Dalhousie said Medicago’s vaccine is produced in the leaf of a plant that’s a relative of tobacco and that the plant itself acts as a “factory” for producing viral particles that are part of the vaccine.

“It’s very novel technology,” he said, adding that Covifenz is the first vaccine that uses this technology to fight COVID-19.

Dr. Scott Halperin, director of the Canadian Center for Vaccinology at Dalhousie University, says it’s critical that Canada build on its capability to produce vaccines for domestic and global markets. (Turgut Yeter/CBC)

Canada lost the capability to produce its vaccines years ago due to the consolidation and buyout of many companies, and the government has recognized that deficiency, Halperin said.

“That’s going to take time to rebuild…. The Medicago story is just one aspect of it,” he said, adding that it’s critical to have domestic vaccine-supply ability because borders tend to close during emergencies.

“Despite what everybody says about global co-operation, borders still close and we need that capacity in Canada — both for our own capability but also to contribute to the international scene.”

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Chinese Demand Will Drive Oil Prices This Year – OilPrice.com

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Chinese Demand Will Drive Oil Prices This Year | OilPrice.com


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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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  • China’s oil and gas demand declines in 2022 as a result of its covid-19 policies.
  • IEA: China to account for 50% of currently projected global oil demand growth in 2023.
  • OPEC: China’s plans to expand fiscal spending to aid the economic recovery is likely to support oil demand in manufacturing, construction and mobility.

Crude storage

For the first time in decades, China’s oil and gas demand declined in 2022 as the strict Covid policies curtailed economic growth and mobility. This year, demand is set to rebound thanks to the reopening of the Chinese economy, pushing global oil demand higher and giving Europe a run for its money to stock up on LNG. The pace of recovery in Chinese oil and gas demand will be one of the most important trends influencing oil and gas markets and prices in 2023.   

Rare 2022 Demand Decline

Last year, while the world saw overall oil demand grow following the reopening of economies and gas trade flows materially shifted after the Russian invasion of Ukraine, China’s demand was subdued and fell for both fossil fuels—for the first time in decades. The Chinese economy continued to grow last year, but at a much smaller pace than in previous years. 

Combined with the property crisis and the zero-Covid policy, all these dragged Chinese oil demand down by 3% – or by 390,000 barrels per day (bpd), according to estimates by the International Energy Agency (IEA). That was the first annual decline in oil consumption in China since 1990. 

At the same time, global oil demand rose by 2.2 million bpd in 2022, per the IEA. 

Related: Everybody Loves Oil Again

Natural gas consumption in China also fell last year—by 0.7 percent, for the first annual fall in demand in four decades, according to the energy agency. China’s LNG imports also fell, much more than gas demand, and China handed back to Japan the top spot in LNG importers in the world. 

In 2022, China saw a rare drop in gas consumption amid a slowdown in economic growth, while most of South and Southeast Asia simply couldn’t afford the skyrocketing spot LNG prices after the Russian invasion of Ukraine and Europe’s race to replace Russian pipeline gas. LNG buyers have returned to securing term deals, even buyers in Europe that were previously reluctant to lock in supply for the long term in view of the clash between the carbon footprint of LNG and the EU’s climate ambitions.  

Expected 2023 Rebound 

Demand for oil and gas in China is expected to rebound this year, as Beijing ditched the zero-Covid policy, which should lead to a jump in mobility and economic activity, analysts say. 

The IEA also expects a rebound in Chinese oil and gas consumption, with oil demand growth in China driving half of the currently projected global oil demand growth in 2023. 

“With the Chinese economy now recovering, it will have major implications for oil and gas market balances,” Fatih Birol, Executive Director of the IEA, told the New York Times in an interview.  

Global oil demand is set to rise by 1.9 million bpd in 2023, to a record 101.7 million bpd, with nearly half the gain coming from China following the lifting of its Covid restrictions, the IEA said in its Oil Market Report for January. 

“Two wild cards dominate the 2023 oil market outlook: Russia and China,” the IEA said. 

“China will drive nearly half this global demand growth even as the shape and speed of its reopening remains uncertain,” the agency noted. 

In the interview with NYT, the IEA’s Birol said that “China is the key uncertainty when it comes to 2023 global energy markets,” adding that “how the country’s economy will perform will have massive implications for global energy markets.” 

OPEC also expressed more optimism about Chinese oil demand and the global economy this year in its Monthly Oil Market Report (MOMR) in January.

China’s reopening is set to push demand higher, and “In addition, China’s plans to expand fiscal spending to aid the economic recovery is likely to support oil demand in manufacturing, construction and mobility,” OPEC said. 

Globally, economies look more resilient than previously expected, the cartel said. 

“The global momentum in 4Q22 appears stronger than previously expected, potentially providing a sound base for the year 2023, especially in the OECD economies. The 2022 growth in both Euro-zone and US has surpassed previous forecasts,” OPEC noted. 

Saudi oil giant Aramco expects the Chinese reopening and a pick-up in jet fuel demand to lead to a rebound in global oil demand this year, Amin Nasser, the CEO of the world’s biggest oil firm, told Bloomberg in an interview earlier this month.

“As China’s infection rate slows post-Chinese New Year, we see domestic oil demand rebounding. As the population hits the roads and the skies, our expectation is Chinese oil consumption in 2023 will increase by around 1.0 million b/d, an impressive performance considering Q1 demand is likely to contract by 190,000 b/d,” Gavin Thompson, Vice Chairman, Energy – Asia Pacific, at Wood Mackenzie, said earlier this month.  

“Look for a particularly bullish Q2, with China adding 1.36 million b/d over the same quarter in 2022, the strongest growth in over a decade (excluding the post-Covid bounce) that will support higher prices,” Thompson added.

China may be one of the two wild cards in oil markets this year, together with Russia, but one thing is certain in energy markets – the Chinese economy and oil and gas consumption trends will shape the markets this year.   

By Tsvetana Paraskova for Oilprice.com

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Before the Bell: Futures dip ahead of Fed rate decision – The Globe and Mail

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Equities

Canada’s main stock index opened lower Wednesday with consumer staples and utilities under pressure. On Wall Street, key indexes also started the day on the back foot as traders await this afternoon’s rate decision from the Federal Reserve.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 52.71 points, or 0.25 per cent, at 20,714.67.

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In the U.S., the Dow Jones Industrial Average fell 46.44 points, or 0.14 per cent, at the open to 34,039.60. The S&P 500 opened lower by 6.53 points, or 0.16 per cent, at 4,070.07, while the Nasdaq Composite dropped 11.41 points, or 0.10 per cent, to 11,573.14 at the opening bell.

Wednesday will see the Fed’s latest policy announcement. Markets are widely expecting a quarter point rate increase. Traders will be watching for signals about what’s coming next and whether the central bank is nearing a pause in its tightening campaign. A week ago, the Bank of Canada hiked by 25 basis points and became the first major central bank to signal a break after eight consecutive rate increases.

“While Fed officials have insisted that rates will stay high for some time to come, the markets simply don’t believe them, especially when several key inflation indicators have shown that prices are still coming down on a steady trajectory,” Michael Hewson, chief market analyst with CMC Markets U.K., said in a note.

“This is what makes today’s [Fed chair Jerome] Powell press conference such a tricky proposition when it comes to market positioning,” he said. “The danger for the Fed is in allowing the market to continue to think that rates are likely to come down this year, which in turn could see inflation take off again, especially with the labour market being as tight as it is.”

The rate decision is due at 2 p.m. ET and will be followed by a news conference.

Meanwhile, earnings continue to pour in on both sides of the border.

On Wall Street, Facebook parent Meta reports after the close of trading.

Shares of Snapchat-parent Snap were down more than 12 per cent in morning trading after the social media company swung to a loss in the latest quarter. The company also warned that revenue in the current quarter could fall by as much as 10 per cent amid a weaker economy and rising competition. Snap’s net loss was US$288-million during the quarter, versus net income of US$23-million the previous year. It reported adjusted earnings per share of 14 US cents, beating Wall Street estimates of 11 US cents. The results were released after Tuesday close.

In Canada, Montreal-based CGI reported results before the start of trading. The company said first quarter earnings per share rose to $1.60 in the most recent quarter from $1.49 a year earlier. Excluding specific items, CGI said it earned $1.66 per diluted share, up from $1.50 per diluted share a year earlier. Revenue for the quarter rose to $3.45-billion, up from $3.09-billion last year.

Canadian Pacific Railway Ltd., meanwhile, says it earned $1.27-billion or $1.36 a share in the fourth quarter of 2022, compared with $532-million or 74 cents in the same period of 2021. The company reported revenue of $2.46-billion, up 21 per cent from a year earlier.

Overseas, the pan-European STOXX 600 was up 0.30 per cent by midday. Britain’s FTSE 100 added 0.23 per cent. Germany’s DAX and France’s CAC 40 were up 0.39 per cent and 0.30 per cent, respectively.

In Asia, Japan’s Nikkei ended up 0.07 per cent. Hong Kong’s Hang Seng added 1.05 per cent.

Commodities

Crude prices wavered as traders await the outcome of the Fed’s latest policy meeting and weigh a decision by OPEC+ to maintain output.

The day range on Brent was US$85.25 to US$86.21 in the early premarket. The range on West Texas Intermediate was US$78.83 to US$79.73.

“The oil market is awaiting a couple of major events, both the FOMC decision and the OPEC+ meeting on output,” OANDA senior analyst Ed Moya said.

Members of OPEC+’s Joint Ministerial Monitoring Committee met virtually today. As expected, the group made recommended no change to its current output level. The group will meet again in April.

Reuters reports that OPEC’s oil output fell in January, as Iraqi exports dropped and Nigeria’s output did not recover, with the 10 OPEC members pumping 920,000 barrels per day (bpd) below their targeted volumes under the OPEC+ agreement. The shortfall was bigger than the deficit of 780,000 bpd in December.

Later in the day, markets will get weekly U.S. inventory figures from the U.S. Energy Information Administration. An earlier report from the American Petroleum Institute showed crude stocks rose about 6.3 million barrels last week, more than markets had been expecting.

Meanwhile, gold prices were down as traders await the Fed decision.

Spot gold was 0.2 per cent lower at US$1,924.26 per ounce by early Wednesday morning, after falling to its lowest since Jan. 19 in the previous session. U.S. gold futures fell 0.3 per cent to US$1,939.70.

Currencies

The Canadian dollar was steady, trading around 75 US cents early Wednesday morning, while its U.S. counterpart slid against a group of world counterparts ahead of this afternoon’s Fed policy decision.

The day range on the loonie was 75.03 US cents to 75.26 US cents in the early premarket period.

There were no major Canadian economic releases due Wednesday.

On world markets, the U.S. dollar index, which measures the U.S. currency against six major peers, fell 0.15 per cent to 101.96 by Wednesday morning. It also slipped in the previous session, in part because of a report showing U.S. labour costs had increased in the fourth quarter at their slowest pace in a year, Reuters reported.

The euro was up 0.2 per cent at US$1.0885 as traders await Thursday’s rate decision from the European Central Bank, while Britain’s pound was flat at US$1.2320.

More company news

TC Energy Corp on Wednesday said it now estimates costs for completion of its troubled Coastal GasLink project to be $14.5-billion from $11.2-billion pegged earlier.

Intel Corp said that it had made broad cuts to employee and executive pay, a week after the company issued a lower-than-expected sales forecast driven by a loss of market share to rivals and a PC market downturn. The reductions will range from 5 per cent of base pay for mid-level employees to as much as 25% for Chief Executive Pat Gelsinger, while the company’s hourly workforce’s pay will not be cut, said a person familiar with the matter who was not authorized to speak publicly. –Reuters

Peloton Interactive Inc on Wednesday reported slower cash burn for the second quarter, after the company carried out a host of cost-cutting measures, including layoffs and store shutdowns. The fitness equipment maker posted a cash burn of US$94.4-million, compared with a burn of US$546.7-million a year earlier. –Reuters

Economic news

(8:15 a.m. ET) U.S. ADP National Employment Report for January.

(9:30 a.m. ET) Canadian S&P Global Manufacturing PMI for January.

(10 a.m. ET) U.S. ISM Manufacturing PMI for January.

(10 a.m. ET) U.S. construction spending for January.

(10 a.m. ET) U.S. Job Openings and Labor Turnover Survey for December.

(2 p.m. ET) U.S. Fed announcement with chair Jerome Powell’s press briefing to follow.

With Reuters and The Canadian Press

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Asia's richest no more? Gautam Adani's wealth crashes as $90 billion wiped off his business – CNN

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New Delhi
CNN
 — 

Gautam Adani looks set to cede his position as Asia’s richest man to another Indian billionaire as shares in his business empire continue to plunge following fraud allegations leveled by an American short seller.

In an investigation published last Tuesday, Hindenburg Research accused Adani’s ports-to-power group of “brazen stock manipulation and accounting fraud scheme over the course of decades.”

Adani Group denounced the report as “baseless” and “malicious,” and has said it is considering legal action, but the market reaction has been brutal and relentless.

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The conglomerate, which has seven listed companies, has lost more than $90 billion in market value in the week since Hindenburg published its report.

Adani vs Hindenburg: India’s top businessman faces biggest test

That stock market rout has wiped nearly $40 billion off Adani’s personal fortune. A week ago he was the fourth-richest person in the world. Now he ranks 10th on the Bloomberg Billionaires Index and looks set to be overtaken by Mukesh Ambani, India’s energy-to-telecom entrepreneur, as Asia’s richest man. Bloomberg’s index is updated at the close of every trading day in New York.

Forbes’ real-time ranking of billionaires already has Ambani, who controls Reliance Industries, above Adani. Ambani’s net worth stands at $83 billion, making him the world’s ninth-richest person, while Adani’s wealth is estimated at about $75 billion, according to Forbes.

The turmoil comes despite a brief respite Tuesday for Adani when his flagship firm, Adani Enterprises, managed to issue new shares worth $2.5 billion. The capital-raising exercise was touted as India’s biggest ever public offering by a listed company. After a tepid start, the offer was fully subscribed shortly before the close of trading in Mumbai.

But interest from retail investors was muted, and the market crash resumed Wednesday. Shares in Adani Enterprises closed down nearly 30% on Wednesday, while Adani Ports plunged almost 20%.

At the peak of his wealth last year, Adani was the world’s second-richest person, ahead of Jeff Bezos. That was the first time a person from Asia had ranked so highly on the Bloomberg list, long dominated by white tech entrepreneurs.

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