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Evergrande strikes deal to meet Chinese bond payment, but foreign dollar investors still up in air – CBC.ca

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A teetering Chinese real estate developer unexpectedly struck an 11th-hour deal to pay some of what it owes to its domestic investors on Wednesday, but foreign investors still owed millions of U.S. dollars on Thursday have so far been left hanging.

Investors around the world have been watching property developer Evergrande Group closely this week, as the company is in danger of defaulting under its crushing debt load.

The company owes more than $300 billion US to various creditors and was struggling to meet a Thursday deadline to make payments on two of its many bonds. One payment denominated in U.S. dollars is for roughly $84 million. The other is for 232 million yuan — about $36 million US.

Evergrande surprised markets by announcing it had struck a deal with holders of its yuan bond, the vast majority of which is held by domestic investors since it is denominated in China’s currency, the yuan.

The payment agreement has been “settled in negotiations outside the market,” the company said, providing no detail about whether or not the payment was made in full.

Whatever the deal was, it likely came as a pleasant surprise to holders of that debt, who were in danger of getting nothing. The company’s silence about the fate of the other U.S.-dollar denominated debt has foreign investors even more anxious.

Evergrande appears to be trying to buy time for “an orderly default rather than a shocking implosion” by paying bondholders in China on time while skipping payments abroad, Vishnu Varathan of Mizuho Bank said in a report.

“Averting a default altogether is highly unlikely,” Varathan said.

The company seems to be favouring Chinese creditors in order to negotiate with a circle of friendly banks and other institutions that hold its debt, he said, noting that “optimizes relief from creditor action” in China.

China’s main stock market benchmark, the Shanghai Composite Index, closed 0.4 per cent higher following the announcement. Hong Kong financial markets, which have been jolted by Evergrande’s predicament, were closed for a holiday.

If Chinese regulators get involved, they are likely to focus on protecting families who paid for apartments that are yet to be built. Getting ordinary people to bear the brunt of the losses would be the most painful scenario for China’s economy, which is why most observers think that’s the least likely outcome.

Jia Wang, interim director of the China Institute at the University of Alberta, says Beijing will do whatever it takes to avoid the worst-case scenario of just toppling over into bankruptcy because of what she calls “the ripple effect,” both in China and abroad. “It is a large company employing so many people and involved in so many projects,” she said.

WATCH | How Evergrande could rattle global markets

Why Evergrande matters

9 hours ago

Jia Wang, Director of the China Institute at the University of Alberta, explains why Evergrande is a big risk for China’s entire housing market and broader economy. 0:54

“There’s going to be a lot of very unhappy investors, from banks to individual investors or to those who prepaid for their apartment yet to be built,” she said in an interview with CBC News.

Troubling Lehman comparisons

Some commentators suggest Evergrande might become China’s “Lehman moment,” referring to the failure of Wall Street bank Lehman Brothers, a forerunner to the 2008 global financial crisis. But economists say the risk of Evergrande’s problems cascading into other parts of the global economy is low.

That’s because while the company is the most indebted real estate company in the world, the vast majority of it is held inside China. Estimates of how much of the company’s debt is owned by foreign investors range from between $14 billion and $19 billion US.

At least one analyst suggested that the yuan payment could augur good news for those owed dollars as well.

“Evergrande’s last-minute deal with bondholders to repay interest due Thursday on domestic notes suggests it could conceivably avoid defaulting this week,” Bloomberg Intelligence analyst Daniel Fan said. “It’s still unclear how it will handle $83.5 million of interest due on offshore bonds on Thursday, but the onshore deal might be a template for an offshore agreement that lets the firm, with government oversight, continue selling assets to try to work through liquidity problems.”

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First U.S. futures-based bitcoin ETF begins trading, bitcoin nears record

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The first U.S.  bitcoin futures-based exchange-traded fund began trading on Tuesday, sending bitcoin to a six-month high and within striking distance of its all-time peak, as traders bet the ETF could boost investment flows into cryptocurrencies.

The ProShares Bitcoin Strategy ETF began trading on Intercontinental Exchange Inc’s NYSE Arca on Tuesday under the ticker BITO after being greenlighted by the U.S. Securities and Exchange Commission.

Bitcoin futures have been overseen by the Commodity Futures Trading Commission for four years and ETFs – securities that track an asset and can be bought or sold on a stock exchange – are regulated by the SEC, offering some level of investor protection, SEC chair, Gary Gensler, said on Tuesday.

“Yet it’s still a highly speculative asset class and investors should understand that underneath, there is the same volatility and speculation,” he told CNBC.

Bitcoin, the world’s biggest cryptocurrency, touched $63,337.54 after the listing, its highest since mid-April and near its record of $64,895.22.

Known throughout its 13-year life for its volatility, bitcoin has risen by some 40% this month on hopes the advent of bitcoin ETFs – of which several are in the works – will see billions of dollars managed by pension funds and other large investors flow into the sector.

The BITO ETF was last at $40.95, up slightly from its $40.88 open.

“It has traded tightly, within a penny of fair value pretty much all morning, so it’s part of the ecosystem,” said Dave Nadig, chief investment officer and director of research at ETF Trends.

The ETF had traded around $500 million worth, notionally, by late morning, which is “about what we would expect for a media-darling first launch in the space,” he said.

Much of BITO’s initial volume appeared to be from retail investors, as there were only four block trades, above 10,000 shares, all morning, Nadig said.

Nasdaq Inc on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF, and Grayscale, the world’s largest digital currency manager, plans to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF, the company confirmed.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing U.S.-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

The SEC has yet to approve a spot bitcoin ETF.

Bitcoin futures were up 2.21% at $63,035.

(Reporting by John McCrank in New York, Tom Wilson in London; additional reporting by Tom Westbrook in Singapore and Katanga Johnson in Washington; Editing by Kim Coghill, Jason Neely and Andrea Ricci)

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Why COVID-19 boosters weren't tweaked to better match variants – CTV News

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More COVID-19 booster shots may be on the way — but when it’s your turn, you’ll get an extra dose of the original vaccine, not one updated to better match the extra-contagious delta variant.

And that has some experts wondering if the booster campaign is a bit of a missed opportunity to target delta and its likely descendants.

“Don’t we want to match the new strains that are most likely to circulate as closely as possible?” Dr. Cody Meissner of Tufts Medical Center, an adviser to the Food and Drug Administration, challenged Pfizer scientists recently.

“I don’t quite understand why this is not delta because that’s what we’re facing right now,” fellow adviser Dr. Patrick Moore of the University of Pittsburgh said last week as government experts debated whether it’s time for Moderna boosters. He wondered if such a switch would be particularly useful to block mild infection.

The simple answer: The FDA last month OK’d extra doses of Pfizer’s original recipe after studies showed it still works well enough against delta — and those doses could be rolled out right away. Now the FDA is weighing evidence for boosters of the original Moderna and Johnson & Johnson vaccines.

“It’s less churn and burn on the manufacturing” to only switch formulas when it’s really necessary, said FDA vaccine chief Dr. Peter Marks.

But Pfizer and Moderna are hedging their bets. They’re already testing experimental doses customized to delta and another variant, learning how to rapidly tweak the formula in case a change eventually is needed — for today’s mutants or a brand new one. The tougher question for regulators is how they’d decide if and when to ever order such a switch.

What we know so far:

CURRENT VACCINES ARE WORKING EVEN AGAINST DELTA

Vaccines used in the U.S. remain strongly effective against hospitalization and death from COVID-19, even after the delta variant took over, but authorities hope to shore up waning protection against less severe infection and for high-risk populations. Studies show an extra dose of the original formulas revs up virus-fighting antibodies that fend off infection, including antibodies that target delta.

MIGHT A DELTA-SPECIFIC BOOSTER WORK EVEN BETTER?

Vaccines target the spike protein that coats the coronavirus. Mutations in that protein made delta more contagious but to the immune system, it doesn’t look all that different, said virus expert Richard Webby of St. Jude Children’s Research Hospital.

That means there’s no guarantee a delta-specific booster would protect any better, said University of Pennsylvania immunologist John Wherry. Waiting for studies to settle that question — and if necessary, brewing updated doses — would have delayed rolling out boosters to people deemed to need them now.

Still, because delta is now the dominant version of the virus worldwide it almost certainly will be a common ancestor for whatever evolves next in a mostly unvaccinated world, said Trevor Bedford, a biologist and genetics expert at the Fred Hutchinson Cancer Research Center.

A delta-updated vaccine would “help to provide a buffer against those additional mutations,” he said. Bedford is paid by the Howard Hughes Medical Institute, which also supports The Associated Press Health and Science Department.

TWEAKING THE RECIPE

The Pfizer and Moderna vaccines are made with a piece of genetic code called messenger RNA that tells the body to make harmless copies of the spike protein so it’s trained to recognize the virus. Updating the formula merely requires swapping out the original genetic code with mRNA for a mutated spike protein.

Both companies first experimented with tweaked doses against a mutant that emerged in South Africa, the beta variant, that has been the most vaccine-resistant to date, more so than the delta variant. Lab tests showed the updated shots produced potent antibodies. But the beta variant didn’t spread widely.

Now the companies have studies underway of fully vaccinated people who agreed to test a booster dose tweaked to match delta. Moderna’s studies also include some shots that combine protection against more than one version of the coronavirus — much like today’s flu vaccines work against multiple influenza strains.

The mRNA vaccines are considered the easiest kind to tweak but some other vaccine makers also are exploring how to change their recipes if necessary.

WHY STUDY UPDATED SHOTS IF THEY’RE NOT YET NEEDED?

Moderna’s Dr. Jacqueline Miller told an FDA advisory panel last week the company is studying variant-specific boosters now to learn if they offer advantages, and to be ready if they’re needed.

And Penn’s Wherry said it is critical to carefully analyze how the body reacts to updated shots because the immune system tends to “imprint” a stronger memory of the first virus strain it encounters. That raises questions about whether a subtly different booster would prompt a temporary jump in antibodies the body’s made before — or the bigger goal, a broader and more durable response that might even be better positioned for the next mutations to come along.

NO RULES YET FOR MAKING A SWITCH

“What is the tripping point?” asked Webby, who is part of a World Health Organization network that tracks influenza evolution. “A lot of what is going to need to go into that decision making is just going to be learned by experience, unfortunately.”

Bedford said now is the time to decide what drop in vaccine effectiveness would trigger a formula change, just as is done with flu vaccines every year.

That’s important not just if a dramatically worse variant suddenly develops. Like many scientists, Bedford expects the coronavirus to eventually evolve from a global crisis into a regular threat every winter — which might mean more regular boosters, maybe even yearly in combination with the flu shot.

Timing between shots matters, too, Wherry noted.

“Your boostability may actually improve with longer intervals between stimulation,” he said. While scientists have learned a lot about the coronavirus, “the story’s not finished yet and we don’t know what the last chapters say.”

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Pfizer officially requests Health Canada approval for kids' COVID-19 shot – CP24 Toronto's Breaking News

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Laura Osman, The Canadian Press


Published Monday, October 18, 2021 4:50PM EDT


Last Updated Monday, October 18, 2021 8:34PM EDT

OTTAWA – Pfizer-BioNTech has asked Health Canada to approve the first COVID-19 vaccine for children aged five to 11 years old.

The vaccine was developed in partnership with Germany’s BioNTech and is now marketed under the brand name Comirnaty. It was authorized for people at least 16 years old last December, and for kids between 12 and 15 in May.

Pfizer already submitted clinical trial data for its child-sized dose to Health Canada at the beginning of the month. The company said the results were comparable to those recorded in the Pfizer-BioNTech study in people aged 16 to 25.

Health Canada said it will prioritize the review of the submission, while maintaining high scientific standards for safety, efficacy and quality, according to a statement from the department.

“Health Canada will only authorize the use of Comirnaty if the independent and thorough scientific review of all the data included in the submission showed that the benefits of the vaccine outweighed the potential risks in this age group,” the statement read.

The doses are about one-third the size given to adults and teens age 12 and up.

As soon as the regulator gives the green light, providers will technically be able to start offering the COVID-19 shot to kids, though new child-sized doses might need to be procured.

Pfizer has delivered more than 46 million doses to Canada to date, and an analysis of the available data on administration from provincial and federal governments suggests there are more than enough Pfizer doses already in Canada to vaccinate kids between five and 11 years old.

But simply pulling smaller doses from the vials Canada already had stockpiled across the country may not be advised, chief public health officer Dr. Theresa Tam said at a media briefing late last week.

“We also understand from Pfizer that this actual formulation has shifted, this is a next generation formulation, so that is something that needs to be examined by the regulator,” Tam said Friday.

Canada signed a new contract with Pfizer for pediatric doses last spring.

The Pfizer-BioNTech vaccine has also been tested on children as young as six months old. Topline data for children under five years old is expected as soon as the end of the year.

Health Canada said it expects to receive more data for review from Pfizer for younger age groups, as well as other manufacturers for various age ranges in the coming months.

The Public Health Agency of Canada has noted rare incidents of myocarditis, an inflammation of the heart muscle, after receiving an mRNA vaccine like Pfizer-BioNTech and Moderna.

As of Oct. 1, Health Canada has documented 859 cases associated with the vaccines, which mainly seem to affect people under 40 year old. On balance, the risk appears to be low, according to Tim Sly, a Ryerson University epidemiologist with expertise in risk management.

“Of course, no one considers any complication in a child to be acceptable, and a tremendous amount of caution is being taken to look for and identify all problems,” said Sly in a recent email exchange with The Canadian Press.

COVID-19 infection also produces a very high risk of other cardiovascular problems, he said.

Aside from protecting kids against more serious symptoms of COVID-19, the vaccine would also reduce the risk of a child passing the virus on to a vulnerable family member and make for a better school environment with less stress about transmission.

Once the vaccine is approved for kids, the National Advisory Committee on Immunization will weigh in on whether the benefits of the shot outweigh potential risks for young children.

This report by The Canadian Press was first published Oct. 18, 2021.

– With files from Mia Rabson

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