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Quebec pension manager and WestCap invest $400-million in cryptocurrency lending platform – The Globe and Mail

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The Caisse de dépôt et placement du Québec has made its inaugural investment in a cryptocurrency company, even amidst growing scrutiny of the digital-asset world from global regulators.

The Caisse, which is Canada’s second-largest pension fund manager, announced Tuesday that it is participating in a US$400-million funding round for New Jersey-based cryptocurrency lending platform Celsius Network. Investing alongside the Caisse is San Francisco-based WestCap Group, a private equity firm set up by former Airbnb executive Laurence Tosi.

Celsius’s core business is facilitating the lending of cryptocurrency to retail and institutional investors. Users deposit cryptocurrency using the Celsius app, and the company then lends the funds out to borrowers for yields as high as 17 per cent.

How to invest in cryptocurrency without buying any

“The way we look at Celsius is that it is the bank of the future. They offer lending and deposit services, not just to retail investors but to institutions as well. Plus we really liked the management team and the expertise they offered in the cryptocurrency world,” Alexandre Synnett, executive vice-president and chief technology officer at the Caisse, said in an interview.

The investment values Celsius at more than US$3-billion, a significant jump in the company’s valuation from its previous funding round last June. At that time, the company was worth about US$120-million. The controversial cryptocurrency company Tether International – which issues the stablecoin Tether, and whose executives are being probed by the United States Department of Justice over allegations of bank fraud – was the lead investor in Celsius’s first equity raise.

In a statement announcing the latest financing, Celsius said it would use the funds to double its team from 486 to 1,000 employees, and to expand globally. The company has processed US$8.2-billion in loans and says it has one million users registered on its platform.

Crypto lending has come under heavy pressure from U.S. regulators, who say the services do not comply with securities laws. Last month, the U.S. Securities and Exchange Commission blocked crypto exchange giant Coinbase from offering a new crypto lending product that would have allowed users to earn interest on holdings of a stablecoin called USDC. (A stablecoin is a type of cryptocurrency that is backed by an underlying asset, such as the U.S. dollar, to prevent wild price fluctuations.)

Celsius Network, too, has been targeted by U.S. regulators. Texas and New Jersey recently accused the company of offering residents unregistered securities. The states argue that Celsius markets its products as alternatives to bank savings accounts, and therefore should be registered with regulators for proper oversight.

Celsius used to be based in the United Kingdom, but moved its operations to the U.S. after the U.K.’s Financial Conduct Authority imposed rules that required all crypto asset companies to be registered with it.

Mr. Synnett said that the Caisse is aware of the regulatory pressure on crypto lending companies. But, he said, the pension manager believes blockchain and crypto technology is here to stay, and that the industry needs to be regulated in the right way.

“We made this investment from the perspective that this technology is not going away,” he said. “We are going to keep looking at companies in this space. It’s a good way to diversify ourselves and position ourselves as global investors in the digital asset industry.”

Canadian pension funds have largely appeared to stay clear of major investments in crypto companies, which makes the Caisse’s sizable investment in Celsius an anomaly. The Ontario Municipal Employees Retirement System pension fund (OMERS) has a stake in Purpose Investments, which launched a Bitcoin ETF earlier this year. Its venture capital arm, OMERS Ventures, had previously invested in three other crypto companies – Digital Currency Group, Citizen Hex and OB1 – but has since exited those investments.

With a report from David Milstead

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Stocks gain as earnings provide some optimism; 10-yr yield climbs

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Stock indexes around the world jumped on Tuesday as U.S. technology shares extended recent gains and earnings reports were upbeat, while the 10-year U.S. Treasury yield rose to its highest in more than four months.

The U.S. dollar was lower on the day as other currencies, including sterling, were supported by investor expectations that interest rates could be increased sooner than some had forecast.

On Wall Street, the technology sector boosted the S&P 500 the most, while recent stronger-than-expected results have bumped up the forecast for S&P 500 earnings for the third quarter.

Investors remain worried, however, about the impact that higher costs, supply disruptions and labor shortages are having on companies.

“The key for the market to going up from here will not be higher multiples, it will have to be higher earnings. That’s why it’s so important to pay attention to what those profit margins do going forward and what the trajectory of GDP looks like,” said Eric Marshall, portfolio manager at Hodges Funds.

Among U.S. companies reporting results on Tuesday, insurer Travelers Cos Inc beat estimates for third-quarter profit and its shares rose. Johnson & Johnson raised its 2021 adjusted profit forecast and its shares jumped 2.3%.

The Dow Jones Industrial Average rose 198.7 points, or 0.56%, to 35,457.31, the S&P 500 gained 33.17 points, or 0.74%, to 4,519.63 and the Nasdaq Composite added 107.28 points, or 0.71%, to 15,129.09.

The pan-European STOXX 600 index rose 0.33% and MSCI’s gauge of stocks across the globe < .MIWD00000PUS> gained 0.73%.

The MSCI index reached its highest in about a month.

 

MSCI World Index https://fingfx.thomsonreuters.com/gfx/mkt/zgvomrjmavd/world%20stocks%20oct%2019.PNG

 

The dollar index against a basket of other currencies was last down 0.22% on the day at 93.73, after earlier dropping to 93.50, the lowest since Sept. 28.

The euro gained 0.25% to $1.1640. Currencies, including sterling and the New Zealand dollar, are benefiting from rising interest rate increase expectations.

Bitcoin last rose 3.49% to $64,201.08.

In the U.S. Treasury market, the yield curve widened, reversing the recent trend.

In afternoon U.S. trading, U.S. 10-year yields were last up nearly six basis points at 1.6407%. The yield hit a 4-1/2-month peak of 1.6440%.

The U.S. 5-year yield, which has been on a tear the last two weeks, was last down at 1.1586%.

Oil prices climbed and were near multi-year highs as an energy supply crunch continued across the globe. Brent crude rose 75 cents to settle at $85.08 a barrel. U.S. West Texas Intermediate (WTI) futures rose 52 cents to settle at $82.96.

In other commodities, U.S. gold futures gained 0.15% to $1,769.70 an ounce.

 

(Additional reporting by Tommy Wilkes in London, Shreyashi Sanyal and Devik Jain in Bengaluru, Karen Brettell, Stephanie Kelly and Sinead Carew in New York, and Saikat Chatterjee; Editing by Jason Neely, John Stonestreet, Steve Orlofsky and Cynthia Osterman)

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In highly uneven recovery, global investment flows rebound – UN News

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That’s according to the latest Investment Trends Monitor, released this Tuesday by the United Nations Conference on Trade and Development (UNCTAD).  

It shows the increase in the first two quarters in FDI, recovered more than 70 per cent of the losses stemming from the COVID-19 crisis in 2020. 

For the UNCTAD‘s director of investment and enterprise, James Zhan, the good news “masks the growing divergence in FDI flows between developed and developing economies, as well as the lag in a broad-based recovery of the greenfield investment in productive capacity.” 

Mr. Zhan also warns that “uncertainties remain abundant”. 

Global outlook  

The duration of the health crisis, the pace of vaccinations, especially in developing countries, and the speed of implementation of infrastructure stimulus, remain important factors of uncertainty. 

Other important risk factors are labour and supply chain bottlenecks, rising energy prices and inflationary pressures.  

Despite these challenges, the global outlook for the full year has improved from earlier projections. 

The growth in the next few months should be more muted than the in the first half of the year, but it should still take FDI flows to beyond pre-pandemic levels. 

Uneven recovery 

Between January and June, developed economies saw the biggest rise, with FDI reaching an estimated $424 billion, more than three times the exceptionally low level in 2020. 

In Europe, several large economies saw sizeable increases, on average remaining only 5 per cent below pre-pandemic quarterly levels.  

Inflows in the United States were up by 90 per cent, driven by a surge in cross-border mergers and acquisitions. 

FDI flows in developing economies also increased significantly, totalling $427 billion in the first half of the year.  

There was a growth acceleration in east and southeast Asia (25 per cent), a recovery to near pre-pandemic levels in Central and South America, and upticks in several other regional economies across Africa and West and Central Asia. 

Of the total recovery increase, 75 per cent was recorded in developed economies. 

High-income countries more than doubled quarterly FDI inflows from rock bottom 2020 levels, middle-income economies saw a 30 per cent increase, and low-income economies a further nine per cent decline.  

Mixed picture for investors 

Growing investor confidence is most apparent in infrastructure, boosted by favourable long-term financing conditions, recovery stimulus packages and overseas investment programmes. 

International project finance deals were up 32 per cent in number, and 74 per cent in value terms. Sizeable increases happened in most high-income regions and in Asia and South America. 

In contrast, UNCTAD says investor confidence in industry and value chains remains shaky. Greenfield investment project announcements continued their downward path, decreasing 13 per cent in number and 11 per cent in value until the end of September.  

Agenda 2030 

After suffering double-digit declines across almost all sectors, the recovery in areas relevant to Sustainable Development Goals (SDGs) in developing countries remains fragile. 

The combined value of announced greenfield investments and project finance deals rose by 60 per cent, but mostly because of a small number of very large deals in the power sector.  

International project finance in renewable energy and utilities continues to be the strongest growth sector. 

The investment in projects relevant to the SDGs in least developed countries continued to decline precipitously. New greenfield project announcements fell by 51 per cent, and infrastructure project finance deals by 47 per cent. Both had already fallen 28 per cent last year.

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Simon Kronenfeld: Best Performing Stocks on TSX in 2021

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Simon Kronenfeld is well-experienced in analyzing stocks across North American markets. Recently he has turned his attention to the Toronto Stock Exchange in particular. Although less liquid than US exchanges, there remains strong potential for reliable returns if you know your way around the TSX. Spotting the stocks with the potential to survive and thrive in changing times will be a key skill in 2021.

Simon Kronenfeld dwells upon three companies that are performing well on the TSX in 2021.

  • Goeasy Ltd: Goeasy’s success is a reflection of the wider financial sector in general. The company primarily offers loans for home appliances and furniture through their easyHome and easyFinancial divisions.

The company has issued around $5 billion in loans to date, and they continue to help Canadian borrower’s build their credit scores, with 60% of customers increasing their credit scores within a year. Despite the pandemic, the company’s stocks have continued to deliver great returns over the last year. In fact, its share prices have risen 210% since August 2020. Considering the wider economy, Goeasy is looking like a sound investment for the future.

  • TFI International: TFI International had some negative news at the start of the year as its stock prices slipped, but they have bounced back to triple the value of that period. These temporary dips are not a major obstacle for smart companies with the right plan.

TFI International is a logistics company with over 500 access points across North America. This company covers all the major sectors of the industry, including Package and Courier, Truckload, and Logistics, and provides more than 31,000 jobs.

The company recently acquired UPS’s Less-Than-Truckload freight service, which has led to a major transformation in their revenue distribution. Now the company predicts 75% of their revenue to come from the US market, where there is more growth potential. Simon expects to see long-term growth and value from this one, despite the stock price boost it has already experienced.

The company has made major improvements to its efficiency following the acquisition, putting it on the right path to make further inroads into the US market.

  • Shopify: Shopify is the most widely-used e-commerce marketing platform, used by small businesses and major operations alike to create online stores and sell products, thanks to its streamlined design process and in-built payment platform.

Business was already booming for Shopify before the pandemic, and the shift towards online shopping in the last year has only served to compound its successes. As a result, it has experience growth of 32% in the last year, and Simon expects this trend to continue.

Simon Kronenfeld is not only a businessman, he is also a business expert in today’s world. He founded the company Electronic Liquidators Inc. in 1999 and paving the way for many opportunities as he sold it and made his way into real estate. Now after 2 decades, Simon Kronenfeld is a real estate mastermind who plans to build luxury housing by the beach. If we think about what the driving force behind Simon Kronenfeld’s success has been, we can say that it is his self-motivation to do better.

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