January 22, 2021

Bitcoin sell-off wipes out $100 billion from crypto market in just two days

Bitcoin was trading at $31,375 per token at 14:40 GMT, having lost nearly 10 percent day to day, according to Coinmarketcap.com. The world’s number-one cryptocurrency has dropped almost 18 percent over the past week.

Bitcoin has seen a wild rally in recent weeks, briefly hitting $41,940 earlier this month before its recent sharp drop.

The second-biggest cryptocurrency by market value, ether, was also down around 10 percent over the past 48 hours. It was trading at $1,238.49, after hitting an all-time high of $1,439 on Tuesday.

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The plunge in major digital assets evoked an enormous drop in the market value of all cryptocurrencies from about $1.06 trillion to under $920 billion.

Despite the latest drop, bitcoin has still been up over 150 percent in the past three months. Experts tied its rally to a number of factors, including growing interest from large institutional investors. Bitcoin’s recent price surge was also boosted by massive investor outflow from gold, which is commonly the preferred inflation hedge for traders.

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Silk Road trade on track: Freight train sets off from China to Russia, drastically cutting travel time

According to China Daily, the train is loaded with 50 containers of goods made by the Guangdong-based Midea Group company, a leading home-appliance manufacturer. It is the first export train used by a local home-appliance company since Guangdong opened its China-Europe freight service in 2015.

The special train service will improve the export of goods made in Guangdong to the European market amid the global Covid pandemic, said Sinotrans, the operator of the China-Europe freight service in Dongguan. The number of Sinotrans-operated China-Europe freight trains traveling from South China reached 686 last year, and comprised 61,324 standard containers worth about $3 billion.

Initiated in 2011, the China-Europe rail transport service is considered a significant part of the Belt and Road Initiative (BRI) to boost trade between China and other countries participating in the program. The ambitious multi-trillion-dollar initiative was announced by Chinese President Xi Jinping in 2013.

Also on rt.com Freight traffic between China Europe hit all-time high in 2020

More than 140 countries and international organizations have inked agreements on jointly building the project since then.

The BRI aims to boost connectivity and cooperation between East Asia, Europe, and East Africa. It is expected to significantly boost global trade, cutting trading costs by half for the countries involved, according to expert estimates.

According to the China State Railway Group, a record 12,400 freight-train trips between China and Europe were made in 2020. That’s up 50 percent on the previous year, the railway operator said.

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Article source: https://www.rt.com/business/513186-china-russia-freight-train/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China ramps up iron ore imports from India by nearly 90% to meet growing demand

Shipments from India were the highest in nine years, statistics showed. Australia and Brazil remained China’s top suppliers in 2020. Australian shipments rose seven percent to 713 million tons, while Brazilian supplies were up 3.5 percent at 235.7 million tons.

“The two countries’ rise could not fully meet China’s demand,” said Tang Chuanlin, an analyst with Citic Securities, as quoted by the South China Morning Post. “Mills had to buy from other countries,” he added.

China relies heavily on imported iron ore to fulfil more than two-thirds of its steel mills demand, which was boosted by Beijing’s stimulus for infrastructure. The country has churned out a record 1.05 billion tons of crude steel in 2020.

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According to Tang, last year Chinese steel firms were using more low-grade ore, like India’s, in an attempt to lower costs.

India’s Federation of Mineral Industries said it expected that purchases from China “will continue until March on strong demand,” but added it was too difficult to predict demand beyond then.

Spot prices of iron ore with 62 percent iron content for delivery to China soared 73 percent in 2020, while 58 percent iron ore skyrocketed 91 percent, according to SteelHome consultancy.

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Article source: https://www.rt.com/business/513092-china-iron-ore-imports-india/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Saudi Arabia remained China’s top oil supplier in 2020

In the end, Saudi Arabia edged past Russia, shipping on average 1.69 million barrels per day (bpd) of oil to China, according to data from China’s General Administration of Customs cited by Reuters.

Saudi oil exports to China grew by 1.9 percent year over year in 2020.

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Russia’s exports saw larger growth last year than the rise in Saudi exports, 7.6 percent compared to 2019. Yet, the total average volume of Russian oil sales to China stood at 1.67 million bpd, just around 20,000 bpd on average lower than the Saudi shipments, according to Reuters estimates of the Chinese customs data in tons.

This means that Saudi Arabia was the top supplier to China for a second year in a row, after clinching the top spot from Russia in 2019. In that year, Saudi Arabia significantly raised its crude sales to the world’s largest oil importer, boosting its exports to China by 47 percent and beating Russia for the top Chinese supplier spot for the first time in four years.

In 2020, Iraq was the third-biggest supplier of crude oil to China, while Brazil was fourth, capitalising on the buying binge of Chinese refiners in the spring and summer when oil prices were at multi-year lows. 

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Also of note in 2020, China more than tripled its crude oil imports from the United States to 394,000 bpd, after refiners accelerated US crude purchases in the latter part of the year as part of the US-China trade deal. Despite the higher US crude oil shipments, China’s total purchases of American energy products were just 38.7 percent of the $25.3 billion target in the deal, according to Reuters estimates.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/513168-saudi-arabiachinas-top-supplier/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Pandemic profiteer: Morgan Stanley makes a killing during coronavirus crisis

Earnings jumped 51 percent in the final three months of the year. The Wall Street bank’s net income applicable to common shareholders surged to $3.39 billion, or $1.81 per share, in the fourth quarter against $2.09 billion, or $1.30 per share, a year earlier.

Analysts had forecasted a profit of $1.27 per share, according to Refinitiv IBES data.

Morgan Stanley confirmed plans to buy back $10 billion worth of its shares this year. The bank’s shares rose 2.5 percent to $76.88 in premarket trading, the highest since late 2000.

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“We saw exceptional support from central banks and strong fiscal policy supports during the health crisis. We supported our clients and were extraordinarily active, and very disciplined around our risk, and that led to record results,” said chief financial officer Jon Pruzan.

Revenue from the institutional securities business, its largest source of income, rose to $7 billion from $5.05 billion recorded a year ago.

Morgan Stanley’s trading unit, which is housed within the institutional securities business, benefitted from the US elections and the release of coronavirus vaccines across the world, which boosted high trading volumes during the last quarter of 2020.

Net revenue grew to $13.64 billion versus $10.86 billion last year. Revenue from the company’s investment banking division advanced to $2.30 billion from $1.58 billion in 2019, while revenue from sales and trading rose to $4.22 billion from $3.19 billion.

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Article source: https://www.rt.com/business/513098-morgan-stanley-higher-profits-coronavirus/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China attracts flood of foreign direct investment amid Covid-19 pandemic

The latest data released by the ministry shows that FDI saw a 4.5-percent year-on-year growth in dollar terms, and a 6.2-percent increase when expressed in yuan.

Foreign inflows into the country’s service industry advanced 13.9 percent year on year, totaling $112 billion and accounting for nearly 80 percent of the entire FDI portfolio. Meanwhile, foreign investment in the advanced-technology industry expanded by 11.4 percent year on year, and high-tech service sector investments rose by 28.5 percent.

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The ministry stressed that the latest figures show China has managed to emerge from Covid-19 and meet its target of stabilizing foreign investment in 2020, bucking the downward trend in global foreign investment.

Foreign investments from the top-15 FDI countries and regions grew by 6.4 percent, and took 98 percent of the total FDI to the Chinese mainland. Financial inflows from the Netherlands and the UK advanced 47.6 percent and 30.7 percent respectively. At the same time, investments by the Association of Southeast Asian Nations increased by 0.7 percent.

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Article source: https://www.rt.com/business/513072-china-foreign-direct-investment-record/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

India’s December oil imports jump to highest level in three years

India’s crude oil imports jumped by 29 percent in December 2020 compared to November and by 11.6 percent compared to December 2019, to more than 5 million barrels per day (bpd), according to the data obtained by Reuters.

At the same time, provisional data from India’s Petroleum Ministry showed earlier this month that fuel demand in India posted its fourth consecutive monthly rise in December, to the highest since February 2020.

Fuel consumption was still two percent below the levels seen before the pandemic, but the rebound in economic activity and transportation resulted in four straight months of rising fuel demand in India.

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India turned from the worst-performing demand market in July into one of the fastest-growing fuel demand markets in November, lending support to oil prices together with strong demand in China and progress with vaccine development and rollout.

India’s fuel demand has been boosted by one of the effects of Covid-19 on customer preferences—people avoid public transportation and prefer the comfort and relative isolation from other people in their own vehicles. This additionally boosts demand for gasoline and diesel for private vehicles.

Indian Oil Corporation (IOC) increased crude oil throughput of its refineries to 100 percent in November 2020, as consumption of all petroleum products has almost reached pre-Covid levels, the country’s biggest refiner and fuel retailer said in December.

READ MORE: Why India is the most exciting renewable market in the world

Despite the fourth-quarter rebound in fuel consumption, India’s crude oil demand for the whole of 2020 fell for the first time in more than 20 years because of the Covid-19 pandemic.

According to Reuters estimates, India’s annual crude oil imports averaged 4.04 million bpd in 2020, the lowest in five years.   

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/513058-india-oil-imports-highest/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia continues ditching US Treasuries as part of state de-dollarization policy

The statistics, commonly published with a three-month lag, show the share of Russian holdings totaled a modest $4.968 billion. Investments in short-term Treasury securities amounted to $3.4 billion, while holding of long-term obligations totaled $1.568 billion.

Russia used to be one of the major holders of US Treasuries. However, the country’s central bank has been steadily cutting this investment since May 2017, in line with the state-supported de-dollarization policy, and in response to sanctions imposed by the White House.

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The regulator also turned to diversifying the national reserves, increasing bullion purchases in recent years to record levels, and earning the title of one of the world’s major gold purchasers.

Japan remains the biggest holder of US Treasury bonds, though the country’s investments in November dropped by $9 billion to $1.26 trillion. China, ranked the second-biggest holder of US state debt, increased its share slightly to $1.063 trillion. The UK is the third-biggest holder with $420.3 billion.

Overall, foreign holders of US sovereign debt decreased their holdings by $15 billion in November to $7.53 trillion.

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Article source: https://www.rt.com/business/513037-russia-dump-us-state-debt/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bitcoin & US tech stocks biggest market bubbles right now – Deutsche Bank survey

The survey, which was based on responses from 627 market professionals, revealed bitcoin is viewed as the most extreme case, as half of respondents gave the digital currency a rating of 10 on a 1-10 bubble scale.

US tech stocks were seen as the next largest bubble, Deutsche Bank said, with an average score of 7.9 out of 10 and 83 percent of respondents giving it a tech bubble rating of 7 or higher.

The survey also found that investors think bitcoin and electric car manufacturer Tesla are more likely to fall than rise over the next year. When asked specifically about the 12-month fate of bitcoin, which surged 300 percent last year, and about Tesla, which skyrocketed nearly 750 percent, a majority of respondents said they were now “more likely to halve than double in value,” Deutsche Bank said.

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The respondents, however, said it’s not clear exactly what might “pop” those bubbles.

According to the poll, “easy monetary situations” supportive of bubbles are likely to stay, with 71 percent of respondents telling Deutsche Bank they don’t believe the US Federal Reserve will tighten policy before the end of 2021. At the same time, a quarter of investors said economic growth or markets could force their hand.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/513039-bitcoin-us-tech-stocks-bubbles/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Goldman Sachs shows best-in-decade performance as underwriting profits more than DOUBLE in last quarter of 2020

While 2020 proved to be a rollercoaster year for global markets – and a death sentence to many small businesses – some fared extremely well amid the Covid-19 turmoil. Reporting its earnings on Tuesday, Goldman Sachs showed impressive results.

Rolling out the earnings sheet, Goldman Sachs chairman and CEO David Solomon said in a press release that “it was a challenging year on many fronts,” warning that 2021 might not be any better. 

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“We hope this year brings much needed stability and a respite from the pandemic, but we remain ready to handle a wide range of outcomes,” he said.

The investment banking company showed some 43 percent growth in revenues from trading in 2020, with its profits jumping 23 percent to $4.27 billion in the last quarter of the turbulent year. Investment banking itself has proven to be a gold mine for the company, surging 27 percent to $2.61 billion during the quarter, which constituted nearly 195 percent growth compared to the same period of the previous year. The record revenues primarily stemmed from equity underwriting, as the company took part in multiple juicy IPOs.

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Apart from showing its best performance in a decade, the banking group also managed to untangle itself from the years-long scandal around the sovereign wealth fund 1Malaysia Development Berhad (1MDB). Last July, it reached a hefty settlement with the Malaysian government, agreeing to pay $2.5 billion and to guarantee at least $1.4 billion in assets in exchange for a dropping of all charges against the company and its leading executives, incumbent and former alike. The banking group was accused of misleading investors over bond sales totaling $6.5 billion that it helped to raise for 1MDB.

Goldman Sachs also reached a separate settlement with the US Department of Justice in October, agreeing to pay $2.9 billion more to various regulators to resolve probes into its role in the 1MDB scandal.

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