January 27, 2022

Trump’s social media venture becomes best-performing SPAC ever

Shares in Digital World Acquisition Corporation (DWAC), the company connected to a planned social media app backed by former US president Donald Trump, have rallied to outperform every other special-purpose acquisition company (SPAC). Digital World currently ranks as the best-performing SPAC stock ever, according to SPAC Research.

The outstanding performance comes despite the regulatory risks facing the merger. The shares ended trading at $73.12 on Friday, way above their $10 initial public offering price. That infers a valuation on the combined entity of close to $13 billion, including debt.

Moreover, DWAC’s share performance has boosted the average trading price of all 114 SPACs that have announced deals that are yet to close. According to SPAC Research, the average SPAC (excluding DWAC) is currently trading at $9.88 a share, below the average trust value of about $10.05.

Trump announces launch of new media group  social network to 'stand up to the tyranny of Big Tech'

In October, Trump announced plans to launch a new media company that will “stand up to the tyranny of Big Tech.” Trump Media Technology Group (TMTG) simultaneously inked an $875-million deal to merge with a SPAC company called Digital World Acquisition Corp.

SPAC deals, also known as reverse mergers, have become very popular in recent years, with celebrities, former politicians and athletes getting involved. SPACs raise money from the public and promise to use those funds to acquire private firms. It’s an increasingly popular way for private companies to go public.

However, SPACs regularly come under regulatory scrutiny. Digital World disclosed in December that federal regulators have opened investigations into the planned merger for potential violations of securities laws around disclosure.

App Store currently lists February 21 as the date that Trump’s new social media app, Truth Social, will be available to download.

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Article source: https://www.rt.com/business/546949-trump-best-performing-spac/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Ruble tumbles as Ukraine tensions rumble

The Russian stock market has dropped more than 4% on Monday, following two weeks of steady decline, while the national currency fell to its weakest in more than a year 78 rubles against the US dollar.

The plunge comes amid mounting geopolitical tensions stemming from claims that Russia is planning to attack Ukraine, actively spread by EU and US officials and fueled by major Western media outlets.

“We expect Russian equities to extend losses today due to an escalation in geopolitical tensions over the weekend,” analysts at Alfa Bank said, as quoted by AFP.

Renaissance Capital reportedly said in a note to clients that the ruble could fall by up to 20% to the dollar in the event of a military escalation.

The Central Bank of Russia announced on Monday that it plans to suspend foreign exchange purchases under fiscal rules to reduce pressure on the ruble. The regulator also said it has all the necessary tools to reduce threats of financial instability.

Western officials were expected to meet on Monday to try and coordinate retaliation measures and discuss new anti-Russian sanctions that should be imminently introduced if Moscow launches a military assault on Ukraine.

EU pins soaring gas prices on geopolitics READ MORE: EU pins soaring gas prices on geopolitics

Media reports claim Russia has amassed over 100,000 troops on the border with Ukraine, with some Western officials believing that a military incursion is around the corner.

Britain and the US have ordered some staff to return home from their embassies in Ukraine with their families.

Russian authorities have repeatedly rejected accusations that Moscow is planning an invasion of Ukraine, which have been voiced by Washington and its allies since November last year, describing the claims as groundless attempts to instill “hysteria.”

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Article source: https://www.rt.com/business/546942-ruble-stock-drop-russia-ukraine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China’s yuan going from strength to strength

In 2021, Beijing’s trade surplus reached an all-time high of $676 billion, boosted by buoyant demand for Chinese-made goods across the world, while a major decline in outbound travel amid the Covid pandemic also limited the deficit in services trade.

The surplus on China’s current account climbed to an eight-year high of $224.2 billion, while the capital account surplus hit $83.2 billion, the highest since records began in 2010, Bloomberg reports, citing calculations based on data released by the State Administration of Foreign Exchange.

The reported figures reflect the nation’s robust trade surplus during the coronavirus pandemic and inflows into yuan-denominated bonds, according to Stephen Chiu, chief Asia FX at Bloomberg.

The soaring surplus bolstered a rallying yuan that strengthened by 2.7% against the US dollar in 2021, extending the gains of 6.7% recorded for the previous year. China’s national currency is climbing toward 6.33 per dollar, a level last recorded in December, when the People’s Bank of China increased the foreign-currency reserve ratio to cool the gains.

Yuan rises in ranks of top global currencies READ MORE: Yuan rises in ranks of top global currencies

“In 2022, overall forex settlements are likely to be similar to last year, especially in terms of a robust current account surplus,” Chiu told Bloomberg.

“Even though global economic growth may slow cyclically, China’s exports are likely to continue to constitute a large share globally because the pandemic continues.”

Last year, foreign investors reportedly expanded their holdings of Chinese sovereign bonds by 575.6 billion yuan ($90.9 billion), marking the fastest pace on record.

Meanwhile, foreign exchange settlement under securities investment in the capital account jumped to $23 billion in December, the highest since records began in 2010.

The big returns of yuan-denominated assets along with the stability of the yuan exchange rate attracts foreign capital, according to Ken Cheung, chief Asian FX strategist at Mizuho Bank, as quoted by Bloomberg.

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Article source: https://www.rt.com/business/546920-china-yuan-strong-trade-surplus/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Energy storage could emerge as the hottest market of 2022

A few years ago, battery energy storage began drawing attention as what one industry executive at the time called the Holy Grail of renewable energy. In the years since, EVs have stolen the spotlight but now battery storage is back, larger than life and, quite likely, twice as expensive.

The ongoing energy crunch in Europe is one good illustration of why, if we are going down the renewable energy path, we need to build battery storage – and a lot of it. One cause of the crunch, admitted unwillingly but still admitted, was lower than usual wind power output. With storage, at least some of that output might have been stored for later use.

The Financial Times reported this month that the battery storage industry is getting billions poured into gigafactories, where battery cells for electric vehicles (EVs) and storage installations are made. According to the report, energy storage companies raised $5.5 billion in venture capital funds over the first nine months of 2021 across 59 deals. This compared with just $1.2 billion across 91 deals during the same period of 2020.

Batteries will play an increasingly important role in allowing high levels of penetration of variable renewable energy like wind and solar on the grid,” the FT quoted Oxford Institute for Energy Studies research fellow Barbara Finamore as saying.

The [investment] numbers are changing so fast, people cannot keep up with how many gigafactories are in the pipeline.

Tesla reducing dependence on China with graphite deal READ MORE: Tesla reducing dependence on China with graphite deal

The above smacks of a future bubble, but given the net-zero targets of the Paris Agreement, investors are excused for buying into this particular bubble. Among these targets, per the International Energy Agency, is selling only electric cars from 2035 onwards and having two-thirds of the global energy supply come from wind, solar, biomass, hydropower, and geothermal. This is one massive undertaking that cannot happen without equally massive storage.

In October last year, energy consultancy Wood Mackenzie forecast that battery storage would really take off after the worst of the pandemic passes.

With the market recovering following the pandemic and a growing acceptance of energy storage as a mainstream power technology, the total energy storage market will double in size in 2021 to reach 56 GWh, with that number expected to increase by 17x in 2030,” Le Xu, senior analyst, Power and Renewables, wrote.

An expected increase is one thing. The cost of this expected increase and its usefulness is quite another matter. For starters, the Wood Mac forecast sees a doubling of global lithium-ion battery manufacturing capacity. This means a surge in demand for battery metals and minerals such as lithium, nickel, and manganese. For seconds, the world consumes huge amounts of energy every minute. Storage will need to become a lot more compact and cheaper to handle this consumption. And this will be tricky.

Electric cars drive nickel prices to ten-year high READ MORE: Electric cars drive nickel prices to ten-year high

Lithium prices are on the climb as demand for the metal rises with battery demand projections and more gigafactories in the pipeline. But the lithium market is already in a deficit, which means even higher prices ahead.

Nickel demand is on its way to outpacing supply, according to Rystad Energy, with the market seen swinging into a deficit in two years. This means more upward cost pressure for batteries.

And the shortage of metals is not all. There is also the ESG aspect of their mining to consider – an aspect that has become essential for European governments, which are also the ones with the most ambitious renewable energy plans for the future. Europe, in other words, is picky about its, say, lithium and cobalt supply. It wants to make sure that it was mined ethically. And this automatically makes it expensive because it limits the places where these metals can be sourced, and puts constraints on the miners.

So, battery cells are only going to become more expensive at a time when they need to become cheaper, so energy and EVs become more affordable, and adoption increases. But this is not the biggest problem of energy storage. The biggest problem is that the amount of storage needed to be deployed in order to ensure energy supply security is truly insane.

Europe’s energy crisis just got worse

Bjorn Lomborg, president of an environmental think-tank and a vocal critic of the renewable energy push in its current form, wrote on Twitter earlier this month that Asia consumes 25 GWh of electricity per minute. The continent has a battery storage capacity of 13 GWh, which is enough for 31 seconds of consumption. With plans in place to boost battery storage capacity 25 times, in 2030, Asia will have enough storage for about 10 minutes of consumption.

But perhaps some would say the whole continent of Asia is not a good example. After all, battery storage capacity there is not exactly equally distributed and aimed at securing the energy supply of the whole of Asia. So let’s take another example. Germany’s per-capita energy consumption for 2018 stood at 6.8 GWh. Germany’s population is over 83 million people. So, Germany alone will need more than the world’s total projected storage capacity for 2021 to secure its energy supply, assuming a 100-percent renewable grid, which is the purpose of the energy transition. It would need a lot more.

It is true that without energy storage, wind and solar are far from reaching their full potential and far from being reliable sources of electricity. Yet the factors determining the commercial viability of storage installations are such that the projections made by Wood Mac and virtually every other energy forecaster out there might end up feeding a bubble that will sooner or later burst.

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Article source: https://www.rt.com/business/546635-energy-storage-hottest-market/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

EU pins soaring gas prices on geopolitics

The price of energy across the world has skyrocketed to unprecedented levels in a trend that is being exacerbated by geopolitical pressures, says the European Commission.

The soaring cost of gas has clearly impacted energy prices on the continent, according to European Commissioner for Energy Kadri Simson.

However, strife between and within nations has inevitably had a knock-on effect too.

February futures prices at the Netherlands’ Title Transfer Facility, a virtual trading point for natural gas, reportedly surged to $915 per 1,000 cubic meters on Friday, or €78 ($88.5) per megawatt hour in household terms.

In December, they hit a record high in Europe of nearly $2,200 per 1,000 cubic meters, which constituted an almost 400% rise since the start of the year.

France may see 40% electricity price surge by February READ MORE: France may see 40% electricity price surge by February

“This is a particularly important time for the energy sector, both for its current state and for its future,” Simson said after a meeting with European energy ministers in France on Saturday.

“In the short term, we are faced with unusually high energy commodity prices – a trend intensified by geopolitical tensions.”

She affirmed that the current astronomically high prices for electricity and gas were placing an intolerable burden on homeowners and businesses alike across the European Union, but said national leaders were taking all possible steps to cushion them from future market shocks.

“These actions taken by member states to protect the consumers amount to more than €21 billion – a remarkable and swift effort by the EU governments,” Simson said.

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Article source: https://www.rt.com/business/546883-high-gas-prices-eu-reason/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Britain to back suspension of Russia from SWIFT – reports

British authorities are reportedly considering “an opportunity to support the suspension of Russia from the SWIFT international payment system, citing a hypothetical military conflict that could erupt between Russia and Ukraine.

Prime Minister Boris Johnson “fears some world leaders may not appreciate the deteriorating picture on the Ukrainian border, or fully comprehend the risks posed by a bullying Russia,” The Telegraph reports, citing sources close to the leader.

Over the past few months, a wide range of Western media outlets, along with multiple US officials, have been spreading speculation about an imminent Russian invasion of Ukraine. Washington and its allies threatened Kremlin with a new round of ‘crippling’ sanctions if this happens, citing the movement of Russian troops within the country’s vast Western territory as evidence of the plan. Moscow has consistently rejected the allegations, saying that Russia has a right to carry out military maneuvers as it pleases within its borders.

German politician compares anti-Russian sanctions to atomic bomb READ MORE: German politician compares anti-Russian sanctions to atomic bomb

According to the British premier, the potential sanctions against Russia “cannot exclude” Nord Stream 2, the widely debated pipeline that is designed to increase gas supplies to crisis-hit European nations and is currently stuck in a protracted EU certification process.

Johnson is reportedly due to hold calls with G7 leaders to finalise a “sanction coalition” to introduce targeted measures against Russia.

Earlier this week, Bloomberg reported that officials at the UK Foreign Office were told to be ready to move into “crisis mode” at very short notice, as “concerns that Russia’s aggression toward Ukraine could escalate into conflict” increased. That reportedly means that officials and diplomats would focus their work on the UK response to any further spike in tensions, including deterrence and sanctions.

Russia responds to British ‘coup’ allegations READ MORE: Russia responds to British ‘coup’ allegations

On Saturday, London’s Foreign Office issued grotesque claims that Moscow was plotting to “install a pro-Russian leader in [Kiev] as it considers whether to invade and occupy Ukraine.” Russia’s Ministry of Foreign Affairs has dismissed the claim, urging the UK to stop spreading “nonsense” and “disinformation.”

The idea of cutting Russia off the SWIFT banking network was reportedly considered as one of the options to punish Russia for the military assault they have been warning about, but was rejected by EU and US politicians, Das Handelsblatt reported earlier this week, citing sources close to the matter. The measure might reportedly result in a destabilization of financial markets in the short term and, in the medium term, in the development of an alternative payment infrastructure.

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Article source: https://www.rt.com/business/546874-uk-support-russia-swift-suspension/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

EU signals it’s on an energy-buying spree

The European Union is in talks with its trading partners in search of viable options to increase supplies of natural gas to its member states, according to the bloc’s Energy Commissioner Kadri Simson.

“The gas storage levels in the EU are significantly lower than usual at this time of the year,” Simson said, after a meeting with European energy ministers in France on Saturday.

The energy chief added that EU authorities need to remain “extremely vigilant” to make sure the bloc is ready for emergency situations at a time of unusually low gas storage levels, along with increased tensions beyond its eastern borders.

US looking for ways to get extra cash out of EU energy crisis – reports READ MORE: US looking for ways to get extra cash out of EU energy crisis – reports

“The Commission is also discussing with our partners the potential to increase supplies to Europe,” she added.

Last year, Europe was hit by an unprecedented energy crunch that sent gas and power prices skyrocketing, and forced several industrial giants in the region to curb production, while households had to struggle with persistently rising bills for electricity and heating.

The severe energy crisis has recently been exacerbated when storage tanks in the EU dropped to their lowest seasonal levels in more than ten years. The decline reportedly occurred due to longer-than-usual maintenance at Norwegian fields and to Russia restocking its own inventories.

Moreover, the latest speculation over probable military conflict between Russia and Ukraine is also fueling concerns about Russian gas supply. The US and Western allies have pledged to impose a new series of sanctions against Moscow in the event of an invasion. The sanctions may reportedly target Russian energy sales.

France may see 40% electricity price surge by February READ MORE: France may see 40% electricity price surge by February

“My message is that Europe has a robust, well diversified and resilient gas infrastructure and clear procedures of solidarity in case of emergencies,” Simson stressed, calling for even stronger solidarity between member states.

According to the European Commission, among the bloc’s 27 member states, 22 have implemented the necessary steps to cushion the impact of the energy crisis, such as lower taxation and duties, direct income support and vouchers.

Such measures have reportedly helped some 70 million individual customers and several million small- and medium-sized companies.The bloc’s authorities are also discussing draft rules to improve their coordination on gas storage, as well as to enable voluntary purchases of strategic gas reserves. EU member states have also been seeking to reform its power market.

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Article source: https://www.rt.com/business/546870-eu-boost-gas-supplies-crunch/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bitcoin drops 50% from its peak value

The world’s biggest digital asset, Bitcoin, fell as low as $34,042.78 on Saturday, marking a drop of 7.2%. It has recovered most of those losses, and was trading at $35,445 at 14:19 GMT. Other cryptocurrencies saw declines as well, with Ethereum down 12%. Solana and Cardano each dropped at least 17%, according to Coinbase.

“Margin positions being liquidated caused a wave of additional sell pressure, as assets that had been held as collateral were forcibly sold to pay for margin loans,” Hayden Hughes, chief executive officer at Alpha Impact in Singapore, told Bloomberg.

The expert expects the cryptocurrency to take some time for a bottom to form and for confidence to return, before projecting any sort of bullishness.

Russia set for complete ban on cryptocurrencies READ MORE: Russia set for complete ban on cryptocurrencies

Bitcoin’s downfall from its all-time high of nearly $69,000 in November has erased some $600 billion from its market value, and more than $1 trillion has been reportedly lost from the aggregate crypto market. According to Bespoke Investment Group as quoted by the agency, this marks the second-largest-ever decline in dollar terms for both, while there have been much larger percentage drawdowns for both Bitcoin and the aggregate market.

The slump in both cryptocurrencies and stocks was caused by the latest move by the US Federal Reserve to tighten monetary policy at a faster pace than expected. In an effort to revive the economy, the Fed may increase key interest rates three times this year, according to Reuters polls.

The cryptocurrency market has also been rocked by China’s crackdown on virtual currencies, as well as Russian moves of a similar nature. Last year, Beijing prohibited cryptocurrency mining in the Sichuan Valley, triggering an adverse impact on the market.

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Article source: https://www.rt.com/business/546846-bitcoin-drop-half-november-peak/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bitcoin drops 50% of its value

The world’s biggest digital asset, Bitcoin, fell as low as $34,042.78 on Saturday, marking a drop of 7.2%. It has recovered most of those losses, and was trading at $35,445 at 14:19 GMT. Other cryptocurrencies saw declines as well, with Ethereum down 12%. Solana and Cardano each dropped at least 17%, according to Coinbase.

“Margin positions being liquidated caused a wave of additional sell pressure, as assets that had been held as collateral were forcibly sold to pay for margin loans,” Hayden Hughes, chief executive officer at Alpha Impact in Singapore, told Bloomberg.

The expert expects the cryptocurrency to take some time for a bottom to form and for confidence to return, before projecting any sort of bullishness.

Russia set for complete ban on cryptocurrencies READ MORE: Russia set for complete ban on cryptocurrencies

Bitcoin’s downfall from its peak has erased some $600 billion from its market value, and more than $1 trillion has been reportedly lost from the aggregate crypto market. According to Bespoke Investment Group as quoted by the agency, this marks the second-largest-ever decline in dollar terms for both, while there have been much larger percentage drawdowns for both Bitcoin and the aggregate market.

The slump in both cryptocurrencies and stocks was caused by the latest move by the US Federal Reserve to tighten monetary policy at a faster pace than expected. In an effort to revive the economy, the Fed may increase key interest rates three times this year, according to Reuters polls.

The cryptocurrency market has also been rocked by China’s crackdown on virtual currencies, as well as Russian moves of a similar nature. Last year, Beijing prohibited cryptocurrency mining in the Sichuan Valley, triggering an adverse impact on the market.

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

Article source: https://www.rt.com/business/546846-bitcoin-drop-half-november-peak/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Telegram CEO assesses impact of Russia’s proposal to ban crypto

Pavel Durov, the executive director and founder of Telegram, one of the world’s most popular messaging apps, has said a proposal to ban cryptocurrency mining and crypto-related transactions via Russian financial services would lead to an inevitable outflow of IT specialists.

The ban, which has been touted by Russia’s central bank, would also destroy a number of sectors in the high-tech economy, the billionaire said, noting that no developed country has prohibited cryptocurrencies.

“Such a ban will inevitably slow down the development of blockchain technologies in general,” Durov said in the post shared on his Telegram channel and on VK, Russia’s most popular social media platform.

“These technologies improve the efficiency and safety of a wide range of human activities, from finance to the arts.”

Russia's ban on crypto: What it means in reality READ MORE: Russia’s ban on crypto: What it means in reality

Earlier this week, the Central Bank of Russia called for the issuance, circulation, exchange, and trade of cryptocurrencies and stablecoins to be prohibited, as well as banning the organization of these operations on Russian soil.

The 37-year-old billionaire highlighted that “Russia’s neighboring states, from Ukraine to Uzbekistan, are adopting advanced laws and regulations related to the blockchain sector, as they are not willing to be left behind technological and economic progress.”

According to Durov, Russia is one of the world’s leading nations when it comes to the number of high-end professionals working in the blockchain industry.

“Thoughtful regulation will allow the country to balance the distribution of forces in the international financial system and become one of the major players in the new economy,” he added.

The businessman admitted that regulatory drive is natural for state authorities when it comes to the circulation of cryptocurrencies, but a total ban on assets of this kind is throwing “the baby out with the bathwater.”

“The step could hardly stop unconscientious participants, but it will put an end to legal Russian projects in the area,” Durov said.

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Article source: https://www.rt.com/business/546838-durov-assesses-crypto-ban-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS