World-Business
UBS reaps $28B in new assets in 1Q; Credit Suisse deal looms
Swiss banking giant UBS said Tuesday it took in $28 billion of net new money for its wealth management business in the first quarter, with $7 billion of that coming in the days after the announcement of its government-backed takeover of ailing rival Credit Suisse.
The Zurich-based bank, which is set to become Switzerland's banking titan after the merger closes in coming months, said underlying pre-tax profit dropped 22 percent to $2.35 billion in the quarter compared to a year ago, while underlying revenues fell 8 percent.
UBS said it had bought back $1.3 billion worth of its shares during the quarter, and reiterated that the share-buyback program has been temporarily suspended ahead of the closing of the 3 billion Swiss franc ($3.4 billion) takeover of Credit Suisse announced on March 19.
Also Read: Credit Suisse, UBS shares plunge after takeover announcement
“In the first quarter, we maintained positive momentum across the firm and attracted $28 billion of net new money in GWM (Global Wealth Management), of which $7 billion came in the last 10 days of March, after the announcement of our acquisition of Credit Suisse,” UBS said in a statement.
The bank said it “captured demand” for higher yield into money market and U.S.-government securities at a time of rising interest rates that can increase the return on lower-risk assets like U.S. government bonds.
“We delivered these results during a quarter characterized by persistent concerns about interest rates and economic growth exacerbated by questions about the stability of the banking system, especially in the U.S.,” UBS said. “Against this backdrop, private and institutional investors’ activity remained muted.”
Also Read: UBS to buy Credit Suisse for nearly $3.25B to calm turmoil
The net inflows at UBS came in marked contrast to the 61 billion Swiss francs (nearly $69 billion) in outflows that Credit Suisse reported Monday for the first three months of the year, adding that clients are still withdrawing assets.
The forced marriage of Switzerland's two biggest banks — arranged by the Swiss executive branch, central bank and financial markets regulator — was designed in part to help stabilize the global financial system that had been roiled by the collapse of two U.S. banks.
The reputation of 167-year-old Credit Suisse had been pummeled in recent years over stock price declines, a string of scandals and the flight of customers worried about the bank’s future.
Volkswagen unveils electric luxury sedan at China auto show
Volkswagen unveiled an electric luxury sedan that promises a 700-kilometer (435-mile) battery range as global and Chinese automakers showed their latest SUVs, sedans and muscle cars Tuesday at the world’s biggest auto show.
Auto Shanghai 2023 reflects the intense competition in China’s fast-growing electric vehicle market after the ruling Communist Party poured billions of dollars into promoting the technology. China accounted for two-thirds of global electrics sales last year.
Brands including General Motors, BMW and Nissan and Chinese rivals BYD Auto and NIO unveiled dozens of new EVs in the cavernous Shanghai exhibition center. Brands touted faster charging, satellite-linked navigation and entertainment, and the future possibility of self-driving technology.
Volkswagen’s ID.7 sedan, the new flagship model for its electric vehicles, was one of 28 models displayed by the German automaker, half of them electrified.
“We are turbo-charging our electric campaign,” said the CEO of VW’s passenger car brand, Thomas Schäfer, who rode onto the stage aboard an electric minibus.
Automakers are looking to China to drive sales growth at a time of slack American and European demand, but that requires them to invest to develop competitive models in a crowded market. Established global brands face pressure from ambitious Chinese newcomers and to meet government sales quotas for electrics. Many are forming partnerships to split soaring development costs.
China is “playing a leading role in the industry’s electric and digital transformation,” said Ford Motor Co. CEO Jim Farley in a recorded message played on a video screen.
Electrics accounted for just over 1 in 4 of the 23.6 million SUVs, sedans and minivans sold last year in China while sales of traditional gasoline-powered vehicles declined.
BMW AG showed an all-electric lineup including two new models, the i7 M70L and XM Label Red. The German sport luxury brand’s M760Le was shown in China for the first time.
GM debuted an electric SUV, the Buick Electra E5, ahead of the auto show. Toyota Motor Co. unveiled two new models for its bZ line of zero-emissions vehicles. Toyota also displayed a prototype self-driving taxi developed with China’s Pony.ai, a leading competitor in the country’s fast-evolving autonomous vehicle industry.
For the first time since 2019, executives flew in from the United States, Europe and Japan for the show after anti-virus controls that cut off most travel into and out of China were lifted in December. VW flew in its entire board of directors and that of Porsche in a show of commitment to the Chinese market.
The organizers said automakers would debut 100 new models, 70 of them electric, according to Chinese media.
Drivers in the world’s biggest auto market bought 5.4 million pure-electric vehicles last year — about two-thirds of the global total of 8 million — plus 1.5 million gasoline-electric hybrids. That was more than one-quarter of total auto sales of 23.6 million. This year’s EV sales are forecast to rise another 30%.
Beijing is winding down government support and shifting the burden to automakers by requiring them to earn credits for EV sales.
Sonamasjid Land Port in Chapainawabganj to remain closed for 6 days during Eid
Export-import activities between Bangladesh and India via the Sonamasjid Land Port will remain suspended for six days on the occasion of Eid-ul-Fitr, the biggest festival of Muslims, port authorities said today.
Abdur Rashid, general secretary of Sonamasjid Land Port C&F Agents Association, said that trade activities will remain suspended from April 19 to April 24 on the occasion of Eid.
Read: Benapole Port to remain shut for 5 days
Trade activities will resume on April 25, he said. However, loading and unloading activities of imported goods at the port will remain normal during this period.
Besides, travelers with passports can travel between Bangladesh and India through the land port's immigration check post during this time, he added.
EgyptAir set to start Dhaka-Cairo flights from May 14
After a long wait, EgyptAir, state-owned airline of Egypt, is set to begin its regular flight operations to Bangladesh on May 14, 2023.
According to EgyptAir, the airline has initially planned to operate two weekly flights between Dhaka and Cairo.
District manager of Egypt Air Mostafa Magdy Hussain Elkady, and executive director and chief operating officer (COO) of Egypt Air Bangladesh office Farhad Hossain met Civil Aviation and Tourism Minister Md. Mahbub Ali at his ministry office on Tuesday.
They discussed the celebration of the launching of bi-lateral air connectivity between Egypt and Bangladesh.
During the meeting Mahbub Ali said that the start of EgyptAir flight operations in Bangladesh is a milestone in the bilateral relations between the two brotherly countries.
“As EgyptAir commences, its direct flights between Dhaka and Cairo will offer a great opportunity for different stakeholders intending to visit Egypt, Europe, and North America via Cairo, and would reflect exchanging businesses, cargoes, and also facilitate Bangladeshi students studying in Egyptian universities,” he said.
It will help the tourists who would come to explore the multifaceted Egyptian tourism, he opined.
Highlighting his country as the cradle of modern civilization Mostafa Magdy said, "Egypt and EgyptAir welcome tourists and passengers from Bangladesh to enjoy the Egyptian hospitality and various cultural heritage.”
He also discussed enhancing bilateral cooperation between Bangladesh and Egypt through trade, tourism, and investment.
Farhad Hossain said that commencing of the flights on this route would boost tourism, trade, and business between the two countries.
The airline will operate flights to and from Dhaka twice weekly on Sunday and Wednesday with brand-new Boeing 787-9 aircraft. Now, Egypt Air will become the sole operator of nonstop flights between Egypt and Bangladesh in the aviation history of Bangladesh, he added.
EgyptAir hopes the nonstop service will further boost leisure travel between the two countries and connect traffic through Cairo to the airline's onward destinations, such as the USA, Canada, Middle East, and Africa.
EgyptAir operates flights to over 80 destinations, including the Middle East, Europe, Africa, Asia, and the United States, with a fleet of 69 modern aircraft.
World Bank spring meeting begins in Washington today, announcement on $50bn allocation to face global crisis likely
The spring meeting of the World Bank Group and the International Monetary Fund (IMF) begins today (April 10, 2023) in Washington DC, USA.
This meeting is likely to announce an allocation of USD $50 billion from the organisations to face the global crisis.
The seven-day meeting will continue till April 16 at the headquarters of the IMF and the World Bank Group in Washington.
Read More: Bangladesh's GDP growth expected to pick up to 6.2% in FY2024: World Bank
According to the Ministry of Finance, a delegation of six members is participating in the spring meeting led by the Governor of Bangladesh Bank, Abdur Rouf Talukder.
Along with the governor, Bangladesh Bank Chief Economist Habibur Rahman, Finance Secretary Fatima Yasmin and Additional Secretary of Finance Department Rehana Parveen and two officials from the Economic Relations Department (ERD) are participating in the meeting.
Apart from this, three more officials from the Bangladesh Embassy in the United States are expected to join the meeting along with the Bangladesh team.
Read More: World Bank agrees to finance for development of metro rail-centric communication
Generally, such meetings are led by the finance minister. However, Finance Minister AHM Mustafa Kamal is not joining the meetings this time.
At this meeting of the World Bank Group, the International Bank for Reconstruction and Development (IBRD), a subsidiary of the organization, may announce an additional financing of $50 billion to deal with the global crisis.
Being a member of IBRD, Bangladesh will also get the benefit of this financing, the finance ministry sources said.
Read More: New World Bank leadership must put Climate Action as top priority: V20
The World Bank's spring meeting will be chaired by President of France Emmanuel Macron, and Prime Minister of Barbados Mia Amor Mottley. They will be joined by world leaders, academics, development experts and climate experts.
Besides, finance ministers, central bank governors of 189 World Bank member countries will participate.
Samsung cutting memory chip production as profit slides
Samsung Electronics said Friday it's cutting the production of its computer memory chips in an apparent effort to reduce inventory as it forecasted another quarter of sluggish profit.
The South Korean technology giant in a regulatory filing said it has been reducing the production of certain memory products by unspecified "meaningful levels" to optimize its manufacturing operations, adding it has sufficient supplies of those chips to meet demand fluctuations.
The company predicted an operating profit of 600 billion won ($455 million) for the three months through March, which would be a 96% decline from the same period a year earlier. It said it sales during the quarter likely fell 19% to 63 trillion won ($47.7 billion).
Samsung, which will release its finalized first quarter earnings later this month, said the demand for its memory chips declined as a weak global economy depressed consumer spending on technology products and forced business clients to adjust their inventories to nurse worsening finances.
Samsung had reported a near 70% drop in profit for October-December quarter, which partially reflected how global events like Russia's war on Ukraine and high inflation have rattled technology markets.
SK Hynix, another major South Korean semiconductor producer, said this week that it sold $1.7 billion of bonds that can be exchanged into the company's shares to help fund its purchases of chipmaking materials as it weathers the industry's downswing. SK Hynix had reported an operating loss of 1.7 trillion won ($1.28 billion) for the October-December period, which marked its first quarterly deficit since 2012.
"While we have lowered our short-term production plans, we expect solid demand for the mid- to long-term, so we will continue to invest in infrastructure to secure essential levels in clean room capacities and expand investment in research and development to strengthen our technology leadership," Samsung said.
Samsung last month announced plans to invest 300 trillion won ($227 billion) over the next 20 years as part of an ambitious South Korean project to build the world's largest semiconductor manufacturing base near the capital, Seoul.
The chip-making "mega cluster," which will be established in Gyeonggi province by 2042, will be anchored by five new semiconductor plants built by Samsung near its existing manufacturing hub. It will aim to attract 150 other companies producing materials and components or designing high-tech chips, according to South Korea's government.
The South Korean plan comes as other technology powerhouses, including the United States, Japan and China, are building up their domestic chip manufacturing, deploying protectionist measures, tax cuts and sizeable subsidies to lure investments.
Hyundai Creta Grand 2023 has started its Production in BD
Fair Technology on Sunday announced the Launching of the Hyundai Experience Center at Babylonia, Tejgaon.
The Experience Zone will showcase Hyundai's latest models, cutting-edge technology and exciting Features to visitors in near Future.
National Film Award winning actor Tariq Anam Khan, Global Television CEO Mrs. Nima Rahman and journalist Syed Ishtiaq Reza were present on the occasion as guest.
"We are excited to bring the Hyundai Experience Center to Babylonia and showcase our latest vehicles and technologies to customers of Bangladesh," said Mutassim Daiaan, Director and CEO at Fair Technology.
At this time Mr. Mutassim Daiaan, Director & CEO of Fair Technology announced the new price of HYUNDAI CRETA GRAD 2023 in the presence of everyone. The price is fixed at 44 lakh 50 thousand taka. At the same time, buyers will get 5 years warranty and up to 60% buy back facility.
The Hyundai Experience Center will be open to the public from now on and is located at Babylonia, Tejgaon. For more information visit the Fair Technology Hyundai website.
Saudis, other oil giants announce surprise production cuts; prices could go up
Saudi Arabia and other major oil producers on Sunday announced surprise cuts totaling up to 1.15 million barrels per day from May until the end of the year, a move that could raise prices worldwide.
Higher oil prices would help fill Russian President Vladimir Putin's coffers as his country wages war on Ukraine and force Americans and others to pay even more at the pump amid worldwide inflation.
It was also likely to further strain ties with the United States, which has called on Saudi Arabia and other allies to increase production as it tries to bring prices down and squeeze Russia's finances.
The production cuts alone could push U.S. gasoline prices up by roughly 26 cents per gallon, in addition to the usual increase that comes when refineries change the gasoline blend during the summer driving season, said Kevin Book, managing director of Clearview Energy Partners LLC. The Energy Department calculates the seasonal increase at an average of 32 cents per gallon, Book said.
So with an average U.S. price now at roughly $3.50 per gallon of regular, according to AAA, that could mean gasoline over $4 per gallon during the summer.
However, Book said there are a number of complex variables in oil and gas prices. The size of each country's production cut depends on the baseline production number it is using, so the cut might not be 1.15 million. It also could take much of the year for the cuts to take effect. Demand could fall if the U.S. enters a recession caused by the banking crisis. But it also could increase during the summer as more people travel.
Even though the production cut is only about 1% of the roughly 100 million barrels of oil the world uses per day, the impact on prices could be big, Book said.
Also Read: As Biden weighs Willow, he blocks other Alaska oil drilling
“It's a big deal because of the way oil prices work,” he said. “You are in a market that is relatively balanced. You take a small amount away, depending on what demand does, you could have a very significant price response.”
Saudi Arabia announced the biggest cut among OPEC members at 500,000 barrels per day. The cuts are in addition to a reduction announced last October that infuriated the Biden administration.
The Saudi Energy Ministry described the move as a “precautionary measure” aimed at stabilizing the oil market. The cuts represent less than 5% of Saudi Arabia's average production of 11.5 million barrels per day in 2022.
Also Read: Oil giant Saudi Aramco has profits of $161B in 2022
Iraq said it would reduce production by 211,000 barrels per day, the United Arab Emirates by 144,000, Kuwait by 128,000, Kazakhstan by 78,000, Algeria by 48,000 and Oman by 40,000. The announcements were carried by each country's state media.
Russia’s Deputy Prime Minister Alexander Novak meanwhile said Moscow would extend a voluntary cut of 500,000 until the end of the year, according to remarks carried by the state news agency Tass. Russia had announced the unilateral reduction in February after Western countries imposed price caps.
All are members of the so-called OPEC+ group of oil exporting countries, which includes the original Organization of the Petroleum Exporting Countries as well as Russia and other major producers. There was no immediate statement from OPEC itself.
The cuts announced in October — of some 2 million barrels a day — had come on the eve of U.S. midterm elections in which soaring prices were a major issue. President Joe Biden vowed at the time that there would be “consequences” and Democratic lawmakers called for freezing cooperation with the Saudis.
Both the U.S. and Saudi Arabia denied any political motives in the dispute.
Since those cuts, oil prices have trended down. Brent crude, a global benchmark, was trading around $80 a barrel at the end of last week, down from around $95 in early October, when the earlier cuts were agreed.
Analysts Giacomo Romeo and Lloyd Byrne at Jefferies said in a research note that the new cuts should allow for “material” reductions to OPEC inventory earlier than expected and could validate recent warnings from some traders and analysts that demand for oil is weakening.
Kristian Coates Ulrichsen, a Gulf expert at Rice University's Baker Institute for Public Policy, said the Saudis are determined to keep oil prices high enough to fund ambitious mega-projects linked to Crown Prince Mohammed bin Salman's Vision 2030 plan to overhaul the economy.
“This domestic interest takes precedence in Saudi decision-making over relationships with international partners and is likely to remain a point of friction in U.S.-Saudi relations for the foreseeable future,” he said.
Saudi Arabia's state-run oil giant Aramco recently announced record profits of $161 billion from last year. Profits rose 46.5% when compared to the company’s 2021 results of $110 billion. Aramco said it hoped to boost production to 13 million barrels a day by 2027.
The decades-long U.S.-Saudi alliance has come under growing strain in recent years following the 2018 killing of Saudi dissident Jamal Khashoggi, a U.S.-based journalist, and Saudi Arabia's war with the Iran-backed Houthi rebels in Yemen.
As a candidate for president, Biden had vowed to make Saudi Arabia a “pariah” over the Khashoggi killing, but as oil prices rose after his inauguration he backed off. He visited the kingdom last July in a bid to patch up relations, drawing criticism for sharing a fistbump with Crown Prince Mohammed.
Saudi Arabia has denied siding with Russia in the Ukraine war, even as it has cultivated closer ties with both Moscow and Beijing in recent years. Last week, Aramco announced billions of dollars of investment in China's downstream petrochemicals industry.
China's e-commerce giant Alibaba says will give up control of some of its business units
The CEO of Chinese e-commerce and financial giant Alibaba said Thursday that the company is moving toward giving up control of some of its business units in a transition toward becoming a capital operator to optimize the value of its sprawling businesses.
Daniel Zhang outlined details of a plan announced earlier this week to split Alibaba into six main groups as a prelude toward stock listings of some of its companies. The restructuring marks a new stage in Alibaba's growth after a series of setbacks as regulators cracked down on it and other tech companies.
Alibaba, whose headquarters is in the eastern city of Hangzhou, will be "in the nature of a holding company that is the controlling shareholder of the business group companies," Zhang said in a conference call.
Alibaba's CFO, Toby Xu, said the company would continue to evaluate the strategic importance of group companies after they go public and decide whether or not to retain control. He declined to say when they might go public.
"We believe the market is the best litmus test, so each business group company can pursue independent fundraising and IPOs as and when they are ready," Xu said.
Alibaba's stock prices in Hong Kong and New York have rallied nearly 15% since the restructuring was announced Tuesday. The firm's Hong Kong-listed stock was up 0.9% by midday Thursday.
The plan, and the recent return of Alibaba founder Jack Ma to China after months abroad appear to mark a turnaround after several hard years. Chinese regulators singled out Alibaba for scrutiny in a crackdown on technology and internet companies, putting the brakes on a planned initial public offering in 2020 of Alibaba's financial affiliate Ant Group.
Ma had kept a low profile with few public appearances since Nov. 2020, when he had publicly criticized China's regulators and financial systems during a speech in Shanghai.
Ant had been set to raise $34.5 billion in what would have been the world's largest share offering at the time. Alibaba was later investigated and fined $2.8 billion for breaching antitrust rules as Chinese authorities cracked down on the once-freewheeling technology industry.
"The looser connections between the business units is in line with the regulatory stance of encouraging competition," said an analyst's note from Moody's Investor Service.
Among other things, the restructuring plan might allay such antitrust concerns, since as Zhang explained, each Alibaba business unit would be empowered to make its own decisions and raise capital independently. He said that having business units operate independently should also foster innovation and growth after years of harsh COVID-19 restrictions that battered China's economy.
Alibaba's restructure — the first of its kind in the Chinese technology industry — also could serve as an example for similar companies such as online games company Tencent to follow suit. Tencent's shares rallied after Alibaba's announcement on Monday.
"We think that Alibaba's new organizational structure could be used by Chinese regulators as a template for other Chinese Big Tech firms," said a report by CreditSights.
Laxman Narasimhan becomes Starbucks' new CEO
Starbucks officially has a new CEO. The Seattle coffee giant said Monday that Laxman Narasimhan has assumed the role of CEO and joined the company’s board of directors. Narasimhan succeeds longtime Starbucks leader Howard Schultz, who came out of retirement last spring to serve as interim CEO while the company searched for a new chief executive. Schultz will remain on the company’s board.
Starbucks announced last Septembe that Narasimhan would become its new CEO. Narasimhan, 55, most recently served as CEO of Reckitt, a U.K.-based consumer health, hygiene and nutrition company.
Prior to that he was a longtime executive at Pepsico. Since he was named incoming CEO, Narasimhan has traveled to more than 30 stores, manufacturing plants and support centers around the world, the company said.
He also earned his barista certification. In a prepared statement, Narasimhan said he was humbled as he stepped into his new role. “The foundation Howard has laid – building from scratch an iconic global brand fueled by a lasting passion to uplift humanity – is truly remarkable, and I am honored to have the opportunity to build on this deep heritage,” Narasimhan said. Narasimhan is scheduled to lead Starbucks’ annual meeting on Thursday.
Read more: Starbucks to have 6,000 stores in China by 2022
In his year as interim CEO, Schultz has announced hundreds of millions in investments to improve worker pay and benefits and revamp Starbucks’ North American stores.
The company posted record sales in its most recent quarter, which ended Jan. 1. But Schultz also faced a growing unionization effort at its U.S. stores, which the company opposes. Schultz is scheduled to testify March 29 before a Senate committee examining the company’s labor record.