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Singapore business events bounce back post COVID, Hong Kong flounders

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November 18, 2021

By Anshuman Daga and Scott Murdoch

SINGAPORE/HONG KONG (Reuters) – Singapore is hosting top executives of big global companies this week at a host of conferences, marking its gradual return to normalcy and underscoring the contrast with long-time rival Hong Kong, which is sticking with some of the toughest quarantine rules in the world.

The Milken Institute’s annual Asia Summit, run by billionaire Michael Milken’s think tank, the Bloomberg New Economy Forum, and an event by sovereign wealth fund GIC attracted hundreds of executives vaccinated against COVID-19.

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Participants were allowed entry only after clearing swab tests and were required to wear masks and comply with strict safe distancing measures, though enjoyed relatively more freedom than the country’s general population in terms of eating together.

The resumption of on-site events in the Southeast Asian hub comes as Singapore is allowing quarantine free travel to at least a dozen countries including Britain, France, Germany, Australia, Canada and the United States.

On Wednesday, UBS inaugurated the Swiss bank’s largest office in Asia, an event attended by its chairman chief executive officer and others in the city-state.

“Things develop, things evolve but evolve fast here in Singapore. And even with the kind of semi lockdown situation that we are currently in, if you come here, you still feel the vibe,” UBS CEO Ralf Hammers said.

Top officials from Goldman Sachs, HSBC, NYSE Group, Standard Chartered, Paypal and BNP Paribas spoke at the business events in Singapore, with many likely to be making their first trip to Singapore since authorities imposed restrictions early last year..

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The two-day Milken event and an evening event by GIC was attended by about 550 people, including 150 overseas executives. The Bloomberg event had over 300 attendees, with 80% flying in.

Rooms at the plush 112-room Capella hotel in Sentosa island where a one-night stay costs at least $1,600 and which hosted the Bloomberg forum were sold out.

Later this month, Singapore singer JJ Lin performs at a two-day concert that organisers expect to be at near full capacity of about 2,000 people per night, the Straits Times daily said.

Over 100 exhibitors from 12 countries are participating in a food and beverages and supply chain event currently underway, with an international jewellery show and a martial arts event taking place in coming weeks.

Despite all this, compared to Europe, Britain and the United States, Singapore still has tight COVID-19 restrictions, with dining out largely limited to two people and mandatory mask-wearing in public.

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TIGHTER RULES IN HONG KONG

By contrast, Hong Kong has followed Beijing’s lead in retaining strict travel curbs to curb new COVID outbreaks, prompting warnings from international business lobby groups that the financial centre could lose talent and investment.

“When you restrict travel in and out, when you restrict the ability for people to come and visit and engage, for people to leave to go engage around the world, over time, that has an impact on your economic activity,” Goldman Sachs CEO David Solomon told the Bloomberg event in Singapore on Wednesday.

Singapore’s daily COVID-19 cases are hovering at more than 2,000 and the city-state still has strict restrictions on social gatherings, but with 85% of its 5.45 million population vaccinated, the government wants to open more for business.

Hong Kong has barely recorded any local coronavirus cases in recent months but the government hopes that its tight rules, including up to three weeks’ hotel quarantine for visitors, would convince China to gradually open its border with the city.

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“There’s only a few cities where people want to congregate where you have that gateway of bringing global finance together and redistribute it. Hong Kong is one of those,” BlackRock CEO Larry Fink told the Hong Kong FinTech Week earlier this month.

“I’m truly looking forward to physically being there in Hong Kong without a 21-day quarantine but that is a whole other story.”

(Reporting by Anshuman Daga and Scott Murdoch in Hong Kong; Editing by Kim Coghill)

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Exclusive-KNDS readies 650 million euro binding bid for Leonardo units – sources

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December 2, 2021

By Angelo Amante, Francesca Landini and Elisa Anzolin

ROME (Reuters) – KMW+Nexter Defence Systems (KNDS) is close to making a 650 million euro ($736 million) binding bid for Leonardo’s OTO Melara and Wass units, three sources said on Thursday, in a move that could strengthen its position in the land defence sector.

The Franco-German consortium is conducting due diligence on the two units that Italian defence group Leonardo has put on the block and could submit its offer by the end of the year or early 2022, the sources familiar with the matter said.

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KNDS is pitted against Italian shipbuilder Fincantieri, which expressed an interest in the units but has not started formal due diligence and has put forward a less generous proposal so far, the sources said.

The Italian government, which controls both Leonardo and Fincantieri, is determined to have the final say on the deal.

As Europe pushes for closer cooperation on defence, Rome wants to keep open the door for cooperation between domestic and foreign groups, political sources have said, but also wants to protect jobs and growth at home.

As part of its proposal, KNDS has offered to include Italy in the Main Ground Combat System (MGCS) tank project, an option that would give Leonardo the possibility of offering its sensors and electronics for the new tank.

OTO Melara, which makes naval and terrestrial cannons, would also fit into KNDS’s portfolio and strengthen its hand in a 2.2 billion euro contract that the Italian army is due to launch in the near future.

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OTO Melara is currently a tank supplier to the Italian army together with Iveco Defence Vehicles, while Wass produces torpedoes.

Fincantieri, which started informal talks with Leonardo over OTO Melara and Wass before KNDS’ approach, could decide to join forces with other groups, the sources said.

($1 = 0.8836 euros)

(Additional reporting by Christina Amann in Berlin Writing by Francesca Landini; Editing by Mark Potter)

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Fed’s Quarles says regulatory overkill could stifle stablecoin innovation

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December 2, 2021

By Pete Schroeder

WASHINGTON (Reuters) -Randal Quarles, the former regulatory chief of the Federal Reserve, said on Thursday that U.S. regulators may “unnecessarily” hamper innovation around so-called stablecoins if they pursue recent recommendations put forward by a Biden administration working group.

Quarles, who will leave the Fed’s Board of Governors at the end of the month, said regulators must show “reasoned constraint” on monitoring stablecoins, which are digital currencies whose value are pegged to traditional assets like the dollar. He added that banks should be allowed to engage with them once certain concerns around transparency, stability and consumer protection are met.

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“It is clear that there is a strong demand for these assets among bank customers, and well-regulated banks should be allowed to engage in activities regarding these assets,” he said in a virtual appearance at an American Enterprise Institute event in Washington.

Quarles specifically cited a recommendation that any stablecoin issuers or “wallet providers” have limited access to other commercial entities, calling it needlessly stricter than rules for nondigital assets.

The President’s Working Group on Financial Markets published a report in November calling on Congress to pass a new law to apply bank-like scrutiny to stablecoin providers.

In his final speech at the Fed, Quarles laid out a series of recommendations for the central bank following his exit. President Joe Biden has yet to nominate his replacement.

For example, Quarles also said the Fed should consider easing its “globally systemic” capital surcharge for the nation’s largest banks, particularly as regulators move to finalize added global capital restrictions known as “Basel III.”

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He said the Fed’s plan to finalize those new rules would come after his exit from the U.S. central bank, and said there will be “little justification” for keeping the G-SIB surcharge at its current high level once it’s done.

He also argued the Fed should consider averaging the results of its annual stress test of bank finances over several years to result in a more consistent capital level, and that the central bank needs to address “perverse implications” of current leverage requirements that could discourage banks from holding safe assets in times of stress.

(Reporting by Pete SchroederEditing by Paul Simao)

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S&P 500, Dow climb on boost from financials, Boeing

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December 2, 2021

By Devik Jain and Anisha Sircar

(Reuters) – The Dow and the S&P 500 rebounded on Thursday, boosted by financials shares and Boeing as rising cases of the new Omicron variant globally continued to drive volatility across markets.

Boeing Co jumped 3.5% after China’s aviation authority issued an airworthiness directive on the 737 MAX jets that will help pave the way for the model’s return to service in China.

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Kroger Co surged 9.9% to top the S&P 500 after the retailer raised full-year sales and profit forecasts, boosted by sustained demand for groceries.

Travel and leisure stocks bounced back, with S&P 1500 Airlines and the S&P 1500 Hotels, Restaurant and Leisure indexes rising 4.5% and 2.8%, respectively.

All of the 11 major S&P sectors advanced in early trading, with eight of them surging more than 1% each. Financials led the pack, up 2.3%.

Wall Street’s main indexes closed below key technical levels on Wednesday, with the Dow breaching its 200-day moving average for the first time since July 2020 on growing angst about the latest coronavirus variant and the Federal Reserve’s hawkish comments.

“It is a bit of a ‘buy the dip’ environment … uncertainty will persist over the next week or so as scientists do more studies over the new variant,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

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“I still think investors want to focus on equities, they just need to be given a reason to do so.”

Wall Street whipsawed this week as investors scrambled for bargains after every drawdown. Still, the three indexes are tracking sharp weekly losses, with the Dow on pace for its fourth straight fall.

The United States and Germany joined countries around the globe planning stricter COVID-19 restrictions as the Omicron variant rattled markets, fearful it could choke a tentative economic recovery from the pandemic.

The CBOE volatility index, also known as Wall Street’s fear gauge, was last trading at 28.6 points, a day after hitting its highest level since February.

At 10:27 a.m. ET, the Dow Jones Industrial Average was up 462.69 points, or 1.36%, at 34,484.73 and the S&P 500 was up 43.36 points, or 0.96%, at 4,556.40.

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The Nasdaq Composite was up 31.90 points, or 0.21%, at 15,285.96, supported by shares of Amazon.com, Tesla Inc, Microsoft Corp and Nvidia Corp.

Apple Inc fell 2.7% after Bloomberg reported about slowing demand for Apple’s iPhone 13.

Meanwhile, lawmakers reached an agreement to fund the U.S. government until Feb. 18 as they scramble to avoid a partial government shutdown this weekend.

Stellar earnings reports and strong economic growth have powered U.S. stocks to a series of record highs in November, with the S&P 500 climbing 20.1% so far this year.

A Reuters poll of equity analysts said a correction was likely in the next six months, with the benchmark expected to gain 7.5% between now and end-2022 to finish at 4,910.

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Advancing issues outnumbered decliners by a 2.63-to-1 ratio on the NYSE and a 1.43-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and nine new lows, while the Nasdaq recorded seven new highs and 393 new lows.

(Reporting by Devik Jain and Anisha Sircar in Bengaluru; Editing by Maju Samuel)

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