Aurelia Butler

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Europe and China’s battle over the solar industry has been going on for two decades. Chinese solar-panel makers are winning with an unassailable lead: they now account for 80 per cent of global production capacity. But the cost of that victory is now looking too high.China dominates the solar panel sector’s entire supply chain. Prices, which are nearly two-thirds lower than US counterparts, have helped it to win market share. Every year, this price gap widens. There was another 40 per cent price cut in 2023. China’s dominance has come from years of investment. It ploughed over $130bn into the solar industry last year — into production capacity increases. Chinese makers are able to build over 860 gigawatts of solar modules annually. The biggest advantage Chinese companies have is scale. Due to the sheer size of the domestic market — which added a record 217 gigawatts of solar last year — companies invested heavily in larger scale manufacturing and automation. That is paying off today.Another 600 gigawatts of annual capacity is expected to start operations this year. That would be enough to cover the world’s total demand through 2032, according to energy research group Wood Mackenzie.Clearly, the fact that there is now more than enough affordable supply of solar products is good news for the environment and global efforts to shift to cleaner forms of energy production. China was the main driving force behind the 50 per cent increase in global renewable electricity generation capacity last year.But the problem is the pace of growth has been much too fast. Even its vast domestic market cannot soak up that excess capacity. The weak stock performance of Chinese solar cell manufacturers reflects that mismatch. Longi Green Energy Technology, JA Solar Technology and Trina Solar are down more than 50 per cent in the past year. Longi, China’s largest business in the sector which has grown to become the world’s second most valuable solar energy group, trades at 18 times forward earnings. That is less than half the valuation of smaller US peers. Operating margins have halved over the past four years. The European Commission has started probes into bids by Chinese firms for projects in the region. The EU’s solar industry has blamed a flood of Chinese imports for losses and plant closures by several European panel makers. With that market looking increasingly unlikely to provide the growth Chinese makers need, the forecast looks decidedly [email protected] More

Taking over the CFO and Company Secretary role is Chris Ellis, a chartered accountant with a wealth of experience in various industries, including Financial Services, Healthcare, Technology/SAAS, and Oil & Gas. Ellis has held leadership positions in both public market and private equity sectors, with past roles that include Chief Operating Officer at McLaren Strategic Capital and CFO of GE Capital’s largest business outside of the US.In addition to the CFO change, Silverbullet has welcomed AnnaMaria Khan-Rubalcaba as a new Non-Executive Director. Khan-Rubalcaba is currently the Chief Executive of HYD, an Omnicom Group (NYSE:OMC) Digital Product Agency, and brings extensive marketing technology and AI services experience to the board.Ian James, CEO of Silverbullet, expressed his confidence in the new appointees’ abilities to contribute to the company’s growth and strategic goals, particularly in the US market. He also thanked Darren Poynton for his significant contributions to Silverbullet’s success.Chris Ellis shared his enthusiasm for the new role, recognizing the potential for growth and innovation in the industry, especially with upcoming changes in privacy regulation and the shift away from traditional online tracking methods like cookies.The company’s leadership transition comes at a time when the digital transformation sector is adapting to new privacy standards and technological shifts. The appointments are part of Silverbullet’s strategy to navigate these changes and capitalize on the evolving market landscape.This report is based on a press release statement from Silver Bullet Data Services Group plc.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

NEW YORK (Reuters) – Global companies with China businesses are increasingly issuing renminbi debt to finance operations there, as for the first time in six years it has become cheaper to do so rather than raising money in U.S. dollars.In recent years, multinationals have tended to raise financing in dollars or their local currencies, which they then converted to renminbi, or the yuan, to lend to their Chinese subsidiaries. Near-zero U.S. interest rates helped to make it cheaper to do so.But since the second half of last year, the funding advantage in favor of renminbi has become more pronounced as the Federal Reserve has kept interest rates high while China has had to cut them as its growth slowed after COVID-19.The divergence in rates is now allowing companies to save as much as 150 to 250 basis points in interest costs by raising money in renminbi, according to traders and corporate advisers.The lower costs and the added benefit of being able to avoid currency risks by raising the funds where they need them has led to a surge in interest in derivatives called cross-currency swaps and bonds denominated in the Chinese currency, according to these market experts.”It means for those who may have renminbi needs, borrowing in renminbi becomes attractive,” said Desiree Pires, managing director and head of corporate sales for the UK at Standard Chartered (OTC:SCBFF).The move to raise money in the Chinese currency shows how global companies are navigating the many surprises thrown by the economy in the aftermath of the pandemic. They are also trying new ways to bring down their cost of capital in a high interest-rate environment. It also underscores the growing acceptance of the Chinese currency in international markets.One currency trader at a blue-chip U.S. company said that in the past, companies would not use renminbi as a funding source because it was not very liquid, but that this perception was now changing.The window for the trade, however, may close in the coming months. The renminbi’s funding advantage would start to evaporate if the Fed starts cutting interest rates later this year.POPULAR DERIVATIVESCross-currency swaps, which allow companies to exchange cash flows from one currency to another at a defined rate, have been increasing in recent months as China’s rate cuts since June pushed the differential between U.S. and Chinese government bond yields to their widest levels in many years.As of April 1, a one-year cross-currency swap between U.S. dollars and offshore Chinese renminbi, or CNH, was trading 2.28% lower than U.S. rates, said Amol Dhargalkar, global head of corporates at risk management advisory Chatham Financial.That means a company could save as much as 228 basis points by borrowing in CNH versus dollars. This differential has widened by 300 basis points from the same period in 2022.Dhargalkar said he started seeing demand for offshore renminbi cross-currency swaps kick off late last year. “It was not a positive opportunity for them before. Today, it is,” he said.Data about the over-the-counter market is patchy. In February, the most recent month for which data is available, there was $5.5 billion in new USD/CNH cross-currency swaps contracts, up from $4.7 billion in December, according to the Hong Kong Exchange’s OTC Clear, which clears some cross-currency swaps. In another sign of this trend, renminbi-denominated debt issued by non-Chinese companies, called panda bonds, totaled nearly $50 billion this year, and is on pace to beat the $143 billion record total in 2023, said George Sun, who runs BNP Paribas (OTC:BNPQY)’ global markets business for Greater China.NAVIGATING UNCERTAINTYWith the difference in rates allowing companies to match assets and liabilities in the same currency relatively cheaply, more companies are looking to lock in the benefits for longer.Most China cross-currency swap trades were for maturities up to 3-5 years, but demand for CNH for up to 10 years is also growing, said Antoine Jacquemin, managing director of corporate derivatives sales at Societe Generale (OTC:SCGLY).By swapping into renminbi or the currency of their local operations, companies were able to protect the dollar value of their local cash, said Garth Appelt, head of foreign exchange and emerging markets derivatives, at Mizuho Americas.”They’re a little worried about the value of all the things they have invested, not just the dividend payments, not just the exports,” he said.The strategy also allows companies to avoid volatility in the currency’s value if there are any changes in trade policy after the U.S. presidential election in November, said BNP’s Sun.Former President Donald Trump, the Republican candidate challenging President Joe Biden in the Nov. 5 U.S. election, imposed tariffs on Chinese products during his White House term, ending decades of free trade policy. Biden maintained those tariffs but has them on review.”When you have uncertainty about what’s coming up in the trade situation and you know you have business to do in both China and the U.S., you want to minimize that currency and rates mismatch,” Sun said. More

ANKARA (Reuters) – Turkey restricted exports of a wide range of products to Israel on Tuesday until a ceasefire is declared in Gaza, in Ankara’s first significant measure against Israel after six months of war.Israel said it would respond to the measures, which include curbs on exports of steel, fertilizer and jet fuel, with its own restrictions on products from Turkey.Turkey has denounced Israel for its campaign on Gaza, which was launched following Palestinian militant group Hamas’ Oct. 7 rampage. Ankara has called for an immediate ceasefire, supported steps to try Israel for genocide, and sent thousands of tons of aid for Gazans.However, Ankara also maintained commercial ties with Israel despite its strong rhetoric, prompting a domestic backlash. The trade restrictions, which come into force on Tuesday, follow Israel’s rejection of a Turkish request to take part in an aid air-drop operation into Gaza.The Trade Ministry said the measures would apply to the export of products from 54 different categories, including iron, marble, steel, cement, aluminium, brick, fertilizer, construction equipment and products, aviation fuel, and more.”This decision will remain in place until Israel, under its obligations emanating from international law, urgently declares a ceasefire in Gaza and allows the unhindered flow of sufficient humanitarian aid into the Gaza Strip,” it said.Responding to the measures, Israel’s foreign minister said Turkey had “unilaterally violated” trade agreements with Israel.Israel Katz said that Turkish President Tayyip Erdogan “is again sacrificing the economic interests of the people of Turkey in order to support Hamas, and we will respond in kind”.Shortly after the Israel-Hamas war started, Turkey and Israel withdrew their ambassadors while regularly trading barbs. Tuesday’s move is the first significant measure taken by Ankara against Israel since the start of the conflict.DOMESTIC BACKLASHIn recent weeks, Erdogan has faced growing criticism over his government’s continuing commercial ties to Israel, prompting some anti-government protests and denting popular support.On Saturday, police in Istanbul detained dozens of protestors demanding an end to the trade with Israel. Erdogan’s stance toward Israel and the conflict in Gaza was a key factor for some of his party’s losses in March 31 local elections, with the Islamist New Welfare Party (Yeniden Refah) gaining support on the back of a more hardline stance on Gaza.According to the data published by the Turkish Exporters Assembly (TIM), while trade with Israel has fallen since Oct. 7, exports to Israel have increased each month in 2024 so far. However, total exports in the first quarter of the year amounted to $1.1 billion, down 21.6% year-on-year, TIM data showed.Turkey had already stopped sending Israel any goods that could be used for military purposes, the Trade Ministry said.Turkey’s main opposition Republican People’s Party (CHP) and other opposition parties supported the decision to restrict exports to Israel, but said the measures did not go far enough.The CHP called for a total halt to trade with Israel, while other parties urged the government to block its airspace and ports to planes and vessels heading to Israel. More

Chinese banks are estimated to have issued 3.56 trillion yuan ($492.11 billion) in net new yuan loans last month, more than double the 1.45 trillion yuan in February, according to the median estimate in the survey of 22 economists.The expected new loans would be lower than 3.89 trillion yuan issued in the same month a year earlier.After record growth in credit in January, new lending declined in February. If the March reading matches forecasts, total lending in the first quarter would reach 9.93 trillion yuan, versus a record of 10.6 trillion yuan in the first quarter of last year.”Banks likely continued to offer credit support for the real economy, recovering a bit after the notable weakness in February,” analysts at UBS said in a note. “Boost from loans to NBFIs (non-bank financial institutions) may have narrowed from February.”In February, new lending to non-bank financial institutions, including brokerages and funds, surged to 404.5 billion yuan, from 24.9 billion yuan in January, central bank data showed, fanning speculation that such loans could have been used to support the ailing stock market.Most analysts believe the central bank will stick with traditional tools rather than resorting to massive liquidity injections through “quantitative easing” (QE), as some major economies such as Japan and the United States have done.China has set an economic growth target for 2024 of around 5%, which many analysts say will be a challenge to achieve without much more stimulus. Consumer and corporate confidence has been persistently weak since a post-pandemic bounce quickly fizzled out early in 2023. The Deputy Governor of China’s central bank Xuan Changneng said in late March that there was still room for cutting banks’ reserve requirement ratio (RRR) following a 50-basis point cut earlier this year, which was the biggest in two years. China has pledged that the growth of total social financing (TSF), a broad measure of credit and liquidity, and money supply will match expected goals on economic growth and inflation this year.Outstanding yuan loans in March were expected to grow by 9.9% from a year earlier, slowing from 10.1% in February, the poll showed. Broad M2 money supply growth in March was seen at 8.7%, the same as in February.China has set the 2024 quota for local government special bond issuance at 3.9 trillion yuan, up from 3.8 trillion yuan last year. China also plans to issue 1 trillion yuan in special ultra-long term treasury bonds to support some key sectors.Any acceleration in government bond issuance could help boost TSF. Outstanding TSF was 9.0% higher at the end of February than a year earlier, growing slower than the 9.5% annual rate seen at the end of January.In March, TSF is expected to soar to 4.70 trillion yuan from 1.56 trillion yuan in February.($1 = 7.2342 Chinese yuan renminbi) More

HONG KONG (Reuters) -Hong Kong Monetary Authority (HKMA) is considering deepening some investment connection schemes between the city and mainland China, CEO Eddie Yue said on Tuesday.Yue told the HSBC Global Investment Summit in Hong Kong that there was capacity for greater “southbound” activity from Chinese investors into Hong Kong’s financial markets.”What we’re trying to do is really to deepen some of these connect schemes … It’s just the beginning of a long journey, especially the southbound flows, the capital or the investments coming out from China into the world,” Yue told the conference.He did not give further details.Northbound trading in the connect schemes allows offshore investors to buy China-listed products including stocks, bonds, exchange-traded funds (ETFs) and wealth management products, while southbound is designed for Chinese-based investors to buy into Hong Kong products.”Think about the Bond Connect. Currently it’s very limited,” said Yue, adding that only Chinese banks can use the southbound Bond Connect.”But what if the eligible investor classes are extended to for example, asset managers in China or importantly insurance companies or pension funds in China in future, there could be a very big potential in money for global bonds through the Hong Kong platform.”Mainland China and Hong Kong in 2017 launched a long-awaited “Bond Connect” programme that links China’s bond market, the world’s second-largest, with overseas investors in a bid to liberalise and strengthen the capital markets.The scheme initially started with northbound, allowing foreign investors to buy and sell Chinese bonds, and in 2021, the southbound leg of the programme was launched to expand Chinese investors’ access to global bond markets. The financial hub, which has taken a hit from China’s economic slowdown and geopolitical tensions, is also looking to boost its market competitiveness and liquidity via a number of measures, according to Julia Leung, head of the city’s securities watchdog.Initial public offerings (IPOs) in Hong Kong in the first quarter were valued at $507 million, down nearly 30% from a year earlier, LSEG data showed. Capital flight also made the city’s stock market the worst-performing major index last year.Apart from continuing to lower transaction costs, Leung, chief executive of the Securities and Futures Commission (SFC), said at the same conference that other potential measures in the medium and long term include reducing bid and ask spreads on stock trading and enhancing the pricing process of IPOs. In late 2023, Hong Kong cut the stamp duty rate for stock transactions to 0.1% from 0.13% for both buyers and sellers to help bolster liquidity. More

LONDON (Reuters) – U.S. firm Ascend Elements and Poland’s Elemental Strategic Metals have formed a joint venture to recycle electric vehicle batteries, with their first Polish plant already open and another plant planned in Germany, they said on Tuesday.The companies did not disclose their planned investments via the joint venture, called AE Elemental, but said they are seeking European Union and local government funding.The EU has mandated that over the next decade a growing proportion of materials in EV batteries must be recycled.”Keeping battery materials in the local supply chain in Europe requires investment and infrastructure,” Ascend Elements CEO Mike O’Kronley told Reuters. “That’s what we’re doing together.”The jointly developed plant in Zawiercie in southern Poland has the capacity to recycle up to 12,000 metric tons of batteries annually, equivalent to approximately 28,000 EVs. EV batteries are shredded to create black mass, which is then further recycled to extract lithium and other battery materials for use in new EVs.On the same site in Zawiercie, the venture will build a plant that will open in 2026 to extract lithium from black mass, processing up to 20,000 metric tons annually.Ascend also plans a separate recycling plant for battery materials, O’Kronley said.The companies said permitting has been completed for a plant in central Germany that will recycle up to 25,000 tons of batteries annually, but declined to disclose a location. Ascend has raised around $700 million in equity funding and received $480 million in U.S. Department of Energy grants as part of Biden administration efforts to boost EV battery production. It has a battery recycling plant in Georgia and is building a second in Kentucky. Elemental Strategic Metals, which is part of the Element Group, has raised $290 million in equity funding and said it was close to completing another round.”This is a matter of speed,” CEO Michal Zygmunt said. “Going together and sharing capex allows us to be more aggressive.” More