Aurelia Butler

OTTAWA (Reuters) – Canada has completed an important step for eventually resuming exports of fresh potatoes to the United States from the province of Prince Edward Island, the Canadian Food Inspection Agency said on Friday.Canada unilaterally halted the shipments in November from the province after finding the potato wart fungus on two farms in October, the first in 21 years.The United States had said it would ban all imports of fresh potatoes from the province unless Canada took further action, a measure Ottawa says would be hard to overturn.One U.S. demand was for Canada to check for wart in fields of seed potatoes. These are exported and then grown to maturity and the risk of contagion would be greater if they had the wart.The CFIA carried out a national survey which detected no wart in seed potatoes in fields not regulated by Ottawa. This, it said, was information Washington wanted.”(This) was provided to the U.S. Animal and Plant Health Inspection Service earlier today, and should serve to provide reassurances they need that it is safe to resume the trade of fresh potatoes,” the CFIA said in a statement.”We do not anticipate that it will lead to any immediate change in the current prohibition,” it added, saying Washington was seeking other information. This, the CFIA indicated, could take months to provide.The U.S. Animal and Plant Health Inspection Service did not respond to a request for comment. Friday is a public holiday in the United States.Potato wart can decrease crop yields but poses no threat to human health or food safety, the CFIA says. Prince Edward Island grew about 20% of the national harvest in 2020. The crop is worth more than C$1 billion ($781 million)annually to the province’s economy. ($1 = 1.2808 Canadian dollars) More

According to Refinitiv Lipper data, investors bought $27.55 billion worth of U.S. equity funds, and $22.96 billion in money market funds. Graphic: Weekly flows into U.S. mutual funds by asset type: https://graphics.reuters.com/USA-MARKETS/byprjqzxwpe/chart.png Wall Street’s main indexes posted solid gains this week, with the S&P 500 marking a record high on Thursday. Graphic: Flows into U.S. equity sector funds: https://graphics.reuters.com/USA-STOCKS/egvbkozbzpq/chart.png Meanwhile, U.S. bond funds attracted $1.5 billion in the week, compared with big outflows the previous week. Graphic: Flows into U.S. bond funds: https://graphics.reuters.com/USA-BONDS/gkplglrqlvb/chart.png More

The draft rules, which had been keenly awaited by investors and were posted by the China Securities Regulatory Commission on its website, extend the CSRC’s oversight of offshore listings to Chinese firms with variable interest entity (VIE) structures.There had been much uncertainty among investors and Chinese firms over how much tighter the new rules would be.”China is tightening the screws on offshore listings but not turning the valves off completely,” Andrew Collier, managing director of Orient Capital Research, said of the plans.The CSRC said that the existing rules regulating offshore listings were outdated and the proposed new ones reflect China’s desire to further open up and are “not about policy tightening”. Previously, the regulator would only examine companies incorporated onshore in China that proposed an offshore listing, such as in Hong Kong.Beijing has unleashed a flurry of regulatory tightening this year under President Xi Jinping, including clamping down on anti-competitive behavior, banning private tuition groups and reining in a debt binge by property developers in a wide-ranging campaign that has rattled domestic and global markets.VIEs have mostly been used by companies that list on offshore stock markets, primarily the United States, to skirt Chinese rules restricting foreign investment in sensitive industries such as media and telecommunications.Most offshore-listed Chinese tech firms, including Alibaba (NYSE:BABA) Group Holdings and JD (NASDAQ:JD).com Inc, use the structures, which give them more flexibility to raise capital, while also bypassing the scrutiny and lengthy IPO vetting process that locally-incorporated companies have to go through.”The real key is how much data needs to be retained, location of servers, and whether the U.S. or China has responsibility for accounting,” Collier said.CSRC said the proposed registration process should take up to 20 working days if adequate materials were submitted.It will also require international banks that underwrite a Chinese firm’s offshore listing to register with the CSRC.DIDI IMPACT Offshore IPOs have provided an alternative source of capital for Chinese companies and a New York listing has been seen as a badge of honor for many.But Beijing has been ramping up supervision of overseas listings since the $4.4 billion initial public offering (IPO) of ride-hailing giant Didi Global Inc and the proposals on Friday were not as stringent as some had expected.Chinese firms have raised about $12.8 billion in U.S. listings in 2021, according to Refinitiv data, but the deals ground to a halt after Didi’s debut in New York in early July. The CSRC said Chinese regulators respected the choices made by companies on listing locations and the rules would not be retroactively applied, adding that it would not consider whether firms met the requirements of overseas listing locations. But the Chinese government can order a company to dispose of its assets or businesses if its offshore listing jeopardizes national security, according to the proposed new rules. The announcement came as U.S. markets were closed on Friday for the Christmas holiday period.In a VIE, a Chinese firm sets up an offshore company for an overseas listing that allows foreign investors to buy into it.The offshore company enters into a series of contracts with the owner of the local Chinese company, which operates the business in China, to obtain 100% economic interest in that business, analysts have said previously.Chinese IPOs on all world markets have reached a record $100 billion this year, Refinitiv data showed. More

ISTANBUL (Reuters) – Turkish banks reacted to the government’s new lira-defence scheme by jacking up loan rates in a race to attract lira deposits, in what could be a surprise for borrowers expecting cheaper credit, banking sources and a company told Reuters.Rates on deposits jumped to more than 20%, from 17-18% a week ago, while rising funding costs pushed SME loan rates to more than 30%. These rates had been rising in weeks past but that accelerated this week, bankers said, requesting anonymity. On Monday President Tayyip Erdogan announced that the government would protect local depositors from any losses due to depreciation versus foreign currencies, a high-stakes gambit that led to an aggressive rally in the lira from record lows. “No one wants to lose lira deposits,” one banking source said. “We are approaching the end of the year and balance sheets should look good. This (scheme) increased the competition and we saw (a) rise in deposit interest rates in the last week.” Banks’ average loan rates on corporate lira loans rose to 20.91% as of Dec. 17 from 19.63% a week earlier, according to central bank data.Selcuk Sadir, chairman of Sadirlar Alliance, a textile company, said he is waiting to make a planned 30-million-euro investment in fabric manufacturing.”We need low rates and long-term borrowing. We have been waiting for 1.5 months now. When the central bank cut rates I was expecting the investment environment to improve, but interest rates only increased,” he said.”Two things are necessary for investment: an appropriate interest rate and long-term financing,” Sadir added. “We cannot find long-term maturities. Banks are telling us that they cannot quote a price, let’s wait.”RATES IN WRONG DIRECTIONThe lira had plunged on Monday to an all-time low of 18.4 to the dollar following a months-long slide due to Erdogan’s policy of unorthodox rate cuts and fears of an inflationary spiral. Under pressure from Erdogan, the central bank cut its policy rate by 500 basis points to 14% since September despite inflation climbing beyond 21%. In response, bond yields and corporate loan rates instead rose as traders predicted a policy U-turn. Under the scheme, the Treasury and central bank would reimburse losses on deposits that Turks convert from either lira or hard currencies into the new instrument. In response the banks raised rates yet more, the sources said, to build up lira reserves in the face of rising funding costs and still-high dollarization. “Banks need lira deposits. There is a need for lira right now,” said another banking source. “The banks need to make lira deposits attractive to increase their holdings and that causes a hike in the rates.”Erdogan has said his “new economic programme” is meant in part to make credit cheaper, while boosting exports. More

ISTANBUL (Reuters) – Turkey’s Central Bank could sign two currency swap deals in two weeks, its governor Sahap Kavcioglu said on Friday according to broadcaster BloombergHT.On Thursday, Reuters reported that talks between Turkey’s central bank and counterparts in Azerbaijan and the UAE on securing a possible currency swap line were almost complete. More