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    Expect a return to more 'normal' investing where stock picking is rewarded, Goldman Sachs says

    Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 15, 2022.
    Brendan McDermid | Reuters

    (Click here to subscribe to the new Delivering Alpha newsletter.)
    Alpha generation is poised to return to the asset management industry as growth will be significantly less concentrated in a post-pandemic world marked by higher inflation and interest rates, according to Goldman Sachs.

    “We are back to a more ‘normal’ cycle where we expect investors to be rewarded for making sector and stock decisions related to potential growth relative to what is priced,” Peter Oppenheimer, chief global equity strategist at Goldman, said in a note. “This should mean a return to Alpha.”
    The current bull cycle hasn’t been an ideal environment for stock pickers as most stocks swung back in unison in the rebound from the Covid-induced slump. However, this market comeback has pushed valuations to new highs, particularly in the growth-oriented technology sector, which could lead to lower overall returns and less tech dominance in the era of hawkish monetary era, the Wall Street firm said.

    Tech stocks, especially megacap names, experienced much stronger earnings growth than the rest of the corporate sector over the past few years, Goldman said. FAAMG — Facebook (now Meta Platforms), Amazon, Apple, Microsoft and Google’s Alphabet — is now 50% bigger than the entire global energy industry and almost five times the size of the global auto industry excluding Tesla, according to Goldman.
    “We believe that we are entering a new environment where the influence of technology is rapidly broadening to impact virtually every industry,” the strategist said. “Moving forward it will become less easy to differentiate between what is and what is not a technology company, and this should broaden out the opportunities across more sectors.”
    The hedge fund industry could already be making a comeback as the community outperformed the market in a volatile January. Hedge funds lost 1.7% on average last month, compared to S&P 500’s 5.3% loss in its worst January since 2009, according to HFR data. More

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    North Sea green hydrogen project to harness offshore wind and use existing pipeline

    Sustainable Energy

    Sustainable Energy
    TV Shows

    RWE and Neptune Energy say the H2opZee project would be developed in two phases.
    Hydrogen has a diverse range of applications and can be deployed in a wide range of industries.
    The vast majority of hydrogen generation is currently based on fossil fuels.

    No-Mad | iStock | Getty Images

    German power firm RWE has signed an agreement with Neptune Energy to develop a green hydrogen demonstration project in the Dutch North Sea, targeting an electrolyzer capacity of 300 to 500 megawatts.
    In a statement Tuesday, the firms said the H2opZee project would be developed in two phases. The first will center on a feasibility study while the second will focus on implementation. The goal is for the project to be developed before 2030.

    “Hydrogen is a gamechanger in the decarbonisation of energy-intensive sectors, and H2opZee is among the world’s first projects of this kind and scale,” Sven Utermöhlen, RWE Renewables’ CEO for offshore wind, said.
    Hydrogen has a diverse range of applications and can be deployed in a wide range of industries. It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.
    If the electricity used in this process comes from a renewable source such as wind or solar then some call it green or renewable hydrogen.
    The companies said H2opZee would produce green hydrogen using offshore wind, with an existing pipeline used to funnel the hydrogen to shore. The pipeline’s capacity ranges between 10 to 12 gigawatts, the companies said.
    “The energy transition can be faster, cheaper and cleaner if we integrate existing gas infrastructure into new systems,” Lex de Groot, who is managing director of Neptune Energy in the Netherlands, said.

    “This infrastructure is technically suitable. As a result … no new pipeline at sea is needed and no new landfall needs to be made through the coastal area.”

    Read more about clean energy from CNBC Pro

    The notion of using existing infrastructure to transport hydrogen is not new. Last July, the CEO of energy infrastructure firm Snam outlined a vision for the future of hydrogen, saying the “beauty” of it was that it could be easily stored and transported.
    Speaking to CNBC’s “Squawk Box Europe,” Snam CEO Marco Alverà spoke about how current systems would be used to facilitate the delivery of hydrogen produced using renewable sources as well as biofuels.
    “Right now, if you turn on your heater in Italy the gas is flowing from Russia, all the way from Siberia, in pipelines,” he said.
    “Tomorrow, we will have hydrogen produced in North Africa, in the North Sea, with solar and wind resources,” Alverà said. “And that hydrogen can travel through the existing pipeline.”
    While there is excitement in some quarters about green hydrogen’s potential, the vast majority of hydrogen generation is currently based on fossil fuels.
    Recently, some business leaders have spoken of the issues they felt were facing the emerging green hydrogen sector. In Oct. 2021, for example, the CEO of Siemens Energy told CNBC there was “no commercial case” for it at this moment in time.
    The European Commission has laid out plans to install 40 GW of renewable hydrogen electrolyzer capacity in the European Union by the year 2030. More

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    Grief-stricken pet owners usher in Instagram and TikTok's new influencers: Their cloned cats and dogs

    The Texas-based ViaGen famously cloned Barbara Streisand’s dog, Sammie, in 2018, which resulted in two exact copies of her cherished pet, Miss Violet and Miss Scarlet.
    The cloning process starts with a small skin sample that can be taken from the animal when it’s alive and then stored to use later or within five days after a pet dies.  
    Surrogates typically have one or two litters before they are spayed and adopted to a home after their puppies or kittens are weaned, the company said.

    Grief-stricken pet owners who can’t bear to say goodbye to their four-legged friends are driving the latest crop of influencers on social media: cloned cats and dogs.
    Kelly Anderson said she was devastated when her 5-year-old cat, Chai, unexpectedly died in 2017.

    “I’ve never really even had a relationship with a human like I did with her,” the 32-year-old Austin-based dog trainer said. “I was very distraught the day she died.” 

    Kelly Anderson said her first cat, Chai, died suddenly after complications from surgery.
    Kelly Anderson

    The white and tan ragdoll had 85,000 followers on Anderson’s Instagram account @adogandacat when she died from complications following a surgery.
    “I lost about 20,000 followers on Instagram after Chai passed,” she explained.
    Anderson said she sent a sample of Chai’s DNA to the Texas-based pet cloning company ViaGen Pets shortly after she died. It took four years and $25,000 for Anderson to get a successful clone, and now she’s back in business with Chai’s identical genetic clone named Belle, who was born in 2021. 

    Belle is a genetic replica of Anderson’s cloned cat, Chai.
    Kelly Anderson

    Pictures of Belle now fill Chai’s former Instagram feed, along with photos of Anderson’s husky, Ghost. Anderson, who documented the cloned kitty’s journey on Instagram, said it wasn’t sponsored by ViaGen. As of this article’s publishing date the account has nearly 65,000 followers.   

    “Some people might buy a car, I bought a clone,” Anderson said. “To me, yeah, it was worth it. I think that she was the most important part of my life.” 
    When Anderson said she contacted ViaGen in 2017, the price to clone a cat was $25,000. Today, the company charges $35,000 for cats and $50,000 for a dog. 
    “People have problems with how much money it is,” Anderson explained. “But at the end of the day, it’s my money, and no one really should be telling other people how to spend their own money.”
    Sammie
    The Texas-based ViaGen famously cloned Barbara Streisand’s dog, Sammie, in 2018, which resulted in two exact copies of her cherished pet, Miss Violet and Miss Scarlet.
    “So what a cloned animal is, is it’s just essentially an identical twin of the original pet,” explained Melain Rodriguez, ViaGen’s client service manager.  
    Rodriguez said the cloning process starts with a small skin sample that can be taken from the animal when it’s alive and then stored to use later or within five days after a pet dies.  
    “That tissue sample comes back into our lab that you see here, and we grow millions of cells from that skin sample,” said Rodriguez.

    The lab inside ViaGen Pets in Cedar Park, Texas.
    ViaGen Pets

    From there, ViaGen takes an egg from a donor animal and fuses it together with the cells it has grown and an embryo starts to grow.

    Surrogates

    “Then those embryos are put into a surrogate animal who will gestate, give birth, nurse and take care of that puppy or kitten until it’s weaned,” Rodriguez explained.
    The surrogates typically have one or two litters before they are spayed and adopted, at the client’s request, to a home after their puppies or kittens are weaned, the company said. Most litters are small, producing one or two offspring.
    But sometimes the process results in multiple clones from a single litter.  
    That’s exactly what happened when 29-year-old photographer and pet enthusiasts influencer Courtney Udvar-Hazy cloned her wolf-dog, Willow, who died in 2018. Unexpectedly, the cloning process gave life to her new dog Phoenix and five more genetically identical copies in 2019. 

    When ViaGen told Udvar-Hazy there were six genetically identical clones of her dog, Willow, she said she was “blown away.”
    Courtney Udvar-Hazy

    Udvar-Hazy turned to cloning after her 2-year-old dog, known as @Wander_With_Willow on Instagram, escaped from a pet sitter and was tragically hit by a car while she was visiting family for Thanksgiving. 
    “She was like my child, my everything,” Udvar-Hazy recalled. “So I was in a position where I just would have done anything just to have her legacy continue.”

    Courtney Udvar-Hazy said she was devastated when she lost her dog, Willow.
    Courtney Udvar-Hazy

    She said her father told her about cloning and they decided to send a skin sample from Willow to ViaGen.

    Wolf-dog pack of clones

    Udvar-Hazy said she was “blown away” when she received the call from ViaGen that Phoenix and a small pack of clones had arrived. Remembering the day she picked up her puppies from ViaGen, she said, “I couldn’t believe that was real, all of the girls were coming out of the car.” 
    She decided to give Willow’s five genetic copies to several of her closest friends. The clone owners now often get “the girls” together for play dates and photo shoots, which Udvar-Hazy shares on Instagram and TikTok. ViaGen offers multiple clones to their clients or helps them adopt them out if the client doesn’t take them, the company said.
    The company said it euthanizes clones only if they’re born with a health issue that’s life threatening.
    Udvar-Hazy’s “Wander with Willow” accounts are now filled with images of Willow’s clone, Phoenix. To anyone but Udvar-Hazy, the two look identical. 

    Courtney Udvar-Hazy with her dog Willow as a puppy on the left and her clone Phoenix as a puppy on the right.
    Courtney Udvar-Hazy

    And while Willow never reached influencer status on Instagram, her clone’s second life online has taken off.
    “On TikTok, that’s what really blew up,” she said. “I started that only a few months ago, and we’re at 1 million followers already.” 

    Courtney Udvar-Hazy with Phoenix, a genetic replica of her dog, Willow.
    Courtney Udvar-Hazy

    While both Udvar-Hazy and Anderson say they paid full price for their clones and neither posts sponsored content about cloning, ViaGen does seek out pet influencer partners, and that’s where Instafamous influencer Tinkerbelle the Dog comes in. 
    Tinkerbelle is a 5-pound papillon, Maltese mix that has more than 800,000 followers on social media. The tiny star is a verified celebrity on Instagram, TikTok and Facebook with the check mark to prove it.

    Photos of Tinkerbelle modeling, acting, and traveling have attracted more than half-a-million followers on Instagram.
    Sam Carrell

    Sam Carrell, who owns a dance school for children, rescued Tinkerbelle from a shelter in 2012, and the pint-size pup’s acting and modeling career began when she was discovered by an animal talent agent on the streets of New York City. 
    About a year later, Carrell said, Tinkerbelle booked her first campaign for Ralph Lauren, and she’s since been in the theater, booked national commercials and even walked in Fashion Week.

    Behind the scenes of Tinkerbelle’s photo shoot for Ralph Lauren.
    Sam Carrell

    Carrell said managing Tinkerbelle’s career is now her full-time job. 
    “I never dreamed of ever having a dog, first of all, and could not have imagined that she became this celebrity overnight,” said Carrell. “I am managing her daily agenda, and shoots, and this and that.” 
    After being approached by ViaGen for a partnership in 2018, Carrell said she saved her famous pooch’s DNA and posted the decision to her more than 500,000 followers on Instagram. Preserving Tinkerbelle’s DNA gives her the option to duplicate the aging pup, who is now 10 years old, or 60 in dog years. ViaGen typically charges $1,600 to preserve a pet’s DNA and an annual storage fee of $150 per year. Carrell said she cannot disclose any details about the partnership. 
    “I don’t know what I’m going to do, but definitely her celebrity status plays a key in everything — in every decision I make in life,” Carrell explained. 
    The Humane Society of the United States doesn’t recommend cloning your pet, CEO Kitty Block said, noting the millions of animals that need good homes.
    Losing a pet, while tragic, could be seen as an opportunity to meet a new animal with their own quirks and personality, she said.
    “I can certainly understand why someone would want to clone their animal,” said Block. “We have our time with our animals that we love, but to artificially try to extend it doesn’t help that next animal.” 
    While clones are genetic copies, they do not always appear exactly the same. In some cloned animals there are small variations in fur such as coloring or spots.
    And if you’re wondering if a dog or cat’s personality and temperament carries over to its clone, that part is less clear.
    Udvar-Hazy said her dog Willow used to throw toys up in the air and try to catch them, which is something Phoenix also does instinctively.
    “Phoenix started doing that as a puppy, so that’s what I would say is the biggest characteristic that she does that Willow did uniquely,” Udvar-Hazy said. 
    Manika Ward, a 29-year-old singer, songwriter and TV host, cloned her 14-year-old childhood dog, a Maltese named Angel, who died of natural causes in July 2017. Her genetic replica, Gel-E, who was born that November and delivered to her Las Vegas home the following January, looks identical and has similar qualities, Ward said.

    Manika Ward with her first dog, Angel.
    Manika Ward

    “Personality wise, there’s a lot of things that are very similar including little random quirks that she does,” Ward explained. “When she jumps up on her hind legs for attention, how she does it, it’s hard to describe but she alternates her back legs opposite of how she alternates her front legs. Only Angel did that.”
    Plus, Ward believes it’s possible that one of her cats, who knew Angel before she passed away, may also sense a connection to her clone.   

    Gel-E is a genetic replica of Ward’s first dog, Angel.
    Manika Ward

    “Something that’s really cool is the first day I got Gel-E, one of my cats, Cosmo, who knew Angel and they were friends, the very first night they were sleeping together on the couch,” Ward said. “It was so cool how they bonded immediately.” 
    Beyond looks and little quirks, Ward says holding Gel-E in her arms makes it feel like part of Angel is still with her.
    “I feel like how they say, when you love someone they’re never really gone, they live on,” Ward said. “It’s extra strong because literally a piece of Angel lives on right here, she’s living and breathing.”

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    'Everyday Millionaires' author says these are the five things that most millionaires have in common

    Odds are high that you know at least one millionaire. More than 1% of the world’s adults have enough assets to fit the definition, according to the Credit Suisse 2021 Global Wealth Report.
    Chris Hogan, radio host and author of the book “Everyday Millionaires,” surveyed more than 10,000 of those wealthy individuals to figure out their secret to success.

    Hogan quickly learned that most millionaires aren’t the spendthrifts and jet-setters you see represented on television.
    “These are regular, hardworking, everyday people. They’re not flashy,” he said. Most of them accumulated their wealth over time by making wise decisions, according to Hogan.
    And having a particular mindset almost universally contributed to their success, Hogan said. He found that around 97% of millionaires surveyed believed they were in control of their own destiny.
    That is much higher than the 55% of the general population Hogan found to hold the same opinion.
    Check out this video to see the other beliefs and practices that more than 90% of millionaires apply to their money.

    More from Invest in You:The American dream of the middle class isn’t what it used to beRetiring with $1 million may leave you with less than $2,800 per month to spend. Here’s whyYour income tax bill for 2022 may have just gotten cheaper if you live in one of these 5 states
    SIGN UP: Money 101 is an eight-week learning course to financial freedom, delivered weekly to your inbox. For the Spanish version Dinero 101, click here.
    CHECK OUT: Grow with Acorns+CNBC.
    Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns. More

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    Stocks making the biggest moves premarket: Generac, Shopify, La-Z-Boy and others

    Check out the companies making headlines before the bell:
    Generac (GNRC) – The maker of generators and power equipment saw its stock rise 2.6% in the premarket after beating top and bottom-line estimates for the fourth quarter. Generac earned an adjusted $2.51 per share, 11 cents above estimates, as both commercial and residential sales increased more than 40%.

    Shopify (SHOP) – Shopify fell 4% in premarket action despite reporting better-than-expected quarterly profit and revenue. The e-commerce platform operator said revenue growth for 2022 would be slower than the 57% it achieved in 2021.
    Kraft Heinz (KHC) – The food maker’s stock was up 1.3% in the premarket after reporting its adjusted quarterly profit of 79 cents per share beat estimates by 16 cents. Revenue was also above Wall Street forecasts.
    La-Z-Boy (LZB) – La-Z-Boy tumbled 12.5% in premarket trading after the furniture company reported a quarterly profit of 65 cents per share, well below the 89-cent consensus estimate. The company best known for its signature recliners noted multiple production issues related to Covid-19, leaving it unable to fully satisfy demand.
    Wynn Resorts (WYNN) – Wynn Resorts reported a quarterly loss of $1.37 per share, wider than the $1.25 per share loss expected by Wall Street analysts, although the casino operator’s revenue beat estimates. A nearly 28% drop in Wynn’s Macau revenue weighed on overall results. Wynn fell 2.3% in the premarket.
    Trade Desk (TTD) – The stock surged 10.5% in the premarket after the programmatic ad company reported adjusted quarterly earnings of 42 cents per share, 14 cents above estimates, with revenue also topping Wall Street forecasts.

    Hilton (HLT) – The hotel operator missed estimates by 2 cents with adjusted quarterly earnings of 74 cents per share. Revenue was slightly above estimates as it more than doubled from a year earlier amid a travel recovery.
    ViacomCBS (VIAC) – ViacomCBS announced it will change its corporate name to Paramount Global, effective Thursday, in an effort to emphasize its Paramount+ streaming service and to take advantage of Paramount’s brand recognition. Separately, the media company reported an adjusted quarterly profit of 26 cents per share, missing the 43-cent consensus estimate. Shares slumped 11.3% in premarket trading.
    Airbnb (ABNB) – Airbnb reported record revenue for 2021, better-than-expected fourth-quarter results, and issued an upbeat current-quarter forecast. The home rental company benefited from consumer preferences shifting away from hotels during the pandemic and said current-quarter bookings are likely to exceed pre-pandemic levels for the first time. Airbnb shares rallied 3.5% in the premarket.
    Roblox (RBLX) – Roblox stock plummeted 15.2% in premarket action after reporting a loss of 25 cents per share for its latest quarter, nearly double the 13-cent loss analysts had anticipated. The social gaming platform operator also saw lower-than-expected revenue amid flat daily active user metrics and engaged gaming hours that fell short of forecasts.
    Cedar Fair (FUN) – Cedar Fair rejected a takeover bid from rival theme park operator SeaWorld Entertainment (SEAS), according to a statement by SeaWorld which confirmed earlier reports of an offer but did not acknowledge the reported $3.4 billion price. Separately, Cedar Fair reported better-than-expected quarterly revenue with record in-park spending by visitors. Cedar Fair stock slid 12.3% in the premarket, while SeaWorld fell 4.2%.

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    Moderna CEO says it’s ‘reasonable’ to think the pandemic may be in its final stages

    Moderna’s CEO Stephane Bancel said it is “reasonable” to assume that we may be approaching the final stages of the pandemic.
    “I think there’s an 80% chance that as omicron evolves or SarsCov-2  virus evolves,  we are going to see less and less virulent viruses,” he told CNBC’s “Squawk Box Asia.” He said there’s another “20% scenario where we see a next mutation, which is more virulent than omicron.”
    Separately, the company announced plans to expand its presence in Asia.

    Moderna’s CEO Stephane Bancel said it’s “reasonable” to assume that we may be approaching the final stages of the pandemic.
    “I think that is a reasonable scenario,” he told CNBC’s “Squawk Box Asia” when asked about views that the Covid-19 pandemic may now be in its final stages.

    “There’s an 80% chance that as omicron evolves or SarsCov-2 virus evolves, we are going to see less and less virulent viruses,” he said Wednesday.
    He also said there’s another “20% scenario where we see a next mutation, which is more virulent than omicron.”
    “I think we got lucky as a world that omicron was not very virulent, but still are we see thousands of people dying every day around the planet because of omicron,” he said.
    According to the World Health Organization, there were 15.47 million new cases reported in the last seven days worldwide, and 73,162 deaths in the same period.

    The reason we want to expand in Asia is the importance of that region. The fact that this virus is not going away … this virus is going to stay with humans forever, like flu and we’d have to live with it.

    Stephane Bancel
    CEO, Moderna

    CNBC Health & Science

    In January, Moderna announced it started a clinical trial to study the safety and efficacy of a booster shot that specifically targets the omicron variant.
    The first participant in the trial has already received a dose of the omicron-specific booster shot, according to the company. It expects to enroll about 600 adult participants ages 18 and over to be split between two groups.

    Asia expansion plans

    Separately, Moderna announced plans to expand its presence in Asia.
    “The reason we want to expand in Asia is the importance of that region,” he told CNBC.
    “The fact that this virus is not going away, as we’ve been saying since almost the beginning — this virus is going to stay with humans forever, like flu and we’d have to live with it.”

    Bancel said he finds Asia’s economic expansion “very exciting,” and that the company intends to open new subsidiaries in Malaysia, Taiwan, Singapore and Hong Kong.
    The expansion comes as Moderna “continues to scale up the manufacturing and distribution of its COVID-19 vaccine and future mRNA vaccines and therapeutics,” the U.S. biotech firm said in a statement.
    Moderna’s messenger RNA vaccine is currently not available in Hong Kong, which recently saw a surge in Covid cases. Bancel said the company is currently “working with authorities to get it authorized.”

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    Singapore aims to allow quarantine-free travel for all vaccinated visitors after omicron subsides

    Singapore plans to allow vaccinated visitors from all countries to skip quarantine on arrival when the omicron wave has passed, authorities announced Wednesday.
    “Our ultimate goal is quarantine-free travel for all vaccinated travelers,” said Minister for Transport S Iswaran.
    The authorities did not set a date for this new policy to take effect, but Gan Kim Yong, the minister for trade and industry, said that the omicron wave could peak in a few weeks.

    The transit hall of Changi International Airport in Singapore on Jan. 12, 2022.
    Roslan Rahman | AFP | Getty Images

    SINGAPORE — Singapore intends to allow vaccinated visitors from all countries to skip quarantine on arrival when the omicron wave has passed, authorities announced on Wednesday during a virtual press briefing.
    Health Minister Ong Ye Kung said travel rules were meant to prevent infections from being imported into the country, but that category of cases represents only 1% of daily cases and “no longer have a material impact” on Singapore’s Covid situation.

    The focus in future will be on whether visitors to Singapore will fall severely ill and burden the health-care system, he said.
    “We should actually emphasize less on SHN and tests on travelers, [and] more on ensuring that they are fully vaccinated and boosted,” he said.
    “Instead of having vaccinated travel lanes or VTLs with selected countries that we think are low risk, we should actually allow SHN-free travel for … fully vaccinated travelers from all countries,” Ong said, referring to stay-home notices issued to visitors to Singapore.
    “We should make this transition not now, but after omicron wave has peaked and start to subside,” he added.
    The authorities did not set a date for this new policy to take effect, but Gan Kim Yong, the minister for trade and industry, said that the omicron wave could peak in a few weeks.

    Vaccinated travel lanes

    In a bid to reopen its borders, Singapore previously announced multiple so-called vaccinated travel lanes that allow travelers from certain countries to visit without serving quarantines.
    But when the new border measures take effect, vaccinated travelers from all countries will not be subject to quarantine requirements.
    “Our ultimate goal is quarantine-free travel for all vaccinated travelers,” said Minister for Transport S Iswaran.
    As Singapore transitions to a “vaccinated traveler system,” it will first change the way it categorizes countries that visitors are arriving from.
    From Feb. 22, countries will be divided into three main groups — restricted, general and low infection. The vast majority of countries will be in the general category and be subject to the same entry requirements unless a VTL has been launched.
    No countries will be in the restricted category for now, but countries and regions may be moved there if a new variant of concern is detected, authorities said.
    Separately, a health ministry press release said previously deferred vaccinated travel lanes with Qatar, Saudi Arabia and the United Arab Emirates will begin on Feb. 25. Authorities also announced that new VTLs for Israel, Hong Kong and the Philippines will be launched.

    Covid situation

    Singapore reported a record 19,420 new Covid cases on Tuesday.
    Over the last 28 days, 99.7% of reported cases have had mild or no symptoms.
    The city-state has reported 497,997 Covid cases and 913 related deaths since the start of the Covid pandemic.
    Around 90% of Singapore’s population have received two shots under the national vaccination program, and 64% of the population have received boosters.

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    From Credit Suisse to Goldman Sachs, investment banks say it's time to buy Chinese stocks

    More and more international investment analysts say it’s time to buy mainland Chinese stocks, ahead of expected government support for growth.
    Bernstein and Goldman Sachs, in particular, have released thick reports on the investability of Chinese shares.
    However, not all investment analysts are as optimistic. Morgan Stanley, Bank of America and J.P. Morgan Asset Management are neutral on mainland China.

    A men wearing a mask walk at the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, as the country is hit by an outbreak of a new coronavirus, February 3, 2020.
    Aly Song | Reuters

    BEIJING — More and more international investment analysts say it’s time to buy mainland Chinese stocks, ahead of expected government support for growth.
    On top of the pandemic’s drag on the economy, heightened regulatory uncertainty since last summer has generally kept foreign investors cautious on Chinese stocks.

    But that’s starting to change for some investment firms in the last several months.
    In its global stock strategy report for 2022, Credit Suisse upgraded China to “overweight,” reversing a downgrade of the stocks about 12 months ago.
    “Monetary policy is being eased [in China] while elsewhere it is being tightened,” its global strategist Andrew Garthwaite and his team wrote in the late January report. “Economic momentum is turning up.”
    One of the early positive turns on mainland Chinese stocks came from BlackRock Investment Institute in late September. As 2022 got underway, other firms also made similar calls, while others remain neutral.
    On the political front, Credit Suisse expects regulatory uncertainty to subside after a national parliamentary meeting in March, and remain muted — at least until after the ruling Chinese Communist Party’s 20th National Congress in the fourth quarter.

    Chinese President Xi Jinping is widely expected to take on an unprecedented third term at the meeting, which occurs every five years to select top government leaders.
    During a December economic planning meeting for 2022, Chinese officials emphasized the need for stability.
    Financial factors, such as how much the stocks have fallen compared to their potential ability to deliver earnings, also contribute to analysts’ positive turn on Chinese stocks.

    Bernstein: China is ‘uninvestable’ no more

    In January, Bernstein released a 172-page report titled “Chinese Equities: ‘Uninvestable’ No More.”
    “We believe there is a case to add back China exposure to global portfolios due to six key reasons,” analysts at the investment research firm said.
    They pointed to expectations for growth in new financing, easier monetary policy and more attractive stock valuations relative to the rest of the world. Other factors included a rare opportunity to pick stocks, growing foreign inflows and increased earnings.

    HSBC: Investors too bearish on China

    The Shanghai composite has climbed 2% since the Lunar New Year holiday, which was from Jan. 31 to Feb. 6 this year. Those gains follow a drop of 7.65% in January, the worst month for the index since October 2018, according to Wind Information data.

    Yes, China is struggling with growth and a stronger USD is not good news for China’s stock markets. But that’s now well-known and is priced in.

    “Investors are too bearish about China stocks,” HSBC analysts wrote in a Feb. 7 report that affirmed its call in October to upgrade Chinese stocks to overweight.
    “Yes, China is struggling with growth and a stronger USD is not good news for China’s stock markets,” the analysts said. “But that’s now well-known and is priced in. Even good, blue chip stocks are now trading at attractive valuations.”
    The bank’s analysts forecast 9.2% gains this year for the Shanghai composite, and 15.6% for the Shenzhen component index.

    Goldman: A-shares are now ‘more investable’

    Goldman Sachs forecasts 16% in gains for the MSCI China index this year as valuations remain below the Wall Street bank’s target of a 14.5 price-to-earnings ratio, its chief China Equity Strategist Kinger Lau said in a Jan. 23 report.
    On Sunday, Lau and his team released an 89-page report about “why China A shares have become more investable for global investors.” Their reasoning for investment in the world’s second largest stock market is based largely on greater accessibility for foreign investors and under-allocation to the share class so far.

    Read more about China from CNBC Pro

    A-shares are mainland Chinese companies listed in China, either on the Shanghai Stock Exchange or the Shenzhen Stock Exchange.
    Goldman Sachs had turned overweight on mainland shares in February 2020, during the height of the coronavirus pandemic in the country.

    UBS: From ‘underweight’ to ‘overweight’

    In late October, UBS announced it was upgrading Chinese stocks to “overweight,” up two notches from an “underweight” call in the summer of 2020.
    In another sign of the firm’s optimism, the emerging markets strategy team said in January its highest-conviction stock ideas include many Chinese internet names like Alibaba that have been the target of Beijing’s new regulation on alleged monopolistic practices and data security.

    Not everyone is a China bull

    However, not all international investment firms are as optimistic.
    Morgan Stanley’s Asia emerging markets stock strategy team is neutral on mainland China, as are Bank of America and J.P. Morgan Asset Management.
    During past years of stimulus, China hasn’t always seen a bull market, Winnie Wu, China equity strategist, BofA Securities, said in a phone interview Monday. While there are investment opportunities within certain sectors, she expects corporate earnings growth across China to decelerate.
    Wu pointed out that in 2016, despite expectations of stimulus, stocks only began to climb after the second quarter. The Shanghai composite closed 12.3% lower that year.

    Risks from regulation, property market

    A sell-off in mainland shares so far this year reflects how investors have generally remained cautious on Chinese stocks.
    Even in upgrades, firms like BlackRock have used conservative language like turning “modestly positive” and cautioned that: “Given the small benchmark weights and typical client allocation to Chinese assets, allocation would have to increase by multiples before they represent a bullish bet on China, and even more for government bonds.”

    A sharp plunge in Chinese property prices, widespread lockdowns due to the pandemic and regulatory uncertainty pose risks to Credit Suisse’s outlook, Garthwaite said.
    China’s pursuit of “common prosperity” — moderate wealth for all, rather than just a few — emerged over the summer as the theme for Beijing’s regulatory changes.
    While the policy remains “the big unknown,” Garthwaite noted official remarks — such as Xi’s speech at the World Economic Forum in January — indicate an easier stance going forward.
    “The common prosperity we desire is not egalitarianism … we will first make the pie bigger and then divide it properly through reasonable institutional arrangements,” Xi said at that time. “All types of capital are welcome to operate in China.”
    — CNBC’s Michael Bloom contributed to this report.

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