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    UK Robinhood rival Freetrade snapped up by trading firm at 29% valuation discount

    U.K. Robinhood rival Freetrade has been acquired by IG Group for £160 million ($195 million) — a 29% discount to its last valuation.
    The deal is a potential signal for further consolidation coming to the wealth technology industry.
    Last year, Hargreaves Lansdown was acquired for £5.4 billion by a consortium of investors including private equity giant CVC Group.

    The Freetrade application on a smartphone and desktop PC.

    LONDON — Freetrade, a British rival to popular stock trading app Robinhood, said Thursday that it’s been acquired by online investing platform IG Group.
    The deal values Freetrade at £160 million ($195 million) — a 29% discount to its last valuation. The startup said that it would continue to operate as a commercially standalone entity under its own brand.

    Founded in 2016, Freetrade garnered popularity among mainly younger, more inexperienced traders in the U.K. with its zero-commission trading platform.
    The app initially began by offering equities but later expanded to roll out trading in exchange-traded funds, savings products and government bonds.
    In pandemic times, Freetrade was riding high on a retail trader frenzy. The app benefited heavily from GameStop “short squeeze” in early 2021, when traders on a Reddit forum for retail investors piled into the stock and caused it to rally in price.
    Short-selling refers to the practice of an investor borrowing an asset and then selling it on the open market with the expectation of repurchasing it for less money in future for a profit.
    However, worsening macroeconomic conditions in 2022 and 2023 hit Covid high-fliers like Freetrade hard — and in 2023, Freetrade completed a crowdfunding round at a valuation of £225 million down 65% from the £650 million it was worth previously.

    The deal is a potential signal for further consolidation coming to the wealth technology industry. It comes after Hargreaves Lansdown was acquired for £5.4 billion by a consortium of investors including private equity giant CVC Group.
    Viktor Nebehaj, CEO and co-founder of Freetrade, described the takeover as a “transformative deal that recognizes the significant value that Freetrade has created.”
    “Together with IG Group’s significant resources and backing, this is an exciting opportunity to accelerate our growth and delivery of new products and features,” he added.
    Freetrade said the transaction is subject to customary closing conditions including regulatory approvals, adding that it expects it will close the deal later this year. More

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    Medicare’s new $2,000 cap on out-of-pocket drug costs could save patients thousands, AARP says

    Most Medicare patients who hit the new $2,000 cap on out-of-pocket spending for prescription drugs could see significant savings, according to a report from AARP. 
    The findings suggest the spending maximum could be hugely beneficial for older adults in Medicare who struggle to afford high-cost drugs for cancer, rheumatoid arthritis and other serious conditions.
    It is one of the most consequential provisions in President Joe Biden’s 2022 Inflation Reduction Act, designed to cut high drug costs.

    U.S. Sen. Bernie Sanders (I-VT) speaks about prescription drug costs during an event at NHTI Concord Community College in Concord, New Hampshire, U.S., October 22, 2024. 
    Elizabeth Frantz | Reuters

    Most Medicare patients who hit the new $2,000 cap on out-of-pocket spending for prescription drugs could see massive savings, despite changes in premiums, according to a report released Thursday by AARP. 
    The findings suggest the cap could be a huge benefit to older adults in Medicare who struggle to afford high-cost drugs for cancer, rheumatoid arthritis and other serious conditions. Those seniors and other U.S. patients pay two to three times more for prescription drugs than people in other developed nations.

    The limit went into effect at the beginning of this year. It is one of the most consequential provisions in President Joe Biden’s 2022 Inflation Reduction Act, designed to cut high drug costs — along with a new $35 monthly cap on insulin and Medicare drug price negotiations with manufacturers.
    The report found that 94% of the more than 1 million enrollees in Medicare Part D expected to reach the new cap in 2025 will have lower out-of-pocket costs — including premiums and cost-sharing — and save an average of $2,474. That’s a 48% decrease on average in their total out-of-pocket costs, according to the report, which analyzed plan enrollment and premium data, among other information. 
    That 1 million tally excludes Medicare beneficiaries who receive a certain low-income subsidy and those in employer waiver plans.
    An estimated 62% of those 1 million enrollees will save an average of more than $1,000 in 2025, while 12% will save more than $5,000, the report said. The remaining 6% of Part D enrollees who are projected to reach the new cap are expected to have higher out-of-pocket costs, with an average of $268 in additional spending in 2025, the report said. 
    Notably, the share of Part D enrollees expected to reach the cap and have lower total out-of-pocket costs in 2025 is estimated to be 95% or higher in 33 states and Washington, D.C.

    “When you’re able to provide these types of savings, that frees up those funds for other really important things that maybe [patients] were having to make trade-offs for, paying for their food or paying for their rent,” Leigh Purvis, prescription drug policy principal at AARP, said in an interview. “It’s a really meaningful impact, especially for a population that’s on a fixed income.” 
    She added that the median income of Medicare beneficiaries is around $36,000 a year. 
    Those savings come despite changes to Part D premiums in 2025, AARP said. Purvis said the new prices for the first 10 medications selected for Medicare negotiations — and the lower costs expected from them — do not go into effect until 2026, so premiums have increased in some cases.
    She said critics have been trying to blame the law for those premium increases and higher costs for Medicare enrollees overall. But the report said the lower out-of-pocket costs for most patients who reach the $2,000 cap will more than offset higher premiums.
    The positive effect “will only grow larger” as new negotiated prices for the first round of drugs go into effect in 2026, according to the report. 
    “The Medicare program is going to be saving a lot of money, so this is really a story that is much bigger than it appears, just because these savings go to a lot of different people in a lot of different ways,” Purvis said. 
    A separate report from AARP found that 3.2 million Medicare recipients are expected to see savings from the out-of-pocket cap in 2025. By 2029, the number is expected to increase to 4.1 million enrollees.
    Medicare covers about 66 million people in the U.S., and 50.5 million patients are enrolled in Part D plans, according to 2023 data from health policy research organization KFF.
    The new price cap applies to all prescription drugs under Medicare Part D, but doesn’t include drugs given to patients in the hospital or other health-care settings such as anesthesia and chemotherapy. 
    Before the change, people on Medicare typically had to spend $7,000 or more out of pocket on prescription medications before they qualified for so-called “catastrophic coverage,” when insurance kicks in and covers most of the drug’s cost. 
    Under this coverage, patients are charged a small co-payment or a percentage of a drug’s cost, usually 5%. More

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    Ethiopia gets a stockmarket. Now it just needs some firms to list

    It was a momentous occasion. But the peal of the bell did not initiate a flurry of trading at the Ethiopian Securities Exchange, which opened on January 10th. With no brokers and only one listed stock, the exchange enjoyed a relaxed start to life. The country’s officials nevertheless see the institution as a crucial part of their liberalising economic reforms. Ethiopia, home to some 130m people, had been the most populous country without an exchange. More

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    Are big cities overrated?

    Judged by their revealed preferences, people love cities. Metropolises such as London and New York are bursting at the seams, with house prices to match. China, meanwhile, can boast at least six cities bigger than either of them. Across the world, 25% of people live in cities of over a million, up from just 15% six decades ago. More

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    Why catastrophe bonds are failing to cover disaster damage

    THE SCENES of devastation in Los Angeles were just the latest in a recent barrage. Last year hurricanes in the Atlantic, earthquakes in Japan and flooding in Europe all carried huge financial and human costs. Indeed, 2024 is set to be the year with the third-biggest insured losses, adjusted for inflation, in more than four decades. More

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    “The Traitors”, a reality TV show, offers a useful economics lesson

    Claudia Winkleman, a television presenter with a helmet of shiny hair, is not a typical economics teacher. Yet students should consider her game show. Those learning outside Britain may opt for any of the 20 or so versions of “The Traitors” screened elsewhere, including a popular American option that has featured celebrities such as Deontay Wilder, a boxing great, and John Bercow, a disgraced British parliamentarian. The game, which involves lying and betrayal, is a chance to study both the theory and reality of game theory, as well as to watch the panic on the face of someone who, having decided a fake Welsh accent would make them more trustworthy, comes across a native Welsh speaker. More

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    China’s slowing economy is waiting for more stimulus. Here’s how the country plans to boost growth

    China’s slowing economy is still waiting for the promised government support to kick in.
    Senior economic and finance officials have told reporters in the last two weeks that fiscal support is in the works, and the issuance of ultra-long bonds to spur consumption would exceed last year’s.
    Stimulus will begin to take effect this year, but it will likely take time to see a significant impact, Mi Yang, head of research for north China at property consultancy JLL, told reporters in Beijing last week.

    Passengers walk along the platform after disembarking from a train at Chongqing North Railway Station during the first day of the 2025 Spring Festival travel rush on Jan. 14, 2025.
    Cheng Xin | Getty Images News | Getty Images

    BEIJING — As promised government support is still to meaningfully kick in, China’s economy hasn’t yet seen the turnaround investors have been waiting for.
    While policymakers have, since late September, cut interest rates and announced broad stimulus plans, details on highly anticipated fiscal support won’t likely come until an annual parliamentary meeting in March. Official GDP figures for 2024 are due Friday.

    “China’s fiscal stimulus is not yet enough to address the drags on economic growth … We are cautious long term given China’s structural challenges,” BlackRock Investment Institute said in a weekly report Tuesday. The firm, which is modestly overweight Chinese stocks, indicated it was ready to buy more if the circumstances changed.
    Of growing urgency in the meantime is the drop in domestic demand, and worries about deflation. Consumer prices barely rose in 2024, up by just 0.5% after excluding volatile food and energy prices. That’s the slowest rise in at least 10 years, according to records available on the Wind Information database.
    “Consumer spending remains weak, foreign investment is declining, and some industries face growth pressure,” Yin Yong, Beijing city mayor, said Tuesday in an official annual report.

    The capital city targets 2% consumer price inflation for 2025, and aims to bolster tech development. While nationwide economic goals won’t come out until March, senior economic and finance officials have told reporters in the last two weeks that fiscal support is in the works, and issuance of ultra-long bonds to spur consumption would exceed last year’s.
    China’s announced stimulus will begin to take effect this year, but it will likely take time to see a significant impact, Mi Yang, head of research for north China at property consultancy JLL, told reporters in Beijing last week.

    Pressure on the commercial property market will continue this year, and prices may accelerate their drop before recovering, he said.
    Rents in Beijing for high-end offices, called Grade A, fell 16% in 2024 and are expected to drop by nearly 15% this year, with some rentals even nearing 2008 or 2009 levels, according to JLL.
    New shopping centers in Beijing opened in 2024 with average occupancy rates of 72% — previously such malls would not be opened if the rate was below 75% or much closer to 100%, JLL said. Within a year, however, the new malls have seen occupancy rates reach 90%, the consultancy said.

    Home appliances

    Unlike the U.S. during the Covid-19 pandemic, China has not handed out cash to consumers. Instead, Chinese authorities in late July announced 150 billion yuan ($20.46 billion) in ultra-long bonds for trade-in subsidies and another 150 billion yuan for equipment upgrades.
    China has already issued 81 billion yuan for this year’s trade-in program, officials said this month. It covers more home appliances, electric cars and an up to 15% discount on smartphones priced at 6,000 yuan or less.
    Consumers who buy premium phones tend to upgrade and recycle their devices more frequently than buyers on the lower end of the market, indicating the government may want to encourage a new group to shorten their upgrade cycle, said Rex Chen, CFO of ATRenew, which operates stores for processing smartphones and other secondhand goods.
    Chen told CNBC on Monday he expects the trade-in subsidies program can boost recycling transaction volumes of eligible products on the platform by at least 10 percentage points, up from 25% growth in 2024. He also expects the government to carry out a similar trade-in policy for the next few years.
    However, it’s less clear whether the trade-in program alone can lead to a sustained recovery in consumer demand.
    Nomura’s Chief China Economist Ting Lu said in a report Tuesday that he expects the sales boost to fade by the second half of this year, and that tepid new home sales will limit demand for home appliances.

    Real estate

    Real estate and related sectors such as construction once accounted for more than a quarter of China’s economy. When central authorities started cracking down on developers’ high debt levels in 2020, that had ripple effects on the economy, alongside the Covid-19 pandemic.
    China shifted its stance on real estate in September following a high-level meeting led by President Xi Jinping that called for halting the sector’s decline.
    Measures to prop up the sector include using a whitelist process to finish construction on the many apartments that have been sold but yet not been built due to developers’ financial constraints. New apartments in China are typically sold ahead of completion.
    Jeremy Zook, lead analyst for China at Fitch Ratings, said the real estate market had yet not reached a bottom, and that authorities might provide more direct support. He pointed out that it was difficult for the economy to transition away from real estate, despite China’s wishes to reduce its reliance on the sector for growth.
    The government’s latest measures have helped the broader stock market rally, and lifted sentiment slightly.
    Sales of new homes in China’s largest cities over the last 30 days have surged by nearly 40% from a year ago, Goldman Sachs analysts said in a Jan. 5 report.
    But they cautioned that high inventory levels in smaller cities indicate property prices “have further room to fall” and that homebuilding is “likely to remain depressed for years to come.”
    In the relatively affluent city of Foshan — near Guangzhou city in southern China — housing inventory could take 20 months to clear in one district, and seven months in another district, according to a 2024 report from Beike Research Institute, a firm affiliated with a major housing sales platform in China.
    The city overall saw floor space sold last year fall by 16% to the lowest in 10 years, the report said.

    Geopolitical concerns

    Complicating China’s economic challenges are tensions with the U.S. Similar to Washington’s export controls, Beijing has also made efforts to ensure national security by prioritizing domestic players in strategic sectors such as technology.
    That stance has pressured an increasing number of European businesses in China to localize — despite added costs and reduced productivity — if they are to retain customers in the country, the EU Chamber of Commerce in China said in a report last week.
    Official Chinese statements have also emphasized coupling security with development.

    A slogan for part of Beijing’s efforts to support growth is an effort to build “security capabilities in key areas,” pointed out Yang Ping, director of the investment research institute within the National Development and Reform Commission. She was speaking at a press event Wednesday.
    This year, “boosting consumption has been prioritized ahead of improving investment efficiency,” Yang said in Mandarin, translated by CNBC. “Expanding and boosting consumption are the main focus of this year’s policy adjustment.”
    She dismissed concerns that the impact of trade-in subsidies on consumption would fade after an initial spike, and indicated more details would emerge after the March parliamentary meeting. More

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    Blue Origin’s first New Glenn rocket reaches orbit, misses booster landing

    Blue Origin launched its New Glenn rocket from Florida for the first time early Thursday morning.
    The uncrewed rocket took off at about 2 a.m. ET and reached orbit.
    New Glenn, which is as tall as a 30-story skyscraper, is designed to be partially reusable.

    Blue Origin’s New Glenn rocket streaks into orbit after launching from the Kennedy Space Center on its maiden flight, at Cape Canaveral, Florida on January 16, 2025.
    Gregg Newton | Afp | Getty Images

    Blue Origin launched its towering New Glenn rocket for the first time on Thursday, in a crucial milestone for Jeff Bezos’ space company.
    New Glenn thundered off the launchpad in the early morning hours in Florida, reaching space and ultimately making it to orbit as a part of a long-awaited debut mission. Blue Origin also attempted to land the rocket’s booster on a barge in the Atlantic Ocean, but the booster was lost during reentry through the atmosphere.

    The launch is a defining moment for Blue Origin.
    Although founded 25 years ago, Bezos’ company had yet to begin flying to orbit — with its much smaller New Shepard rocket only flying people and research on short jaunts to the edge of space. New Glenn’s flight marks Blue Origin’s entrance into a market dominated by Elon Musk’s SpaceX and is crucial to unlocking the centi-billionaire founder’s larger ambitions.
    No one was on board the New Glenn flight, which carried a single small test payload into space. The rocket was named to honor the late John Glenn, the first American to orbit the Earth.

    Blue Origin’s New Glenn rocket lifts off at Cape Canaveral Space Force Station prior on January 16, 2025.
    Miguel J. Rodriguez Carrillo | Getty Images News | Getty Images

    Originally the company was aiming for the audacious feat of flying NASA’s “ESCAPADE” mission to Mars on New Glenn’s debut. But with a dwindling launch window, the agency delayed ESCAPADE to a later launch. Blue Origin also has orders from Amazon’s Project Kuiper for at least 12 launches of its internet satellites, as well as plans to launch the Blue Moon lunar and Orbital Reef space station. Bezos founded Amazon six years before he created Blue Origin.
    Headquartered in the Seattle suburb of Kent, Washington, Blue Origin has over 10,000 employees there and in half a dozen other major locations around the country, including in industry strongholds of Texas, Florida and Alabama. Blue Origin CEO Dave Limp previously told CNBC that Blue Origin has been “in kind of an R&D phase for a long time,” an aspect of the company’s culture he’s trying to change.

    Blue plans to scale the cadence of New Glenn missions quickly, wanting to perform as many as 10 New Glenn launches this year. Originally targeted for a 2020 debut, the rocket faced years of delays.

    The mission

    A few minutes after launch, the rocket’s booster separated and returned back through the atmosphere. The booster — nicknamed “So You’re Telling Me There’s a Chance” — was attempting to land on the company’s barge Jacklyn about 600 miles offshore in the Atlantic Ocean, but fell short. Blue Origin’s webcast last showed the booster at an altitude of about 84,000 feet.
    While New Glenn did not deploy any satellites in orbit on the flight, it carried a small demonstration version of the company’s “Blue Ring” spacecraft. Known in the industry as an orbital transfer vehicle (OTV), or space tug, Blue Ring is designed to host satellites and spacecraft, delivering them from the rocket to their intended target.
    As is typical with an orbital rocket’s debut, New Glenn’s launch had some bumps along the way, with multiple day delays due to technical issues with the rocket and weather.

    The rocket

    The first New Glenn rocket rolling out in preparation for launch.
    Blue Origin

    New Glenn is the size of a 30-story skyscraper at 322 feet tall, nearly as tall as the Saturn V rockets that carried the Apollo missions to the moon, and 23 feet in diameter. Blue’s rocket is powered by seven of the company’s BE-4 engines, together generating nearly 4 million pounds of thrust, and the nosecone of New Glenn is both wide and tall enough to launch three school buses into space at once.
    The rocket is powered by liquid oxygen and liquid methane and is designed to be partially reusable, as Blue Origin aims to launch, land and re-launch each booster as many as 25 times.
    In terms of mass delivered to orbit per launch, New Glenn fits between SpaceX’s Falcon 9 and Falcon Heavy rockets, with Blue Origin’s vehicle designed to lift as much as 45,000 kilograms (or about 100,000 pounds) to low Earth orbit.
    Blue Origin has not disclosed the total cost or pricing per launch of its New Glenn rockets. Three years ago, Blue Origin said it had invested $2.5 billion to date on New Glenn development. And, according to a competitor’s estimate, New Glenn sells for about $70 million per launch.
    So far in the industry table stakes of orbital missions, Blue Origin had not entered the serious rocketry game, as the U.S. launch market remains dominated by SpaceX, followed by Rocket Lab, United Launch Alliance, and Firefly Aerospace.
    Already, Blue Origin has a foothold with New Glenn in the most lucrative part of the launch market: Flying for the military. Last year Blue Origin joined SpaceX and ULA in the Pentagon’s $5.6 billion National Security Space Launch (NSSL) program, allowing the company to compete for contracts.
    While Blue Origin has lagged SpaceX in the industry, Bezos has remained upbeat about his company’s potential.
    “I think it’s going to be the best business that I’ve ever been involved in, but it’s going to take a while,” Bezos said recently.
    Jeff, welcome to the club. More