Economy

The EU is taking China to the World Trade Organization for alleged patent infringements that are costing companies billions of euros, as part of what officials in Brussels claim is a “power grab” by Beijing to set smartphone technology licensing rates.Businesses, including Sweden’s Ericsson, Finland’s Nokia and Sharp of Japan, have lost money after China’s supreme court banned them from protecting their patents by securing licensing deals in foreign courts, the European Commission said.Chinese courts set licence fees at around half the market rate previously agreed between western technology providers and manufacturers such as Oppo, ZTE and Huawei, it added.“It is part of a global power grab by the Chinese government by legal means,” said a European Commission official. “It is a means to push Europe out.”Smartphone makers have agreed global standards for telecommunications networks. In return, technology manufacturers must license their patents to others. If they cannot agree on a price, they go to court to set it. Chinese courts generally set prices at half the level of those in the west, meaning their companies pay less for the technology from overseas providers. In August 2020, China’s Supreme People’s Court decided that Chinese courts can impose “anti-suit injunctions”, which forbid a company taking a case to a court outside the country. Those that do are liable for a €130,000 daily fine and the judgments of courts elsewhere are ignored.The policy of driving down licence costs has been backed by the People’s Congress, China’s national assembly, although it has not been put into legislation, the commission alleged. After Ericsson lost a court case, it said licensing revenues would fall by €100mn-€150mn a quarter. US company InterDigital and EU research institutes such as the Fraunhofer network in Germany, which also license new technologies, have also suffered. Companies used licensing fees to reinvest in research to stay ahead, the commission said.Valdis Dombrovskis, EU trade commissioner, said: “We must protect the EU’s vibrant high-tech industry, an engine for innovation that ensures our leading role in developing future innovative technologies. EU companies have a right to seek justice on fair terms when their technology is used illegally. That is why we are launching WTO consultations today.” The EU believes China’s actions are inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (Trips).Huawei declined to comment. The Chinese foreign ministry, ZTE and Oppo did not respond to requests for comment. The US and Japan have also expressed concern and are expected to join the EU’s request for consultations. China has 60 days to respond after which Brussels could ask for a dispute settlement panel to rule on the matter.It is the second case the commission has launched against Beijing at the WTO in a month, after China blocked all imports from Lithuania in a dispute over its relationship with Taiwan. More

In a call with analysts after doValue reported better-than-expected 2021 results, Chief Executive Andrea Mangoni said the group had teamed up with funds Bain and Fortress in the race to secure the portfolio, dubbed ‘Ariadne’.The three have worked together before. A consortium comprising doValue Greece, Bain and Fortress last year was picked in a 6 billion euro bad loan securitisation sale by National Bank of Greece.Bain and Fortress invested to buy the notes backed by the bad loans, while doValue provided the debt recovery services.Given the huge size of the loan pool, the bidding process for Ariadne will be very competitive, Mangoni said, adding the tender was one of doValue’s priorities at present and he was optimistic on its outcome.”We are positive on Ariadne,” he said.Appointed by the Bank of Greece, PQH is liquidating the bad assets of 12 lenders that were shut down between 2011 and 2014. The assets amounted in total to around 9 billion euros and consisted mainly of impaired loans. ($1 = 0.8808 euros) More

Shares in the Moline, Illinois-based company were up 1.3% at $385.58 in light premarket trading.Record grain prices have put more cash in farmers’ pockets and spurred them to increase investments in agricultural machinery amid a tight labor market. The U.S. Department of Agriculture estimated net farm income to have risen 25% to $23.9 billion in 2021.Deere (NYSE:DE) raised prices to combat rising shipping and supply chain costs, but that has not deterred demand, with the company’s North American order books full for most of its large farm equipment in 2022. “Looking ahead, we expect demand for farm and construction equipment to continue benefiting from strong fundamentals,” Chief Executive John May said in a statement. Deere forecast fiscal 2022 net income between $6.7 billion and $7.1 billion, up from its prior expectation of $6.5 billion to $7.0 billion.Net sales from equipment operations rose about 6% to $8.53 billion for the first quarter ended Jan. 30. Net income fell to $903 million or $2.92 per share from $1.22 billion or $3.87 per share a year earlier, as costs weighed. More

NEW DELHI (Reuters) – (This February 17 story corrects first line to say five million tonnes per annum, not cumulative)India plans to manufacture five million tonnes of green hydrogen per annum by 2030, the power ministry said on Thursday, aiming to meet its climate targets and become a production and export hub for the fuel.Green hydrogen, produced using renewable energy, has some of the best environmental credentials among cleaner-burning fuels. The zero-carbon fuel is made using renewable power from wind or solar sources to split water into hydrogen and oxygen.India will set up separate manufacturing zones, waive inter-state power transmission charges for 25 years and provide priority connectivity to electric grids to green hydrogen and ammonia producers in a bid to incentivise production, the federal power ministry said.The five million tonnes production target is half of that of the European Union, which plans to produce 10 million tonnes of hydrogen from renewable energy by 2030.While green hydrogen is not currently made in India on a commercial scale, the country’s richest men Mukesh Ambani and Gautam Adani have announced plans to produce it. India, with a population more than three times larger than the EU, has a much lower per capita energy consumption, but among the fastest rates of energy demand growth in the world.Mayank Bansal, chief commercial officer of ReNew Power, said the incentives announced by India could help lower cost of hydrogen manufacturing.”Currently, manufacturing green hydrogen is a costly proposition and in cognizance of this, the government has correctly waived off inter-state transmission charges,” Bansal said in a statement.India’s Power Minister RK Singh said on Wednesday green hydrogen manufacturers would also be allowed to transmit unused electricity to the grid.The incentives announced on Thursday are the first part of India’s national hydrogen policy. The government has not said when the rest will be released.India also plans to provide federal financial support to set up electrolysers, as it wants to make the use of green hydrogen mandatory for refineries and fertiliser plants. More

Investing.com — The U.S. and Russia will meet for talks over Ukraine again next week, but not before Russia has staged some nuclear and missile exercises later this weekend.  Stocks are set for a weak bounce from Thursday’s sell-off, with eyes on Deere (NYSE:DE) earnings and DuPont (NYSE:DD)’s latest exercise in corporate restructuring. The ECB’s hawks continue to find their voice, and U.K. retail sales also point toward another rate hike soon. Crude oil prices slip, meanwhile, on reports of progress in talks to lift sanctions on Iran. Here’s what you need to know in financial markets on Friday, 18th February. 1. Russian saber-rattling gets louderRussia will hold exercises to test the readiness of its nuclear and ballistic missiles on Saturday, in the latest extravagant show of military strength.The drills, which the Kremlin says are long-planned, will involve its armed forces in the Southern Military District (opposite Ukraine) and its Black Sea Fleet. They come at a time when the U.S. is still warning that a Russian invasion of neighboring Ukraine may be imminent. Russia says it has no plans to invade but, in a document published by the Foreign Ministry on Thursday, again warned of possible military action if NATO does not grant its demand that Ukraine never be allowed to join the alliance.U.S. Secretary of State Anthony Blinken is to meet his Russian counterpart Sergey Lavrov one more time for talks to resolve the crisis next Thursday, the State Department said late on Thursday.2. Celanese in $11 billion deal for DuPont AssetsCelanese (NYSE:CE) is set to buy DuPont’s mobility and materials unit for $11 billion, the latest reshuffling of DuPont’s portfolio as it focuses on electronics, automotive and water.DuPont has already spun off its nutrition and biosciences unit and agreed to sell other businesses including. It’s also been an active buyer, agreeing to buy Laird Performance Materials for $2.3 billion and engineering materials maker Rogers (NYSE:ROG) for $5.2 billion.The deal is expected to close around the end of 2022.3. Stocks set to open higher on hopes for last-ditch resolutionU.S. stock markets are set to open modestly higher later, rebounding from Thursday’s losses that were triggered by fresh fears of war in eastern Europe, as well as some worryingly weak guidance from companies making their quarterly reports.By 6:15 AM ET, Dow Jones futures were up 104 points, or 0.3%, while S&P 500 futures were up 0.4% and Nasdaq 100 futures were up 0.7%/. In all three cases, that’s not even a quarter of what was lost on Thursday.Earnings season has more or less run its course now but has been distinguished by the regular and violent reactions to companies who have either missed consensus forecasts or warned of slowing growth in the months ahead. The trend has hit not just ‘profitless tech’ but also market darlings such as Meta Platforms (NASDAQ:FB) and, on Thursday, chipmaker Nvidia (NASDAQ:NVDA).Deere, Cerner (NASDAQ:CERN) and Campbell Soup (NYSE:CPB) report earnings later.4. Europe’s rate path edges higherThe trajectory for interest rates in Europe nudged higher overnight, with another European Central Bank policy maker – Slovakia’s Peter Kazimir – coming out in favor of ending the bank’s asset purchases in August to give itself ‘flexibility’ for interest rate hikes thereafter.As of today, the ECB is still – just about – holding to the notion that it won’t have to raise interest rates this year. However, an increasing number of policymakers are now questioning that. The influential German board member Isabel Schnabel earlier this week issued a strongly worded warning about the inflationary impact on house prices from the ECB’s current stance.Elsewhere in Europe, U.K. retail sales bounced back strongly in January, keeping the U.K. on course for a third successive rate hike at the Bank of England’s next policy meeting in March.5. Crude slips further on Iran optimism; U.S. rig count dueCrude oil prices slid on reports that Iran and the West are closer to a deal that would lift sanctions on the Islamic Republic in return for it abandoning further progress on its nuclear program.Analysts say a deal would pave the way for the return of as much as 1 million barrels of oil a day to world markets, although its hard to predict the net effect as there is no reliable information readily available on the ability of Iran’s oil industry to ramp up production, and much of its current output is already leaking out into world markets – notably to China – via unofficial channels.By 6:30 AM ET, U.S. crude futures were down 2.3% at $89.72 a barrel, while Brent crude futures were down 2.1% at $91.06 a barrel. The Baker Hughes rig count and the CFTC’s weekly positioning data follow later Friday. More

SINGAPORE (Reuters) -Singapore will begin implementing a long-flagged increase to its goods and services tax next year, its finance minister said in his budget speech on Friday, while also announcing a slew of tax hikes aimed at higher income groups. The moves come as Singapore emerges from a pandemic-induced economic slump, but walks a tight rope in maintaining its attractiveness as a global financial hub while guarding against local concerns about rising wealth inequality and rising costs of living.GST will rise to 8% from January next year and to 9% in 2024, Lawrence Wong said, from 7% now. The government also plans to increase income taxes for high earners, hike taxes on residential properties and impose higher levies on luxury cars.”These tax adjustments will help to raise additional revenue and also contribute to a fairer revenue structure,” Wong said. Singapore has been seeking to raise revenues to fund future spending that it estimates could reach more than 20% of gross domestic product (GDP) by 2030, especially as its ramps up spending on healthcare in one of the fastest ageing countries. Over the last two years, the government has committed close to S$100 billion to cushion its people, businesses and the economy from the impact of the COVID-19 pandemic. Wong announced a further S$500 million ($372 million) package to support jobs and businesses as part of his budget proposals and proposed to set aside S$560 million to help Singaporeans deal with the rising cost of living. The government expects an overall deficit of S$5 billion for 2021 and Wong unexpectedly forecast a deficit of S$3 billion for 2022. Total expenditure for 2022 was forecast at S$102.4 billion versus S$98.4 billion the previous year. Analysts had expected a return to a surplus. The budget was more expansionary than expected, said MUFG analyst Jeff Ng, adding that the government was addressing the still uneven recovery of the economy. Singapore’s economy, which is highly reliant on global trade, is expected to expand 3-5% this year as it continues to reopen its borders and ease COVID-19 restrictions. The economy grew 7.6% in 2021 after a record contraction in 2020. Still, recovery in some sectors such as those in aviation and tourism is expected to take longer as virus concerns linger. Wong said the government will spend a total of about S$9 billion ($6.70 billion) over the next five years on measures to help its low-wage workers. It will also spend on schemes to build digital capabilities for businesses and workers. The government will further tighten its foreign worker policy and increase salary thresholds for issuing work visas.As part of its ambition to achieve net zero emissions, the government will also increase carbon taxes from 2024.Wong said the corporate tax system would need to be updated, following a global agreement on a minimum corporate tax rate, and was considering a move that would increase multi-national companies’ effective tax rate to 15%. Singapore, a low-tax jurisdiction where several multinationals including Alphabet (NASDAQ:GOOGL)’s Google, Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:FB) have regional headquarters, has a rate of 17% but provides incentives and schemes which reduce the effective rate. Wong said the government was closely monitoring the risk of rising inflation, which has been driven by a recovery in global demand, continuing supply chain disruptions, and especially by rising energy prices.The government has set aside a S$6.6 billion package to help cushion the impact of the GST hike. The Monetary Authority of Singapore tightened its policy settings in January in its first out-of-cycle move in seven years as the economic recovery gained traction and price rose. It is widely expected to tighten again at its scheduled policy meeting in April.The city-state’s 2022 core inflation is forecast at 2-3% and headline inflation at 2.5–3.5%.($1 = 1.3431 Singapore dollars) More

“It is an unquestionably ambitious timetable, but it is also a major and important project for international tax justice,” Lindner said when asked if he still supports the deadline.Last October, nearly 140 countries reached a deal on a minimum tax rate of 15% on multinational companies to make it harder for companies like Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) to park profits in low-tax countries.Earlier on Friday, French Finance Minister Bruno Le Maire said he was “really asking for a swift implementation” of the agreement as he also backed the 2023 deadline.The timetable is widely considered to be ambitious, not least because U.S. President Joe Biden’s administration is struggling to pass legislation that would bring U.S. law in line with the global deal. More

LONDON (Reuters) -Inflation is raging, interest rates are rising and bonds look like treacherous investment waters – all of which make arguments for a dip back into the fixed income vortex intriguing at least.To be sure, it’s been a lousy year so far for most asset classes aside from oil and commodities. But the most interest rate sensitive securities, or long “duration” plays, have been under the cosh. Government bonds have lost 5-6% while U.S. technology stocks are down more than 10% – and fund managers are heavily underweight in both, with a overweight bias for global equities and cash.Mutual fund data shows two consecutive months of outflows from global bond funds – a cumulative $32 billion exit for the year to date.Spiking oil prices, tensions over war in eastern Europe and central banks mapping a return to pre-pandemic monetary settings all stir the water for investors who are once again fearful of an end to the 40-year bond bull market.But JPMorgan (NYSE:JPM)’s long-term strategists take a different tack and screen out all the turbulent news, macro forecasts and tactical trading views to model how mixed portfolios would perform a 10-year view based on past performance.Jan Loeys and team this week updated their view of prospective 10-year returns for a standard 60/40 equity/bonds portfolio and said the recent shakeout in asset prices lifted their expected returns significantly from a year ago. Dispensing with different takes on macro drivers – which may be valid but impossible to predict with any certainty over 10 years – the JPM team insisted the best guide to bond returns over a subsequent decade has historically been the prevailing yield. The jump of more than a percentage point over the past year in yields on U.S. aggregate bond indices – which include Treasury and agency bonds as well as investment grade and high yield corporate debt – now put today’s yield at some 2.7%. Crucially, this makes them positive again in real or inflation-adjusted terms when using 10-year market inflation expectations of 2.4% as a guide.Along with a pullback in U.S. stock multiples that improves their annual return outlook over a next decade to 4.8%, JPM reckons a mixed 60/40 portfolio’s prospects were now 4% per annum. That’s a percentage point higher than last year and 1.6% positive in real terms – even if still unattractive historically and far below the real 5% average of the past century.But their conclusion was this improvement in mixed returns may be enough to dissuade investors from the TINA (there is no alternative) phenomenon that has at least partly driven the equity price boom as bond yields were floored in recent years.”The urge to overweight equities to bring portfolio returns closer to one’s requirements has been softened,” they told clients. “At the margin (it’s) a reason to start rebalancing towards bonds, without having to be in a hurry.”BOUNDARY CONDITIONS?While that’s hardly consensus, the view does chime with some fundamental arguments – such as central banks acting swiftly now; peaking inflation rates and improved real returns; cooling growth and flattening yield curves; and the idea that any positive real yields in “safe assets” are attractive right now to risk averse funds.Dynamics in the “defined benefit” pension fund industry, for example, were widely cited last year as a major factor steamrolling the yield curve and weighing on long-term yields as outsize equity gains hastened full-funding status and a mass “de-risking” of portfolios into bonds alone.For more tactical active managers, there are also signs that this latest volatile period may have overdone the bond gloom.PIMCO chief investment officer Dan Ivascyn said this week that his portfolios remained underweight bond duration but valuations had now become more interesting. “I don’t think we’re too far away from levels where we’ll begin to reduce that duration underweight.”Even chartists mapping 10-year Treasury yields think calling the end of the 40-year bond bull market would premature at least.The main criticism of that long-term JPM view of course is that it relies on past performance as a guide – reasonable unless you think we’re in for a paradigm shift in the world economy where bond yields and credit spreads have nowhere to go but up.Newton Investment Management Chief Executive Euan Munro wrote this month that markets had hit such “boundary conditions” and that should force a rethink of 60/40 portfolios towards a more diverse and actively managed fixed income portion at least.His main bone of contention with modelling based on historical price performance was that it did in fact assume a questionable view the future repeated the recent past.”Those that apply such an approach are making – or at least implying – quite a detailed forecast of future market conditions, whether they realise it or not.”Place your bets now on 2032.The author is editor-at-large for finance and markets at Reuters News. Any views expressed here are his own(by Mike Dolan, Twitter (NYSE:TWTR): @reutersMikeD; editing by David Evans) More