Pacifico Acquisition Corp., the latest Asian-related SPAC to go public in the U.S., rose by 0.5% to $10.05 on its Nasdaq debut yesterday, a day after it said raised $50 million in an IPO.
Pacifico acquisition targets won’t “be limited to a particular industry or geographic region, although the company intends to focus on operating businesses in and around the new energy, biotech, and education industries in Asia (excluding China),” a statement said.
Ronald Shuang, the Harvard-educated chairman of Shanghai-headquartered boutique investment and asset management company Balloch Holding Group – Pacifico’s ultimate investor, says Asia’s economic growth prospects and demand for capital among growing businesses are likely to expand the region’s role in global markets despite recent ups-and-downs in the U.S.-China relationship.
In particular, he said in an interview in Shanghai, “there is strong demand for Asian companies for U.S. listings.” SPACs offer a time-saving way to raise capital compared with traditional IPOs, Shuang said.
Given ample global liquidity in capital markets plus the likelihood of continued economic recovery from Covid-19, demand and supply trends look favorable to SPAC issuers, Shuang said. “There will be a gold rush” from Asia into SPACs, he predicted.
Besides working with Asian companies to raise capital, Shuang aims to help smaller U.S. investment firms that can’t afford to maintain a large staff on the ground in Asia to find suitable targets in the region. Regulatory approvals for new investments by global fund management heavyweights such as BlackRock and Fidelity make it likely that increased funds will also come from smaller investment firms, he believes. That would benefit boutique firms like Balloch, Shuang said.
Balloch says it was involved in eight U.S.-listed SPACs in 2020. Besides Pacifico, Balloch is planning two other SPAC listings by the end of this year: Qomolangma Acquisition Corp., also $50 million, will focus on Asian biopharmaceutical、e-healthcare and beauty care businesses, and Quantron Acquisition Corp., at $100 million, will focus on consumer, cleantech and blockchain businesses.
As for U.S. and China policy toward listings in the wake of DiDi’s disappointing New York IPO, Shuang said the ride-sharing company appears to have not heeded or searched out Chinese regulator views about its overseas listing and may not have adequately warned overseas investors of Chinese regulatory concerns. Shuang said U.S. tightening of rules for Chinese issuers was a natural response but predicted that new regulations will eventually emerge to allow U.S. listings by mainland companies.
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France cancels defence meeting with UK over submarine row, sources say By Reuters
PARIS (Reuters) – France has cancelled a meeting between Armed Forces Minister Florence Parly and her British counterpart planned for this week after Australia scrapped a submarine order with Paris in favour of a deal with Washington and London, two sources familiar with the matter said.
Parly personally took the decision to drop the bilateral meeting with British Defence Secretary Ben Wallace, the sources said.
The French defence ministry could not be immediately reached. The British defence ministry declined comment.
The sources confirmed an earlier report in the Guardian newspaper that the meeting had been cancelled.
The scrapping of the multi-billion-dollar submarine contract, struck in 2016, has triggered a diplomatic crisis, with Paris recalling its ambassadors from Washington and Canberra.
France claims not to have been consulted by its allies, while Australia says it had made clear to Paris for months its concerns over the contract.
French President Emmanuel Macron and U.S. President Joe Biden will speak by telephone in the coming days to discuss the crisis, the French government’s spokesman said on Sunday.
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Coronavirus latest: Hoarded vaccines must reach poor before they expire, says former UK leader
Hoarded vaccines must reach poor before they expire, says former UK leader
Former British prime minister Gordon Brown said on Sunday that millions of Covid-19 vaccines currently stored in rich countries must be distributed to poorer nations before they expire.
Brown said data from scientific research group Airfinity revealed that 100m Covid-19 vaccines stockpiled in wealthy countries in the northern hemisphere would become unusable after December this year, and then “thrown away”.
His call to action came in the run-up to a virtual Covid-19 summit due to be hosted by US President Joe Biden on Wednesday, timed to coincide with the annual UN General Assembly meeting this week.
“We need a plan to distribute vaccines quickly,” Brown said in a statement. “It will be a profound and collective political tragedy if this summit misses the opportunity to act with doses transferred immediately to poorer countries.”
Brown said he had sent the Airfinity data to Biden and other world leaders.
“It is unthinkable and unconscionable that 100m vaccines will have to be thrown away from the stockpiles of the rich countries whilst the populations of the world’s poorest countries will pay for our vaccine waste in lives lost,” said Brown, who was the UK’s chancellor of the Exchequer from 1997 to 2007 in the government of Tony Blair, before serving as prime minister from 2007 to 2010.
“No one is safe anywhere until everyone is safe everywhere. It is in everyone’s interest everywhere that President Biden and his fellow G7 leaders do what it takes … to eradicate Covid in every corner of our globe,” Brown said.
Lufthansa looks to repay German bailout with €2.1bn share offer
Lufthansa is to raise more than €2.1bn by offering new shares to investors, the German carrier said on Sunday, and use the proceeds to repay the multibillion-euro bailout it received from Berlin in the summer of 2020.
The long-anticipated capital raising, underwritten by 14 banks and due to be completed in early October, will help the Frankfurt-based airline refund the full €2.5bn it has drawn from its home country’s Economic Stabilisation Fund (ESF) by the end of the year, the group added.
Germany’s ESF participated in a €9bn rescue package for Lufthansa last summer, which included support from the Austrian, Swiss, Italian and Belgian governments. Berlin also spent €300m on shares in the company, and now owns almost 16 per cent of the group.
Lufthansa has repaid much of what it drew from the package, including a €1bn loan from the German development bank KfW. Once the ESF tranche is fully repaid, the airline will cancel the facility in its entirety, before repaying the €1.2bn it owes to the remaining governments, a spokesperson said.
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Vietnam approves Cuban vaccine as Delta cases continue to rise
Vietnam’s health ministry has approved Cuba’s Abdala Covid-19 vaccine, the government said at the weekend, as Delta-driven cases continue to rise in the south-east Asian country.
Abdala is the eighth Covid-19 vaccine to be approved for use in Vietnam, which has one of the lowest jab rates in the region, with only 6.3 per cent of its 96m people being fully vaccinated.
“The ministry of health has approved Abdala vaccine, based on the country’s urgent need for its Covid-19 fight,” the government said in a statement released just hours after President Nguyen Xuan Phuc left the capital Hanoi for an official visit to Havana.
Vietnam’s health ministry said last month that Cuba would supply large quantities of Abdala vaccines to the country and transfer the production technology by the end of the year. Cuba has claimed its three-shot vaccine solution to be 92.28 per cent effective.
Vietnam has reported close to 678,000 Covid-19 cases and over 16,000 virus-related deaths since the start of the pandemic.
Costa Rica warns of unrest in developing world without more Covid aid
Developing countries are at risk of sliding into instability under the weight of the pandemic without more financial support from richer nations and the IMF, Costa Rica’s president has warned. Costa Rica, which has a population of just over 5m people, is known for eco-tourism. It has suffered an increase in its own debt-to-GDP ratio in recent years.
President Carlos Alvarado said that lower income and higher social spending caused by the pandemic were squeezing governments in the developing world and pushing society to its limit.
“It’s put a lot of economies that were already indebted under a lot more pressure,” he told the Financial Times. “There’s also a lot of social demands, there’s a big risk of economic, political and social instability in developing economies.”
The UN has warned of a global debt sustainability crisis in the wake of the coronavirus pandemic, which pushed an estimated 100m more people into poverty in 2020, according to the World Bank. The IMF has offered new support by issuing special drawing rights or SDRs and debt service relief.
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Aircraft sales show signs of life after pandemic slump
The multibillion-pound business of buying and selling commercial aircraft was put on hold during the Covid-19 pandemic. But a rare public spat between Ryanair boss Michael O’Leary and Boeing over the Irish airline’s latest order of 737 Max 10 jets shows the high stakes game is sputtering back to life.
It is also a sign that the aircraft market is reviving as airlines return to the negotiating table to place orders for passenger jets in anticipation of the return of more passengers.
The pandemic has hit aviation hard, with Boeing saying the virus has cost the industry two years of growth. The breakdown of talks with O’Leary over a new batch of Max 10 jets shows a more confident approach from the US manufacturer, according to industry watchers.
“It is good for the industry that Boeing is showing some price discipline. The Max is a good aircraft. They shouldn’t be pressured by O’Leary into giving it away,” John Leahy, former commercial director at Airbus, told the Financial Times.
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What China developer Evergrande’s debt crunch means for U.S. investors: Ed Yardeni
A debt crunch involving China’s second largest properly developer has caught investors’ attention in the past week.
Evergrande, the Shenzhen-based company, is facing a default on its debt burden of roughly $300 billion. The crisis has echoes to the Lehman Brothers bankruptcy, which marked its 13-year anniversary last week, a development that at the time sent shockwaves through global markets.
Ed Yardeni, president of Yardeni Research, says it’s unlikely Evergrande will have a fallout quite as severe as the Lehman bankruptcy when the global economy and credit markets collapsed. Instead, he sees it as analogous to a different event a decade even earlier.
“If it’s similar to anything, it’s similar to Long-Term Capital Management, which is the calamity that occurred in 1998 but that was dealt with very quickly by the Federal Reserve and the major banks and it didn’t have any global implications,” Yardeni told CNBC’s “Trading Nation” on Friday.
Like with hedge fund Long-Term Capital Management, Yardeni sees government intervention in Evergrande preventing any collapse and contagion.
“The reality is it is too big to fail, and I think the Chinese government is going to intervene big time. I don’t think they’re going to save management… but it will be restructured and in a way that won’t harm the economy too much over there and won’t affect the global economy or financial markets the way Lehman did,” said Yardeni.
Even if a crisis tied to Evergrande is avoided, Yardeni does not see Chinese markets rebounding anytime soon. He says Evergrande is just one reason for investors to avoid the region.
“If you’re invested in Chinese stocks, there have been lots of reasons to get out, quite honestly,” said Yardeni. “The Chinese Communist Party which runs the government over there has been meddling, intervening in the markets, interrupting corporate governance, telling companies how they should manage their businesses. And so I think it’s a good opportunity here just to lie low. I would not be buying on the dips in China.”
Beijing has tightened regulations on industries such as technology and private education in recent months. That increased scrutiny has taken their markets and U.S.-listed Chinese stocks lower.
Continued uncertainty in China could be a benefit for U.S. markets, he adds.
“There are lots of global investors that want to be invested in areas where they feel comfortable, where there’s corporate governance rules, where there’s contract laws that are obeyed. I think a lot of money that has gone global and might have been tempted to go to China may very well come to the U.S.,” he said.
Yardeni has a 5,000 price target on the S&P 500 for the end of 2022, though he says the benchmark index could reach that level sooner. The S&P 500 closed Friday at 4,433.
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