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The World
One of Washington’s top business groups, the Business Roundtable, condemned those perpetuating “the falsehood of an illegitimate 2020 presidential election” as the anniversary of last year’s violence at the U.S. Capitol prompted fresh scrutiny of corporate America’s response — and activist pressure to back pro-democracy rhetoric with louder support for voting rights and changes to political spending. Some alliances of smaller companies echoed that view. Business for America, whose members include PayPal and Warby Parker, said it was not enough for employers to issue statements and encourage staff to vote. (Financial Times)
The U.S. and Japan are responding to China’s growing hypersonic weapons and space capabilities. The two nations will collaborate on R&D of advanced space capabilities, US Secretary of State Antony Blinken said after a ‘2+2’ meeting, as Washington and Tokyo also will sign a new accord upping Japan’s financial contribution to stationing of US troops on its soil as both seek to counter an assertive China. (South China Morning Post)
Hong Kong banks are reducing the number of people at the workplace amid a spike in COVID-19 cases. HSBC, one of the biggest Hong Kong employers with 30,000 employees, will maintain a maximum of 50% staff occupancy in its offices. Bank of America encouraged its staff to work from home from Jan. 7-24. UBS is splitting its 2,500 Hong Kong workforce into two groups, with each returning to the workplace on alternate weeks. (Reuters)
Moderna CEO Stephane Bancel said the efficacy of boosters against Covid will likely decline over time, and people may need a fourth shot in Fall ‘22. Bancel said people who received their boosters last fall will likely have enough protection to get them through the winter. (CNBC)
Japan is set to declare a quasi-state of emergency in three prefectures, including Okinawa, as the omicron variant advances. (Nikkei Asia Review)
Omicron’s spread means more food outages at U.S. grocery stores: From farm to fork, every aspect of the food supply chain is under increasing pressure. (Bloomberg)
Royal Caribbean and Norwegian Cruise Line canceled sailings, dampening the nascent recovery of the pandemic-ravaged cruise industry. (Reuters)
More than 2,100 flights were canceled yesterday after two weeks of disruption, as carriers continued efforts to restore flight networks hobbled by bad weather and staffing shortages. (Washington Post)
North Korea said it would not participate in the Beijing Winter Olympics because of the pandemic and moves by “hostile forces.” (New York Times)
The Lira slide is pushing young Turks to virtual working overseas: As global companies and their employees have adapted to the pandemic, remote working has offered exciting opportunities for outward-looking young people — but is causing problems for Turkish businesses. In particular, Turkey’s local businesses complain of a virtual brain drain in Turkey’s tech and computing sectors that has been accelerated by the coronavirus pandemic and compounded by Turkey’s economic woes. President Recep Tayyip Erdogan, a life-long opponent of high interest rates, ordered the central bank to repeatedly lower the cost of borrowing despite soaring inflation. (Financial Times)
Fresh violence erupted in Kazakhstan's main city of Almaty as Russia sent in paratroopers to put down a countrywide uprising in one of Moscow's closest former Soviet allies. Police in Almaty said they had killed dozens of rioters overnight into the early hours of Thursday morning. Authorities said at least 18 members of the security forces had died, including two found decapitated. More than 2,000 people were arrested. (Reuters)
Kazakhstan’s deadly protests hit bitcoin, as the world’s second-biggest mining hub shuts down. The second-biggest country for bitcoin mining lost its internet access, taking as much as 15% of the network offline. Bitcoin fell below $42,000 for the first time since September, falling over 8% at one point. (CNBC)
Economy
U.S. mortgage rates this week rose to their highest levels since May 2020, driving up the costs associated with home buying at a time when home-sales prices are already near record highs. The average rate for a 30-year fixed-rate loan was 3.22%, up from 3.11% last week. A year ago, mortgage rates stood at 2.65%. (Wall Street Journal)
The post-pandemic office should be a clubhouse: If the primary purpose of an office today is no longer to get actual work done, then perhaps it’s better conceived as a place for connection and community. Do we still need desks and cubicles? In the post-pandemic economy, physical space where workers gather should have a much different feel and purpose. In an office functioning as a clubhouse, few people will be at their desks. Instead, they’ll be talking and mingling—sometimes in meetings but more often in informal conversations that might resemble what we think of as “happy hour.” (Wall Street Journal)
UK private equity market leads the way in Europe: Europe’s private equity industry has continued to rebound following disruption caused by the pandemic, completing 741 buyouts cumulatively valued at EUR141.5 billion in 2021. Deal value reached its highest level since 2007, reaching levels not seen since before the global financial crisis. At GBP45.8 billion, the cumulative value of the 235 buyouts of UK-based companies last year represented the biggest headline figure in the 35-year history of CMBOR, surpassed on an inflation-adjusted basis only by the GBP44.1 billion recorded in 2007. (Private Equity Wire)
M&A Outlook 2022: ESG will stay front and center. (Mergers & Acquisitions)
Cryptocurrency-based crime hit a new all-time high in 2021, with illicit addresses receiving $14 billion over the course of the year, rising 79% from $7.8 billion in 2020. However, the boom in the size of the digital assets market is significantly outpacing the growth in illicit activity: Total cryptocurrency transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. (Chainanalysis)
Technology
Apple CEO Tim Cook received almost $100 million in compensation in 2021, a year in which he completed 10 years as the company’s CEO and led the iPhone maker to record profits during a global pandemic. His $98.7 million pay package rose more than 500% compared with the previous year’s $14.8 million. (Wall Street Journal)
The New York Times Co agreed to acquire subscription sports site The Athletic in a deal valued at around $550 million. The deal is a major acquisition for the Times, giving it a new pocket of subscription customers, which has set an ambitious goal of reaching 10 million subscribers by 2025. As of Sept 30, the Times reported 8.3 million digital and print subscribers. The big question is how the Times can integrate The Athletic without squeezing its bottom line too much. The Athletic has said it doesn’t expect to be profitable until 2023, thanks to its hefty staff. (The Information)
CES Roundup: Social media, podcasts & TVs:
LinkedIn is launching interactive, Clubhouse-style audio events this month in beta; a video version will come this spring. (TechCrunch)
Spotify is introducing a new ad format aimed at podcasters which it’s calling “Call-to-Action Cards” — or CTA cards, for short. The feature will display a visual ad in the Spotify app when the audio ad begins to play. The cards can be customized by advertisers with their own images, text and other clickable buttons that direct listeners to “shop now” or take some other action the advertiser is hoping to encourage. (TechCrunch)
Twitter launched a new feature in its iOS app for a small group of users. With this option, it’s now possible to retweet someone’s post and add your own video reaction using your camera. (9to5Mac)
TikTok has been taking its first steps to break onto the TV screen, launching and integrating a new app called TikTok TV. Now TikTok has inked a partnership with Atmosphere, the startup that provides licensed and curated streamed video content for commercial venues like Westin, Taco Bell and Texas Roadhouse, as well as doctors’ offices, gyms and other venues where people spend dwelling time. Atmosphere develop a new channel dedicated to curated TikTok videos — the first time that TikTok content is being used for an out-of-home video service. (TechCrunch)
Samsung’s TV R&D team seemingly never runs out of ideas: After giving the world a TV the size of a wall, a TV that looked like a giant phone and a TV that doubles as art, the company debuted a TV that’s capable of turning anything and everything into a screen. The new Samsung Freestyle is a portable projector capable of projecting video from 30 inches to 100 inches. It offers access to the very same UI and apps as any of the company’s other 2022 smart TVs, but that’s pretty much where the similarities to a traditional TV end. (Protocol)
The South Korean government moved to block the release of new play-to-earn (P2E) games and requested that existing ones be removed from Google Play and Apple’s App Store. P2E gaming has become popular in the cryptocurrency industry. Gamers typically must first purchase game pieces as nonfungible tokens (NFT) in order to play the game and receive in-game rewards. However, gaming prizes over a few dollars are banned in South Korea. (Cointelegraph)
Weekend Reading & Watching
Top themes to watch in global banking for 2022: Risk and uncertainty remain heightened. 1. Although liquidity conditions will remain loose by historical standards, rising inflation in many emerging markets and less-expansive monetary policy in advanced economies will raise funding costs. 2. Trends in lending rates will vary, and in many cases be based on regional factors. 3. Sovereign exposures are likely to continue growing in emerging markets, increasing bank-sovereign linkages. 4. Corporate debt is likely to remain a threat to asset quality, but recent improvements in corporate gearing are encouraging ahead of broader interest-rate increases. 5. Non-performing loans could edge up but an NPL tsunami is unlikely. 6. Broad-based support measures will be replaced with targeted support for priority sectors, particularly micro, small, and medium-sized enterprise (MSME) loans. 7. Profitability will continue improving, but gradually. 8. If a new shock, epidemiological or other, does occur, policymakers in emerging markets will respond, but measures will be less robust. 9. Expansion of sustainable finance products and further refinement of "green" policies for the financial sector will be a growing policy priority. 10. Consolidation is likely to continue and could accelerate in key economies. (IHS Markit)
What’s next for M&A? The record levels of M&A activity in 2021 show no signs of dropping even in the face of rising inflation and economic uncertainty. Mark Sorrell and Stephan Feldgoise, co-heads of global mergers and acquisitions in Goldman Sachs’ Investment Banking Division, join host Allison Nathan to discuss what’s driving the surge in deal-making and the outlook ahead. “It's been a remarkable year,” Sorrell says. “We really have had a year of real consistency and real momentum—and we see that continuing.” From the role of private equity and low interest rates, to the impact of activist investing and technological and digital advancement, Sorrell and Feldgoise dig into the main causes of the M&A boom. Even in light of economic concerns and a resurgence in COVID-19 cases, Sorrell says that boards are pushing forward with strategic transformation. That’s because, Feldgoise argues, they’re focusing on the long-term: “Boards are really looking through these issues as we have looked through COVID in its prior waves, as we have looked through global instability to say, ‘What is my long-term strategic vision?...What do I need to do to be the winner in 5, 10, 20, 50 years?’” (Goldman Sachs)
Smart Links
Samsung says Q4 operating profit likely up 52.5% amid chip demand. (Nikkei Asia Review)
Canada posts biggest trade surplus for 13 years. (Reuters)
Bank of America: Coinbase revenue diversification to accelerate in 2022 and beyond. (Blockworks)
The worst technology of 2021. (MIT Technology Review)
MIT’s top research stories of 2021. (MIT News)
Japan misses foreign talent as companies seek strong linguists. (Nikkei Asia Review)
The world’s largest crypto exchange Binance is trying to woo France. (CNBC)
PayPal eyes Japan acquisitions push to crack Asia market. (Nikkei Asia Review)