China In-Focus — Asian giant's April forex reserves fall; US, Chinese regulators in talks for audit deal; Tesla targets pre-lockdown output in Shanghai

China In-Focus — Asian giant's April forex reserves fall; US, Chinese regulators in talks for audit deal; Tesla targets pre-lockdown output in Shanghai
China’s foreign exchange reserves fell by $68 billion in April. (Shutterstock)
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Updated 08 May 2022

China In-Focus — Asian giant's April forex reserves fall; US, Chinese regulators in talks for audit deal; Tesla targets pre-lockdown output in Shanghai

China In-Focus — Asian giant's April forex reserves fall; US, Chinese regulators in talks for audit deal; Tesla targets pre-lockdown output in Shanghai

BEIJING: China’s foreign exchange reserves fell by $68 billion in April, the biggest drop in five and half years, official data showed on Saturday, as the dollar climbed while foreign investors dumped Chinese stocks amid worries about the slowing economy.

The country’s foreign exchange reserves — the world’s largest — fell to $3.12 trillion last month from $3.18 trillion in March, the biggest monthly drop since November 2016.

Analysts polled by Reuters had expected the reserves to fall to $3.13 trillion in April.

The State Administration of Foreign Exchange said in a statement that the 2 percent drop in April reserves from March mainly reflected the valuation effect as the dollar gained against other major currencies and changes in global asset prices.

“In April 2022, China’s cross-border funds generally continued the trend of net inflows, and the supply and demand in the domestic foreign exchange market remained basically balanced,” the SAFE said.

The yuan fell 4 percent against the dollar in April, while the dollar rose 5 percent in April against a basket of other major currencies.

Overseas investors extended their selling of Chinese shares into April on mounting worries about the impact of prolonged COVID-19 lockdowns and the fallout of the Ukraine-Russia war. 

China’s foreign exchange reserves dropped $130 billion in the first four months, the official data showed. They had climbed to $33.6 billion in 2021.

China held 62.64 million fine troy ounces of gold at the end of April, unchanged a month earlier. The value of China’s gold reserves fell to $119.73 billion at the end of April from $121.66 billion at the end of March.

US, Chinese regulators in talks for audit deal




The standoff, if not resolved, could see Chinese firms kicked off New York bourses. (Shutterstock)

The US and Chinese regulatory officials are in talks to settle a long-running dispute over the auditing compliance of US-listed Chinese firms, three people briefed on the matter told Reuters.

The standoff, if not resolved, could see Chinese firms kicked off New York bourses.

The US Public Company Accounting Oversight Board, also known as PCAOB denied an earlier Reuters report that said a team from the agency had arrived in Beijing for talks.

This week the US Securities and Exchange Commission added over 80 firms, including e-commerce giant JD.com and China Petroleum & Chemical Corp. to the list of companies facing possible expulsion.

The talks between officials from the PCAOB and their counterparts at the China Securities Regulatory Commission can be described as “late-stage” after China made concessions in recent months, the people said.

But a PCAOB spokesperson said, “Recent reports that PCAOB officials are currently in China, or that PCAOB officials were in China earlier this year to conduct face-to-face negotiations, are untrue. The PCAOB has not sent any personnel to China since 2017.”

He said the board continues to engage with the Chinese authorities but “speculation about a final agreement remains premature.” As a result, the PCAOB is planning “for various scenarios.”

Authorities in China have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.

But in a key concession, Chinese regulators last month proposed revising confidentiality rules for offshore listings and scrapping requirements that on-site inspections of overseas-listed Chinese firms be conducted mainly by domestic regulators. 

Sources told Reuters last month that a preliminary framework for audit supervision cooperation between the two countries has been formed. 

The spat over audit oversight of New York-listed Chinese companies, simmering for more than a decade, came to a head in December when the SEC finalized rules to delist Chinese companies under the Holding Foreign Companies Accountable Act. It said there were 273 companies at risk but did not name them.

As of Friday, the PCAOB has identified 128 Chinese firms as at risk of being delisted.

The issue has been a major factor dragging on American depositary receipts issued by Chinese firms, with the Nasdaq Golden Dragon China Index tumbling 57 percent over the past 12 months.

Goldman Sachs estimated in March that US institutional investors held around $200 billion worth of Chinese ADRs.

Tesla targets pre-lockdown output in Shanghai by mid-May




This will bring weekly output to 16,900 vehicles based on Tesla’s established work week at the facility. (Shutterstock)

Tesla Inc. is aiming to increase output at its Shanghai plant to 2,600 cars a day from May 16, it said in an internal memo seen by Reuters, as it seeks to restore production to levels before the city was locked down to control COVID-19.

Tesla, which is now only running one shift, plans to add more at its Shanghai plant from May 16 to achieve the goal, the memo reviewed by Reuters showed.

That would bring weekly output to 16,900 vehicles based on Tesla’s established work week at the facility, according to Reuters calculations.

It would also represent a return to the production levels at the plant before Shanghai’s lockdown in late March forced the company to suspend work there.

Tesla declined to provide immediate comment.

Before the lockdown, Tesla had run three shifts at the Shanghai plant. The factory, which makes Tesla’s Model 3 and Model Y, reopened on April 19 after a 22-day closure, its longest since the site opened in late 2019.

The Shanghai lockdown has also been challenging for Tesla and other manufacturers because of the complication of getting parts from suppliers.

(With inputs from Reuters)


Techies in Dubai boast top-dollar salaries 

Techies in Dubai boast top-dollar salaries 
Updated 06 July 2022

Techies in Dubai boast top-dollar salaries 

Techies in Dubai boast top-dollar salaries 
  • Software engineers in Dubai earn nearly 30% more than workers in London, Amsterdam and Berlin

LONDON: Software engineers in Dubai with at least three years of experience earn the third highest salaries in the world compared to other global technology hubs, according to global consulting firm Mercer.

When compared to other global tech hubs such as London, Amsterdam, and Berlin, software engineers in Dubai earn nearly 30 percent more.

This reaffirms the UAE’s ambition to attract top digital talent and become a global tech talent magnet that fuels the digital economy’s growth.

Mercer’s Cost of Living 2022 survey also revealed that while Dubai ranked as the 31st most expensive city to live and work in for expatriates this year, its cost of living remains significantly lower than most tech hubs, including London (seventh), Singapore (eighth), New York (11th), San Francisco (19th), and Amsterdam (25th).

Almost 60 percent of UAE employers provide flexible working, reducing employees’ transportation costs. Dubai is also less expensive in terms of housing and rental costs, which accounts for a significant portion of the cost of living in a city.

“Dubai’s status as a global business hub, coupled with its income tax-free environment, world-class infrastructure, safety, and high quality of life make the emirate a very attractive market for talent,” said Vladimir Vrzhovski, workforce mobility leader at Mercer Middle East.

He added: “The demand for tech talent, in particular, will continue to grow in the UAE given the nation’s drive to be a global capital of the digital economy. Above all, a key incentive for tech talent is the opportunity for a significant uplift in salary when compared to other tech hubs, where the cost of living is higher in terms of transportation and housing.

“While inflation and rising fuel costs are a pressure on the cost of living around the globe, Dubai is building a nurturing and highly competitive tech ecosystem that pays highly competitive salaries — creating an environment that promises to attract and retain the best talent globally.

“Over the years, the UAE has also implemented several initiatives that make it easier for talent to live, work and stay in the country. The launch of the Golden Visa program in addition to Dubai’s recently announced Talent Pass aims to attract global professionals in the fields of technology amongst other key areas.

“National initiatives, such as the National Program for Coders launched last year, is designed to attract 100,000 coders from around the globe and set up 1,000 digital companies by 2026.”


Ben & Jerry’s sues parent Unilever to block sale of Israeli business

Ben & Jerry’s sues parent Unilever to block sale of Israeli business
Updated 06 July 2022

Ben & Jerry’s sues parent Unilever to block sale of Israeli business

Ben & Jerry’s sues parent Unilever to block sale of Israeli business

NEW YORK: Ben & Jerry’s on Tuesday sued its parent Unilever Plc to block the sale of its Israeli business to a local licensee, saying it was inconsistent with its values to sell its ice cream in the occupied West Bank, according to Reuters.

The complaint filed in the US District Court in Manhattan said the sale announced on June 29 threatened to undermine the integrity of the Ben & Jerry’s brand, which Ben & Jerry’s board retained independence to protect when Unilever acquired the company in 2000.

An injunction against transferring the business and related trademarks to Avi Zinger, who runs American Quality Products Ltd, was essential to “protect the brand and social integrity Ben & Jerry’s has spent decades building,” the complaint said.

Ben & Jerry’s said its board voted 5-2 to sue, with the two Unilever appointees dissenting.

Unilever, in a statement, said it does not discuss pending litigation, but that it had the right to sell the disputed business and the transaction had already closed.

“It’s a done deal,” Zinger’s lawyer Alyza Lewin said in a separate statement. The sale resolved Zinger’s own lawsuit in March against Ben & Jerry’s for refusing to renew his license.

The dispute highlights challenges facing consumer brands taking a stand on Israeli settlements in the occupied West Bank.

Most countries consider the settlements illegal. In April 2019, Airbnb Inc. reversed a five-month-old decision to stop listing properties in the settlements.

Last July, Ben & Jerry’s said it would end sales in the occupied West Bank and parts of East Jerusalem, and sever its three-decade relationship with Zinger.

Israel condemned the move, and some Jewish groups accused Ben & Jerry’s of anti-Semitism. Some investors, including at least seven US states, divested their Unilever holdings.

Unilever has more than 400 brands including Dove soap, Hellmann’s mayonnaise, Knorr soup and Vaseline skin lotion.

Ben & Jerry’s was founded in a renovated gas station in 1978 by Ben Cohen and Jerry Greenfield.

No longer involved in Ben & Jerry’s operations, they wrote in the New York Times last July that they supported Israel but opposed its “illegal occupation” of the West Bank. 

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Kuwait Lender KFH to acquire Bahrain's Ahli United for $12bn

Kuwait Lender KFH to acquire Bahrain's Ahli United for $12bn
Updated 06 July 2022

Kuwait Lender KFH to acquire Bahrain's Ahli United for $12bn

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RIYADH: Kuwait Finance House has agreed to fully acquire Ahli United Bank for $11.6 billion.

KFH plans to offer one share per 2.695 shares of Ahli United, implying a $1.04 offer price, according to Bloomberg.

Through the merger, the Gulf will have its seventh-largest lender worth $115 billion, a rare cross-border acquisition.


Saudi developer Jabal Omar plans $1.4bn capital hike through debt conversion

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Updated 06 July 2022

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RIYADH: Saudi developer Jabal Omar Development Co. has received approval from the Capital Market Authority to increase its capital by SR5.3 billion ($1.4 billion).

The listed company will finance the capital plan by converting debt, according to a statement by CMA.

The move is subject to approval from the company’s shareholders as well as completing the required regulatory procedures.

The Makkah-based developer’s losses narrowed by 47 percent and revenues surged 408 percent in the first quarter of 2022, due to improved post-pandemic business operations.


Microsoft's $69bn Activision deal under investigation by UK regulator

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Updated 06 July 2022

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RIYADH: Microsoft Corp.’s $68.7-billion planned purchase of American video game company Activision Blizzard Inc is under investigation by the UK's antitrust watchdog, Bloomberg reported.

The Competition and Markets Authority will decide by Sept. 1 whether the agreement between the US tech giant and the maker of the Call of Duty game series limits competition and increases prices.

The regulators will take notice of Microsoft's ownership of Activision to understand if the deal could limit rivals' access to the company's biggest games.

The US Federal Trade Commission is also reviewing the deal, chair Lina Khan told lawmakers in June.