David Fuller and Eoin Treacy's Comment of the Day
Category - General

    How China's New Carbon Market Will Work

    This article from Caixin may be of interest to subscribers. Here is a section:

    Before the launch of the national ETS, China had already established regional ETSs in eight provinces and cities, including Beijing, Shanghai and Shenzhen. Seven of the regional ETSs started trading in 2013, while the one in the eastern province of Fujian kicked off three years later. These regions allow companies to buy carbon credits equivalent to as much as 5% to 10% of their original quotas or actual emissions. The average price of carbon credits traded on the regional ETSs stands at 50 yuan ($7.73) per ton, analysts at Guotai Junan Securities Co. Ltd. estimate, far lower than the 250 yuan equivalent per ton in the EU ETS in 2020.


    Initially, China’s national ETS will only cover the electricity generation sector. A batch of 2,225 electricity companies (link in Chinese) will participate in the trading.

    In addition to electricity, the trading system will eventually cover seven other industries (link in Chinese), including petrochemical, chemical, construction materials, steel, nonferrous metal, papermaking and aviation. Companies that emit greenhouse gases equivalent to more than 26,000 tons of carbon dioxide a year will be included in the system.

    It is expected that financial institutions will indirectly engage in the carbon market, as central bank Governor Yi Gang in April said that “the carbon market should be a financial market in nature and allow carbon financial derivatives trading.”

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    World Hunger Hit 15-Year High as Virus Stifled Food Access

    This article from Bloomberg may be of interest to subscribers. Here is a section:


    “This is a wake-up call to the entire world,” David Beasley, executive director of the World Food Programme, said on a webcast on Monday. “We’re heading in the wrong direction. To think that we’re going to end hunger by 2030, that’s not even possible given the direction, trajectory we’re on now.”

    Between 720 million and 811 million people were undernourished last year, according to the UN, which used a mid-range of 768 million due to uncertainty of the pandemic’s impact. Most of those were in Asia. Roughly a third of all people lacked access to adequate food, a figure that rose by 320 million from a year earlier, about as much as in the previous five years combined.

    The report -- the first global assessment of food insecurity in the wake of the Covid-19 crisis -- was jointly produced by agencies including the Food and Agriculture Organization, the WFP, Unicef and World Health Organization.

    “Famine should be consigned to history, yet in multiple countries they loom again,” Unicef Executive Director Henrietta Fore said. “Millions of children are still struggling to access the nutritious and safe diets they need to grow, to learn, to develop and reach their full potential.”

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    Email of the day on Seadrill

    Thanks for bringing Seadrill to our attention back in April. Given the recent price performance what are your thoughts from a chart and fundamentals perspective? Many thanks and best wishes, Nav

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    Moderna's Next Act Is Using mRNA vs. Flu, Zika, HIV and Cancer

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The speed with which Moderna and its primary mRNA competitor, a partnership between Pfizer Inc. and BioNTech SE, devised their shots has made a major contribution to the fight to end the pandemic. With strong efficacy, steady supply, and no show-stopping safety scares (officials are carefully monitoring rare heart inflammation cases in teenagers and young adults), mRNA shots have become the vaccines of choice, at least in countries that can get them.

    But for Moderna Chief Executive Officer Stéphane Bancel, the Covid vaccine is just the beginning. He’s long promised that if mRNA works, it will lead to a giant new industry capable of treating most everything from heart disease to cancer to rare genetic conditions. Moderna has drugs in trials for all three of these categories, and Bancel says his company can also become a dominant vaccine maker, developing shots for emerging viruses such as Nipah and Zika, as well as better-known, hard-to-target pathogens such as HIV.

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    U.S. Consumer Prices Jump Most Since 2008, Topping All Estimates

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Shelter costs, which are seen as a more structural component of the CPI and make up a third of the overall index, rose 0.5% last month, the most since October 2005. The gain was driven by a 7.9% jump in hotel stays.

    Wage growth rose steadily through the second quarter, but higher consumer prices are taking a toll. Inflation-adjusted average hourly earnings fell 1.7% in June after slumping 2.9% a month earlier, separate data showed Thursday.

    Figures out Tuesday from the National Federation of Independent Business showed 47% of small-business owners, the largest share since 1981, reported higher selling prices in June.

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    Chinese Tech Stocks Jump After Tencent Gets Deal Approval

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    The gauge of the city’s tech stocks had fallen as much as 10% this month after China vowed to increase scrutiny over data collection and overseas listings.

    “Regulators are still considering each deal case by case and not rejecting all of them. The sentiment is not that negative now,” said Castor Pang, head of research at Core Pacific Yamaichi. “Any good news will trigger buying on dips in the sector.”

    Elsewhere, internet giant Meituan rose 3.4% after Caijing reported Monday that the company re-launched a ride-hailing app after industry leader Didi Chuxing was barred from offering new downloads. Short-video streaming platform Kuaishou Technology jumped 5.7% and Alibaba Group Holding Ltd. gained 4%.

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    Rioters Undeterred by Army Wreak Havoc in South Africa

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    “Zuma’s imprisonment was the spark that ignited the protests, but underlying issues such as rampant unemployment, widespread inequality and discontent with Covid-19 related restrictions are the powder keg,” Montana said.

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    Branson's Space Jaunt Worth $841 Million for Virgin Galactic

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The suborbital journey kicks off a landmark month for the future of space tourism, with Branson demonstrating Virgin Galactic’s capabilities nine days before Amazon.com Inc. founder Jeff Bezos plans to fly on a rocket made by Blue Origin, his space venture. Both companies envision businesses catering to wealthy tourists willing to pay top dollar for a short period of weightlessness and an unforgettable view of the Earth and heavens.

    Virgin Galactic’s test flight demonstrated that such trips -- once the stuff of science fiction -- are becoming increasingly realistic.

    While mostly accessible only to a tiny number of super- wealthy customers, they would add a new dimension to a burgeoning industry of private-sector space companies with plans for voyages to the International Space Station and new human outposts.

    Branson and his fellow crew members experienced a few minutes of weightlessness as the Unity reached its peak altitude.

    “So I looked out the window and the view is just stunning,” operations engineer Colin Bennett said afterward. “It’s very Zen; it’s very kind of peaceful up there as well.” Branson, who founded Virgin Galactic in 2004, said the memories of seeing the Earth from space will stay with him. “I’m never going to be able to do it justice,” he said. “It’s indescribably beautiful.”

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