Tag Archives: spooks

Adani’s market losses top $100 billion as shelved share sale spooks investors

NEW DELHI/MUMBAI, Feb 2 (Reuters) – India’s Adani group shares sank on Thursday after it abandoned its flagship company’s $2.5 billion stock offering, swelling the conglomerate’s market losses to more than $100 billion and sparking worries about the potential systemic impact.

The withdrawal of Adani Enterprises’ (ADEL.NS) share sale caps a dramatic setback for Gautam Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but dwindled over the past one week after a U.S.-based short-seller published a critical research report.

The events are an embarrassing turn for Adani who has forged partnerships with foreign giants such as France’s TotalEnergies (TTEF.PA) and investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion of businesses that stretch from ports and mining to cement and power.

Adani late on Wednesday called off the share sale as a stocks rout sparked by short-seller Hindenburg’s criticisms intensified, despite the offer being fully subscribed on Tuesday.

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Adani Enterprises plunged nearly 20% on Thursday, trading at its lowest since March 2022. Other group companies were also under pressure – Adani Ports and Special Economic Zone (APSE.NS) was down 5%, while Adani Total Gas (ADAG.NS), Adani Green Energy (ADNA.NS) and Adani Transmission (ADAI.NS) lost 10% each.

Since Hindenburg’s report was released on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises – described as an incubator of Adani’s businesses – alone has lost $24 billion in market capitalisation.

Adani, 60, is also no longer Asia’s richest person, having slid in the rankings of the world’s wealthiest to 16th, as per Forbes’ list, from third last week.

Reuters Graphics

“Unless Adani is able to regain the confidence of institutional investors, stocks will be in freefall,” said Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities.

Adani’s plummeting stocks have raised concerns about the likelihood of a wider impact on India’s financial system.

India’s central bank has asked local banks for details of their exposure to the Adani group of companies, government and banking sources told Reuters on Thursday. CLSA estimates that Indian banks were exposed to about 40% of the 2 trillion rupees ($24.53 billion) of Adani group’s debt in the fiscal year to March 2022. read more

Citigroup’s (C.N) wealth unit has stopped extending margin loans to its clients against securities of Adani group and decided to cut the loan-to-value ratio for credit against Adani securities to zero on Thursday, said a source.

“We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” Monica Hsiao, Chief Investment Officer of Hong Kong-based credit fund Triada Capital, said.

In New Delhi, opposition lawmakers submitted notices in the Indian parliament, demanding discussion on the U.S. short-seller’s report. The Congress party demanded setting up a Joint Parliamentary Committee or a Supreme Court monitored investigation into the matter.

ADANI VS HINDENBURG

Hindenburg’s report last week alleged an improper use of offshore tax havens and stock manipulation by the Adani group. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The Adani group has denied the accusations, saying the short-seller’s allegation of stock manipulation has “no basis” and stems from an ignorance of Indian law. The group has always made the necessary regulatory disclosures, it added.

Earlier this week, the Adani group said it had the complete support of investors, but investor confidence has tapered in recent days.

As shares plunged after the Hindenburg report publication, Adani managed to secure the share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. But on Wednesday, stocks plunged again.

Maybank Securities and Abu Dhabi Investment Authority, as well as India’s Life Insurance Corporation (LIFI.NS), had bid for the anchor portion of the issue. Those investments will now be returned by Adani.

In a late night announcement on Wednesday, the billionaire said he was withdrawing the share sale as the company’s “stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct.”

Early on Thursday, Adani said in a video address the “interest of my investors is paramount and everything is secondary. Hence, to insulate the investors from potential losses we have withdrawn” the share sale.

Reporting by Chris Thomas, Nallur Sethuraman, Tanvi Madan, Ira Dugal, Aftab Ahmed, Sumeet Chatterjee, Anshuman Daga, Summer Zhen; Writing by Aditya Kalra; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.

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Wall St slides as services data spooks investors about Fed rate hikes

  • U.S. service sector activity picks up in November
  • Tesla cuts output plan for Shanghai plant for December-sources
  • All S&P 500 sectors decline, with energy stocks hit hard
  • Indexes down: Dow 1.4%, S&P 1.79%, Nasdaq 1.93%

Dec 5 (Reuters) – U.S. markets ended Monday lower, as investors spooked by better-than-expected data from the services sector re-evaluated whether the Federal Reserve could hike interest rates for longer, while shares of Tesla slid on reports of a production cut in China.

The electric-vehicle maker (TSLA.O) slumped 6.4% on plans to cut December output of the Model Y at its Shanghai plant by more than 20% from the previous month.

This weighed on the Nasdaq, where Tesla was one of the biggest fallers, pulling the tech-heavy index to its second straight decline.

Broadly, indexes suffered as data showed U.S. services industry activity unexpectedly picked up in November, with employment rebounding, offering more evidence of underlying momentum in the economy.

The data came on the heels of a survey last week that showed stronger-than-expected job and wage growth in November, challenging hopes that the Fed might slow the pace and intensity of its rate hikes amid recent signs of ebbing inflation.

“Today is a bit of a response to Friday, because that jobs report, showing the economy was not slowing down that much, was contrary to the message which (Chair Jerome) Powell had delivered on Wednesday afternoon,” said Bernard Drury, CEO of Drury Capital, referencing comments made by the head of the Federal Reserve saying it was time to slow the pace of coming interest rate hikes.

“We’re back to inflation-fighting mode,” Drury added.

Investors see an 89% chance that the U.S. central bank will increase interest rates by 50 basis points next week to 4.25%-4.50%, with the rates peaking at 4.984% in May 2023.

The rate-setting Federal Open Market Committee meets on Dec. 13-14, the final meeting in a volatile year, which saw the central bank attempt to arrest a multi-decade rise in inflation with record interest rate hikes.

“Stock Exchange” is seen over an entrance to the New York Stock Exchange (NYSE) on Wall St. in New York City, U.S., March 29, 2021. REUTERS/Brendan McDermid/File Photo

The aggressive policy tightening has also triggered worries of an economic downturn, with JPMorgan, Citigroup and BlackRock among those that believe a recession is likely in 2023.

The Dow Jones Industrial Average (.DJI) fell 482.78 points, or 1.4%, to close at 33,947.1, the S&P 500 (.SPX) lost 72.86 points, or 1.79%, to end on 3,998.84, and the Nasdaq Composite (.IXIC) dropped 221.56 points, or 1.93%, to finish on 11,239.94.

In other economic data this week, investors will also monitor weekly jobless claims, producer prices and the University of Michigan’s consumer sentiment survey for more clues on the health of the U.S. economy.

Energy (.SPNY) was among the biggest S&P sectoral losers, dropping 2.9%. It was weighed by U.S. natural gas futures slumping more than 10% on Monday, as the outlook dimmed due to forecasts for milder weather and the delayed restart of the Freeport liquefied natural gas (LNG) export plant.

EQT Corp (EQT.N), one of the largest U.S. natural gas producers, was the steepest faller on the energy index, closing 7.2% lower.

Financials (.SPSY) were also hit hard, slipping 2.5%. Although bank profits are typically boosted by rising interest rates, they are also sensitive to concerns about bad loans or slowing loan growth amid an economic downturn.

Meanwhile, apparel maker VF Corp (VFC.N) dropped 11.2% – its largest one-day decline since March 2020 – after announcing the sudden retirement of CEO Steve Rendle. The firm, which owns names including outdoor wear brand The North Face and sneaker maker Vans, also cut its full-year sales and profit forecasts, blaming weaker-than-anticipated consumer demand.

Volume on U.S. exchanges was 10.78 billion shares, compared with the 11.04 billion average for the full session over the last 20 trading days.

The S&P 500 posted six new 52-week highs and four new lows; the Nasdaq Composite recorded 105 new highs and 133 new lows.

Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian and Devik Jain in Bengaluru and David French in New York; Editing by Anil D’Silva, Shounak Dasgupta and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

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The US Keeps Losing Wars Because Nobody Listens to the Spooks

In mid-May, CNN reported that the U.S. intelligence community was about to begin a sweeping review of the way it does business. What prompted the senior officials to action? The answer is simple enough: alarmingly inaccurate predictions as to the durability of the U.S. supported government of Afghanistan, which led to a decidedly ignominious withdrawal of our forces there, as well as overly pessimistic projections of Ukraine’s ability to stave off a major assault by the Russian army.

In view of the gravity of those mistakes, this seems a necessary and laudable undertaking. But… don’t expect the review and inevitable list of recommendations to improve the complicated process of gathering, analyzing, and consuming intelligence products by much. So say two of the leading scholars of intelligence in the English speaking world, Richard Betts and the late Robert Jervis, both of Columbia University’s political science department. After decades of studying the question, these men have concluded that invariably the recommendations of commissions designed to improve the caliber of the intelligence process after American wars tend to produce a new set of problems. As Betts put it in a widely quoted essay on this topic:

Curing some pathologies with organizational reforms often creates new pathologies or resurrects old ones; perfecting intelligence production does not necessarily lead to perfecting intelligence consumption; making warning systems more sensitive reduces sensitivity; the principles of optimal analytic procedure are in many ways incompatible with the imperatives of the decision-making process; avoiding intelligence failure requires the elimination of strategic preconceptions, but leaders cannot operate purposefully without some preconceptions. In devising measures to improve the intelligence process, policymakers are damned if they do and damned if they don’t.

Strategic intelligence, which Betts nicely defines with admirable economy as “the acquisition, analysis, and appreciation for relevant data,” is an extremely tricky business. It’s a unique amalgam of science and art, for it invariably involves political and psychological factors that are unique to a given conflict, and subject to abrupt change. And it must not be forgotten that senior intelligence officials have to sell their product well if it is to carry real weight with consumers, and that’s an entirely separate skill than producing good analysis.

Of course, serious students of recent American military history already have a basic understanding of what went wrong in assessments of the final phase of the Afghan tragedy, and in the first phase of the Russia-Ukraine War. Broadly speaking, the American intelligence community—the 18 agencies involved in its collection , along with the chief consumers, the White House and the National Security Council—have become overly dependent on quantitative analysis derived primarily from technical and electronic sources (signal intelligence), at the expense of both human intelligence (agents and sources on site in the arena of conflict) and expertise about the political dynamics and cultural histories of foreign societies.

What Clausewitz called moral, or spiritual, factors in his masterwork, On War—the will to fight among the soldiers of an army, the level of popular support for the government, the creativity and intuition of the political leaders of the adversaries—these are things that Clausewitz says “cannot be classified or counted. These have to be seen and felt.”

On paper, the American-trained Afghan Army of more than 300,000 troops, armed with far more sophisticated weapons than the Taliban, including drones and jet fighters, should have been able to hold off the final offensive Taliban onslaught well into 2022. That didn’t happen, because except for some 30,000 Afghan Special Forces, the rest of the “Army” had no interest in defending a government they and their families perceived to be corrupt, ineffectual, and in the pocket of the West. The majority of the Afghan Army units did not put up any resistance to the Taliban. They negotiated their own surrender or offered no resistance whatsoever.

As for the CIA projections that the Russians would break the back of Ukrainian resistance in a matter of days, it’s clear that analysts relied too much on their quantitatively-based assessment of Russian units and weapons systems, while their grasp of Clausewitz’s “moral factors” on both sides was shaky, at best.

One of the most significant failures in U.S. intelligence since Vietnam was the community’s inability to get a grip on the swirling political and military developments surrounding the Iranian Revolution of 1979. In February of that year, a bizarre collection of liberal reformers, leftists, and Muslim fundamentalist clerics overthrew the Shah of Iran, at the time the United States’ most powerful ally in the Middle East and a bulwark against Soviet expansionism. Led by a glowering, mysteriously charismatic cleric, Ayatollah Khomeini, the clerics deftly outmaneuvered and marginalized their revolutionary allies, and established the world’s first modern Islamic Republic.

The Carter administration’s responses to developments in Iran was halting, contradictory, and in the opinion of every serious historian of U.S. relations of whom I’m aware, depressingly inept.

Anti-Americanism had been the glue that kept together the disparate factions of resistance to the Shah’s rule. All the revolutionaries believed that the Shah, whose regime had become increasingly oppressive and corrupt, was in the pocket of Washington. Washington completely misread the dynamics of Iranian politics. Less than a year before the Shah was ousted, President Jimmy Carter had praised the Shah lavishly, calling his regime “an island of stability in a turbulent corner of the world.” The turbulence and rising tide of anti-Americanism in Iran had been in plain sight for several years, but the American intelligence community had developed no contacts among the myriad opposition groups and depended heavily on the Shah’s intelligence agencies. They told the Americans not what was really going on, but what the Shah wanted the Americans to know.

The Carter administration’s responses to fast-moving developments in Iran before and after that event, including the infamous hostage crisis of 444 days, was halting, contradictory, and in the opinion of every serious historian of U.S. relations of whom I’m aware, depressingly inept. Among the U.S. intelligence community, opines the noted military historian Lawrence Freedman in his history of U.S policy in the Middle East, A Choice of Enemies, “there was little grasp of the internal power struggles that were soon underway in Tehran. The diplomats and intelligence specialists sent to try to pick up the pieces of U.S.-Iranian relations lacked any expertise in the ideological wellsprings of the Islamic movement… Because clerics were not generally known for their lust for power or their appetite for government, the comforting assumption was that their role would soon be circumscribed by proper politicians.”

Professors Betts and Jervis join a wide consensus of scholars in believing that the most egregious intelligence failures in recent American history lie more with the top-level consumers of intelligence than with the CIA or the other myriad organizations involved in its collection and analysis. Here, the chief villains, writes Betts, are “wishful thinking, disregard of professional analysis, and the preconceptions of consumers.” There was nothing impulsive about the series of decisions that committed the United States to fighting a major war in Vietnam, and then prolonged America’s commitment to winning that conflict, even as signs of failure began to accumulate like buzzards around a corpse.

Between 1950 and the summer of 1965, three U.S. presidents opted to expand America’s involvement in Vietnam, despite that ancient Asian country’s seeming irrelevance to American vital interests, and the extraordinary level of dysfunction and corruption among America’s Vietnamese allies. Had President Johnson heeded the CIA’s pessimistic reports about American prospects in Vietnam, he never would have committed the country to a major ground war.

While the Johnson administration’s “best and the brightest” justified America’s growing military presence in Southeast Asia as a proper response to “wars of national liberation” sponsored by the Kremlin and Beijing, the CIA consistently pointed out that this was simply not the case. Hanoi ran its own show, deftly playing off one communist superpower against the other, and frequently decided to go its own way in the prosecution of the war effort against the Americans. The Agency’s doubts about the trajectory of American policy in the war were especially pronounced during late 1964 and early 1965, when the Johnson administration crossed the Rubicon by deploying American combat units to take the fight to the enemy in the South in March 1965. In effect, Johnson took over management of the war from the South Vietnamese and put it in the hands of his own generals.

Here is a brilliantly prescient assessment by CIA analyst Harold P. Ford, written in April 1965, just as LBJ was committing American Marines to offensive operations for the first time:

This troubled essay proceeds from a deep concern that we are becoming progressively divorced from reality in Vietnam, that we are proceeding with far more courage than wisdom—toward unknown ends… There seems to be a congenital American disposition to underestimate Asian enemies. We are doing so now. We cannot afford so precious a luxury. Earlier, dispassionate estimates, war games, and the like, told us that [the communists in Vietnam] would persist in the face of such pressures as we are now exerting on them. Yet we now seem to expect them to come running to the conference table, ready to talk… The chances are considerably better than even that the United States will in the end have to disengage from Vietnam, and do so considerably short of our present objectives.

Johnson ignored Mr. Ford’s sage advice. Within weeks of receiving this report, he approved General Westmoreland’s three-phase plan to win the war by 1968 through a strategy of attrition. Using as many as half a million U.S. troops, he would destroy the enemy’s main forces with massive “search and destroy” sweeps, using American mobility and firepower to vanquish an enemy without any air power whatsoever, and little motorized transport. Westmoreland would pay lip service to the CIA’s belief that the war had to be fought and won in the villages, but he’d fight and win in the traditional American way: conventional warfare, emphasizing air power and artillery, even though American military operations inflicted massive destruction on the people America had come to South Vietnam to “save.”

Why did America’s policy makers dismiss the astute counsel of the CIA’s wise men? The short answer is that they couldn’t break free of the domino theory—the false notion that if one state fell to communism, a string of others was sure to follow, and that this would lead to an irreversible loss of credibility and prestige for the United States… and for Lyndon Johnson and his senior advisers.


The disastrous decision by the Bush administration to invade Iraq grew out of a refusal to listen to good intelligence.

One of the most subtle and perceptive of the CIA analysts, George W. Allen, puts it well in his book, None So Blind: “America failed in Vietnam not because intelligence was lacking, or wrong, but because it was not in accord with what its consumers [i.e., Ike, JFK, LBJ, and their chief advisers] wanted to believe, and because its relevance was outweighed by other factors in the minds of those who made national security policy decisions.”

The disastrous decision by the Bush administration to invade Iraq grew out of a refusal to listen to good intelligence analysis as well. From the spring of 2002 forward, Bush joined with Cheney, Rumsfeld, and several other influential hawks in marginalizing a very substantial body of intelligence and analysis from within and outside the government indicating that an invasion of Iraq might well create more problems for the United States, Iraq, and the entire Middle East than it would solve.

This, at least, was the considered impression of no less a figure than Richard Dearlove, the head of Britain’s equivalent of the CIA, MI6, who engaged in top-secret discussions with the American president and his principal advisers in early July 2002.

A summary of Dearlove’s testimony about those meetings was recorded in a top-secret Downing Street memo: “There was a perceptible shift in attitude. Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy. The NSC had no patience with the UN route [of diplomatic pressure] . . . There was little discussion in Washington of the aftermath of military action.”

Indeed, the most reliable and objective accounts we have of the administration’s deliberations agree entirely with Dearlove’s assertions that the intelligence and facts were being manipulated to fit the administration’s policy inclinations, and that there was precious little discussion of the likely aftermath of cutting the head off the snake in Iraq.

In its secret discussions during the planning phase and in its public defense of the project, the administration aggressively “worst-cased” the threat posed by Saddam, and “best-cased” the results of removing him from power.

A four-star general who worked on the war plan for months told military writer Tom Ricks that he felt the president was shielded from the advice of those in the upper ranks of the military who thought the United States was heading into a quagmire both before and after the invasion commenced. That advice, he said, was “blown off by the president’s key advisers… the people around the president were so, frankly, intellectually arrogant. They knew that postwar Iraq would be easy and would be a catalyst for change in the Middle East. They were making simplistic assumptions and refused to put them to the test.”

The CIA and State Department analysts were far, far less sanguine about what might happen as a result of the invasion than Rumsfeld, Cheney, and the other hawks. According to Paul Pillar, the top CIA coordinator for intelligence on Iraq from 2001 to 2005, the professional intelligence community presented a picture of a political culture in Iraq that would not provide fertile ground for democracy and foretold a long, difficult, turbulent transition.

It projected that a Marshall Plan-type effort would be required to restore the Iraqi economy, despite Iraq’s abundant oil resources.

It forecast that in a deeply divided Iraqi society, with Sunnis resentful over their loss of their dominant position and Shiites seeking power commensurate with their majority status, there was a significant chance that the groups would engage in violent conflict unless and occupying power prevented it.

And it anticipated that a foreign occupying force would itself be the target of resentment and attacks—including by guerrilla warfare—unless it established security and put Iraq on the road to prosperity in the first few weeks or months after the fall of Saddam… War and occupation would boost political Islam and increase sympathy for terrorists’ objectives—and Iraq would become a magnet for extremists from elsewhere in the Middle East.

The policy implications of “the entire body of official intelligence analysis,” said Pillar, was to avoid war, or “if war was going to be launched, to prepare for a messy aftermath.”

Vietnam and Iraq, of course, were fundamentally irregular, or asymmetric conflicts. Far more than conventional conflicts, irregular wars are shaped more by politics and political organization among the people than by military operations. Since Vietnam, America’s senior foreign policy decision makers have a very unfortunate habit of forgetting this fundamental truth. They have been overly enamored by the power of the U.S. military machine, but obtuse in failing to recognize the limits of military power alone to shape politics in foreign societies.

This tendency goes far in explaining why the United States keeps losing wars.

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SHOP Stock Tumbles As Higher Spending On Fulfillment Network Spooks Investors

Shopify stock tumbled Wednesday amid December-quarter earnings, revenue and gross merchandise volume that topped consensus estimates. Management said marketing investments for SHOP stock would rise in 2022 to spur merchant customer growth, with capital spending jumping as well.




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The higher investments come as the coronavirus pandemic fades and e-commerce growth normalizes. Canada-based Shopify (SHOP) reported fourth-quarter earnings before the market open on Wednesday.

Shopify is building a U.S. distribution network to store and ship products for its merchant customers. On an earnings call with analysts, management outlined plans to increase investments in the Shopify Fulfillment Network. Shopify aims to provide two-day delivery in the U.S.

“Shopify expects capital expenditures related to the fulfillment network to ramp in 2022 and for there to be approximately $1 billion in capex in 2023 and 2024, specifically for key U.S. warehouse hubs,” said Stifel analysts Scott Devitt in a report. “The company will invest heavily in consolidating its fulfillment network into larger, more controlled facilities that will provide for better quality control and eventually operational savings.”

SHOP Stock: Tough Year-Over-Year Comparisons

Gross merchandise volume from merchant customers rose 31% to $54.1 billion vs. estimates of $53.03 billion.

Shopify stock tumbled 17.9% to 730.51 in afternoon trading on the stock market today.

“The big unknown here is Shopify Fulfillment Network,” said Evercore ISI analyst Mark Mahaney in a report. “Now more than ever, investors will have to trust that management is an efficient allocator of capital with the announced investment levels perhaps greater than investors had expected. In this market environment with investors favoring near-term profitability and cash flow we are not entirely surprised to see shares falling hard.”

For the quarter ending Dec. 31, Shopify earnings came in at $1.36 cents per share on an adjusted basis, down 14% from the year-earlier period. Revenue rose 41% to $1.38 billion, said the company. Revenue growth decelerated for the third straight quarter.

Analysts expected Shopify earnings of $1.30 a share on revenue of $1.34 billion. A year earlier, Shopify earned $1.58 per share on revenue of $978 million.

“Our initial impression is that the absolute results were solid considering the tough comparisons, but they fell short of buyside expectations,” said Jefferies analyst Samad Samana in a report. He added that gross profit margin of 50.8% fell shy of the street’s 52.8% estimate.

Heading into the Shopify earnings report, the e-commerce stock had retreated 35% in 2022.

In Q4, Shopify said merchant solutions revenue rose 47% to $1.03 billion. Subscription solutions revenue climbed 26% to $351.2 million. Analysts had projected merchant solutions revenue of $985 million and subscription solutions revenue of $357 million.

Shopify Stock: Management Provides General Revenue Outlook

For full-year 2022, Shopify said it expects “Year-over-year revenue growth to be lower in the first quarter of 2022 and highest in the fourth quarter of 2022.” “We do not expect the COVID-triggered acceleration of ecommerce in the first half of 2021 from lockdowns and government stimulus to repeat in the first half of 2022,” the company said.

In addition, Shopify said it expects “Merchant Solutions revenue growth to be more than twice the rate of subscription solutions revenue growth year-over-year, as merchants make greater use of our offerings, and as we expand existing products into new geographies and roll out newer features like Shopify Markets.”

Shopify said it plans higher sales and marketing investments as well as $200 million in capital spending in 2022.

In addition, Shopify had nearly $7.8 billion in cash on its balance sheet at the end of 2021.

Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping. Also, the e-commerce firm has stepped up business lending.

Also, the company had a Relative Strength Rating of 13 out of a possible 99, according to IBD Stock Checkup.

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines.

Follow Reinhardt Krause on Twitter @reinhardtk_tech   for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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India spooks Amazon by suspending 2019 Future Group deal, cites suppression of information

  • Amazon 2019 Future deal was at heart of ongoing legal disputes
  • India watchdog suspends deal, says Amazon suppressed info in 2019
  • Amazon should pay penalty of 2 billion rupees-watchdog
  • Suspension of deal latest legal twist in Future-Amazon saga

NEW DELHI, Dec 17 (Reuters) – India’s antitrust agency suspended Amazon.com’s (AMZN.O) 2019 deal with Future Group on Friday, potentially denting the U.S. e-commerce giant’s attempts to block the sale of Future’s retail assets to an Indian market leader.

The regulator ruled that the U.S. company had suppressed information while seeking regulatory approval on an investment into Indian retailer Future Group two years ago.

The ruling by the Competition Commission of India (CCI) could have far-reaching consequences for Amazon’s legal battles with now estranged partner Future.

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Amazon has for months successfully used the terms of its toehold $200 million investment in Future in 2019 to block the Indian retailer’s attempt to sell retail assets to Reliance Industries (RELI.NS) for $3.4 billion.

The regulator’s 57-page order said it considers “it necessary to examine the combination (deal) afresh,” adding its approval from 2019 “shall remain in abeyance” until then.

The CCI’s order said Amazon had “suppressed the actual scope” of the deal and had made “false and incorrect statements” while seeking approvals.

“The approval is suspended. This is absolutely unprecedented,” said Shweta Dubey, a partner at Indian law firm SD Partners, who was formerly a CCI official.

“The order seems to have found new power for CCI to keep the combination approval in abeyance,” she added.

With the 2019 Future deal’s antitrust approval now suspended, it could dent Amazon’s legal position and retail ambitions, while making it easier for Reliance – the country’s largest retailer – to acquire number two player Future, people familiar with the dispute said.

The CCI also imposed a penalty of around 2 billion rupees ($27 million) on the U.S. company, adding that Amazon will be given time to submit information again to seek approvals, the CCI added.

Future Group, however, is unlikely to cooperate with Amazon if it tries to reapply for antitrust clearance after the CCI’s decision, a source with direct knowledge told Reuters.

The Indian company is also set to take CCI’s Friday decision before various legal forums to argue that Amazon has no legal basis to challenge its asset sale, the source added.

Future and Reliance did not respond to a request for comment. Amazon said it is reviewing the order “and will decide on its next steps in due course.”

RETAIL BATTLE

The dispute over Future Retail, which has more than 1,500 supermarket and other outlets, is the most hostile flashpoint between Jeff Bezos’ Amazon and Reliance, run by India’s richest man Mukesh Ambani, as they try to gain the upper hand in winning retail consumers.

Hit by the COVID-19 pandemic, Future last year decided to sell its retail assets to Reliance for $3.4 billion, but Amazon managed to block the sale successfully through legal challenges.

Amazon cited breach of contracts by Future, arguing that terms agreed in 2019 to pay $200 million for a 49% stake in Future’s gift voucher unit prevented its parent, Future Group, from selling its Future Retail Ltd (FRTL.NS) business to certain rivals, including Reliance.

The CCI review of the deal started after Future, which denies any wrongdoing, complained, saying that Amazon was making contradictory statements before different legal forums about the intent of the 2019 transaction.

In June, the CCI told Amazon the U.S. firm in 2019 explained its interest in investing in Future’s gift voucher unit as one that would address gaps in India’s payments industry. But later, the CCI said, Amazon disclosed in other legal forums the foundation of its investment in the Future unit was to obtain special rights over the retail arm, Future Retail.

In the Friday order, CCI said there was “a deliberate design on the part of Amazon to suppress the actual scope and purpose of the” deal.

Ahead of CCI’s decision, Amazon denied concealing any information and warned the watchdog that Future’s bid to unwind the 2019 deal to allow Reliance to consolidate its position “will further restrict competition in the Indian retail market”.

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Reporting by Aditya Kalra in New Delhi;
Editing by Euan Rocha, Jane Merriman and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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Stocks slip, havens rally as new COVID-19 variant spooks investors

Passersby wearing protective masks are reflected on an electronic board displaying stock prices outside a brokerage amid the coronavirus disease (COVID-19) outbreak, in Tokyo, Japan, September 29, 2021. REUTERS/Issei Kato

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SYDNEY, Nov 26 (Reuters) – Asian stocks suffered their sharpest drop in two months on Friday after the detection of a new and possibly vaccine-resistant coronavirus variant sent investors scurrying toward the safety of bonds, the yen and the dollar.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1.3%, its sharpest drop since September. Casino and beverage shares sold off in Hong Kong, and travel stocks dropped in Sydney.

Japan’s Nikkei (.N225) skidded 2.5% and U.S. crude oil futures fell nearly 2% as well amid fresh demand fears.

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Scientists said the variant, detected in South Africa, may be able to evade immune responses. British authorities think it is the most significant variant to date, worry it could resist vaccines and have hurried to impose travel restrictions on South Africa. read more

“You shoot first and ask questions later when this sort of news erupts,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

South Africa’s rand dropped 1% to a one-year low in early trade. The risk-sensitive Australian and New Zealand dollars fell to three-month lows and S&P 500 futures fell 0.9%.

The selling in Asia has global shares (.MIWD00000PUS), on course for their worst week since early October. Dow Jones futures fell 1% , while FTSE futures and Euro STOXX 50 futures each dropped about 1.4%.

Little is known about the new variant. However scientists told reporters it has “very unusual constellation” of mutations, concerning because they could help it dodge the body’s immune response and make it more transmissible. read more

“Markets are anticipating the risk here of another global wave of infections if vaccines are ineffective,” said Moh Siong Sim, a currency analyst at the Bank of Singapore.

“Reopening hopes could be dashed.”

Moves in Treasuries were also sharp following the Thanksgiving holiday and yields quickly pulled back some of the week’s gains. Benchmark 10-year yields fell nearly 6 basis points to 1.5841%.

The yen jumped about 0.4% to 114.84 per dollar and the Aussie was last down 0.5% at $0.7148.

The moves come against a backdrop of concern about COVID-19 outbreaks driving restrictions on movement and activity in and as markets aggressively price U.S. rate rises next year.

European countries expanded COVID-19 booster vaccinations and tightened curbs overnight. Slovakia announced a two-week lockdown, the Czech government will shut bars early and Germany crossed the threshold of 100,000 COVID-19-related deaths. read more

Shanghai on Friday limited tourism activities and a nearby city cut public transport as China doubles down on its zero-tolerance approach that is also unnerving traders. read more

At the same time a slew of stronger-than-expected U.S. data points has Fed funds futures markets priced for as many as three rate hikes in 2022.

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Reporting by Tom Westbrook; Editing by Lincoln Feast.

Our Standards: The Thomson Reuters Trust Principles.

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