11:24 AM
EU ‘agrees to freeze Abramovich assets’
The European Union has agreed to add Chelsea owner Roman Abramovich to its list of sanctioned Russian billionaires, Reuters reports.
The news service says:
The informal greenlight to Abramovich’s listing came in a meeting on Sunday, one source said, and the EU envoys will reconvene at 11:00am on Monday to adopt the measure and a further set of economic sanctions against Russia.
Sanctions will be effective only after publication on the EU’s official journal, which usually happens within hours or the day following formal approval.
11:19 AM
China plots coal production boost
China is plotting a major increase in coal mining to reduce its reliance on imports, casting a shadow over its climate ambitions.
Beijing told officials from the country’s top mining regions that it aims to increase production of the heavily polluting fuel by around 300m tons a year.
The increase would be split, with one half from increased capacity from new or upgraded operations, and the other from re-opening mines that were previously closed. The NRDC said it would bring daily output to an average of 12.6m tons, which would be a record-breaking pace.
The National Development and Reform Commission said it would also aim to build a 620m ton stockpile of coal.
10:58 AM
RAC: Fuel hit new records at the week
Petrol and diesel prices continued their climb, hitting new records at the weekend, according to the RAC.
Petrol rose to 163.46 pence per litre, while diesel reached 173.44p.
Spokesperson Simon Williams said:
While there will almost certainly be more rises this week, drivers should soon get some respite from pump prices jumping by several pence a litre every day as oil and wholesale prices appear to have settled.
The price hikes seen over the weekend are still a result of the oil price rise which began at the start of the month and peaked early last week at $137 a barrel.
10:40 AM
Banks close in on backstop deal for nickel tycoon
Efforts to shore up the nickel market by providing a loan facility to a Chinese tycoon who was caught flat-footed by last week’s price surge are reportedly nearing fruition.
Per Bloomberg:
Banks led by JPMorgan Chase & Co. are in advanced talks for a loan facility to backstop Xiang Guangda’s short position in nickel, in an attempt to restore stability to the market after an unprecedented squeeze.
The deal would allow Xiang to maintain his short position, which has roiled the nickel market after he struggled to pay massive margin calls to banks and brokers last week. If it goes ahead, the loan could give the London Metal Exchange the certainty it needs to reopen the nickel market, which has been suspended since last Tuesday morning.
It is also likely to be highly controversial: several traders have accused the LME of foul play and favouritism by intervening to shield Mr Xiang, also known as ‘Big Shot’, after his position blew up.
10:34 AM
Protestors occupy Deripaska’s London house
Protestors have launched an occupation of sanctioned Russian oligarch Oleg Deripaska’s house in London.
The Big Issue’s Greg Barradale has some videos:
Someone now getting a telling-off from police after trying to throw a bag of food up to the occupiers, and landing it on top of a police van pic.twitter.com/vdxIovqsHV
— Greg Barradale (@GregBarradale) March 14, 2022
10:29 AM
India mulling Russia’s offer of discount fuel and commodities
India is considering an offer from Moscow of discount fuel and commodities, as Russian companies struggle to find buyers for their goods, Reuters reports.
Citing two officials, the news wire says:
India, which imports 80pc of its oil needs, usually buys about 2pc to 3pc of its supplies from Russia. But with oil prices up 40% so far this year, the government is looking at increasing this if it can help reduce its rising energy bill.
“Russia is offering oil and other commodities at a heavy discount. We will be happy to take that. We have some issues like tanker, insurance cover and oil blends to be resolved. Once we have that we will take the discount offer,” one of the Indian government officials said.
Some international traders have been avoiding Russian oil to avoid becoming entangled in sanctions, but the Indian official said sanctions did not prevent India importing the fuel.
Such a move would likely draw ire from the West, but would follow a pattern on India tending to support Russia during the country’s military actions.
10:23 AM
Morningstar: Global damage from Russian default may be limited
Fund research platform Morningstar has a helpful note out this morning rounding up some of their recent report on Russia.
Analysts warn cost increases pose the biggest risk.
Here are its key takeaways:
Alex Morozov, its EMEA head of equity research, said:
For now, it appears the greatest risk to the markets is determining how high inflation will rise and how long it will remain before it subsides. Persistent inflation could depress global economic growth as well as pressure individual companies’ operating margins.
10:15 AM
China disputes claims Russia has asked for military assistance
Beijing has come out swinging against reports weighing on markets this morning, which said Russia had asked for Chinese aid in the invasion of Ukraine.
China’s foreign ministry spokesperson Zhao Lijian said the reports were “disinformation”.
10:10 AM
Oil continues to decline after wild week
The price of oil is continuing to come down after some frankly wildly movements last week. Brent’s trading at around $108.5 per barrel, while futures for WTI US crude in New York have fallen below $106 per barrel.
The decline is being spurred by optimism over the prospects for a diplomatic solution to the Ukraine conflict.
10:02 AM
Suits booted as ONS tweak inflation basket
Men’s suits, individual doughnuts and coal have all been cut as the Office for National Statistics shakes up the basket of goods used to measure inflation.
The stats body says the list of items used to determine the rate of price changes will now include pet collars, antibacterial wipes and sports bras, reflecting changing consumer habits.
Here’s are the key changes (per the ONS):
OUT Men’s suit – The rise in homeworking has seen the demise of the suit from the consumer basket. A new men’s formal jacket/blazer item is being introduced to ensure men’s formal/business wear is still represented in the basket.
OUT Doughnut – The increase in home working has seen sales of individual cakes decline in favour of multipacks, so our representative sweet treat, the single doughnut is leaving the basket this year.
IN Antibacterial surface wipes – Demand for antibacterial products is still high, and the convenience and ease of use of the surface wipe sees it sweeping into the basket.
IN Collars – Pet ownership has increased during the pandemic, so dog and cat collars have been added to reflect the growth in pet accessories.
IN Canned pulses/Meat free sausages – Canned beans, chickpeas and lentils enter the basket for the first time alongside meat free sausages. The growth in vegetarianism and veganism, driven by both greater health and environmental consciousness, see these items make their debut into the basket.
IN Sports bra/crop top – The pandemic has helped to increase our awareness of fitness, with many people working out at home during lockdown periods. With this has come a rise in expenditure on sports clothing, so the sports bra/crop top extends the sportswear items in the basket.
OUT Coal – This item already had a very low weight, but with sales of domestic coal being banned in 2023 as part of the government’s actions to combat climate change, this item drops out of the basket in anticipation of this.
Sam Beckett, the ONS’s head of economic statistics, said:
The 2022 basket of goods sees some really interesting changes, with the impact of the pandemic still evident in our shopping habits. With many people still working from home, demand for more formal clothing has continued to decrease. So, men’s suits disappear from the basket and are replaced with a formal jacket or blazer.
09:52 AM
Money round-up
Here are some of the day’s top stories from the Telegraph Money team:
09:36 AM
Snap wrap: Chinese stocks in Hong Kong have worst day since financial crisis
With trading in Hong Kong now closed, here’s a quick assessment of the damage:
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Beijing has put Shenzhen, a major economic hub, into lockdown following a rise in Covid cases
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There are also reports that Russia has asked for Chinese military assistance in Ukraine, which could prompt a Western backlash against China
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The Hang Seng Tech Index fell 11pc, its biggest fall since launching in July 2020, with $2.1 trillion now wiped off valuations since its peak a year ago
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Tech giant Tencent slumped almost 10pc on reports it will face a hefty fine over failings in its anti-money laundering controls
09:22 AM
JP Morgan: We don’t expect a European earnings recession
There’s been growing talk that soaring inflation and uncertainty will knock the eurozone into a recession in the coming months.
Not so fast, say strategists at JP Morgan, America’s biggest bank. who say they disagree with “many” that foresee a slowdown in corporate profits as a result.
Here’s what is underpinning their thinking:
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GDP growth is still expected to be solid, although it could be heavily contingent on movements in oil prices
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Fiscal stimulus could be greater than expected, shielding businesses and consumer from eye-watering cost increases
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Markets don’t yet indicate a recession is coming, with only a 20pc drop so far (versus the 40pc fall they say would typically indicate a recession)
09:09 AM
Shenzhen: economic heavyweight
Charlie Robertson, chief economist at Renaissance Capital, has another way of looking at the Shenzhen shutdown that really drives home how important the city is:
Shenzhen in China is the world’s 30th largest economy – at about $475bn in 2021 – bigger than Israel ($468bn) and just behind Nigeria ($480bn) or Austria ($481bn).
Omicron still problematic where mRNA (eg Pfizer type) vaccines have been limited https://t.co/IwiOGIEnTW
— Charlie Robertson (@RencapMan) March 14, 2022
It’s worth nothing that such a list should probably also include other cities, which would make Shenzhen somewhat lower than 30th… but let’s not get too hung up – the important takeaway is that it’s big and important.
09:01 AM
Zero marques: EU mulls export ban on luxury cars
The European Union is discussing a plan to ban exports of luxury vehicles worth more than €50,000 to Russia as part of new sanctions.
Bloomberg report:
The proposed ban, which is set to be approved as early as Monday and could still change, would apply to models from several European car brands, including Audi, BMW, Mercedes, Ferrari and Porsche. The EU measure would also include boats and planes, as well as chairlifts and motorbikes worth more than €5,000.
It may be a moot point for some car makers that have already suspended sales to Russia – but potentially bad news if you’re an oligarch who has been diligently saving up for a nice new Ferrari.
08:56 AM
Petrol surge pain
Bert Colijn, from Dutch bank ING, has one way of looking at Europe’s soaring petrol prices (I think this is a ‘laugh-or-you’ll-cry moment):
08:53 AM
Round-up: Our top business stories right now
If you’re just joining us, here are some of the business news stories you should be reading:
Here are some key reads on Ukraine:
08:50 AM
Tencent slump
Bloomberg’s Joe Weisenthal has a chart that puts Tencent’s slump today in perspective: shares are the lowest since March 2020, amid a combination of risk-off sentiment towards China and reports the company faces a fine over anti-money laundering failings.
08:46 AM
European gas prices fall on talk hopes
European gas prices have fallen sharply today amid growing hopes that talks over stopping the war in Ukraine may actually get somewhere.
Talks will take place over video link today.
Here’s a chart of the Dutch gas futures benchmark, which has fallen as much as 16pc today.
It’s a similar story in the UK, where gas futures have fallen as much as 12.1pc this morning.
08:32 AM
Musk: I’m keeping my crypto
Tesla boss Elon Musk, the world’s richest man, has said this morning that he doesn’t plan to sell his crypto holdings, so that’s that.
As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high.
I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.
— Elon Musk (@elonmusk) March 14, 2022
08:28 AM
Javid: Johnson is trying to convince Saudis to raise oil output
Boris Johnson is trying to convince Saudi Arabia to raise its oil output, health secretary Sajid Javid has said in an interview this morning.
The Prime Minister is reportedly travelling to meet with Saudi officials this week – although Downing Street has so far declined to confirm plans.
Speaking to Times Radio, Mr Javid said:
At a time of a major global energy crisis that has been caused by this war in Europe, it is right for the prime minister and other world leaders to engage with Saudi Arabia and try to work together where that makes sense.
Pressed on whether it is right to seek to do more business with Saudi Arabia – which executed 81 men just days ago – the health secretary said: it is “important to recognise, whether we like it or not, that Saudi Arabia is one of the world’s largest oil producers”.
08:17 AM
Why Shenzhen matters
The lockdown of Shenzhen is a big deal: the city is a major producer of electronic and automotive components, so prolonged disruption could mean a fresh wave of disruptions to global supply.
It’s the country’s largest lockdown since Wuhan, in the early days of the pandemic.
In the past hour, Beijing has also announced a lockdown across Jilin province, in the country’s north-east.
China placed the 17.5 million residents of the southern city of Shenzhen into a lockdown — this is one of the world’s most important manufacturing exports hubs, particularly for electronics (and the city is the 4th world’s largest container port). https://t.co/kDMoxTAgJm
— Javier Blas (@JavierBlas) March 14, 2022
08:13 AM
Hang Seng China drop worst since 2008
The pain is only getting worse: the Hang Seng China stock index – a Hong Kong-listed gauge of mainland stocks – is now off 7.2pc, its biggest fall since November 2008.
08:07 AM
Tencent drop passes 10pc
The rout across Chinese stocks is showing few signs of abating, with video gaming giant Tencent falling more than 10pc.
Adding to the company’s headaches, the Wall Street Journal is reporting that Tencent faces a record fine after China’s central bank found its popular WeChat app has violated anti-money laundering rules.
In Hong Kong, the Hang Seng index is now off 5.3pc:
More broadly, today’s drop builds on a wider crash that has taken the total losses on Chinese tech stocks to around 72pc since their peak last year – a dotcom crash-scale wipeout.
The shock of Shenzhen going into lockdown is compounding growing concern that Beijing is damaging its international standing by continuing to align itself with Russia despite recent events.
07:59 AM
FTSE 100 poised to open higher
London’s top stock index is poised to start the week on the front foot, with equity futures trading indicating a rise of about 0.6pc at the open in a minute’s time.
07:53 AM
Rio Tinto makes $2.7bn bid for Turquoise Hill
London-listed miner Rio Tinto has tabled a $2.7bn to by Turquoise Hill, which is developing a giant gold mine in Mongolia.
Rio already owns 51pc of the company, which had a two-thirds stakes in Oyu Tolgoi project.
It’s a flagship project for Rio – and a key growth hope – but has been plagued by disputes with Turquoise and the Mongolian government.
The all-cash offer price is $26.60 per share, a 32pc premium to Friday’s close. There are several hurdles facing the takeover, including the requirement of support from two-thirds of Turquoise shareholders.
Rio chief executive Jakob Stausholm said:
Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term. That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio. We believe the terms of proposal are compelling for Turquoise Hill shareholders.
07:44 AM
FTSE to delete Russian groups including Evraz from indexes
FTSE Russell, the subsidiary of the London Stock Exchange that puts together the UK’s top stock indexes, plans to delete a slew of Russian companies from its lists.
The deletions are:
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Evraz, the FTSE 100 mining company in which Roman Abramovich holds a 29pc stake
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Polymetal, the FTSE 100 Anglo-Russian miner
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Petropavlosk, the FTSE 250 gold miner
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Raven Property, a small-cap property investment group focused on Russia
In a statement, FTSE Russell said:
FTSE Russell has received feedback from FTSE Russell’s External Advisory Committees and a range of market participants that the ability to buy or sell shares of the index constituents below is severely restricted due to major international brokerage firms no longer supporting trading of these securities and therefore there is insufficient institutional liquidity and market depth. Consequently, this will prevent index trackers from replicating the ongoing inclusion of these names within the FTSE Russell indices.
As a result, it continued, the members will be removed to ensure the index calculations can be “readily understood and followed by index users”.
Evraz’s shares were suspended last week after Mr Abramovich was sanctioned.
07:36 AM
FCA tells banks to open up about oligarchs – FT
In the UK, the City watchdog has told banks they need to help out with the crackdown on Russian oligarchs by sharing information on how Vladimir Putin’s allies move money around the world.
The Financial Conduct Authority has instructed lenders that it is not enough to just sever ties – they have to offer information as well, the Financial Times reports.
07:30 AM
Bond drop ‘worst since financial crisis’
The drawdown on global bonds is now the worst since the height of the financial crisis in 2008, in a sign of the damage being done across markets.
A aggregate index of government and corporate debt compiled by Bloomberg is off about 9.9pc from highs at the start of this year, with Asian bonds suffering especially.
The fall reflects growing inflationary pressures and rising geopolitical tensions.
07:20 AM
Agenda: Chinese stocks plunge
Good morning. Chinese stocks have dropped sharply overnight after Beijing placed the 17.5m residents of tech hub Shenzhen into a lockdown.
The Hang Seng Tech Index, in Hong Kong, fell more than 9pc, while the city’s broader gauge fell 4.7pc.
The lockdown comes after virus cases in China doubled to 3,400, and shows the long tail of the country’s strict zero-Covid policy.
Elsewhere, the German subsidiary of the Russian energy company Rosneft has reported a hacker attack, according to Die Welt newspaper, which said there has not been any impact on Rosneft’s business. Businesses around the world have been on high alert for cyber assaults ever since Russia invaded Ukraine.
5 things to start your day
1) More guided munitions and fighter jets: what higher spending will mean for Britain’s armed forces: Expanding armoured cavalry and artillery will need to be matched with logistical support in the form of supplies, ammunition and engineers
2) Grant Shapps takes aim at Russian aviation and shipping: Vladimir Putin’s decision to shut out foreign airlines costs Kremlin billions in lost fees
3) End of Russian wood pellets mean soaring bills for biomass boiler owners: Suppliers are scrambling to find alternative supplies for homes and businesses that depend on the fuel for heating
4) Don’t blame every Russian for Putin’s barbaric invasion: Companies are right to boycott Russia – now they must ensure their penalties don’t validate anger at a nation.
5) Ofgem urged to prepare for Gazprom sanctions: Existing regulations do not allow for measures against licenced operators, energy regulator is warned
What happened overnight
Asian stocks fell Monday on a rout in Chinese technology shares, while Treasuries slid as elevated commodity prices stoke concerns that the U.S. may need aggressive monetary-policy tightening to tame inflation.
The 8pc plunge in a gauge of Chinese tech firms reverberated around the region, leaving an Asia-Pacific equity index in the red for a second session. A Covid lockdown in Shenzhen, a tech hub, added to the geopolitical and regulatory risks facing the sector in part from strained ties between the US and China.
A climb in Japanese shares amid a weaker yen and gains for S&P 500, Nasdaq 100 and European futures eased some of the gloom. Investors were parsing efforts at diplomacy as Russia continues its war in Ukraine, as well as comments from a U.S. official that Moscow asked China for military assistance.
Coming up today
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Corporate: Bodycote, Phoenix Group (full year results)
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Economics: Foreign direct investment (China)
