Three Way Merger of China's Commodities Rare Earth Producers

Minmetals Rare Earth, Chinalco Rare Earths and Metals Co and China Southern Rare Earth Group Co are merging with the approval of the state regulator, Sasac (State-owned assets Supervision and Administration Commission). Analysts have noted pricing power of rare earths such as dysprosium and terbium (whose prices are up 50% in 2021 and are key inputs into rare earth magnets), will be concentrated in the new rare earths "super group", second only to China Northern Rare Earth Group.

Backwardated Brent Futures Curve Retains Lofty Front Month Price

Brent Dec 21 futures have been hovering upwards through the 80s levels all through October 2021 peaking at 86.4 then dropping to 84.3, still above the Jan 22 futures at 83.5. 80+ levels are reflected across all contracts out to April 2022.

Brent front month premium to WTI is $1.10; with WTI Dec 21 futures trading at 83.2. WTI has a much sharper gradient in terms of backwardation, suggesting prices will rock down faster than for Brent.

Evergrande Shares up as Interest Payment Comes Due

Chinese real-estate developer Evergrande is due to make an interest payment of $83.5m on an overseas bond. The firm has debts of over $300bn.

Brent Premium is 3.40 over WTI

Premium reflective of the November 2021 (X) futures contract. As might be guessed by the high levels and spreads, both curves are currently backwardated.

Brent is at almost 72 dollars a barrel and WTI is just under 68.5 dollars a barrel.

WTI October (V) is still trading; at a slight premium (24 cents) to November (X).

For a quick recap of month codes check out the CME Group's contract code table.

Goldman's Acquires Hague Based Investment Manager for 355 billion dollar European AuS Boost (With Caveats)

Goldman Sachs has agreed to acquire Hague-based NN Investment Partners for 1.6 billion Euros from NN Group NV.  The deal is expected to close end Q1 2022. The acquisition fits into GS' strategy to scale its European business. Assets under supervision will increase by approximately 355 billion dollars (some caveats over some mortgage assets which will continue to be managed by NN Group). GS has 2.3 trillion dollars in Assets under supervision globally.

UK Unveils Hydrogen Investment Plan (#2 in TP Plan)

The UK government has unveiled its plan for hydrogen investment to 2030. Further details in the policy papers. Low carbon hydrogen is a key part of the UK's strategy to go net-zero by 2050. It forms part of the government's Ten Point Plan for a "green industrial revolution" announced in November 2020 aimed at creating 250,000 jobs. Hydrogen sits at priority number two with an aim to generate 5GW from low carbon hydrogen by 2030 just below offshore wind, where the aim is to quadruple the UK's current production to 40GW by 2030. Number 3 is nuclear - advancing nuclear as a clean energy source.

Valuations in Softbank's Vision Fund Portfolio Hammered by China Regulatory Action

Ride-hailing app Didi Global listed in New York (NYSE:DIDI) but valuations were impacted by China regulatory action (investigation from the Cyberspace Administration of China), aimed at policing the huge datasets that Didi has access to, given its dominant market position in China. This has led to speculation of of a possible delisting.

Vision Fund CFO Navneet Govil (MBA, MEng from Cornell) has asserted the China thesis remains strong. Navneet former roles include SVP of Finance and Strategic Pricing at CA Technologies (which was acquired by Broadcom in July 2018).

Porfolio managers, such as Joshua Crabb of Robeco (part of ORIX Europe), have commented we are now in an age of unprecedented regulatory scrutiny over Tech not limited to China.