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Search Results for "covid 19" (360 articles)


Japanese ambassador to Britain Hajime Hayashi walks in front of Japan’s Emperor Naruhito and Empress Masako as they arrive on a state visit to Britain, at Stansted Airport near London, Britain.
International

Japanese Emperor Naruhito finally begins delayed UK state visit

Emperor Naruhito and his wife began a week long trip to Britain yesterday, during which they will visit Oxford University where they both studied and attend a banquet with King Charles, but no formal meeting with Prime Minister Rishi Sunak is scheduled.Naruhito and his wife, Empress Masako, had been due to make the visit in 2020 when Queen Elizabeth was still alive but it was postponed because of the Covid pandemic.Their first overseas trip together after Naruhito’s enthronement was to Elizabeth’s funeral in 2022. Ahead of this state visit the 64-year-old emperor spoke of the kindness the British royals showed him when he arrived in Britain to study in the early 1980s.He recalled how the late queen had invited him to Buckingham Palace for tea, which she made herself. “I have fond memories of the heartwarming hospitality I received from her majesty the queen and the royal family, making me feel like I was part of their family,” he told a news conference in Tokyo. Naruhito was greeted by officials on his arrival at London’s Stansted airport on Saturday afternoon. The emperor’s trip is the third state visit of Charles’ reign, and the first since it was revealed earlier this year that the British monarch had been diagnosed with cancer.Ahead of the visit, Naruhito said he was grateful the king would host them despite his illness, and he also sent good wishes to Charles’ daughter-in-law Kate, wife of heir Prince William, who is having preventative chemotherapy treatment for cancer.“I understand that they are both going through a hard time, but I pray that their treatment will go smoothly and that they will have a speedy recovery,” he said.The official reason for the trip is to celebrate the long ties between the two royal families, and to demonstrate the deep relationship between the two countries. The Japanese royals are also using it as a chance to return to Oxford where they both studied at separate times, while Naruhito will visit the River Thames flood barrier which he researched while at university.The visit clashes with campaigning for the British election on July 4, and a Japanese foreign ministry official said there were no plans for a meeting with the prime minister.The official state elements of the trip begin on Tuesday when Prince William will formally greet the emperor, before a grand carriage procession along The Mall to Buckingham Palace where there will be a state banquet.During the trip Naruhito will also privately visit St George’s Chapel at Windsor Castle to lay a wreath at the tomb of Queen Elizabeth.

Gulf Times
Opinion

Growing global uncertainties muddle energy transition path

Recent years have witnessed an increase in global uncertainties, driven by economic, political and technological shifts, adding complexity to the environment in which countries operate and their energy transition trajectory.Geopolitical tensions pose risks to energy security and hinder international co-operation, according to the World Economic Forum (WEF). Ongoing conflicts in the Middle East risk exacerbating volatility in oil markets, potentially resulting in an oil price spike.Despite a moderation in energy prices, regional disparities persist, constraining economic growth, imposing financial burdens on households and businesses, and hindering efforts to enhance electricity access.This situation, WEF noted, could have been much worse if not for the mild weather conditions globally.However, there have been instances of accelerated change, notably in Europe, where there has been a rapid reduction in dependence on Russian natural gas and significant improvements in energy efficiency.Global investments in efficiency increased by 45% since 2020, with countries representing three-quarters of global energy demand strengthening energy efficiency policies or implementing new ones in the past year.The disruptions caused by the Covid-19 pandemic and the Russia-Ukraine war led to a global energy crisis and a surge in inflation and interest rates during 2022 and 2023.This created a cost-of-living crisis in many countries, raising concerns across industries and economies, especially those in developing countries with dollar-denominated debt and imports. Headline inflation has since slowed down due to tighter monetary policy in G7 nations, with the International Monetary Fund (IMF) projecting a rate of 5.8% for 2024 (down from 6.9% and 8.7% in 2023 and 2022, respectively).However, persistently high interest rates and capital costs remain significant obstacles in the energy transition, particularly for emerging and developing economies. This directly impacts the ability of firms and countries to finance the upfront investments to meet energy demand and decarbonise the energy system.Despite lower operational costs, capital-intensive clean energy solutions remain disproportionately affected due to high upfront capital investment requirements.In 2023, clean energy sources faced challenges, including uncertainties in subsidies and supply chains, coupled with high interest rates and significant cost increases.Trade patterns in the energy sector have shifted significantly as governments focus on enhancing supply chain resilience and strengthening energy security.This shift has coincided with accelerated momentum towards cleaner energy sources, including the rapid expansion of renewable power capacity and increased adoption of technologies such as electric vehicles (EVs) and heat pumps, driven partly by supportive government policies.Despite these positive trends, growing trade protectionism and costs create headwinds, especially for developing nations.The United Nations Conference on Trade and Development (UNCTAD) data indicates a $1tn contraction in global trade in 2023.Geopolitical tensions have continued to impact bilateral trade flows, evidenced by shifts such as the European Union (EU) reducing its trade dependence on Russia and decreasing trade interdependence between China and the US.However, certain industries, such as motor vehicles, saw growth in trade value, driven by growing demand for EVs. This, coupled with an improved global economic outlook, could bolster trade resilience in the coming year.Uncertainties remain regarding geopolitical tensions and potential future disruptions to global supply chains, underscoring the need for adaptive strategies.

Gulf Times
Qatar

Dutch Ambassador to QNA:  Amir's visit to Netherlands reflects partnership level, shared commitment to strengthening cooperation across all

HE Ambassador of the Kingdom of the Netherlands to Qatar Ferdinand Lahnstein said that the visit of HH the Amir Sheikh Tamim bin Hamad Al-Thani to the Netherlands is a significant milestone in the bilateral relations between the two countries. It highlights the highest level of engagement, reflecting the strong and growing ties between Qatar and the Netherlands. He added that the visit underscores the two countries' shared commitment to strengthening the strategic partnership, enhancing political and economic collaboration, and promoting regional and global stability.In his remarks to Qatar News Agency (QNA), His Excellency added that the Netherlands and Qatar have developed strong and diverse relations since they began diplomatic ties in 1972. The Dutch embassy opened in Doha in 2005, initially focusing on trade and investment. However, with fast-changing global dynamics, especially in the Gulf, the relationship evolved into a strategic partnership. This partnership emphasizes safety, security, and regional stability.His Excellency pointed out that the two countries also have distinguished economic and trade relations. He said that Dutch exports to Qatar have grown significantly after the COVID-19 pandemic, rising from 560 million Euros in 2020 to 825 Euros million in 2022. These exports mainly include fruit and vegetables, office equipment, data processing and telecom equipment, and dairy products.His Excellency added that the Netherlands imports mostly mineral fuels, metals, chemical products, and telecom equipment from Qatar. These imports have surged from 223 million Euros in 2020 to 1.4 billion Euros in 2022, largely due to increased LNG deliveries to the Netherlands since the war in Ukraine began.His Excellency also pointed out that the Netherlands stands out as a digital economy leader, boasting substantial infrastructure such as major internet nodes and data centers. The WEB Summit in Qatar and Qatar Economic Forum left the Netherlands impressed, highlighting the immense potential for deepening Dutch-Qatari ties in the digital sector. The Netherlands envisions enhanced collaboration in trade, investment, innovation, and R&D, with a particular focus on cybersecurity and protecting digital infrastructure.HE the Ambassador of the Netherlands also noted that Dutch companies have significantly contributed to Qatar's infrastructure, leaving a footprint in numerous sectors.On the other hand, His Excellency indicated that the Qatari investments in the Netherlands total around 7.4 billion Euros, involving state companies, private firms, and individuals. Notable investments include Q Terminals Group's majority stake in the Kramer Group and their sponsorship of Feyenoord Football Club. Other Qatari-owned assets include the Amstel Hotel, InsingerGilissen bank, Nedair Freight, and a horse-trading company.His Excellency said that foreign investors in the Netherlands receive incentives and support at national and regional levels through the Netherlands Foreign Investment Agency (NFIA). NFIA aids companies worldwide in establishing or expanding operations in the Netherlands. Their free and independent services connect investors with a network of partners and institutions. NFIA offers tailored information on Dutch legislation, tax regulations, and more, along with practical solutions for establishment. They provide personalized support across sectors like agrifood, IT, and energy. The Invest in Holland Network aids in decision-making and offers ongoing assistance to established foreign companies, fostering growth and sustainability in the Netherlands.On the other hand, HE the Ambassador of the Netherlands said that the Netherlands values Qatar's role as a mediator in the Israeli-Palestinian conflict and its humanitarian efforts in Gaza. He added that the leaders of the two countries are in regular contact as the Dutch Prime Minister visited Qatar last November. In 2024, there were several visits from Dutch ministers, including the defense minister, as well as high level visits."We hope Qatar will continue its vital role in mediating, especially as talks for a ceasefire and the release of hostages are crucial. It's essential for the international community to understand the severe consequences of undermining this process, particularly for the Palestinian people. With over 37,000 casualties, mostly women and children, it emphasizes the urgent need to adhere to International Humanitarian Law in protecting civilians and livelihoods," His Excellency said."The Dutch government stands behind a Two-State solution based on the 1967 borders, with a Palestinian State encompassing Gaza, the West Bank, and East Jerusalem. Israeli settlements in occupied Palestinian territories are deemed illegal and obstructive to a sustainable solution," His Excellency added.His Excellency stressed that both the Netherlands and Qatar are dedicated to providing humanitarian aid to Gaza and other global crises, acknowledging the necessity for closer collaboration. Recently, the Dutch Special Envoy on Humanitarian Affairs in Gaza held extensive discussions with Qatari counterparts regarding air-dropping provisions in Gaza. However, more action is required. Both governments are exploring additional ways to assist more people in need with essential goods.HE the Ambassador of the Netherlands pointed out that Qatar has succeeded in playing a humanitarian political role in the region and the world due to several key factors. First, Qatar has a strategic location and a deep understanding of regional dynamics, allowing it to act as an effective mediator in conflicts. Second, Qatar's leadership is committed to diplomacy and dialogue, consistently advocating for peaceful solutions and cooperation. Third, Qatar invests significantly in humanitarian aid and development, supporting communities in need and promoting stability. Finally, Qatar's balanced foreign policy and strong international partnerships enhance its credibility and influence on the global stage. These elements together enable Qatar to make a positive humanitarian impact both regionally and globally.Regarding the Qatari-Dutch consensus on current global issues, His Excellency asserted that both the Netherlands and Qatar find it important that the international legal order is maintained to ensure a level playing field for the nations. International legal institutions like the International Court of Justice and the International Criminal Court, both based in The Hague, are crucial in enforcing conventions and treaties that have been ratified by the United Nations and most national states.Regarding the amount of aid provided by the Netherlands to Palestine since the beginning of the war on Gaza, HE the Ambassador of the Netherlands said that the Netherlands has supported the Palestinian people with 51 million Euros, mainly through the UN Flash Appeal and partially as a direct contribution to UNRWA

Gulf Times
Opinion

What the next EU leadership must do

Now that voters across the European Union’s 27 member states have elected the 720 members of the next European Parliament, the focus shifts to manning the institutions that will guide the bloc’s work and set its strategic priorities over the next five years. This process will take some time. But by the end of the year – following all the predictable parliamentary haggling and turmoil – it should be complete.All told, the shift in the political balance within the European Parliament was not as dramatic as many commentators expected. The share of seats held by traditional centre-right, centre-left, and liberal parties fell only from 59% to 56%. Most of the drama was confined to a few countries, not least France, where Marine Le Pen’s National Rally trounced President Emmanuel Macron’s Renaissance party. Though that outcome will not immediately affect the process of staffing EU institutions, a political sea change in one of the bloc’s key members obviously could have a greater impact over time.Looking back on the past five years, it is fair to say that the EU has outperformed expectations. It might not have transformed itself into the geopolitical power that European Commission President Ursula von der Leyen envisioned in so many speeches, but it has proven to be an effective crisis manager through one “black swan” crisis after another (from the Covid-19 pandemic to Russia’s invasion of Ukraine).The road ahead may be even more challenging. A big question mark hovers over France as it holds a snap parliamentary election this month and a presidential election in 2027. Germany’s three-party coalition government will probably stumble on, despite its members’ poor showing in the European election. And it remains to be seen what kind of internal resistance the EU will face from the governments in Hungary, Slovakia, the Netherlands, and perhaps Austria (following its general election this fall).Even without potential spoilers, the EU’s political agenda would be daunting. The EU got off to a good start on the green transition over the past decade, establishing itself as a global leader on climate issues; but domestic political pressures in many member states are now forcing policymakers to proceed more slowly. Meanwhile, its digital transition has been less impressive – a shortcoming that stands out even more as the age of artificial intelligence transforms the global economy.European leaders are only gradually waking up to the fact that the EU has a competitiveness problem. In a world where the US is the innovation superpower and China is the production superpower, being a regulatory superpower is not enough.How Europe tackles this issue will fundamentally shape its future. Many are calling for new tariffs, subsidies, and expensive industrial policies, often under the pretext of economic and national security. But such proposals sidestep the real issues. Until Europe completes its single market and establishes a true capital union, European entrepreneurs will struggle to commercialise new innovations, and global investors will continue to favour the US and other markets.These issues have grown more urgent with the return of war to the continent. Preserving peace and stability is the reason the EU was created in the first place. Born in the ashes of World War II, it has been extraordinarily successful so far. But Russia’s brutal war of aggression against Ukraine poses a direct challenge to the European project. If it is not met head-on, the entire European order could unravel in the coming years.Preventing that outcome will require the EU to transform itself into a security union, in partnership with Nato, and to move ahead with enlargement to include Ukraine. The choice here is quite simple: Either we extend our stability eastward, or Russia will continue to push its project of destabilisation westward.The discussions on EU leadership, personnel, and priorities over the coming weeks and months will be about preparing the bloc to meet these challenges. The EU has shown itself to be an effective crisis manager, but now it must become a major strategic player in an increasingly difficult global environment. As if the Russian threat wasn’t bad enough already, it will become even more acute if Donald Trump wins the US presidential election in November. A US administration that openly abandons allies and dismantles or de-fangs key pillars of the international order – including the World Trade Organisation, the World Health Organisation, global climate agreements, and Nato – will pose an altogether different and greater challenge.Faced with the task of manoeuvring between Russian President Vladimir Putin, Chinese President Xi Jinping, a second Trump administration, and its own populists, the EU’s situation is not going to get any easier. But Europe is not helpless. The more EU member states unify around shared institutions and common goals, the more secure they will be. – Project SyndicateCarl Bildt is a former prime minister and foreign minister of Sweden.


File photo: Vehicles are seen on a road after flood water broke the bank of river Benue, in Lokoja, Nigeria, on October 13, 2022.
Opinion

What climate-vulnerable developing countries need right now

A problem as unprecedentedly large and destructive as climate change demands bold new thinking and urgent action. Yet since the Covid-19 pandemic and Russia’s invasion of Ukraine, geopolitical tensions have dominated the global agenda, hindering collective efforts to address this existential challenge.Anticipating what lay in store for their countries, African finance ministers came together during the pandemic to call for a $100bn stimulus package to weather the shock. Four years later, however, net financial flows to developing countries have turned negative – meaning more money is being paid out to lenders in mostly rich countries than is coming in – owing to spiralling debt-service costs, higher interest rates, and the lack of additional external financing options. It is now crucial that existing pledges – such as the €150bn ($160bn) EU-Africa Global Gateway Investment Package – be implemented fully to support African countries.US President Joe Biden and Kenyan President William Ruto acknowledged these challenges in their Nairobi-Washington Vision statement last month, when they committed to ensuring that “high ambition countries don’t have to choose between servicing their debts and making necessary investments in their futures.” The Biden administration recognises that positive net financial flows are critical to supporting countries in responding to the climate crisis and building low-carbon energy systems.As UN Secretary-General Antonio Guterres recently reminded us, there is an 80% chance that the global average temperature will temporarily rise by more than 1.5C above pre-industrial levels in at least one of the next five years. The battle to keep global warming below the threshold established by the Paris climate agreement will be won or lost in the 2020s. The necessary investment and innovation needs to be happening now.Countries like Nigeria and Sierra Leone are developing green growth plans and launching investment packages focused on renewables and climate-resilient infrastructure; and Barbados has just introduced its own 2035 investment plan to achieve prosperity and resilience. But these efforts all require financing.The Bridgetown Initiative’s proposals for reforming the global financial architecture can drive the kinds of changes we need. The G20 has already responded by seeking a wealth tax that could unlock around $250bn in new finance, and we could mobilise up to a trillion dollars more in low-cost lending by leveraging multilateral development banks’ (MDBs) balance sheets. Moreover, with climate clauses added to debt contracts, developing countries can preserve the fiscal space they need to respond to major climate shocks.But we must do more. In May, the International Monetary Fund’s board approved the use of Special Drawing Rights (SDRs, the IMF’s unit of account) as hybrid capital, which will allow MDBs to expand their balance sheets. That is a good start, but G20 countries must commit the SDRs needed to capitalise on this financial innovation.We also must ensure that concessional finance (loans with accommodative terms) continues to flow to the most vulnerable and climate-afflicted countries. One-third of the countries eligible for support from the World Bank’s International Development Association are now poorer than they were on the eve of the Covid-19 pandemic.IDA countries have significant economic potential. They account for about 20% of global production of tin, copper, and gold; most are well-positioned to take advantage of solar energy (owing to abundant sunshine); and many possess deposits of minerals essential for the energy transition. But they are energy-poor and will need technical and financial support to provide electricity to 300mn people who lack it, as envisioned by a new programme launched by the World Bank and the African Development Bank. To achieve an ambitious replenishment of the IDA fund later this year and unlock $120bn in grants and loans to make this possible, World Bank shareholders must step up with new resources.Middle-income countries – especially the Vulnerable 20 (which now includes 68 countries) – also urgently need more access to grants and long-term capital. Small island developing states should not be penalised for good performance by being forced to “graduate” from the IDA. That will put them at the mercy of capital markets when they still need quick, affordable finance to build resilience and maintain insurance against persistent climate shocks. The IMF’s Resilience and Sustainability Trust has demonstrated the necessary sensitivity toward vulnerable low- and middle-income countries’ need for long-term, affordable finance. But more of these kinds of facilities – and related mechanisms, like guarantees – are needed to accelerate progress over the coming decade.We must continue to reduce the cost of capital for all countries seeking to invest in the energy transition. Our own countries face a premium when borrowing on capital markets, partly because credit rating agencies do not fully account for the conditions we face. The situation is not only unjust but also unwise. A good first step toward reducing borrowing costs and making investments commercially viable would be to reform IMF surcharges, which cost indebted borrower countries $1.9bn in 2023 alone.We also must continue to provide liquidity for developing countries through a new issuance of SDRs. This is a no-brainer, because it would stabilise currencies and help manage debt burdens without contributing to inflation. And finally, we must get carbon markets working to deter pollution and channel resources toward cleaner energy. Our collective stake in the planet’s future requires us to act both now and at scale. – Project SyndicateMia Amor Mottley is Prime Minister and Finance Minister of Barbados. Wale Edun is Finance Minister of Nigeria and Chair of the African Governors Forum at the World Bank.


Emmanuel Macron
Opinion

The financial risks of France’s snap election

When former French president Valéry Giscard d’Estaing was finance minister in the 1960s, he famously described America’s status as the issuer of the world’s reserve currency as an “exorbitant privilege”. But his label applies equally well to his own country’s position in the European monetary union. Despite persistently widening budget deficits, France has long been able to borrow almost as cheaply as fiscally prudent Germany. The bond market even shrugged off S&P’s downgrade of French sovereign debt at the end of last month, implying that France was somehow immune from the usual credit discipline. Then politics intervened.Following the surge of support for the French far-right in this month’s European Parliament election, President Emmanuel Macron’s abrupt decision to dissolve the National Assembly and call a snap election has met with a decidedly negative market reaction. But investors may now be underestimating the resilience of the French exorbitant privilege.The seeds of this privilege were sown in the 1992 Treaty of Maastricht, which created a monetary union without a fiscal union. That scheme required a “no-bailout” rule, lest profligate countries free ride on more fiscally responsible members. But the 2010-12 euro crisis exposed the fatal flaw in this design: if the ban on bailouts meant that the European Central Bank (ECB) could not serve as lender of last resort, it would threaten the monetary union and, by extension, the entire European project.The resulting compromise hinged on a fiscal rule. The ECB stood ready to buy unlimited quantities of eurozone member-state bonds, provided that their budget plans were consistent with fiscal rules set and enforced by the European Commission. Meanwhile, the fiscal police in Brussels remained very lenient toward French governments. The crises in smaller peripheral countries, and then in Italy, had been alarming enough. The last thing they wanted was a similar bust-up with France, the cornerstone of the entire European construct. So, they devised a fudge.As a penalty for its routine non-compliance with fiscal rules, France would be placed on a naughty list. In accordance with the EU’s “excessive deficit procedure,” the French government would promise to tighten up, and the Commission would declare itself satisfied. The ECB then had political cover to buy French sovereign bonds (if necessary), and this resulted in markets valuing French government debt almost as highly as German Bunds, despite the absence of any real improvement in the French fiscal position.There was no need for this charade when the eurozone fiscal rules were suspended in response to the Covid-19 pandemic. But the rules (with some modifications) have now been revived, and the French budget deficit, at 5.1% of GDP, is further than ever from the 3% threshold. Thus, even before the latest political shock, the dance between Paris and Brussels was expected to be more sensitive than usual. France was going to have to commit to reduce the deficit by perhaps half a percentage point of GDP, and even that moderate adjustment might have triggered a vote of no-confidence in Macron’s government in the lower house of parliament, where his party lost its majority in the 2022 election.Two years later, the snap election could well replace Macron’s limping centrist government with one led by parties whose campaigns have abandoned any pretense of fiscal discipline. The European Parliament election and the latest polling both show that the main challenge is coming from Marine Le Pen’s National Rally and allied right-wing parties, and financial markets are already reacting the same way they did when Le Pen first made a credible run for power in 2017.Back then, Le Pen was promising to abandon the euro and restore the French franc, which would have caused a systemic financial shock. Though she later dropped the idea of leaving the eurozone, she still rattled markets when she ran again for the presidency in 2022. It is no surprise that markets are spooked again.If National Rally and its allies do win this election, though, it will not be in Le Pen’s interest to trash the country’s exorbitant privilege within the eurozone. In fact, she will have every incentive to exploit it, to smooth her path to the presidency in 2027. That is why her prime minister-designate, the charismatic 28-year-old Jordan Bardella, has already back-pedalled on the party’s most fiscally costly campaign promise: reversing the increase in the retirement age (from 62 to 64) that Macron forced through last year in the teeth of public protest.Thus, in the event of a right-wing government (which would rule in “cohabitation” with Macron), I would expect to see the same old fiscal charade vis-à-vis Brussels, albeit with more rhetorical brinkmanship that would further unsettle markets. And the same would go for a left-wing government elected on an aggressive tax-and-spend platform, since the revenues from higher taxes would likely satisfy the European fiscal police.The outcome that would most fully justify the market’s fears is a stalemate. If the right- and left-wing alliances each win around 200 seats while Macron’s centrist bloc is reduced from 250 seats to 150 at most, it would be extremely difficult to form any kind of government, let alone a stable one. Although any future French government is likely to end up resuming the fiscal dance, it takes two to tango. A persistent political deadlock in Paris would leave Brussels with no government to engage, and the longer the political limbo lasted, the greater the financial instability and damage to the European economy would be. – Project SyndicateBrigitte Granville, Professor of International Economics and Economic Policy at Queen Mary University of London, is the author of Remembering Inflation (Princeton University Press, 2013) and What Ails France? (McGill-Queen’s University Press, 2021).


On Tuesday, Nvidia unseated Microsoft as the world’s most valuable company with a market capitalisation of $3.34tn. More than $2tn of that value has been added this year
Business

Nvidia’s 591,078% rally to most valuable stock came in waves

The year was 1999. Steve Jobs had recently returned to lead Apple. Intel was the dominant force in semiconductors. And a little-known chipmaker named Nvidia made its debut on the Nasdaq stock exchange.It took less than three years for Nvidia Corp to ascend into the S&P 500 — replacing the disgraced oil-trading conglomerate Enron, no less.But even then, few people would have bet that the company would go on to become the best performing stock of the last quarter-century, posting a total return of 591,078% since its initial public offering, including reinvested dividends. It’s a difficult number to comprehend and a testament, in part, to the financial mania brewing around artificial intelligence and how investors have come to see Nvidia — which makes the cutting-edge chips powering the technology — as the single-biggest winner of the boom.On Tuesday, that run culminated in Nvidia unseating Microsoft Corp as the world’s most valuable company with a market capitalisation of $3.34tn. More than $2tn of that value has been added this year.The company’s rise was by no means assured — and neither is its staying power at the top of the S&P 500. Long-time investors in Nvidia have had to stomach three annual collapses of 50% or more in the stock. Sustaining the current rally will require customers to keep spending billions of dollars a quarter on AI equipment, whose returns on investment are so far relatively small.What ultimately paved the way for Nvidia to climb to the top, though, was the company’s big bet on graphics chips and the vision of co-founder and Chief Executive Officer Jensen Huang that the industry would shift to what he calls “accelerated computing,” something his chips are inherently better at than the competition.“You have to give the management team, I think, an enormous amount of credit,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “They have caught each wave of innovation in hardware perfectly well.” Early Years Nvidia got off to a hot start.Between its debut and the time it entered the S&P 500, the stock gained more than 1,600%, giving it a market value of about $8bn. That rise came as many other technology stocks were cratering in the aftermath of the dot-com bubble, which peaked in March 2000.The company’s key to early success: getting its technology in video-game consoles like Microsoft’s Xbox and Sony’s PlayStation. Nvidia’s GeForce graphics processing units, or GPUs, became objects of desire among gamers because they consistently offered the most realistic experience.“Jensen was always a great communicator, told a good story, and clearly GPUs were becoming more important,” said Rhys Williams, chief strategist at Wayve Capital Management, who was a buyer in the IPO. “Each successive generation of hardware gave a lot better performance, a lot more realistic picture and then PC gaming really came into being.”The next six years weren’t kind to Nvidia. The stock plunged in 2008 as the financial crisis weakened demand and long-struggling rival Advanced Micro Devices Inc started turning things around.Meanwhile, an agreement between Nvidia and Intel that allowed the companies to use each other’s capabilities went sour, forcing Nvidia out of one of its biggest markets. The two settled in 2011, with Intel agreeing to pay Nvidia $1.5bn.The following year, Nvidia unveiled graphics chips for servers inside data centres. They could help sophisticated computing work such as oil and gas exploration and weather prediction, giving Nvidia a foothold in what would become a lucrative market. However, those chips did not immediately fly off the shelf. It would take nearly nine years for Nvidia shares to surpass their 2007 high.Nvidia shares took off again in 2015. During that period, the company’s chips were becoming the foundation of emerging technologies, from advanced graphics interfaces to autonomous vehicles to a new wave of AI products.That’s when Shana Sissel, chief executive officer at Banrion Capital Management, first really took note of the company. She described a 2017 conference where Nvidia was more like a pageant winner than an investment idea.“Every single speaker talked about Nvidia being the most important company,” Sissel said. “At that point, it was really on my radar screen.” Even after demand from cryptocurrency miners dried up, data-centre sales continued to grow. The Covid-19 pandemic boosted that business, as companies needed to purchase additional computing power to support remote work. Nvidia’s data-centre revenue rose by a multiple of eight from fiscal 2017 to fiscal 2021.Nvidia’s shares slumped in 2022 along with the rest of the technology sector, which was reeling from soaring interest rates and falling demand after the Covid-era boom.OpenAI’s release of ChatGPT in late-2022 made an instant splash but it took time for investors to realise how Nvidia might benefit. Eventually, interest in ChatGPT and other generative AI products exploded, triggering a frantic surge in orders for Nvidia’s chips.When the company reported first-quarter 2023 earnings, the scale of the jump in its business shocked nearly everyone on Wall Street. Nvidia gave a forecast for quarterly sales that was more than 50% above the average projection.Nvidia’s data-centre sales eclipsed its gaming revenue for the first time in fiscal 2023. In Nvidia’s current fiscal year, analysts expect those sales to top $100bn.“They have a very defensible place in the industry,” said Williams, the strategist at Wayve Capital Management. “They’re not gonna be 95% of market share forever, obviously, but it would be almost impossible for anybody to replace them.”

Sami Masri, a 38-year-old businessman from the south, attends an interview with Reuters at his coffeeshop in Hamra, Lebanon.
Region

Weary Lebanese brace for war after new Hezbollah threats

Lebanese product designer Tara Tabet does not want to see her country pulled into a full-scale war with Israel, but like many of her compatriots is bracing for possible conflict after new threats by armed group Hezbollah against both Israel and Cyprus.Hezbollah chief Sayyed Hassan Nasrallah surprised many on Wednesday when he said Cyprus -- the EU member state closest to Lebanon -- could be drawn into the group's conflict with Israel, raging in parallel with the Gaza war. Cyprus has denied taking sides in any war.The warning by Nasrallah, who also threatened Israel with widespread precision strikes, left many Lebanese resigned to preparing for a possible escalation. "Of course we don't want to go into a war with them - but if that's in solidarity with the people in Gaza, then so be it," Tabet, 32, told Reuters in Beirut on Thursday.Asked if the threat to Cyprus had worried her, Tabet said it could derail her plans for a civil marriage. In Lebanon, personal status laws are governed by the courts of each religion - pushing many couples from different religious backgrounds to travel 40 minutes by plane to Cyprus to be married in court.She said it was "stressful" to live with so much uncertainty, but that she had been trying to carry on "as if there's nothing - all of Beirut is like that". Many Lebanese see Hezbollah's eight-month conflict with Israel as the latest episode in a string of recent setbacks - from Covid-19 lockdowns to the 2020 Beirut blast and an economic crisis that crushed the local lira and wiped out bank savings.Sami Masri, a 38-year-old businessman from the south who runs a coffeeshop in Beirut, said Israeli strikes had kept him from taking his family to the rolling hills of southern Lebanon for weekends, as they usually did in summer. That meant spending more to access private beaches closer to Beirut - and even there, Masri said, he could not have fun."You're not happy because, you don't know, at any point - we have our passports ready, we have a suitcase ready, we have some food stocks ready," he told Reuters.Already, some 90,000 Lebanese have fled their homes in the south. Some left Lebanon, others are staying with relatives and the most vulnerable are in collective shelters, including in the port city of Sidon. Bana Baalbaki, a Sidon resident who spoke to Reuters in the city's market quarter, put on a brave face."No, I am not afraid because we are not better than the people of Gaza, nor the people of the south who were displaced," she told Reuters. But others - like shopkeeper Qassem Qarram - were more worried. "Of course everyone is afraid, and those who tell you they are not afraid will be lying to themselves," he said.

On Tuesday, Nvidia unseated Microsoft as the world’s most valuable company with a market capitalisation of $3.34tn. More than $2tn of that value has been added this year
Business

Nvidia’s 591,078% rally to most valuable stock came in waves

The year was 1999. Steve Jobs had recently returned to lead Apple. Intel was the dominant force in semiconductors. And a little-known chipmaker named Nvidia made its debut on the Nasdaq stock exchange.It took less than three years for Nvidia Corp to ascend into the S&P 500 — replacing the disgraced oil-trading conglomerate Enron, no less.But even then, few people would have bet that the company would go on to become the best performing stock of the last quarter-century, posting a total return of 591,078% since its initial public offering, including reinvested dividends. It’s a difficult number to comprehend and a testament, in part, to the financial mania brewing around artificial intelligence and how investors have come to see Nvidia — which makes the cutting-edge chips powering the technology — as the single-biggest winner of the boom.On Tuesday, that run culminated in Nvidia unseating Microsoft Corp as the world’s most valuable company with a market capitalisation of $3.34tn. More than $2tn of that value has been added this year.The company’s rise was by no means assured — and neither is its staying power at the top of the S&P 500. Long-time investors in Nvidia have had to stomach three annual collapses of 50% or more in the stock. Sustaining the current rally will require customers to keep spending billions of dollars a quarter on AI equipment, whose returns on investment are so far relatively small.What ultimately paved the way for Nvidia to climb to the top, though, was the company’s big bet on graphics chips and the vision of co-founder and Chief Executive Officer Jensen Huang that the industry would shift to what he calls “accelerated computing,” something his chips are inherently better at than the competition.“You have to give the management team, I think, an enormous amount of credit,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “They have caught each wave of innovation in hardware perfectly well.” Early Years Nvidia got off to a hot start.Between its debut and the time it entered the S&P 500, the stock gained more than 1,600%, giving it a market value of about $8bn. That rise came as many other technology stocks were cratering in the aftermath of the dot-com bubble, which peaked in March 2000.The company’s key to early success: getting its technology in video-game consoles like Microsoft’s Xbox and Sony’s PlayStation. Nvidia’s GeForce graphics processing units, or GPUs, became objects of desire among gamers because they consistently offered the most realistic experience.“Jensen was always a great communicator, told a good story, and clearly GPUs were becoming more important,” said Rhys Williams, chief strategist at Wayve Capital Management, who was a buyer in the IPO. “Each successive generation of hardware gave a lot better performance, a lot more realistic picture and then PC gaming really came into being.”The next six years weren’t kind to Nvidia. The stock plunged in 2008 as the financial crisis weakened demand and long-struggling rival Advanced Micro Devices Inc started turning things around.Meanwhile, an agreement between Nvidia and Intel that allowed the companies to use each other’s capabilities went sour, forcing Nvidia out of one of its biggest markets. The two settled in 2011, with Intel agreeing to pay Nvidia $1.5bn.The following year, Nvidia unveiled graphics chips for servers inside data centres. They could help sophisticated computing work such as oil and gas exploration and weather prediction, giving Nvidia a foothold in what would become a lucrative market. However, those chips did not immediately fly off the shelf. It would take nearly nine years for Nvidia shares to surpass their 2007 high.Nvidia shares took off again in 2015. During that period, the company’s chips were becoming the foundation of emerging technologies, from advanced graphics interfaces to autonomous vehicles to a new wave of AI products.That’s when Shana Sissel, chief executive officer at Banrion Capital Management, first really took note of the company. She described a 2017 conference where Nvidia was more like a pageant winner than an investment idea.“Every single speaker talked about Nvidia being the most important company,” Sissel said. “At that point, it was really on my radar screen.” Even after demand from cryptocurrency miners dried up, data-centre sales continued to grow. The Covid-19 pandemic boosted that business, as companies needed to purchase additional computing power to support remote work. Nvidia’s data-centre revenue rose by a multiple of eight from fiscal 2017 to fiscal 2021.Nvidia’s shares slumped in 2022 along with the rest of the technology sector, which was reeling from soaring interest rates and falling demand after the Covid-era boom.OpenAI’s release of ChatGPT in late-2022 made an instant splash but it took time for investors to realise how Nvidia might benefit. Eventually, interest in ChatGPT and other generative AI products exploded, triggering a frantic surge in orders for Nvidia’s chips.When the company reported first-quarter 2023 earnings, the scale of the jump in its business shocked nearly everyone on Wall Street. Nvidia gave a forecast for quarterly sales that was more than 50% above the average projection.Nvidia’s data-centre sales eclipsed its gaming revenue for the first time in fiscal 2023. In Nvidia’s current fiscal year, analysts expect those sales to top $100bn.“They have a very defensible place in the industry,” said Williams, the strategist at Wayve Capital Management. “They’re not gonna be 95% of market share forever, obviously, but it would be almost impossible for anybody to replace them.”

Gulf Times
International

India shuns China callsto resume passenger flights, say officials

China is pressing India to restart direct passenger flights after a four-year halt, but New Delhi is resisting as a border dispute continues to weigh on ties between the world's two most populous countries, officials said.India-China relations have been tense since the biggest military confrontation in decades on their disputed Himalayan border killed 20 Indian and at least four Chinese soldiers in June 2020. Thousands of troops remain mobilised on each side.Since the clash, India has made it difficult for Chinese companies to invest, banned hundreds of popular apps and severed passenger routes, although direct cargo flights still operate between the Asian giants.Direct flights would benefit both economies, but the stakes are higher for China, where a recovery in overseas travel after the Covid-19 pandemic is lagging, while India's aviation sector booms.Several times over the past year or so, China's government and airlines have asked India's civil aviation authorities to re-establish direct air links, two people with direct knowledge of the matter said, with one saying China considers this a "big issue"."We hope the Indian side will work with China in the same direction for the early resumption of direct flights," China's foreign ministry said in a statement last week, adding that resuming flights would be in both countries' interests.But a senior Indian official familiar with India-China bilateral developments said of Beijing's desire to resume flights: "Unless there is peace and tranquillity on the border, the rest of the relationship cannot move forward."Indian airlines are holding discussions with New Delhi, while Chinese carriers are talking to their government about resuming direct routes, CEO Pieter Elbers of Indigo, India's largest airline, said.India's external affairs and civil aviation ministries did not respond to requests for comment.Beijing has repeatedly protested India's ramped up scrutiny of Chinese businesses since 2020. Chinese smartphone giant Xiaomi told India's government this year that "confidence building" measures were needed as component suppliers were wary about setting up in India, citing compliance and visa issues.Direct India-China flights peaked in December 2019, with a total of 539 scheduled flights by the likes of IndiGo, Air India, China Southern, China Eastern, Air China and Shandong Airlines, data from aviation analytics firm Cirium shows.Chinese carriers scheduled 371 of those flights, more than double the 168 by India's airlines.Flights were halted four months later as the pandemic escalated. Except for a smattering of Covid repatriation flights, they have not resumed even though India lifted Covid restrictions on international air routes a year later and China lifted all Covid travel measures in early 2023.Travellers must now change planes either in Hong Kong, which has a separate aviation regulator and border controls from the rest of China, or in hubs like Dubai or Singapore.This has lengthened the India-China journey from less than six hours to upwards of 10, handing business - including lucrative through traffic to the US - to carriers like Emirates, Singapore Airlines and Cathay Pacific .The recovery in Chinese overseas travel is lagging due to rising costs and difficulties in securing visas for the world's top spenders on international tourism and airlines.Indigo's Elbers said a recent interview in Dubai, "When the time is right and the governments come to a mutual understanding of how to move forward, we'll assess the market."IndiGo flies seven times a week on the Delhi-Hong Kong route, where passengers can connect to mainland China.Air India CEO Campbell Wilson said direct India-China flights "would seem to be a huge potential market" but for now there are factors at play "beyond our level".

Gulf Times
Opinion

Why Europe needs Chinese investment

Over the past two decades, the productivity gap between Europe and the United States has steadily widened, with labour productivity in the US growing at more than twice the pace of the eurozone’s. The European “competitiveness crisis” can be attributed to several factors, including insufficient public and private investment, a shortage of tech firms and venture-capital funds, and the continent’s demographic decline. Another possible explanation that is often overlooked is the decline in foreign direct investment (FDI).FDI is a crucial driver of productivity growth, introducing recipient countries to new technologies, knowledge, and management skills. After falling by 4% in 2023, Europe’s FDI inflows are now 14% below their 2017 peak. Germany experienced a sharp 12% drop in foreign investment last year, undermining its post-pandemic recovery. In the United Kingdom, inward FDI declined by nearly 30% since 2016-17, as Brexit prompted foreign firms to redirect investments to other European countries. French policymakers seem determined to benefit from this shift, with President Emmanuel Macron actively marketing his country to foreign investors.Attracting FDI is crucial for the European Union as it grapples with two emerging challenges: de-risking its supply chains and preventing member states’ economies from experiencing a China shock similar to the one the US experienced after China joined the World Trade Organisation in 2001.FDI flows may play a key role in addressing both of these challenges. Climate change and heightened geopolitical tensions have made global supply chains increasingly vulnerable, especially since most inputs for green industries, such as semiconductors and battery cells for electric vehicles (EVs), come from Taiwan, South Korea, and China. A 2012 paper by MIT economist Daron Acemoglu and co-authors suggests that such geographic concentrations of input suppliers increase the risk of economic shocks. As supply disruptions reverberate across the global economy, they create multiplier effects that compound the initial disruption.Moreover, firms cannot protect themselves against such disruptions by diversifying their suppliers, since no alternative sources are available outside Asia. This vulnerability was underscored in 2021 when the Taiwan Semiconductor Manufacturing Company (TSMC) had to shut down some of its factories due to the Covid-19 pandemic and a severe drought, halting automobile production worldwide.To foster diversification, the EU has begun subsidising foreign investments in battery cells and semiconductors through the European Chips Act and the European Battery Alliance. Much like the Inflation Reduction Act and the CHIPS and Science Act in the US, these measures aim to ensure that enough alternative suppliers are available in the event of a climate disaster or geopolitical conflict.Despite these efforts, however, there are signs that Europe has begun to experience its own China shock. In 2022, for the first time ever, Germany imported more cars and machinery from China than it exported. A recent study by Allianz Research finds that China has surpassed Germany in key sectors of the global export market. For example, China’s share of machinery and equipment exports increased to 29% in 2022, compared to Germany’s 15%. While Germany still leads in exports of automobiles and transport equipment, with a 17% share compared to China’s 9%, its lead is diminishing.This should alarm policymakers for two reasons. First, losing its lead in critical high-tech sectors poses a major threat to Germany’s economic model. Second, a European China shock could fuel the rise of far-right parties like the German Alternative für Deutschland (AfD).The US should serve as a cautionary tale. The China shock of the early 2000s had a devastating impact on manufacturing regions, as workers displaced by Chinese competition struggled to find new jobs and often had to settle for significantly lower wages. The decline in manufacturing employment contributed to an epidemic of “deaths of despair” – from suicide, drug overdoses, and alcoholism-related liver disease – and set the stage for Donald Trump’s victory in the 2016 presidential election.With this in mind, EU policymakers are considering imposing import tariffs on Chinese EVs. In a recent speech, European Commission President Ursula von der Leyen said that the Commission has launched an anti-subsidy investigation into the Chinese EV industry and accused China of violating fair competition rules in an effort to “flood our market with massively subsidised electric cars.”US President Joe Biden’s decision to impose a 100% tariff on Chinese-made EVs is likely to redirect Chinese EV exports from the US to Europe, which leaves European policymakers with no choice but to impose their own import tariffs.Such a move could have the added benefit of boosting Chinese FDI flows to the EU, as Chinese carmakers might try to bypass import tariffs by building new factories in Europe and selling EVs directly to European consumers.But more must be done. By forming partnerships with companies in technologically advanced economies like China, Taiwan, South Korea, and Israel, European firms could bridge the EV and digital knowledge gap and increase FDI flows to the EU. For decades, China has used this strategy to become a world leader in green technologies, forcing Western companies to form joint ventures with domestic manufacturers to access the vast Chinese market.Today, the roles are reversed: China is now a technologically advanced economy seeking access to the large EU market for its EVs, and European countries lack the necessary technical expertise to remain competitive. To boost FDI flows and improve its competitiveness, the EU should reverse engineer China’s industrial policy and require Chinese EV manufacturers to establish joint ventures with domestic companies in exchange for market access. — Project SyndicateDalia Marin, Professor of International Economics at the School of Management of the Technical University of Munich, is a research fellow at the Centre for Economic Policy Research and a non-resident fellow at Bruegel.

Gulf Times
Opinion

How Denmark is keeping the far right at bay

Unlike in other countries, the far right in Denmark did not dominate this month’s European elections. Although populism surged in the country a decade ago, the parties at the centre have pushed the far right to the fringes and are now back in control. In the 2014 European Parliament election, the far-right Danish People’s Party (DPP) shocked the political establishment by winning the largest number of seats, with the party’s main candidate setting a national record for personal votes received. Then, the DPP triumphed in the general election one year later, to become the largest party in the conservative bloc, and the second-largest party in parliament. But in the European elections this month, the Danish far right was left scrambling to hold on to just one seat. What happened? Since the shock of 2014, the established political parties, led by the Social Democrats and the current prime minister, Mette Frederiksen, have adopted elements of the far right’s policy positions, especially on immigration, which is generally seen as the main driving force behind the rise of populism. Whereas Denmark once had among the most liberal immigration regimes in Europe, it has gradually tightened its policy and introduced stricter requirements for those seeking Danish citizenship. Another factor in recent populist waves is the deterioration of living conditions outside the big cities, where jobs and opportunities have been disappearing throughout the globalisation era. To address this problem, successive Danish governments have shifted public funds away from the cities – especially the capital, Copenhagen – to shore up social mobility in small-town Denmark. Meanwhile, the run-up to the recent European Parliament election demonstrated that the far right has fallen out of sync with an overwhelming majority of Danish voters on two key issues: climate change and security policy. In addition to challenging the European Union’s authority to act against climate change, far-right politicians have even announced their intention to withdraw from key climate agreements at the national level. Yet poll after poll has shown that Danish voters demand aggressive policies to combat climate change. Likewise, on security policy, the far right questioned the EU’s legitimacy as a forum for collective action, and argued that Danish security policy should be decided solely under the auspices of Nato. Yet in light of Russia’s war on Ukraine, Danish voters strongly disagree. While the Danish far right has always been skeptical of the EU, the DPP did not follow other right-wing nationalist parties in moderating its position in the years following Brexit and the Covid-19 pandemic. Instead, it doubled down and called for Denmark to leave the EU altogether. While that move consolidated the party’s electoral base, it radically reduced its chances of regaining its earlier strength. Danish support for EU membership has grown, and, in 2022, a referendum even scrapped a longstanding opt-out on defence cooperation. These sentiments should not come as a surprise. Danish television viewers watched in horror as the British House of Commons descended into chaos in the wake of Brexit. Britain’s political turmoil and economic sclerosis have convinced many Danes not to pursue a similar path. Similarly, Russia’s war of aggression has underscored the importance of EU membership and joint policymaking. Denmark is a strong supporter of not only Ukraine but also the Baltic countries, any one of which could be next in line. But while the far right has been pushed to the margins of Danish politics – owing to its hardened hostility toward the EU and the centre’s neutralisation of immigration as an issue – the threat of populism is still alive. The far right has splintered, and – contrary to what one might assume – this development is not necessarily beneficial for the political center. The breakaways, under the banner of the Denmark Democrats party, made a strong showing in the 2022 general election, and have secured one seat in the European Parliament. While the new party is closer to the centre and more supportive of EU membership, it has managed to keep immigration on the agenda. Sensing the risks, the Social Democrats’ spokesman on immigration, Frederik Vad, recently warned foreigners in the country against engaging in subversive activities, implying that non-native residents are not generally well integrated into Danish society. By shifting the issue from levels of immigration to the supposed challenges of integration, Vad, who is backed by the prime minister and other established parties, echoed what the far right has been claiming for years.