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Chinese Markets Poised for Wild Volatility in 2023 By Bloomberg

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(Bloomberg) — When China’s securities regulator pledged to reduce market volatility in January, few expected it to be one of the most turbulent in recent memory.

The drama only increased this quarter, setting the stage for more turmoil in 2023.

Chinese stocks now move 5% a day more frequently than at any time since the global market crash of 2008. Market volatility is near a record high. The cost of insuring Chinese government debt against default is at a multi-year high.

While the market consensus is that Chinese assets will rise over the next 12 months, the catalysts for extreme shifts in sentiment are still everywhere: from the overwhelming contagion risk as Covid-Zero recedes, to the ongoing real estate crisis and a regulatory culture that never stops springing. surprises. China’s relations with the United States remain fraught, and the economic outlook at home and abroad is more uncertain than ever.

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Traders who got burned after betting on a rally in China this time last year are back. But they are much more careful.

“It’s not going to be a smooth one-way trip,” said Keiko Kondo, head of multi-asset investments for Asia at Schroeder Investment Management in Hong Kong. Investor sentiment is still very fragile – and the one thing people don’t want to own is extreme volatility. That is why we did not go all the way to overweight Hong Kong and mainland stocks.”

Traders express their caution by piling up derivatives that will pay out if stocks and the yuan collapse, while building a hoard of those who should profit if those assets rise.

The HSCEI volatility index, which serves as a measure of fear for Hong Kong’s stock market, is up 50% this year and well above its average over the past decade, even after slipping from its October high. While all global markets have seen volatility, the equivalent measure of US stocks is far behind with a 33% increase since the start of 2022.

“2023 is not going to be easy,” Kieran Calder, head of equity research for Asia at Union Bancaire Privee, said on Bloomberg TV. We are cautiously optimistic about reopening in China. The big swing factor is how China will emerge from Covid and how quickly.”

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The bulls base their argument on Beijing refocusing the economy as officials consider a 5% growth target for 2023. Achieving that target will likely require a well-executed exit from Covid Zero and further deleveraging in the real estate market — two policies that have lowered Chinese asset valuations for nearly from two years.

With valuations so low and positioning by global investors light after sharp outflows, it wouldn’t take much for the recovery in asset prices to sustain. But it wouldn’t take much to generate volatility with these components either.

The language accompanying the current chorus of orders to buy Chinese assets reflects a degree of caution not present a year ago.

“The road will be bumpy,” Morgan Stanley (NYSE::) strategists including Laura Wang wrote in a recent note to upgrade Chinese stocks.

“Activity is resuming, but we see China on a path of declining growth,” the team at BlackRock (NYSE::) Investment Institute wrote.

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“Things can still be choppy,” said Christina Wun of Abrdn plc.

Bears form pessimism on top of the same warnings about volatility that come from bulls.

For them, confirming Xi Jinping’s third term at the helm of the Communist Party means continuing to risk China’s financial markets rather than policy stability.

There is little sign that policymaking will become more transparent and predictable. Case in point health officials pledged an “unwavering” adherence to Covid Zero as recently as November, only to state media claiming a near victory over the virus this month, undermining markets along the way rather than calming them.

“Although some equity promoters continue to recommend China as a recovery bargain for 2023, this narrative has been around since spring and many are giving up,” said Simon Edelsten of Artemis Investment Management LLP in London.

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He said that for investors targeting growth and a market-friendly governance framework, the arguments for avoiding China in the long run are getting stronger. Edelsten’s team has reduced exposure to Chinese assets in the two products it operates to 1% at Hong Kong-based AIA Insurance Group (OTC: Ltd).

However, the volatility may be worth the risk for tactical traders in the short term as battered assets jump back in. Consider returns of more than 500% on Country Garden Holdings’ bonds, or a rally of more than 200% in shares of Ali Baba (NYSE: Health Information Technology Ltd.) Since late October.

“The market is likely to be volatile amidst a bumpy transition period ahead,” writes Mark Heffel, chief investment officer at UBS Global Wealth Management. “But we also see opportunities in sectors that will directly benefit from China’s transition to eventual reopening, including pharmaceuticals, medical equipment, consumer and internet, transportation, capital goods, and materials.”

© Bloomberg LP 2022

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Red Flags That Your Spouse Is Hiding Money (And What To Do About It)

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Marriage can be hard enough without one spouse hiding money from the other.

When financial infidelity occurs in the form of “hidden cash,” a marriage or a live-forever relationship can easily be ended.

The truth is About 30% of American couples suffer from financial infidelity. Other evidence shows that more than 75% of couples describe the hidden money situation as negative and common 10% of these scenarios end in divorce.

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US judge orders Norwegian Cruise Line to pay $110m for use of Cuba port By Reuters

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© Reuters. Norwegian American Airlines cruise ship Marina arrives in Havana Bay, Cuba on March 9, 2017. REUTERS/Alexander Meneghini/File/File Photo

Written by Brian Ellsworth

MIAMI (Reuters) – Norwegian Shipping Line (NYSE) has to pay $110 million in compensation for the use of a port confiscated by the Cuban government in 1960, a US judge said Friday, marking a significant milestone for Cuban Americans. Who are seeking reparations for the Cold War era. Assets confiscation.

The decision by US District Judge Beth Bloom in Miami follows her decision in March that use of the Havana Cruise Terminal constituted smuggling of forfeited property belonging to the plaintiff, Delaware-registered Havana Docks Corp.

The decision read: “The judgment is made in favor of Plaintiff Havana Docks Corporation and against Norwegian Cruise Line Holdings, Ltd.”

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“The plaintiff was awarded $109,848,747.87 in damages,” it says, adding that the Norwegian must also pay an additional $3 million in legal fees and costs.

Norwegian Cruise Line did not immediately respond to a request for comment.

Cuban President Miguel Diaz-Canel has sharply criticized the Helms-Burton Act, calling it an extraterritorial violation of international law.

Havana Docks also sued Carnival Cruise Lines (NYSE: ), Royal Caribbean (NYSE:) and MSC under the Helms-Burton Act, which allows US citizens to sue over the use of property seized in Cuba after 1959.

The ruling could fuel more lawsuits by Cuban exiles pursuing claims, worth $2 billion, according to one estimate, over asset seizures under late Cuban leader Fidel Castro.

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It may also serve as a reminder to multinational companies of the complexities that can come with doing business in Cuba.

In 2016, US cruise ships began traveling to Cuba for the first time in decades after a détente negotiated by former President Barack Obama eased some provisions of a Cold War US embargo.

But the Trump administration in 2019 ordered a halt to all such cruises amid efforts to pressure Cuba over its support for Venezuelan President Nicolas Maduro, Washington’s ideological foe.

The Trump administration has also allowed US citizens to sue third parties for using property seized by Cuban authorities, a provision of the Helms-Burton Act that every previous president has waived since the law was passed in 1996.

Havana Docs says Cuba, which has been under a US trade embargo for decades, has never compensated it for taking the drug.

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The four cruise lines sued in 2019 in the US District Court for the Southern District of Florida. Bloom in March held the companies liable for damages under the Helms-Burton Act, also known as the Libertad Act.

According to the US-Cuban Economic and Trade Council, a nonprofit organization that provides information on relations between the two countries, 5,913 validated claims related to property seized in Cuba represent an estimated liability of nearly $2 billion.

Forty-four lawsuits have been filed under Title III of the Helms-Burton Act, the organization says.

“For the current plaintiffs of Cuban descent, (the decision) will give them a moment of relief,” said John Cavulich, the group’s president. “It will give them a moment to say ‘You can run but you can’t hide,’” Cavulich said.

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Is a Royal Caribbean or Carnival beverage package worth it?

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An all-inclusive beverage package that gives you access to beer, wine, liquor, bottled water, soda, specialty coffee, and even shakes/juices may cost more than your cruise fare.

This is especially true right now when many cruise cabins are being sold at discounted prices while the drinks package prices have gone up.

Deciding whether to purchase a drink package is a challenge because you have to estimate whether you will be drinking enough to cover the cost. Or, more importantly, whether you’d spend more if you decided not to purchase a drink package.



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