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Q2 Special: Delta takes over

WORLD

What changed around the world?

As 2021 went on, the world kept on moving forward. We saw Biden make more moves for national security, and also witnessed the annual G7 summit in the UK.

🐿️: Let’s refresh our memory 🙂

#1 Time to test digital yuan? 💰

China started testing digital yuan in a few major cities, with a broader roll-out expected to come during the Winter Olympics in Beijing next February.

  • Digital currency? It might seem like our money is already virtual since we pay online using Apple Pay, Grabpay, Alipay… etc, but a digital yuan would not involve a third party (like a bank, or payment apps).
  • We want in too 🇺🇸 Fed said it is also researching plans for a digital USD – however, it’s not in a rush, as they want to “get it right”.

#2 Biden: Let me change Trump’s policy 👔

Biden kept busy in the 2nd quarter, amending Trump’s blacklist on Chinese companies, blocking 59 firms. The ban took effect on August 2nd and gave investors one year to divest.

    • The ban largely continued ex-President Trump’s policy but came with slight changes to focus more on defense + surveillance sectors, and to make sure the law was legally sound in the long term.
  • Nooo, my phone! 📱 One company affected by the ban was Huawei, one of the largest smartphone makers in recent years. China’s top 3 telecom companies were also placed on an investment blacklist – meaning US investors can no longer invest in them.

#3 We’re back after a break 🤝

World leaders met at the southern English coast of Cornwall (with some nice views) for the 47th G7 summit – the first time they met since the previous meeting was canceled because of Covid.

  • What did they chat about? 💬 Vaccines were on their minds, as they agreed to provide 1 bln doses of Covid vaccines for other countries.
  • One-Belt-One-Road v.s. B3W (Build Back Better World). G7 leaders also agreed to try and form a rival to China’s Belt and Road Initiative infrastructure plan (in theory), meant to counter Chinese influence overseas by providing financing for poorer nations.

BUSINESS

Some say hello, some say bye

Two massive US debuts and a major bank said “goodbye 👋” to the US in the second quarter – let’s jump right into it.

#1 The largest US crypto platform goes public

It was a big, big moment for crypto on April 14th, as the largest US crypto platform, Coinbase went public on the US stock exchange.

  • What’s Coinbase? 🧐 It’s a platform that allows users to trade cryptocurrency – Some estimate that Coinbase holds over 11% of the entire world’s crypto assets.

The stock tumbled 📉 after its debut, and despite briefly hitting a valuation of USD 100 bln. But its price is now well below its debut.

#2 A warm welcome for Oatly 

The oat milk 🥛 producer Oatly made its debut on the 20th of May, and investors extended a warm welcome, pushing its share price up over 18% on debut.

  • Not just oat milk 🍦 The company is known for being one of the largest plant-based milk companies but has expanded into yogurt and ice cream as well.
  • Since then though, a short-selling firm called it “an inflated bubble stock”, and production in 2021 slowed due to global issues.  

As of December, Oatly is trading nearly 50% below its IPO price.

#3 HSBC: Goodbye, America! 

While two companies said hello to the US, one said goodbye. In May, The British bank 🏦 HSBC said it would sell the majority of its retail banking business, and pull out of the country.

    • HSBC had huge losses in the US, as many American residents would choose other more accessible banks like Chase or Bank Of America. 
  • We’ll stay for you 💰 HSBC sold most branches but kept a few open for wealthier customers. The bank shifted focus to Asia – particularly China + Singapore.

TECH

Big changes, big effects

Two massive changes happened to the companies Alibaba and Apple in the 2nd quarter, and the effects are still being felt today. 

Alibaba… and the start of China’s tech crackdown?

Let’s start with Alibaba first. The big tech company was slapped by Chinese regulators with a record USD 2.8 bln fine for monopolistic behavior.

  • No more “choose 1 of 2” 🚫 Alibaba previously told merchants if they sold on Alibaba, they were not allowed to sell on other platforms. Merchants would always choose Alibaba – its user base was over 50% of China’s population.
  • Chinese regulators were not happy and said Alibaba hurt competition and innovation, slapping them with a massive fine – equivalent to 4% of its 2019 revenue.

Previously, penalties were considered “symbolic”. This fine told us that regulators were starting to get more serious. Since then, we’ve also seen crackdowns on Tencent, Didi, and other Chinese tech giants.

This became the start of China’s tech crackdown…

Many said @#$%&! to Apple 🤬

Many social media apps have been angry at Apple since this change in May, as an iOS 14.5 update has significantly affected the advertising profit of many major apps. 

  • Er… don’t track me 🤔The update required apps to get permission from users before tracking usage behavior – Nearly 90% of global users said no.
  • The change made it difficult for advertisers to acquire data and hurt their revenue. Both Facebook and Snapchat had a slowdown in revenue because of this update.

Thanks, Apple! 🤣 Google had a good laugh though, as many advertisers stopped spending money on Facebook and Snap – and went to Google instead. 

 

COVID

Along came the delta variant

While doctors and scientists were busy, the delta variant appeared… By now, it is still the most dominant variant in the world.

I remember delta…

Yea…it became the most dominant strain in the world by late June, infecting nearly 80 countries since cases were first reported in India. 

  • A terrible world record 😢 India had a rough time dealing with Covid in April, as it recorded over 314,000 cases in a single day. 
  • “Freedom Day” is coming later 🇬🇧 The UK was forced to delay its plans for opening up till July after cases in the country soared.

Some countries were also forced to suspend plans for quarantine-free travel. In April, New Zealand opened a travel bubble with Australia, the first time in over a year New Zealand opened its borders. By May, the travel bubble had to be suspended 4 times. 

So what did countries do about delta?

The answer? More and more vaccines 💉. China led all countries, administering nearly 1 bln vaccine by June, and accounted for nearly 40% of all the vaccines given globally. There were some issues with vaccine rollout though…

  • Pause this for a moment In April, US regulators temporarily suspended the J&J Covid-19, after a blood-clotting issue affected 6 women – but they lifted it after 10 days, stating the issue was “remote”.
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