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To start off, we're looking into:
Alibaba cuts XPeng stake
The backstory: XPeng, the Chinese electric vehicle (EV) maker, burst onto the scene in 2014, ready to take on big players like Tesla and BYD. Setting itself apart from the traditional car crowd, XPeng positioned itself as a tech powerhouse, venturing into everything from robots to drones.
In 2019, Alibaba's arm, Taobao China, grabbed a chunk of XPeng's shares leading up to its public market debut. Beyond financial backing, XPeng and Alibaba have joined forces in the autonomous driving arena, leveraging a high-tech computing center fueled by Alibaba Cloud. They’ve also been working on in-car payments by integrating Alibaba's Alipay.
The development: On Friday, Alibaba revealed plans to sell some of its shares in XPeng, and the EV maker’s stock dropped by over 8% the same day as a result. Taobao plans to sell 25 million XPeng shares, worth around US$391 million based on Thursday's closing price, according to a filing with the US Securities and Exchange Commission (SEC). Click the link here for more.
China reportedly expands iPhone ban
The backstory: Over the past year, tensions between China and the US have risen over a series of issues. For one, the US put curbs on tech exports to Chinese companies, impacting major Chinese players like Huawei and SMIC. These companies faced sanctions due to concerns about the potential military applications of advanced chips.
Meanwhile, China looked to reduce reliance on American tech, supporting domestic companies like Huawei. In August, Huawei launched its advanced 5G smartphone, the Mate 60 Pro. This created waves in the Chinese chip industry, with experts seeing it as a breakthrough in domestically-made chips. The US government has even launched an investigation into the phone to see whether or not the company had managed to skirt those US semiconductor export curbs.
The development: A big change just rocked China's mobile market. Reports are saying that companies and government-backed groups in eight provinces now have a new rule – no iPhones or foreign devices at work, according to insiders. This rule started in September in Beijing and Tianjin and has quickly spread in the past month or two. Insiders say that the rule now covers at least eight provinces. Click the link here for more.
EV startup founder sentenced to jail
The backstory: In 2015, electric vehicle (EV) startup Nikola was founded by Trevor Milton, who would also become its CEO. The company wanted to create EVs that were bigger and more specialized, like those for long-haul trucking and other commercial uses. These rigs would use “hydrogen fuel cell technology” to be emission-free. In 2020, Nikola was introduced to the market. Investors came rolling in pretty quickly. GM even took on an 11% stake in the company and announced it would help to produce some of Nikola’s vehicles. That year, Nikola’s market cap was above US$30 billion.
Then, there was trouble. Bloomberg reported that Milton had misled people about one of Nikola’s prototypes. A few months later, Hindenburg Research released a report accusing Nikola of fraud. GM quickly backed out, and Milton stepped down.
More recently: In 2021, Milton was charged with fraud for exaggerating and making excessive claims about Nikola cars. Last year, he was put on trial in a federal US court.
The development: On Monday, Milton was sentenced to four years in prison for his fraud convictions. He also has to pay a US$1 million fine. Click the link here for more.
To end, we'll look into:
Could gene editing end malaria?
Malaria is a disease that millions of people suffer from every year, and it disproportionately affects the Global South. The World Health Organization (WHO) estimates that, in 2022, there were 249 million malaria cases and 608,000 malaria deaths in 85 countries. It’s usually spread by mosquitoes, and there’s not really any reasonable option for getting rid of those pests. But what if there was a new way to address the disease?
For the past few years now, scientists have been looking into gene editing as a potential solution to the spread of malaria. Not editing the genes of people but of mosquitoes. Malaria is a parasitic pathogen that thrives in humans but is moved from person to person by mosquitoes drinking blood. So what if there was a way to make mosquitoes themselves unable to carry that pathogen from one person to the next?
"If we can make the mosquitoes inhospitable to the pathogens, you know, we can eliminate the threat of getting the disease," explains Anthony James, a professor of molecular biology and genetics at the University of California, Irvine. Click the link here for more.
In other news ...
📉Market snapshot and key quotes:
- In the US: In the US, the market extended its seven-week winning streak on Monday, with the S&P 500 just shy of its all-time closing high it hit in January of last year. The Dow was little changed, gaining just 0.86 points, or 0.00%.
- In Hong Kong: Hong Kong stocks fell on Monday after last week's rally fueled by the Fed's policy shift.
📊Top gainers/losers and company news:
- In the US: US Steel surged more than 26% after Japan's Nippon Steel announced a US$14.9 billion acquisition deal.
- Adobe gained over 2% after deciding to end its US$20 billion merger with Figma due to regulatory challenges.
- Affirm fell 0.6% after a downgrade from Morgan Stanley.
- In Hong Kong: Xpeng was down around 1% following Alibaba’s recently revealed plans to sell 25 million of its US-listed shares.
👀The numbers everyone is watching:
- In the US: This week, attention is on US GDP data and Nike's earnings report.
- In Hong Kong: China is releasing its loan prime rates on Wednesday.
📅To check out our economic calendar for this week, click here.
More headlines ...
📰Israel/Palestine update: Recently, the Israel Defense Forces (IDF) discovered the biggest Hamas tunnel yet under Gaza – wide enough to fit a car. Israel says it's a major part of the Hamas tunnel network. Currently, there are dozens of civilians reportedly trapped in a church in Gaza City, unable to leave for fear of being shot. On Saturday, a mother and her daughter were shot and killed after they left the church to use the bathroom, and on Sunday, Pope Francis condemned that attack by saying, "Some say, 'This is terrorism. This is war.' Yes, it is war. It is terrorism." On Monday, US CIA director Bill Burns met with Qatari PM Mohammed bin Abdulrahman Al Thani and the head of Israel's Mossad spy agency in Poland to work on a possible new deal to get Israeli hostages in Gaza released by Hamas. Also on Monday, Israel said it'll be moving on to the next phase of operations in Gaza after the defense minister held talks with the US Defense Secretary about less intense combat and lowering civilian harm.
💣North Korea fires another missile: The US and South Korea are currently having talks on how to limit North Korea's use of nuclear weapons, and North Korea has already criticized this meeting. On Monday, North Korea tested an intercontinental ballistic missile off its coast, showing more of its nuclear capabilities. This comes after another missile firing from the country on Sunday.
⛴️Supply chain affected by Houthi attacks: For the past few weeks, the Yemen-based Houthi rebel group has been launching attack drones at ships traveling the Red Sea, especially ones linked to the West or Israel. At this point, the attacks are affecting trade, with many companies deciding to avoid going through these waters. Oil groups BP and Frontline have suspended trade routes through the Red Sea for now.
⛽Iran fuel supplies cut after cyberattack: On Monday, Iran began experiencing oil supply issues stemming from a system problem. Once detected, stations "disconnected the online system" and started supplying fuel offline, said Deputy Oil Minister Jalil Salari. About 60% of the gas stations in Iran have been affected. Iranian officials are saying that the country is dealing with a cyberattack from the US and Israel, and Iran president Ebrahim Raisi is calling for a full investigation.
🌊Major flooding in Australia: Northern Australia is seeing massive rains, bringing on floods that have caused families to seek refuge on their rooftops. Authorities have also warned people that the floods might bring snakes and crocodiles in with them. As the rain continues, it's challenging to rescue people.
🌈Pope allows same-sex blessings: The Catholic Church has long stood against giving same-sex couples marriage blessings, saying that it would go against the belief that marriage is between a man and a woman. But, on Monday, the Vatican said that Pope Francis gave the green light for priests to bless same-sex couples. But these blessings aren't marriage blessings and shouldn't be given during marriage or union ceremonies.
🚫Adobe and Figma kill their deal: Adobe is known for its creative software and planned on acquiring Figma, which is used for interface design. But, it doesn't look like Adobe will be able to get past regulators in Europe in order to complete this purchasing deal. So, Adobe is walking away and will pay Figma a US$1 billion termination fee.
🕵️♀️The EU is investigating X: Social media has been a breeding ground for spreading false or misleading information lately, especially when it comes to the conflict in Israel and Palestine. Now, the EU is investigating X (formerly Twitter) about this kind of content on its platform, which might count as breaking its rules under the new Digital Services Act (DSA).
🏃Chinese firm bases bonus on exercise: For many, it's that time of year for much-anticipated holiday bonuses. But one Chinese company has come up with new rules that are stirring up controversy. Guangdong Dongpo Paper plans to distribute bonuses according to how far an employee jogged that month, with the reported aim of promoting a healthy lifestyle and making workers happier. But the internet is wondering if this is an attempt to essentially cut bonuses or scrap them altogether. Weibo users point out that it would be hard for employees to run as much as the company expects since Chinese private-sector workers put in long hours.
👨⚖️Jonathan Majors found guilty: Actor Jonathan Majors, known recently for his roles as Kang the Conqueror in the Marvel Universe and Damian Anderson in "Creed III," has been on trial over assault charges stemming from an incident in March with his then-girlfriend Grace Jabbari. After his arrest, Majors was dropped by his management, PR firm and several advertisers, and Disney scrapped his upcoming film "Magazine Dreams" from its schedule. On Monday, he was found guilty of one count of misdemeanor assault and one of harassment and acquitted on the other charges. Marvel Studios has since also dropped Majors, as reported by Variety.
🚗Insurance company: "You hit WHAT?": On Sunday evening, US President Joe Biden was having dinner with staff at his campaign headquarters when someone crashed their car into a parked vehicle that was part of the official White House motorcade. Security quickly circled the car while Biden was whisked away in his armored SUV. After speaking with the driver, police found the crash was an accident and charged the 46-year-old driver with DUI and inattentive driving. The Secret Service also said they found no evidence that the president was at risk.
☃️Hong Kong is chilly: Hong Kong's been experiencing some cold weather lately, with temps hitting the coldest all month so far on Sunday at 11.4 C (52 F). Now, the Hong Kong Observatory is saying people in the city can expect things to warm up a tad this week before dropping to expected lows of around 12 C (53 F) sometime between Wednesday and Friday.
📸Funny pic awards: Every year, the Comedy Wildlife Photography Awards crowns a winner of a funny wildlife photo chosen from thousands of entries as a way for people to engage more with animals and to participate in conservation efforts. The 2023 winners were announced a few weeks back. "Air Guitar Roo" won the overall competition, but a lot of other photos were also category winners, including one of two green finches in what seems to be an argument. This one is called "Dispute."
Which EV maker is Alibaba’s Taobao the second-largest shareholder of?
Scroll wayyy down for the answer if we stumped you ...
And the answer is ... XPeng!
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