Dredging operations successful

March 30, 2021 (Tuesday) Sunny with occasional clouds; rights and dividends drop (about 180 yen)

・The Covid-19 pandemic has worsened liquidity for small and medium-sized food and accommodation businesses.

From bank account data, it was found that food and accommodation businesses with expenses exceeding income, such as real estate rents, had a cash shortfall of about 60% at January, double the previous year.

Unable to cover working capital, they rely on bank loans, etc. With the cooperation of Japan Risk Data Bank (RDB), transaction data from about 20,000 bank accounts were examined.

There is a risk that excessive debt will continue, and business rehabilitation needs to be supported.

・The governments of Japan and the United States are adjusting to state in a joint document to be issued during a summit in Washington in early April that stability in the Taiwan Strait is important.

They will also express "serious concerns" about China’s coast guard law.

・Sumitomo Mitsui Card <8316> [closing price 4,170 yen] will lower transaction fees for credit cards aimed at small and medium-sized businesses to at least 2.7%.

It will be the lowest in the card industry as well.

・Egypt's Suez Canal Authority announced on the 29th in the afternoon (Japan time the same night) that it successfully refloated the large container ship Ever Given, which had run aground and blocked the canal.

From the 23rd, the international shipping artery Suez Canal, which had been blocked, is expected to resume, but normalization may take time.

・Applied Materials, the world’s largest maker of semiconductor manufacturing equipment, on the 29th, in the legacy Hitachi system <6501> [closing price 5,346 yen] was part of the

・Under KOKUSAI ELECTRIC (Tokyo, Minato), owned by private equity firm Kohlberg Kravis Roberts (KKR), gave up on the acquisition.

Chinese antitrust authorities did not grant approval. It appears the U.S. company faced a hold on M&A by China.

・Concerns about losses tied to U.S. investment firms are spreading among financial institutions worldwide.

Nomura HD <8604> [closing price 603.0 yen] on the 29th announced that there is a possibility of a loss of about $2 billion (about 220 billion yen) related to dealings with U.S. clients.

Credit Suisse Group, a Swiss financial giant, also announced on the same day the possibility of recording large losses (30–40 billion dollars).

According to U.S. media, investment firm Archegos Capital Management sold assets at a loss last week after a drop in the value of its holdings.

Nomura and Credit Suisse losses are believed to be related to Archegos.

Nomura HD said that “there will be no major disruption to business operations,” but that it would review whether risk management was adequate.

It is not clear whether Archegos has completed asset sales, and there are concerns about a widening crack in the “excess liquidity bubble.”

・Japan and the European Union (EU) are expected to establish a framework for comprehensive cooperation on decarbonization within this spring.

They will collaborate on introducing renewable energy in Asia and other developing regions and the development of new technologies.

・Conflict between Myanmar’s military and ethnic minority armed groups is escalating.

Armed factions are intensifying offensives against the military in response to civilian resistance against the coup.

Approximately 3,000 residents have fled to Thailand.

・In response to rising infections by a mutated Covid-19 virus, local governments are accelerating measures.

Efforts include massively expanding testing for mutated viruses and hospitalizing as symptomatic even for mutated strains.

Whether expansion can be contained is a focal point.

・Bank of Japan <8301> [closing price 38,200 yen] on the 29th published a report on digital transformation (DX) in regional banks.

While cashless payments and other consumer services are expanding, the reality is that lending to corporations using AI has not progressed much.

Isolating that regional banks with higher cost ratios are less digitalized, suggesting there may be room to differentiate in corporate lending, an area where banks have historically had strength.

・As of 4:00 p.m. on 3/29, global Covid-19 infection numbers (deaths compared to the previous day) compiled by Johns Hopkins University: total 127,193,000 worldwide (6,612 deaths)

United States 30,262,380 (50,7) Brazil 12,534,688 (1,656) India 12,039,644 (291) France 4,606,185 (131) Russia 4,469,327 (331) United Kingdom 4,347,013 (21)

Italy 3,532,057 (297) Spain 3,255,324 (0) Turkey 3,208,173 (153) Germany 2,784,652 (49) Colombia 2,382,730 (165) Argentina 2,308,597 (81)

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