INDIA
Comrade RB More: Bridge Linking Dalit and Communist Movements

The struggle for liberation from untouchability and the class struggle can learn to come together through lessons from his life.

Subhashini Ali 15 May 2020


The month of April is filled with memories of Phule and Babasaheb and narratives of their birth, life, writings and struggles. Then comes May, which brings reminisces of comrade Ramchandra More, who fought for the Dalits in the tradition of Phule and participated in the great revolutionary movements of Babasaheb. He died on 11 May 1970.

Comrade More was born in 1903 in a part of the Konkan which was the birthplace of all the Mahar caste members who, like Babasaheb Ambedkar’s father, were soldiers and freedom fighters. This section of Dalit society, having joined the army in large numbers, had been able to access some education. Permanent jobs, followed by assured post-retirement pensions provided the members of this section considerable strength, and social respect too. Many of them were associated with the social reform movements of their time: they met Jyotiba Phule, they visited Shahuji Maharaj, and they worked to spread both egalitarian literature and ideas.

It was in this society and in this environment that Comrade More was born, with an instinctive desire to struggle for self-respect. This desire, once it arose, very soon became an indelible part of his attitude and demeanour. He was uniquely talented. At a young age, took a three-day walk to Alibaug. It is during this journey that he experienced for the first time the implications of being an “untouchable”. Because he was not allowed to enter the dharamshalas that fell along the way, he had to spend the nights with animals.

In Alibaug, he took the entrance test of the English school at Mahad. He was the only Dalit to appear in that examination, but he scored the highest marks and also earned a stipend. The difficult circumstances in which he took the test included not only the fatigue and humiliation of the journey, but also the misery of having lost his father just a few days ago. Yet he was denied admission in the school, because its landlord said that if an “untouchable” was allowed to enter, he would vacate the entire school altogether. Incidentally, several decades later, during the Mahad Satyagraha, members of the very same landlord’s family also opposed the attempt of the Dalits to drink water from the Mahad Tal under Babasaheb’s leadership.

Comrade More sent a postcard to a newspaper against this injustice. As a result, the school had to admit him, but he had to get his education from outside the class, sitting near the window.

Mahad was also a market hub for all the nearby villages. Comrade More used to interact with the Mahars, the other Dalits and poor agricultural labourers and farmers who came there from far-flung areas. He became well-acquainted with every aspect of their lives. With his efforts, a tea shop operated by a Mahar was opened, where all untouchables got drinking water, which they were earlier denied. This shop became their base. Here he would meet people, write down their requests and get all the information about their problems. After some years, this tea shop took the shape of a small hotel, where people could spend the night.

In 1923, a very important decision was taken at this base. A resolution had been passed in the Bombay Legislative Assembly to make all public places accessible to the “untouchables”. To implement this, on the very next day, Comrade More decided, along with all the people gathered at this base, that a big convention for the rights of untouchables would be organised at Mahad, which would be presided over by Babasaheb. After this, Comrade More went to Bombay and invited Babasaheb, but it took a long time to persuade him. During this time, he became very close to Babasaheb and began assist him with his publication-related work, and got a good hold over the craft of journalism.

Meanwhile, in his own village Dasgaon, Comrade More successfully got hundreds of untouchables together to drink water from the village lake which was always forbidden to them.

In the end, Babasaheb’s program for Mahad was set for March 1927 and Comrade More was its chief organiser. He visited all the villages in the Konkan belt and mobilised thousands to join Babasaheb’s program. On that day, when thousands of Dalits reached Mahad’s Chavdar Tank under Babasaheb’s leadership and people lined up to touch its water, they were fiercely attacked—but they had already touched its water. The Savarnas proved this when they carried out a “purification” ritual of this water.

Nine months later, on 25 December 1927, Comrade More and his comrades announced another Satyagraha. As Babasaheb left for Mahad from Bombay taking the water route, workers of the Samata Sainik Dal saluted him in farewell. It is Comrade More who had founded this historical party. This gives an indication of his position in the Dalit movement of the time. It is this party’s members who confronted the tyranny of the Savarnas in the Dalit colonies. It is believed that the irritation this party caused was one reason why the RSS was established in Nagpur.

After the 25th December session, the crowd marched towards the Mahad Tal again. It was attacked once more. But that day Babasaheb gave the most compelling evidence of his resistance by publicly setting the Manusmriti afire. By holding a religious scripture responsible for a grossly inhumane crime such as untouchability, Babasaheb posed a major challenge to the populist movements of the day. It was now an imperative for the liberation movement in India to accept and acknowledge his movement.

Comrade More spent most of his time in Bombay with Babasaheb, helping him with his work. He used to stay in the workers’ chawls and had many conversations and discussions with those who lived with him—especially the workers in the cotton factories. He had a keen interest in cultural activities and actively participated in them. This strengthened his relations with all the workers’ communities.

At the same time, through members of the left unions, he became acquainted with the leaders of workers as well. He started participating in union activities; distributing pamphlets, writing on the walls, preparing for strikes, and so on. His experiences of class struggle came not from a book but from the lives of people just like him. To transform these experiences into practice and thought, he held long debates and discussions with Marxists such as SV Deshpande, BT Ranadive and RM Jambhekar. The caste oppression which he had knowledge about from the moment he was born now took the form of the flame that emanates from the furnace of class struggle.

Working with Babasaheb, he acquired this new knowledge with full force and, after a deep study of the Communist Manifesto, in 1930, decided to join the Communist Party. He informed Babasaheb about it. Instead of being angry, he encouraged Comrade More to pursue this path, but also told him that he was worried whether the organisation he is joining will give him the respect he deserves. Until the end, Comrade More remained a communist. In 1964, he decided to join the CPI(M). The same year, he sent a letter to the party leadership, in which he mentioned a few things: that Dalit society is the largest, most oppressed and exploited part of the working class. That only by fighting the social exploitation of this section, which is a moral and ethical duty, can the Communist Party attract them to its movements in large numbers.

These words of Comrade More in his letter have become very relevant in a new way today. Now at the Center and in many states there are governments inspired by the RSS, which had announced in 1950 itself that it upholds the Manusmriti as justice and law and not the Constitution written by Babasaheb. In the wake of this misguided thought process, governments, under direction from the RSS, are making all-out attacks on Dalits, labourers, women and the minorities. Bringing those sections and communities that are victimised by these attacks together is the duty of the communist movement, which has always brought about radical changes in society.

To achieve this, the communist movement will have to participate in the social and cultural campaigns striving for Dalit rights and support the organisations that run them. It will have to demonstrate its full vigour, so as to instil the confidence and desire in these movements to join hands with the communist movements. A movement to overcome untouchability and social oppression will require continuous proof of being prepared to suffer and face martyrdom.

That the government is carrying out attacks on the workers and working classes is clearly evident. The concerted attacks against Dalit rights and Dalit self-respect are no less obvious. Behind these attacks stands Manu-wad, the justification of inequality which prescribes terrible punishments for the Dalits and opposes their equal status. Financially too, there are constant attempts to weaken Dalit communities. Manu-wad desires to remove the Dalits from the field of education and deny them employment opportunities. That is why Dalits are being deprived of many rights and entitlements, their judicial protection against atrocities is being neutralised.

To push any segment of society back, it is necessary that its talented heroes are forcefully riven from it. This has also been happening. Rohith Vemula, who had sought to fashion a new path for the liberation of Dalits was institutionally murdered; Anand Teltumbde has vanished from sight, pushed behind bars. Both of them had sought to bring the struggle for liberation from oppression, including untouchability, and the class struggle closer. Both these streams of thought flow at a considerable distance from each other. Yet, somewhere, their goals also cleave to each other today. What is needed is a strong bridge between these two movements. Surely Comrade More’s life struggle and his guidance can become that bridge.

After becoming the closest warrior to Babasaheb, he became a Communist and remained one all his life. He never parted from his struggle against caste oppression, and decided to become a Communist only to fight it effectively. No one can deny the truths of his life. There is a need to learn from them and use them.

Recently, LeftWord Books published the English translation of More’s biography, Memoirs of a Dalit Communist: The Many Worlds of RB More, written by Comrade Satyendra More. It will soon be available in other languages, including Hindi.

The author is a former Member of Parliament and vice president of the All India Democratic Women’s Association (AIDWA).

INDIA WORKING WOMEN OVERBURDENED UNDER LOCK DOWN

                                             WAGES FOR HOUSEWORK
Women in India are engaged in some kind of work, including household work, which is not counted as a job. The lockdown has only multiplied the burden of women. A large percentage of frontline healthcare workers are women. However, there is no concrete data about the number of working women in the country. This is reflected in the relief measures announced by the government, which do not make any special consideration for them. NewsClick presents a report.

Seattle Is Considering an ‘Amazon Tax.’ It’s a Model for Taking Back Fiscal Power

Lenore Palladino May 15, 2020 BARRONS
Photograph by Jason Redmond /AFP via Getty Images

Those trying to figure out how to survive the pandemic-induced economic collapse should look to Seattle. Not to soon-to-be-trillionaire Amazon CEO Jeff Bezos, but to the local government and its efforts to impose fair taxes on his business. Council member Kshama Sawant of Seattle recently proposed an “Amazon Tax”: a 1.3% tax on corporations with a significant headcount in Seattle to fund ongoing support for laid-off families. It should be a model nationwide.


In the aftermath of the Tax Cuts and Jobs Act of 2017, federal corporate tax collection dropped sharply. In the absence of reform at the federal level, states and cities should fairly tax corporations. In order to avoid catastrophic austerity, which would destroy jobs and prolong economic suffering well after the public health crisis has been resolved.

The contours of the current economic crisis are coming into focus: historic levels of unemployment, declines in state and local revenue, and strain on all social-support systems. In March alone, 40% of American workers in households earning less than $40,000 lost their jobs. It is easy to forget just how profitable corporations have been over the last decade, while typical American workers saw their wages stagnate and household debt rise. This has left families financially fragile.

The statistics of corporate tax are well-known: The enactment of the TCJA lowered the corporate tax rate from 35% to 21%. Accordingly, corporate tax revenue cratered, even as corporate profits were steady as a percentage of GDP. This led, according to one estimate, to a decline of $750 billion in federal revenue over 10 years. Meanwhile, corporations earned $1.9 trillion in profits after tax in the fourth quarter of 2019.



It’s crucial to understand how a period of booming corporate profits left workers of these same corporations vulnerable to a loss of income. Over and over again, major American corporations earning record profits have fought off efforts to raise wages of their lowest-paid workers to a decent salary. The need to make record shareholder payments was a common justification for squeezing employee compensation. Corporations spent $6.3 trillion on the unproductive practice of stock buybacks in the 2010s. This prioritization of increasing shareholder wealth over all other uses of corporate funds is a prime driver behind the increasing concentration of wealth among a very small segment of American households.

All of this explains why fair corporate taxation to support collapsing city and state budgets is a key part of the equation for surviving the pandemic. The Seattle proposal focuses on corporations with a major local employment presence, but the basic lesson can be broadly applied: With federal corporate tax revenue sharply down, policymakers should not worry about complaints that small tax levies will force corporations to shut down and relocate. Thanks to Congress, they are already paying far lower taxes than three years ago.

The alternative is public austerity, which we know had disastrous consequences for states and cities in the Great Recession. When households have stable income, they continue to spend money in their local economy and on consumption from the large corporations facing the tax. When public employment declines and social support craters, households pull back spending or load up on debt. All of this makes it more difficult for the economy to get going again. Fair taxation of large corporations can help shorten the economic crisis.

Naysayers will claim that any increase in corporate taxes is job-destroying. They ignore the basic economics of any tax policy: Apply taxes to those least likely to change their behavior as a result of the tax. Large corporations, which have been incredibly profitable, and, just a few years ago, paid higher federal taxes than they do today, are least likely to stop production if a tax levy is applied. There is still simply too much profit to be made. Others will argue, as critics have for decades about minimum wages, taxes, and a host of other regulations, that any new local or state tax will cause companies to move locations. But profitable companies deeply rooted in a major city are unlikely to pack up and leave due to a 1% tax. The Seattle tax is constructed via headcount, and only applies to about 2% of the city’s corporations—by definition the largest companies with the largest local workforce.


Seattle’s proposal also highlights one of the biggest economic winners in the pandemic: Amazon. The company’s latest public filing, from May 1, shows net product sales of $41 billion in the first quarter of 2020, compared to $34 billion in the first quarter of 2019. The Seattle proposal applied to April 2019-March 2020 would have yielded roughly $300 million, far less than the $5 billion Bezos made in just the last three months of the year.

The Seattle proposal would pay $500 a month to working-class households for four months: hardly a windfall, but an important stabilization in the current crisis. State and municipal policymakers across the country should look to Seattle’s example and require corporations that made record profits in the 2010s to pay their fair share today. As workers and communities nationwide face unprecedented economic insecurity, progressive tax policy at the state and local level can ensure that any gains made during this crisis aren’t hoarded by the corporations that already hold outsized power over our economy.

Lenore Palladino is assistant professor of economics and public policy at the University of Massachusetts Amherst. She is a fellow at the Roosevelt Institute and a research associate at the Political Economy Research Institute.

Biggest U.S. Pension Sold Facebook, Bank of America, and Disney Stock. Here’s What It Bought.

By Ed Lin May 16, 2020

Calpers reduced its investment in Facebook to 5.4 million shares.

Photograph by Sean Gallup/Getty Images

The largest U.S. public pension by assets made some big moves in its major stock investments in the first quarter, a perilous period for public pensions as the coronavirus pandemic spread.

California Public Employees’ Retirement System, known as Calpers, lowered its investments in Facebook (ticker: FB), Bank of America (BAC), and Walt Disney (DIS) stock in the first three months of 2020. The pension also bought Verizon Communications stock (VZ). Calpers disclosed the trades in a form it filed with the Securities and Exchange Commission.
Calpers declined to comment on its stock transactions.

Facebook stock slipped 18.7% in the first quarter, but in the second through Wednesday’s close it has more than erased that loss with a 26.4% rise. In comparison, the S&P 500 index has gained 10.8% in the second quarter.

The social-media giant got a boost after the company noted a rebound in advertising revenue in April . Facebook also beat first-quarter revenue estimates.

The pension sold 300,400 Facebook shares in the first quarter, lowering its investment to 5.4 million shares.

Calpers sold 1.54 million Bank of America shares in the quarter to end March with 18.4 million shares.
Bank of America stock crumbled 39.7% in the first quarter but has eked out a 1.0% gain in the second.

The banking giant reported a first quarter that was roiled by rising credit costs. But one observer told us that Bank of America doesn’t get “enough credit for how much it de-risked its loan book” since the last financial crisis.

The pension sold 1.31 million Disney shares in the first quarter to cut its investment to 3.93 million shares.

Disney stock crumbled 33.2% in the first quarter, as its theme parks have closed , and the lack of live sports have hobbled its broadcast operations. Shanghai Disneyland reopened on a limited basis earlier in May after being closed for nearly four months. In the second quarter, Disney stock has gained 12.9%.

Calpers bought 3.1 million additional Verizon shares in the first quarter to lift its investment to 23.6 million shares of the telecom and media giant.

Verizon stock slipped 12.5% in the first quarter, and it has managed to rise 1.8% in the second. We’ve noted that cord-cutting continues to hurt Verizon and peers , but the company’s first-quarter earnings were strong .

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Because of their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

$1.6T in century-old Chinese bonds offer Trump unique leverage against Beijing

THE BONDS ARE LIKE CONFEDERATE DOLLARS

'Americans pay their debts. (ROFLMAO)

China needs to do the same'
By Jonathan GarberFOXBusiness

Published May 14

China owes US bondholders $1.6T in century-old bond debt: American Bondholder Foundation president

American Bondholder Foundation President Jonna Bianco discusses evening out bond debt with China.

As the Trump administration seeks ways to penalize China for its handling of the COVID-19 pandemic, it need look no further than Tennessee.

The Lewisburg, Tennessee-based American Bondholder Foundation holds $1.6 trillion of century-old Chinese debt, including interest, dating to before the founding of the communist People’s Republic of China, that it wants the administration's help in redeeming. There is an estimated $6 trillion or more of the debt outstanding worldwide.

The bonds were issued by the Republic of China -- which ousted the imperial government in a coup -- as far back as 1912 and backed by gold; they were defaulted on in 1938. The ROC government fled to Taiwan, where it remains the official ruling body, after Mao Zedong’s communist party took over following the 1949 end of the revolution.

Beijing maintains Taiwan is part of China, and under international law, successor governments are responsible for the debts of their predecessors.

President Trump is a “'promises made, promises kept' president, and he said to my face that he was going to do this transaction, do this deal, and hold China accountable,” Jonna Bianco, president and chairwoman of the American Bondholder Foundation, told FOX Business.

Bianco, who has power of attorney for 95 percent of the thousands of U.S. bondholders, said making China repay its debt would “not be punishment,” but rather a basic fundamental of international finance.

There's international precedent for such a move: Prime Minister Margaret Thatcher ordered Beijing in 1987 to make good on the bonds owned by Brits or lose access to the British capital markets. Then-Chinese President Li Xiannian’s government obliged, reaching a settlement of 23.5 million British pounds.

By paying some bondholders and not others, Beijing is technically in selective default, according to the ratings of bond-risk firms Moody’s, Standard & Poors and Fitch. Until China pays, it cannot sell debt on the international market, Bianco said.

Video

The U.S. and China normalized relations in 1979, but cables dating as far back as May 1973 viewed by FOX Business show the State Department told Beijing that while the debt didn’t have to be paid at that time, it would not be forgiven.

There have been attempts to litigate pre-Communist party bonds in the past.

A class-action lawsuit brought by Hukung railway bondholders was thrown out in 1979 under the Foreign Sovereign Immunity Act, which establishes limits on lawsuits against foreign governments.

Since then, developments in a few cases have suggested sovereign immunity might not be as strong with regard to certain types of debt, but those cases could be tied to specific language within the bond contracts themselves.

“It's a difficult suit to bring just because at this point, it's really very old,” Odette Lienau, associate dean and professor of law at Cornell University, told FOX Business. “Technically, these don't necessarily expire, but in practice, doing something like this is going to be difficult. You have to be legally creative with how you would do it.”

Bianco spent a year researching the issue and working with the White House, State Department, Securities and Exchange Commission, Federal Trade Commission, former Senate Majority Leader Bill Frist of Tennessee, former Congressman Bart Gordon and former Congressman Walter Jones when the American Bondholder Foundation was founded in August 2001.

While not widely accepted in international law, the doctrine of odious debt, which is akin to China’s argument, states national debt incurred by an illegitimate regime is not enforceable.

The U.S. made a similar argument when faced with the burden of Confederate obligations following the end of the Civil War. Congress in 1868 passed the 14th Amendment to the U.S. Constitution, which says “neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States.”

While there’s a “plausible legal argument” for redeeming the bonds, Lienau said, it’s “politically difficult.” Bianco, who met with Trump and Treasury Secretary Steven Mnuchin about the matter in 2018 while the U.S. and China were negotiating a phase one trade deal, said the U.S. Treasury could take the bonds in and use them to offset the nation’s debt with China.

The U.S. might then say it considers the bonds paid, but China could still dispute that, bringing the two sides back to square one.

"Ultimately, this is going to have to be some kind of negotiated settlement if it gets taken up."- Odette Lienau, associate dean and professor of law at Cornell University

A spokesperson for the Treasury Department did not respond to FOX Business’ request for comment.

The Foreign Bondholders Protective Council, established under former President Franklin Roosevelt in 1933, helps U.S. citizens collect on defaulted bonds from foreign governments and has settled 47 cases. If the group were to successfully resolve this case, it would be the 48th.

Bianco’s clients would be willing to take “pennies on the dollar,” she said, letting the rest go toward helping repay a national debt that has swelled to more than $25 trillion as policymakers have taken unprecedented action to shield the economy from fallout related to COVID-19.

The government has extended trillions of dollars of aid to combat record job losses and the sharpest contraction of the post-World War II era, caused by a virtual shutdown of the U.S. economy through stay-at-home orders intended to limit the virus' spread.

Both the Trump administration and some members of Congress have in recent weeks been looking at ways to punish Beijing for what they call an insufficient initial response to COVID-19, first identified in Wuhan, China, at the end of last year.

FOX Business learned on Monday that the administration is forging ahead with plans to divest $4 billion of worth of equity stakes in Chinese companies held by the Federal Retirement Thrift Investment Board. But other options are limited.

“There is almost no clean-cut tool that you can use to put pressure on China without hurting ourselves,” Xiaobo Lu, political science professor at Barnard College of Columbia University, told FOX Business. 

BECAUSE CHINA AND JAPAN ARE TWO OF THE USA LARGEST CREDITORS

Earlier this month, Sens. Martha McSally, R-Ariz., Marsha Blackburn, R-Tenn. and Steve Daines, R-Mont., introduced the Stop China-Originated Viral Infectious Disease Act, which, if passed, would give Americans the right to sue China for the damage COVID-19 has caused to the economy and human life.

Another group of senators, led by Lindsey Graham, R-S.C., have introduced the COVID-19 Accountability Act, which would give Trump the authority to impose sanctions and travel bans, restrict loans to Chinese businesses by U.S. firms and ban Chinese companies from listing on U.S. stock exchanges.

Lu pushed back on the feasibility of those options, however, noting that the U.S. has “already done quite a bit” in terms of sanctions and that Chinese companies can list their shares in other international markets.

Fighting to collect payment on the aging Republic of China notes would have none of those drawbacks, though it might prove as arduous a struggle as negotiating a trade deal. Still, B

Texas fears losing oil-rich lands in Chinese takeover of weakened energy companies

Jonathan Garber
Fox Business May 16, 2020

Plunging prices have wreaked havoc on Texas oil companies struggling to avoid a wave of bankruptcies that has ravished the industry during the past five years, leaving them ripe takeover targets for rivals from China and elsewhere.

Ninety-eight exploration and production companies in Texas with $75.7 billion of debt filed for bankruptcy from 2015 through 2020, according to the international law firm Haynes and Boone.

That number is expected to grow even larger after West Texas Intermediate crude oil prices plunged 52 percent this year as stay-at-home orders designed to slow the spread of COVID-19 wiped out 30 million barrels per day of demand while Saudi Arabia and Russia ramped up production amid a price war.

The companies’ vulnerability to foreign buyers raises the risk that the U.S. might lose control over valuable oil-producing lands in the Permian Basin, a swath of land in western Texas and southeastern New Mexico that helped the country become the world's largest crude producer amid a shale boom.

“We have discovered this volume of natural gas and oil that is more than any time in history,” said Wayne Christian, commissioner of the Texas Railroad Commission -- the agency that regulates the state's oil and gas industries.

“I believe it's a national security concern to allow unfriendly foreign countries to come in and buy land and oil in Texas and the United States," he told FOX Business.

OIL-RICH ALASKA WARY OF SAUDI POWER PLAY IN BATTERED CRUDE MARKET

A 2018 oil discovery in the Permian uncovered 46.3 billion barrels of crude, 281 trillion cubic feet of gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey.

The discovery effectively doubled America’s oil and gas reserves and puts the country on a path for years of energy independence. A separate estimate from RS Energy Group found the discovery could be as large as 230 billion barrels.

The oil industry is critical for the Texas economy, accounting for $16.3 billion of revenue in 2019 and about 10 percent of the state’s labor force. An oil worker makes about $132,000 a year, 1.6 times the state’s average wage.

Exxon Mobil, Chevron, and BP are the major players in the industry, but there are also hundreds of companies that produce less than 1,000 barrels of oil per day.

The scope of the industry reaches far beyond the oil and gas producers, also including midstream companies that operate pipelines, service rigs and more.

To help smaller companies navigate the industry's crisis, Christian said Texas is working on measures that include cutting regulations and permit costs.

When the industry is prospering, such firms get bought out at a premium by the big international companies such as Exxon Mobil, leaving money in Texas and giving workers bonuses, Christian said.

When markets sour, however, the firms can be snapped up at fire-sale prices.

“The federal government should watch very carefully and raise their standards on who can buy,” Christian said.

China and other countries are already “starting to look for deals,” said Malcolm O’Neil, international practice co-leader at the law firm Arent Fox.

He said that while recent volatility in oil prices has left some Chinese companies "cash poor," those that have money are “going to be seeking bargains.”

The uncertainty surrounding the outcome of the 2020 election will cause Chinese firms to “explore deals now, but wait to bargain-hunt until companies are really hurting” and there is more clarity on the political front, he added.

Should President Trump win re-election, prospective acquisitions might be less appealing to Chinese buyers, given his administration's prickly relationship with Beijing and efforts to limit Chinese control of vital U.S. resources.

Any oil deal, unless it’s rudimentary, will likely involve the Committee on Foreign Investment in the United States (CFIUS), which would require arduous reviews. U.S. law prohibits foreign companies from directly holding many oil, gas and mineral leases, but does allow them to form U.S. corporations to make purchases.

Chinese acquisitions of U.S. oil and gas companies have faced increased scrutiny since China National Offshore Oil Corporation in 2005 attempted a takeover of the El Segundo, California-based explorer Unocal, now a subsidiary of Chevron, causing public uproar.

PLUNGING OIL PRICES, CORONAVIRUS FUEL BUDGET CRISIS IN PETROLEUM-RICH ALASKA

While that deal was blocked, the Chinese firm Yantai Xinchao Industry Co. in 2015 received CFIUS approval to forge ahead with a $1.3 billion purchase of oil assets in the Permian Basin owned by Tall City Exploration and Plymouth Petroleum.

Stewart Glickman, an energy analyst at New York-based CFRA Research, told FOX Business that barring a “rapid V-shaped recovery in oil prices,” there are going to be a “fair number of new Chapter 11 filings.”

While Texas is an attractive investment destination for companies from China and elsewhere, it’s difficult for them to “swoop in” and start acquiring acreage “like a vulture feasting on a carcass,” he said.

Though companies from China, Saudi Arabia and elsewhere may have experience in oil and gas, shale is a “U.S. phenomenon,” Glickman noted.

A more plausible way for foreign companies to gain access to the rock, according to Glickman, is to enter a joint venture that gives them financial exposure but not operational exposure. He added that such a route would also be the way to go for those seeking to gain access through midstream and downstream businesses.

But while the tactic might help eager overseas buyers reach lucrative deals, such developments are precisely what Christian, the Texas railroad commissioner, hopes to avoid.

“I don’t want to wind up five years from now with, all of a sudden, some foreign country shutting down production in Texas because they own it, and prefer buying from their own reserves overseas,” Christian said. “I think that would be inefficient use, and I would think it would threaten national security.”

Saudi Sovereign Wealth Fund Seeking $10 Billion Margin LoanHarry Wilson, Matthew Martin and Dinesh Nair
Bloomberg May 16, 2020

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund is planning to borrow about $10 billion by pledging some of its stakes in SoftBank Group Corp.’s technology investment vehicle to shore up liquidity, according to people familiar with the matter.

The Public Investment Fund, which has been on an overseas shopping spree recently, is speaking with investment banks about a margin loan backed by some of its investments in the $100 billion Vision Fund, the people said, asking not to be identified as the matter is private. While discussions with banks are ongoing, it may not materialize in a deal, and the fund may also decide against raising the loan, the people said.

The Saudi wealth fund declined to comment on the margin loans.

PIF is in need of capital as it embarks on an investment spree that has seen it build stakes in some of the world’s largest companies since the start of the coronavirus pandemic. On Friday, it disclosed stakes in companies including Facebook Inc., Boeing Co. and Citigroup Inc.

The fund is looking into “any opportunity” arising from the economic wreckage of the crisis, its governor, Yasir Al-Rumayyan, said at a virtual event in April. The fund expects to see “lots of opportunities,” he predicted at the time, citing airlines, energy and entertainment companies as examples.Behind the scenes, as coronavirus outbreaks disrupted commerce and drove stock prices to their lowest levels in years, the fund reassigned staff to find bargains to broaden its global portfolio, people familiar with the plan have said. The investments disclosed in a quarterly filing Friday amount to a bet that marquee names of the corporate world will rebound as many facets of life return to normal.

PIF has targeted some of the companies hit hardest in the crisis, including cruise operator Carnival Corp. and hotel owner Marriott International Inc. It’s also broadened its natural resources exposure with stakes in Suncor Energy Inc. and Canadian Natural Resources Ltd, according to the filing, which outlined investments in nearly $10 billion worth of U.S. equities.

Simultaneously, the recent plunge in oil prices is pushing sovereign wealth funds in the region to find ways to unlock liquidity. The move by PIF follows a similar plan by Qatar’s sovereign wealth fund to raise 7 billion euros ($7.6 billion) against some of its most high-profile European equity investments.

PIF, the backbone of Saudi Arabia’s economic transformation plan, is the largest contributor to the Vision Fund after committing $45 billion to invest along with SoftBank founder Masayoshi Son in companies such as WeWork, Oyo Hotels and Uber Technologies Inc.

The loan could act as a way for PIF to raise money against its investments in the fund, which has been going through challenging times recently. The Vision Fund, which contributed more than half of the conglomerate’s profit a year ago, has swung to record losses.

In a margin loan, a borrower secures the debt by pledging an asset with the understanding that they’d need to pay up if the value of the collateral declines. The lender can typically sell some of the collateral if the borrower is unable to provide the cash. Banks compete for these deals because of the fees associated with structured financing.

(Adds details on investments throughout)

©2020 Bloomberg L.P.


https://plawiuk.blogspot.com/2020/05/saudi-sovereign-fund-discloses-stakes.htm

https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in.html

Saudi Wealth Fund Builds Stakes in European Energy Giants

Matthew Martin and Dinesh Nair, Bloomberg News

Employees walk on the one of the four connected platforms on the Johan Sverdrup oil field off the coast of Norway in the North Sea, on Tuesday, Dec. 3, 2019. Sverdrup's earlier-than-expected start in October broke a long trend of underperformance for Norway's overall oil production. Photographer: Carina Johansen/Bloomberg , Bloomberg

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund has built up stakes in four major European energy firms, including about $200 million in Equinor ASA, as the oil-rich kingdom navigates the coronavirus pandemic and plummeting crude prices.

The Public Investment Fund amassed shares in Norway’s largest producer mostly through the open market last week, according to people with knowledge of the matter who asked not to be identified, adding that it’s unclear exactly when the fund bought the holding or if it’s still buying. It also bought stakes in Royal Dutch Shell Plc, Total SA and Eni SpA, according to another person with knowledge of the matter.

Saudi Arabia’s $320 billion sovereign wealth fund, run by Yasir Al-Rumayyan and controlled by Crown Prince Mohammed bin Salman, is taking advantage of a slump in stock market valuations as it steps up deal-making to become the world’s biggest manager of sovereign capital, the people said. The fund last month built an 8.2% stake in cruise operator Carnival Corp. after its shares slumped due to the fallout of the coronavirus pandemic.

The PIF is a key part of the crown prince’s efforts to diversify the Saudi economy away from its dependence on oil and has made a series of high-profile investments in recent years. Its amassed holdings in Uber Technologies Inc. and Tesla Inc., as well as committing giant sums to Softbank Group Corp.’s Vision Fund.

Oil Policy

Still, building stakes in some of the largest international oil companies is unusual, especially as Al-Rumayyan also heads up state-owned crude producer Saudi Aramco. He’s also a close adviser to the crown prince, who sets the kingdom’s oil production policy and influences prices globally.

Representatives for the PIF and all of the oil companies declined to comment.

On top of the slump of oil prices and a meltdown in global markets, Gulf sovereign wealth funds are channeling some of their billions back home to counter slowing economic growth triggered by the coronavirus. The decline in assets from funds in countries such as Qatar, Abu Dhabi and Saudi Arabia could exceed $300 billion this year, according to the Institute of International Finance, the industry’s global association.

In contrast to 2015, the last time crude prices collapsed, Saudi Arabia will likely focus on borrowing rather than drawing down PIF funds, according to the IIF. Last month, Finance Minister Mohammed Al Jadaan said the kingdom would fund an expected larger deficit through borrowing more rather than drawing down reserves.

Equinor shares slumped just over 30% this year before rising 18% last week, amid a broad recovery for European energy majors, giving the company a current market value of about $44 billion.

The Wall Street Journal was first to report that the PIF has acquired stakes in Shell, Total and Eni, worth about $1 billion along with the Equinor holding, citing people familiar.

Norwegian daily Finansavisen this week reported that JPMorgan Chase & Co.’s unit in Saudi Arabia had bought 14.5 million shares in Equinor on behalf of an unnamed client, followed by another 6.4 million shares.

(Updates with details in second paragraph.)

©2020 Bloomberg L.P.


https://plawiuk.blogspot.com/2020/05/saudi-sovereign-fund-discloses-stakes.html

https://plawiuk.blogspot.com/2020/05/saudi-sovereign-wealth-fund-seeking-10.html

https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in.html

Saudi sovereign fund discloses stakes in Citi, Boeing, Facebook

May 16, 2020DUBAI, May 16 (Reuters) - Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), has purchased minority stakes in major U.S. companies including Boeing, Facebook and Citigroup, according to a U.S. regulatory filing.

PIF disclosed a $713.7 million stake in Boeing, around $522 million in Citigroup, a $522 million stake in Facebook, a $495.8 milllion stake in Disney and a $487.6 million stake in Bank of America, the Securities and Exchange filing on Friday showed. It also disclosed a small stake in Berkshire Hathaway.

PIF also disclosed an $827.7 million stake in oil company BP , which has American Depstory Receipts (ADRs) listed in the United States.

The $300 billion Saudi sovereign fund has been buying minority stakes in global companies, taking advantage of market weakness in the wake of the coronavirus outbreak.

PIF was not immediately available to comment.

Last month it disclosed an 8.2% stake in coronavirus-hit Carnival Corp< l, sending the cruise operator's shares nearly 30% higher.

The Saudi fund earlier this year bought stakes in Royal Dutch Shell, Total, Eni and Equinor, a source familiar with the transactions told Reuters on April 9.

PIF already has stakes in Uber Technologies and electric car company Lucid Motors.

(Reporting by Saeed Azhar and Kanishka Singh; Editing by Andrew Heavens)

Saudi Arabia Wealth Fund Buys Boeing, Citi, Disney Stakes

Pierre Paulden
Bloomberg May 16, 2020

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund said in April that it was looking into “any opportunity” arising from the economic wreckage of the coronavirus crisis. A regulatory filing Friday shows how the fund spent billions of dollars this year on stocks.

The $320 billion Public Investment Fund, which until five years ago was a holding company for government stakes in domestic businesses, disclosed an $827.8 million stake in BP Plc, a $713.7 million investment in Boeing Co. and $522 million positions in both Citigroup Inc. and Facebook Inc. at the end of the first quarter. Other bets include $495.8 million on Walt Disney Co. and $487.6 million on Bank of America Corp.

The PIF is looking into “any opportunity” arising from the economic wreckage of the crisis, the fund’s governor, Yasir Al-Rumayyan, said at a virtual event in April. The fund expects to see “lots of opportunities,” he predicted at the time, citing airlines, energy and entertainment companies as examples.

Behind the scenes, as coronavirus outbreaks disrupted commerce and drove stock prices to their lowest levels in years, the fund reassigned staff to find bargains to broaden its global portfolio, people familiar with the plan have said. The investments disclosed in a quarterly filing Friday amount to a bet that marquee names of the corporate world will rebound as many facets of life return to normal.

“PIF is a patient investor with a long-term horizon,” according to a statement from the fund. “We actively seek strategic opportunities both in Saudi Arabia and globally that have strong potential to generate significant long-term returns while further benefitting the people of Saudi Arabia and driving the country’s economic growth.”

Other holdings described by the fund include a $513.9 million investment in hotel owner Marriott International Inc. that’s even greater than the PIF’s previously disclosed wager on cruise operator Carnival Corp. Both companies are contending with a virtual shutdown in global travel. Similarly, the fund gathered a $416.1 million stake in concert promoter Live Nation Entertainment Inc., which faces bans on large gatherings.

The fund also amassed shares of Canadian oil sands players Suncor Energy Inc. and Canadian Natural Resources Ltd., on top of investments that previously emerged in Equinor ASA, Royal Dutch Shell Plc, Total SA and Eni SpA. The regulatory filing disclosed the fund held almost $10 billion of U.S. equities, including an approximately $2 billion position in Uber Technologies Inc.

The bargain-hunting contrasted with retreats by the likes of Warren Buffett’s Berkshire Hathaway Inc., which previously announced a full exit from investments in four major U.S. airlines. On Friday, Berkshire also disclosed that it sold off most of a longtime investment in Goldman Sachs Group Inc. and trimmed stakes in companies including JPMorgan Chase & Co.

Coincidentally, the fund bought a $78.4 million stake in Berkshire as well.

The PIF’s mandate was broadened in 2015 by Crown Prince Mohammed bin Salman to include international investments to support economic diversification.

(Updates with comment from PIF in fifth paragraph.)


SEE
https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in.html

https://plawiuk.blogspot.com/2020/05/saudi-wealth-fund-builds-stakes-in_16.html

Saudi Wealth Fund Builds Stakes in Canadian Oil Sands Giants

Michael Bellusci Bloomberg May 15, 2020


(Bloomberg) -- Saudi Arabia’s sovereign wealth fund built stakes in two major Canadian oil sands players during the energy market rout.

The Public Investment Fund amassed shares in Calgary-based Canadian Natural Resources Ltd. and Suncor Energy Inc., with a 2.6% and 2% stake in the companies, respectively. PIF is now the eighth largest shareholder in Canadian Natural and 14th largest in Suncor, according to data compiled by Bloomberg.

The fund also bought stakes in Equinor ASA, Royal Dutch Shell Plc, Total SA and Eni SpA, according to a Bloomberg report earlier in April. Saudi Arabia’s $320 billion sovereign wealth fund is run by Yasir Al-Rumayyan and controlled by Crown Prince Mohammed bin Salman.Read more: Saudi Wealth Fund Builds Stakes in European Energy Giants

The Saudi purchase is disclosed at a time when Norway’s wealth fund is dumping oil-sands companies. The latter said this week it will exclude Canadian Natural, Cenovus Energy Inc., Suncor, and Imperial Oil Ltd. over concerns about carbon emissions.

Canadian oil producers have announced that almost 700,000 barrels per day of oil production is offline amid low prices and weak demand because of the coronavirus pandemic.

Shares of Canadian Natural have lost 43% this year, while Suncor is down 46% versus a 15% drop for the S&P/TSX Composite Index.

Suncor elected to slash its quarterly dividend 55% earlier this month, while Canadian Natural maintained its current payout.
SEE
https://plawiuk.blogspot.com/2020/05/saudi-sovereign-fund-discloses-stakes.html