ABI’s CEO: First Global Executive to Visit China’s Minister of Commerce This Year – AB InBev Invests for a Future with More Cheers in China
ABI’s CEO: First Global Executive to Visit China’s Minister of Commerce This Year – AB InBev Invests for a Future with More Cheers in China
PR Newswire
BEIJING, Feb. 28, 2023
AB InBev’s CEO Michel Doukeris Visits China as Budweiser Invests for Beer…
ABI's CEO: First Global Executive to Visit China's Minister of Commerce This Year - AB InBev Invests for a Future with More Cheers in China
PR Newswire
BEIJING, Feb. 28, 2023
AB InBev's CEO Michel Doukeris Visits China as Budweiser Invests for Beer Industry Growth with Three Leading "Accelerators"
BEIJING, Feb. 28, 2023 /PRNewswire/ -- Michel Doukeris, CEO of Fortune 500 company "AB InBev", flew to Beijing on February 24, 2023, to visit China's Minister of Commerce, Mr. Wang Wentao, as an early visitor to meet China's central government after the lifting of pandemic restrictions in China. AB InBev is the parent company of Budweiser APAC and is a public company based in Leuven, Belgium and listed on Euronext which has over 600 years of brewing heritage and an extensive global presence.
This year marks the beginning of Chinese modernization. The past two months have shown good economic growth, which is promising for both consumption and investment in China. "China is the largest beer industry globally. China is such an important market, one of the top markets for us globally. It was only natural to me to come on in the year, to see how things are and have the opportunity to talk to the team. And I'm very glad to see how consumption is returning very fast." said Mr. Doukeris. During his interview with Chinese media, Mr. Doukeris shared AB InBev's strategic plans in China. This included progress toward carbon neutrality, sustainability and AB InBev's ESG goals, as well as ways the beer industry can boost local consumption and economic revitalization.
Investments in China for Long-Term Growth
Mr. Doukeris emphasized China's importance to AB InBev, noting that "one beer in four globally is consumed in China". Since entering China in 1984, AB InBev has laid down significant roots in the country and invested more than 30B RMB (including direct investments and acquisitions). AB InBev brews beer at approximately 30 breweries across China and provides a diverse portfolio of more than 50 brands. AB InBev has also spared no efforts to fulfill its commitments to the Chinese market, while continually increasing its investment here.
In recent years, China has firmly and continuously implemented its "dual circulation" model in which domestic market is core with foreign investment to accelerate the growth and expansion. This aligns with the country's commitment to high-quality economic opening following the 20th National Congress of the Communist Party of China. The growth of the middle-income population at the size of over 400 million and the ongoing trends of trading up and premiumization are good news to AB InBev which embraced premiumization at very early stage.
"We have been in China since 1984. Each and every time that the market is growing, that there is consumption, we need to keep up with the investment to grow," said Mr. Doukeris. The listing of Budweiser APAC on the Hong Kong Exchange in 2019 has increased investment in China. For example the Putian Craft Brewery, the largest craft brewery of Budweiser China, started operation in July 2022, producing globally well-known craft beers such as Goose Island and Boxing Cat. It is also a base for its locally inspired craft beer brand "059 Coastline Craft" which combines local ingredients in Fujian such as Wuyi Mountain Da Hong Pao tea and FJ passion fruit.
AB InBev's development in China was also fast-tracked last October when the beer industry was listed as an encouraged catalogue in the West and Northeast. AB InBev promptly invested to expand the brewery for the production of its three premium brands at its Ziyang plant, Sichuan province, by an additional 42,000 tons.
Expand Consumption to Accelerate Market Growth
China's 2022 Central Economic Work Conference stated that relevant local government departments should prioritize recovery and expansion of consumption. China's Ministry of Commerce also defined 2023 as the year of consumption-expansion with nationwide promotions to boost consumption and revitalize the market.
Shortly after arriving in Beijing, Mr. Doukeris and his team visited the market to see the recovery of consumption first-hand at local restaurants and pubs. Mr. Doukeris noted, "With the rise of 'she economy', healthy consumption and other market segments, AB InBev will continue to introduce more diversified and innovative products. We will create more consumption occasions while establishing connections with more consumers."
Beer consumption is occasion oriented, creates more human interactions and strengthens connections among us—thereby playing an important role in boosting overall consumption in the market. "The beer industry is of huge significance in global economy." said Mr. Doukeris, "According to a new Oxford Economics study, one out of one hundred and ten jobs is related directly and indirectly with the beer industry."
Despite three years of global pandemic, being one of the Global Top 500 Enterprises, AB InBev has shown resilience and continued to inject confidence into the industry and market. Budweiser China plans to launch a public welfare program called "Cheers Campaign" in China at the end of March. The program aims to support small and medium-sized merchants to boost consumption and the development of the night-time economy with AB InBev's "BEES". It is a B2B digital platform which helps wholesalers cut costs and improve efficiency with its technology and professional supports.
ESG and Empowering Industrial Chains
The report to the 20th National Congress of the Communist Party of China highlighted that high-quality development is the first and foremost task for building a modern socialist country. As a sunrise industry with a market size of 400B RMB, the beer industry is speeding towards such development. Budweiser APAC's goal is to become the "Most Loved High-Quality Growth Leader in Beverage" and has placed ESG at the heart of its strategy and operations.
AB InBev emphasizes that ESG is at the core of its business. Mr. Doukeris reiterated that "Beer is natural, inclusive and local". According to him, the beer business can only be sustainable with healthy, prosperous communities and healthy, natural ingredients. Hence, AB InBev's ESG strategy focuses on eight priorities including water stewardship, smart agriculture, circular package and climate action.
Budweiser APAC develops ESG breakthroughs through innovation and cooperation with market players and stakeholders of the upstream and downstream value chain. Its Nanning brewery sets a new industry benchmark with water efficiency of 1.11hl/hl; its breweries in Wuhan and Jinzhou are the first carbon-neutral breweries; and its Taizhou brewery is 'Zero Waste'. Last June, MSCI ranked Budweiser China as an ESG leader with AA rating. Currently, AB InBev is incubating innovative ESG solutions through the 100+ Accelerator, Budweiser 100+ Innovation Hub, and the Supplier Strategic Alliance.
Hand in hand with the business partners, AB InBev leverages its resources and technology to empower the industrial chain and achieve shared prosperity in the communities where it operates. For example, the Wholesaler Excellent Program has already helped nearly 2,000 wholesalers nationwide reduce costs and increase efficiency. Budweiser China has also supported lychee farmers in Zhangzhou, Fujian Province, and lime farmers in Anyue, Sichuan Province, to explore new models of rural revitalization.
In the new journey towards Chinese-style modernization, foreign capital has increased involvement in China's high-quality development. By accelerating investment deployment, consumption deployment and ESG, AB InBev has jumpstarted the growth of the beer industry with "three accelerators" and strengthened its determination and confidence to further grow the Chinese market.
Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution…
Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution of the market into a “casino” following the pandemic, where retail traders have increased their speculative appetites.
“Such is unsurprising, given that retail investors often fall victim to the psychological behavior of the “fear of missing out.” The chart below shows the “dumb money index” versus the S&P 500. Once again, retail investors are very long equities relative to the institutional players ascribed to being the “smart money.””
“The difference between “smart” and “dumb money” investors shows that, more often than not, the “dumb money” invests near market tops and sells near market bottoms.”
That enthusiasm has increased sharply since last November as stocks surged in hopes that the Federal Reserve would cut interest rates. As noted by Sentiment Trader:
“Over the past 18 weeks, the straight-up rally has moved us to an interesting juncture in the Sentiment Cycle. For the past few weeks, the S&P 500 has demonstrated a high positive correlation to the ‘Enthusiasm’ part of the cycle and a highly negative correlation to the ‘Panic’ phase.”
That frenzy to chase the markets, driven by the psychological bias of the “fear of missing out,” has permeated the entirety of the market. As noted in “This Is Nuts:”
“Since then, the entire market has surged higher following last week’s earnings report from Nvidia (NVDA). The reason I say “this is nuts” is the assumption that all companies were going to grow earnings and revenue at Nvidia’s rate. There is little doubt about Nvidia’s earnings and revenue growth rates. However, to maintain that growth pace indefinitely, particularly at 32x price-to-sales, means others like AMD and Intel must lose market share.”
Of course, it is not just a speculative frenzy in the markets for stocks, specifically anything related to “artificial intelligence,” but that exuberance has spilled over into gold and cryptocurrencies.
Birds Of A Feather
There are a couple of ways to measure exuberance in the assets. While sentiment measures examine the broad market, technical indicators can reflect exuberance on individual asset levels. However, before we get to our charts, we need a brief explanation of statistics, specifically, standard deviation.
“Like a rubber band that has been stretched too far – it must be relaxed in order to be stretched again. This is exactly the same for stock prices that are anchored to their moving averages. Trends that get overextended in one direction, or another, always return to their long-term average. Even during a strong uptrend or strong downtrend, prices often move back (revert) to a long-term moving average.”
The idea of “stretching the rubber band” can be measured in several ways, but I will limit our discussion this week to Standard Deviation and measuring deviation with “Bollinger Bands.”
“Standard Deviation” is defined as:
“A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of the variance.”
In plain English,this meansthat the further away from the average that an event occurs, the more unlikely it becomes. As shown below, out of 1000 occurrences, only three will fall outside the area of 3 standard deviations. 95.4% of the time, events will occur within two standard deviations.
A second measure of “exuberance” is “relative strength.”
“In technical analysis, the relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can read from 0 to 100.
Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.” – Investopedia
With those two measures, let’s look at Nvidia (NVDA), the poster child of speculative momentum trading in the markets. Nvidia trades more than 3 standard deviations above its moving average, and its RSI is 81. The last time this occurred was in July of 2023 when Nvidia consolidated and corrected prices through November.
Interestingly, gold also trades well into 3 standard deviation territory with an RSI reading of 75. Given that gold is supposed to be a “safe haven” or “risk off” asset, it is instead getting swept up in the current market exuberance.
The same is seen with digital currencies. Given the recent approval of spot, Bitcoin exchange-traded funds (ETFs), the panic bid to buy Bitcoin has pushed the price well into 3 standard deviation territory with an RSI of 73.
In other words, the stock market frenzy to “buy anything that is going up” has spread from just a handful of stocks related to artificial intelligence to gold and digital currencies.
It’s All Relative
We can see the correlation between stock market exuberance and gold and digital currency, which has risen since 2015 but accelerated following the post-pandemic, stimulus-fueled market frenzy. Since the market, gold and cryptocurrencies, or Bitcoin for our purposes, have disparate prices, we have rebased the performance to 100 in 2015.
Gold was supposed to be an inflation hedge. Yet, in 2022, gold prices fell as the market declined and inflation surged to 9%. However, as inflation has fallen and the stock market surged, so has gold. Notably, since 2015, gold and the market have moved in a more correlated pattern, which has reduced the hedging effect of gold in portfolios. In other words, during the subsequent market decline, gold will likely track stocks lower, failing to provide its “wealth preservation” status for investors.
The same goes for cryptocurrencies. Bitcoin is substantially more volatile than gold and tends to ebb and flow with the overall market. As sentiment surges in the S&P 500, Bitcoin and other cryptocurrencies follow suit as speculative appetites increase. Unfortunately, for individuals once again piling into Bitcoin to chase rising prices, if, or when, the market corrects, the decline in cryptocurrencies will likely substantially outpace the decline in market-based equities. This is particularly the case as Wall Street can now short the spot-Bitcoin ETFs, creating additional selling pressure on Bitcoin.
Just for added measure, here is Bitcoin versus gold.
Not A Recommendation
There are many narratives surrounding the markets, digital currency, and gold. However, in today’s market, more than in previous years, all assets are getting swept up into the investor-feeding frenzy.
Sure, this time could be different. I am only making an observation and not an investment recommendation.
However, from a portfolio management perspective, it will likely pay to remain attentive to the correlated risk between asset classes. If some event causes a reversal in bullish exuberance, cash and bonds may be the only place to hide.
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Credit: Impact Journals
BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals.
Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”
Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Agingteam.
About Aging-US:
Agingpublishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.
Agingis indexed and archived byPubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed Central, Web of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).
Please visit our website at www.Aging-US.com and connect with us:
NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism
One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%.
The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.
Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.
We find the rent expectations surprising because it is happening just asking rents are rising across the country.
At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.
Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."
Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.
Turning to household finance, we find the following:
The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."
Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months
Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
