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“Weak Links” Are Being Exposed – Jeff Gundlach Warns “The Period Of Abundance Is Over”

"Weak Links" Are Being Exposed – Jeff Gundlach Warns "The Period Of Abundance Is Over"

Authored by Christoph Gisiger via TheMarket.ch,

Jeffrey…

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"Weak Links" Are Being Exposed - Jeff Gundlach Warns "The Period Of Abundance Is Over"

Authored by Christoph Gisiger via TheMarket.ch,

Jeffrey Gundlach, CEO of DoubleLine, worries that the Federal Reserve is overreacting in the fight against inflation. He expects a severe slowdown of the economy and says how investors can navigate today’s challenging market environment. A conversation with the Bond King.

When Jeffrey Gundlach speaks, financial markets around the globe listen carefully. The founder and CEO of DoubleLine, a Los Angeles based investment boutique mainly specializing in bonds, ranks among America’s highest-profile investors. On Wall Street, he is known for speaking his mind.

According to his view, one of the biggest risks right now is that the Federal Reserve is doing considerable damage to the economy with its aggressive rate hikes:

«The next shock is that we’re having to put in a big overreaction to the inflation problem which we created from our initial reaction of excess stimulus,» Mr. Gundlach says.

«My guess is that we will end up creating momentum that’s more deflationary than a lot of people believe is even possible.»

In this in-depth interview with The Market NZZ, the market maven explains why he expects a severe economic downturn in the coming months, where he sees the weak links in the system, and where he spots opportunities for prudent investments in today’s volatile market environment.

Mr. Gundlach, financial markets are in a fragile state. Inflation is the highest in more than four decades, and stocks as well as bonds suffered significant losses this year. What’s on your mind in light of this environment?

The Federal Reserve is very keen on preserving what is left of its credibility and reputation because they have not been able to execute on their interest rate plans for many years. Every time they try to tighten monetary policy, it doesn’t take long for the economy to get weak, and they get embarrassed. In the past, the Fed was able to pivot like it did at the end of 2018 when it completely reversed its course in just six weeks because the stock market collapsed. It was able to do that because the inflation rate was still below 2%, so it didn’t seem to have much of a near-term consequence.

And how about today?

This time, the inflation rate is 500+ basis points higher than the yield on any Treasury bond, and the Fed has said forcefully and repeatedly that they are going to bring it down. Therefore, they are not in a position to do a quick pivot.

What do you think happens next?

Weirdly, the market consensus thinks that the Fed is going to raise rates somewhat more, maybe even 125 or 150 basis points, and then, around six or seven months from now, the market expects that they mysteriously are going to start easing. Basically, the idea is that they are going to hike interest rates significantly more, and then they are going to drop them back down. To me, that’s a strange thing to predict because why bother with anything then? If you’re taking rates up and then back down, why bother taking them up? Why not just do nothing? It’s like a six-foot-tall man who’s in shape and weighs 185 pounds saying: «I’m going to put on 100 pounds this holiday season, and then I’ll take it off with a crash diet by Easter.» What’s the point of that? That’s not healthy, it’s very bad.

But isn’t the idea here to give the economy a quick hit so that inflationary pressures subside and the system can recalibrate on a more balanced basis?

Sure, but what you’re implying here is that the inflation rate goes down from 9% to 2% which is the Fed’s goal within a year or by the end of next year. That’s sort of the hope. But if this would be really possible, if the inflation rate were to fall so quickly and so sharply, why do you think it would stop at 2%? Why wouldn’t you think it goes negative? Why wouldn’t you think so much momentum towards a slowing economy might overshoot on the deflation side?

How serious is the risk of deflation, in your view?

Due to the pandemic, we did this huge amount of radical economic policy. The idea was that it was going to be free money and free growth with no bad consequences. But of course, we’ve had bad consequences. Now, people are thinking we can just do this reactionary shock to the economy by taking the federal funds rate up to 3.5% or 4%. But if that’s enough to weaken the economy to take 7 percentage points off the inflation rate, why wouldn’t it be 15 points? So maybe, we are going to get a delayed reaction that’s deflationary, just like we had a delayed reaction that was highly inflationary.

What would that mean for financial markets?

These shock-and-awe tactics work with a delay, and if you overdo them, you end up getting tremendous incremental volatility. We’ve had so much economic volatility in the past two and a half years compared with the preceding decade where the economy grew more or less steadily at 2% and the inflation rate never truly budged. Then, we introduced all these extraordinary policies that work with a lag. We just keep doing them until they kick in after the lag, and by then we’ve greatly overdone it. I think that’s the message of the bond market. Why else would we have interest rates so far below the inflation rate and such a flat yield curve?

Into this highly volatile situation, we have a Fed that is expected to do $1 trillion of quantitative tightening over the next twelve months. Will this become an additional burden for the economy?

Yes, that will add to economic weakness. The consumer is very weak as you can see with some of the upper middle-class oriented retail chains like Nordstrom. Nordstrom’s stock lost 25% just last month. All these things that are aspirational purchases rather than necessities have fallen off the cliff because people have to spend too much money on gasoline and food. In contrast, low-end retailers like Walmart had an explosion in new customers. Many of them used to shop at Whole Foods, now they shop at Walmart because the food there is about 30% cheaper. Walmart is also reporting a significant shift in their customers paying with credit cards, not debit cards. In other words, shoppers are borrowing to buy food.

However, the labor market is still performing quite robustly.

It’s highly suspicious. The labor market is screwed up because of all the dislocation. People still don’t know what the future is for office work, or for hybrid work. Looking ahead, it’s hard to figure out where the economic strength is supposed to come from. It’s pretty obvious that the consumer is not in good shape. Therefore, it’s not surprising that we’re seeing weakness in some of the former stock market darlings like Peloton. Peloton’s stock is down like 97% from its high, and it looks like it’s going to zero. Zoom and all the other darlings of the lockdown are collapsing as well. My guess is that a lot of them are going to go bankrupt.

 

In this context, where are the weak links investors should pay close attention to?

 

The large banks in Europe continue to perform very poorly. I see Credit Suisse is backing away from trying to be a Wall Street and United States titan. Their stock just seems to never go up. Deutsche Bank fared a little bit better, but interest rate suppression policies had made it impossible for European banks to make money. In the American economy, the weak links are producers and retailers of discretionary goods because the people don’t have the money to buy them. It’s like French President Macron recently said: The period of abundance is over. The weak links are those that benefit from abundance. We’re in an economy that doesn’t have the liquidity. There is no more funding for questionable ventures, for non-profitable businesses. Those are the weak links: The people that were living off of free money and cheap money and not making any money.

What is the probability of a more severe economic downturn in this regard?

Again, the overarching theme people are not fully appreciating is that we have become unhinged in terms of our economic parameters versus trying to manage the economy gradualisticly, as we did for quite a while. All of sudden, we’ve decided we had to respond in a way that is not all gradualistic. We had to damn the torpedoes and just go for it. That took us off balance, and we’re having a hard time finding our footing. It’s going to take a long time to find footing, but the next shock is that we’re having to put in a big overreaction to the inflation problem which we created from our initial reaction of excess stimulus. My guess is that we will end up creating momentum that’s more deflationary than a lot of people believe is even possible.

Do you think Fed Chair Powell has the stamina to resolutely continue his fight against inflation if the signs of an economic slowdown continue to pile up?

He has to. He’s not going to stop. He waffled too much in the past. He made policy pivots on small changes of data, and that put him in an unfortunate light. Now, he has made a pledge to bring inflation down, and he can’t break it without strong evidence that the reason for the pledge has passed. He can’t say «we have won the inflation battle» if the consumer price index stays above 6%. If Powell changes his rhetoric, he will go down in history as a joke. He has said unequivocally and repeatedly that he’s not going to stop just because we get one or two good inflation numbers or we get a little bit of economic weakness. I’m paraphrasing here because he doesn’t want to say it so directly, but essentially, he stated that the Fed doesn’t care if we have a mild recession.

 

But what happens if this turns out to be a severe downturn?

 

Powell is in an unstable place right now because it probably can’t last. He has a supposedly good employment market. While that’s suspicious, the unemployment rate is at 3.7%, and there are a lot of job openings, which gives the Fed cover to fight inflation. By a mild recession Powell means the unemployment rate goes up to 4%. If it rises to that level, I think he can continue with inflation fighting. But what if the unemployment rate goes up to 8%? Then what? We know exactly what’s going to happen: In the next recession, the US is going to go on a much more aggressive round of free money.

You’re referring to another money printing binge?

Much bigger. That’s their methodology: zero interest rates and money printing. It started back in the 2000s, and we’ve been at it ever since. And it always takes a bigger dose. Once you’re on a debt-financed scheme, you always have to borrow more.

What then, would you advise monetary policy makers to do right now?

I think Powell should slow down. The Fed should actually not raise the target rate by 75 basis points at the next meeting. They should do 25 basis points, and let a little time pass. Powell can keep playing the inflation fighter as long as he’s raising rates gradually. I wouldn’t even care if he skipped a meeting: A 25 basis point hike in September, and then pause at the next FOMC meeting in November. Let’s wait and see what happens because the bond market should be listened to: Every time the bond market is at odds with consensus economists, the bond market is right. And the bond market is saying that yields are peaking.

But wouldn’t waiting raise the risk of persistently high inflation?

We had this incredible shock of liquidity injected into the system in the second quarter of 2020, and the negative consequences really didn’t show up for over a year. The inflation rate didn’t start to go up significantly until the second half of last year. That’s why we should wait. We started raising rates meaningfully in May, so let these hikes percolate through and see what happens. But Powell can’t do that. He has stated so forcefully and repeatedly that he’s not going to let up until he sees inflation coming down in a «convincing» way. Satisfying these conditions is going to take some time. But I think he should slow down.

How can prudent investors navigate this challenging environment?

This has been a capital preservation situation for the past year. Beginning of this year or a year ago, stocks, by historical measures, were extremely overvalued in terms of P/E ratios, price-to-book, and all kinds of measures. Except for one thing: As overvalued stocks were versus historical measures, they were actually cheap to bonds. Bonds were even more overvalued, and it’s surprising to people that bonds are down as much as stocks this year. The only thing that’s up at all is commodities, and that ended too back in June. Nothing is really up since the Fed started raising interest rates in earnest in June. So it’s just a capital preservation market.

That doesn’t sound encouraging. Is there nothing investors can do?

The problem is that financial markets are entirely balanced upon zero interest rates and quantitative easing. The Fed pledged that was going away, and they are still speaking like they have the intention of further honoring that pledge. As a consequence, your financial assets are devaluing. If people really wanted to invest in something fundamentally, you probably want to invest in something like an energy company. You actually want to have the most old-school types of assets, things producing something that’s needed: farm land, food, energy, oil. Those are the places where you can protect yourself from inflation. These are also assets that are somewhat recession proof. People have to buy food and other necessities, but there is nothing left for all of this abundance spending.

What about bonds, DoubleLine’s core competence?

As I said, bond yields are probably in the process of peaking out. Parts of the yield curve have been inverted for a while, so it’s very reasonable to expect an economic downturn of significance within a year. We’re heading into the lean years, and that’s probably a situation where ultimately income becomes harder to come by. That’s why bond yields have been stuck at around 3% to 3.25% for about three or four months now. It sends the message that high-quality bonds might actually perform reasonably well as unattractive as they are versus inflation. In fact, they already have. The long bond got to 3.50%; it’s up in price the past few months. That’s why I think investors should own bonds instead of stocks; bonds are cheap to stocks.

 

Where do you see the most attractive opportunities for fixed-income investments?

 

Because of the illiquidity and the redemptions from the bond industry, spreads on non-government bonds were widening in a pretty powerful way until the middle of the summer. For instance, junk bonds started out this year with a yield of about 5%, and they got up to about 10%. Some emerging market bonds are yielding 15%, 18%. These are risky, but they are so much more attractive than stocks. Some bonds have yields of 10% to 12% and have prices of 75 cents on the dollar. Think about what the return potential is here: If you have a yield of 10-12%, and you have a 10% price gain, you could easily make 20-25%. It’s very unlikely that you make that from stocks. The bond market has gone from no value anywhere two years ago to abundant value relative to stocks.

A key question is also what the dollar is going to do after the recent strong rally. How do you view the outlook for the greenback?

The dollar is in the very late stages of its strength. The dollar will go up until the next recession, and then it will drop precipitously. I have been bullish on the dollar for over a year, but I’m extremely bearish on the dollar for the next ten years.

A weaker dollar should be good for emerging markets, shouldn’t it?

Yes, when the dollar tops out, you should own nothing but emerging markets if you’re an extremely aggressive investor. I wouldn’t do it personally because I’m a low-risk personality type, but emerging markets will do very, very well. They’re so cheap compared to developed markets, and their currencies will appreciate, I think, in the next recession. That means you could have a double win when you’re a US dollar-based investor. But I don’t think it’s going to happen this year. That might be a story for 2023.

China looms particularly large for many investors in emerging markets since it represents an outsize stake in many EM funds. How should one deal with that in times of rising geopolitical tensions?

I wouldn’t invest in China. I think there is just too much uncertainty. Tensions between China and the United States are high, and likely to get much worse. If you’re an American, you might not even be able to redeem your investment. So I would stay out of there, but Asia ex-China I would invest in.

Should investors rather buy bonds or shares when it comes to emerging markets?

I think you would buy both when we get to the next recession, after we have perhaps a Treasury rally. I think bonds broadly will do reasonably well, and in emerging markets they’re so much cheaper than in the United States. Right now, emerging market portfolios yield about 9.5%. So if the currency goes your way, and the yield goes your way, you make a lot of money off emerging markets.

 

How about Europe? Do you spot opportunities for investments in Europe?

 

We own European stocks. I think in the next recession they will do better, and they’re cheaper than US stocks. Europe doesn’t have the same sort of crazy zombie companies to the extent we do in the United States. It’s the zombie companies that are really going to have problems, and the US is loaded with zombie companies. And again, ultimately the dollar will depreciate, which is another reason we like European stocks. So far, this position hasn’t been a tremendous benefit to us, but it hasn’t hurt either. That’s actually a good sign. Europe was underperforming the United States almost all the time for a decade, and that stopped two years ago. When the trend stops, it takes a while for it to reverse, but once it stops, it tends to reverse.

You started your career in the investment industry in the early Eighties when the general environment was somewhat similar to today. Looking back on your experience in all kinds of markets, what is the most important thing in investing?

You have to buy when prices are low. I’m not making a joke, I mean it. Every time when there is a problem in the bond market, money pours out. There is greed and fear: Greed is powerful, but fear is more powerful. Yet, there is one thing that is even more powerful: need. When you need something, you have to have it. If people need to make a certain investment return, what they will do when opportunities go down is increase their risk because they need a higher return. They can’t live on a 3% return, they need 6%. So when there is no 6%, they try to manufacture a 6%. As a result, their risk goes up, up, up, up, up, and then they’re maximum exposed to risk. Next, prices collapse, and then they sell because their fear is so great. Instead, they should be buying. Right now, the bond market is very attractive, but no one is listening because everybody is selling. You’re supposed to be buying when people are selling, and that opportunity is still very strong today.

Tyler Durden Thu, 09/08/2022 - 17:40

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Climate-Change Lockdowns? Yup, They Are Actually Going There…

Climate-Change Lockdowns? Yup, They Are Actually Going There…

Authored by Michael Snyder via The End of The American Dream blog,

I suppose…

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Climate-Change Lockdowns? Yup, They Are Actually Going There...

Authored by Michael Snyder via The End of The American Dream blog,

I suppose that we should have known that this was inevitable.  After establishing a precedent during the pandemic, now the elite apparently intend to impose lockdowns for other reasons as well.  What I have detailed in this article is extremely alarming, and I hope that you will share it with everyone that you can.  Climate change lockdowns are here, and if people don’t respond very strongly to this it is likely that we will soon see similar measures implemented all over the western world.  The elite have always promised to do “whatever it takes” to fight climate change, and now we are finding out that they weren’t kidding.

Over in the UK, residents of Oxfordshire will now need a special permit to go from one “zone” of the city to another.  But even if you have the permit, you will still only be allowed to go from one zone to another “a maximum of 100 days per year”

Oxfordshire County Council yesterday approved plans to lock residents into one of six zones to ‘save the planet’ from global warming. The latest stage in the ’15 minute city’ agenda is to place electronic gates on key roads in and out of the city, confining residents to their own neighbourhoods.

Under the new scheme if residents want to leave their zone they will need permission from the Council who gets to decide who is worthy of freedom and who isn’t. Under the new scheme residents will be allowed to leave their zone a maximum of 100 days per year, but in order to even gain this every resident will have to register their car details with the council who will then track their movements via smart cameras round the city.

Are residents of Oxfordshire actually going to put up with this?

[ZH: Paul Joseph Watson notes that the local authorities in Oxford tried to ‘fact check’ the article claiming they’re imposing de facto ‘climate lockdowns’, but ended basically admitting that’s exactly what they’re doing...]

I never thought that we would actually see this sort of a thing get implemented in the western world, but here we are.

Of course there are a few people that are loudly objecting to this new plan, but one Oxfordshire official is pledging that “the controversial plan would go ahead whether people liked it or not”.

Ouch.

Meanwhile, France has decided to completely ban certain short-haul flights in an attempt to reduce carbon emissions…

France can now make you train rather than plane.

The European Commission (EC) has given French officials the green light to ban select domestic flights if the route in question can be completed via train in under two and a half hours.

The plan was first proposed in 2021 as a means to reduce carbon emissions. It originally called for a ban on eight short-haul flights, but the EC has only agreed to nix three that have quick, easy rail alternatives with several direct connections each way every day.

This is nuts.

But if the French public accepts these new restrictions, similar bans will inevitably be coming to other EU nations.

In the Netherlands, the government is actually going to be buying and shutting down approximately 3,000 farms in order to “reduce its nitrogen pollution”

The Dutch government is planning to purchase and then close down up to 3,000 farms in an effort to comply with a European Union environmental mandate to slash emissions, according to reports.

Farmers in the Netherlands will be offered “well over” the worth of their farm in an effort to take up the offer voluntarily, The Telegraph reported. The country is attempting to reduce its nitrogen pollution and will make the purchases if not enough farmers accept buyouts.

“There is no better offer coming,” Christianne van der Wal, nitrogen minister, told the Dutch parliament on Friday.

This is literally suicidal.

We are in the beginning stages of an unprecedented global food crisis, and the Dutch government has decided that now is the time to shut down thousands of farms?

I don’t even have the words to describe how foolish this is.

Speaking of suicide, Canada has found a way to get people to stop emitting any carbon at all once their usefulness is over.  Assisted suicide has become quite popular among the Canadians, and the number of people choosing that option keeps setting new records year after year

Last year, more than 10,000 people in Canada – astonishingly that’s over three percent of all deaths there – ended their lives via euthanasia, an increase of a third on the previous year. And it’s likely to keep rising: next year, Canada is set to allow people to die exclusively for mental health reasons.

If you are feeling depressed, Canada has a solution for that.

And if you are physically disabled, Canada has a solution for that too

Only last week, a jaw-dropping story emerged of how, five years into an infuriating battle to obtain a stairlift for her home, Canadian army veteran and Paralympian Christine Gauthier was offered an extraordinary alternative.

A Canadian official told her in 2019 that if her life was so difficult and she so ‘desperate’, the government would help her to kill herself. ‘I have a letter saying that if you’re so desperate, madam, we can offer you MAiD, medical assistance in dying,’ the paraplegic ex-army corporal testified to Canadian MPs.

“Medical assistance in dying” sounds so clinical.

But ultimately it is the greatest lockdown of all.

Because once you stop breathing, you won’t be able to commit any more “climate sins”.

All over the western world, authoritarianism is growing at a pace that is absolutely breathtaking.

If they can severely restrict travel and shut down farms today, what sort of tyranny will we see in the future?

Sadly, most people in the general population still do not understand what is happening.

Hopefully they will wake up before it is too late.

*  *  *

It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.

Tyler Durden Fri, 12/09/2022 - 06:30

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How Noggin Boss Became the Next Big Thing in Sports Apparel

The Brian Robinson photo was just the latest moment in company history.
The post How Noggin Boss Became the Next Big Thing in Sports Apparel appeared first…

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The story of Noggin Boss really begins three times.

Most recently, it began in late November, when a photo of Washington Commanders RB Brian Robinson wearing a giant hat lit the internet ablaze.

After that, Noggins started popping up everywhere.

Buffalo Bills QB Josh Allen was awarded one from Amazon Prime’s Thursday Night Football crew as the player of the game after Buffalo’s win over New England. Players from the Orlando Magic did a photo shoot wearing the hats. Players from the University of Georgia wore them after winning the SEC Championship.

ESPN’s Scott Van Pelt also notably sported one on SportsCenter, having gotten in on the action long ago when Noggin Boss co-founders Gabe Cooper and Sean Starner were just trying to spread the good word about their product.

“We have planted seeds for years, and we will do whatever it takes to try to find people that we feel would be good promoters of the brand,” Cooper told Front Office Sports. “We literally shipped those years ago to Scott Van Pelt and never heard anything back, but all of a sudden, it resurfaced.”

Those promoters all notably wore Noggins with logos that Noggin Boss is unlicensed to sell — but Cooper says that’s a fortunate piece of serendipity for the company.

Noggin Boss has never sold a hat with an unlicensed logo on it, doing everything “100% above board.”

“Fans will take liberties on their own,” Cooper says. “We are very interested in going down the paths of obtaining the proper [league] licensing ourselves, so we wouldn’t do anything to jeopardize that.”

A Hot Item

Of course, the sudden popularity of the brand means that everyone wants one.

After the Robinson photo, several outlets reported that Noggin Boss saw a 2,000% spike in sales. Cooper says that number was misrepresented — but the company has certainly seen a wild spike in orders, especially at this time of year.

“We’re just thankful for the grace that our fans are extending to us during the holiday season, which is crazy enough,” Cooper says.

Brian Robinson Photo Leads to 2,000% Spike for Big Hat Company

Monday was one of the biggest sales days in Noggin Boss history.
November 30, 2022

Noggin Boss was ready for this moment. That’s because its second pivotal moment happened in the studios of the extremely popular television series “Shark Tank.”

Cooper and Starner appeared on the show earlier this year, very quickly striking a deal with apparel magnate Daymond John.

But that wasn’t all: Dallas Mavericks owner Mark Cuban verbally agreed to sell Mavs Noggin Bosses in the team’s store. Cuban held up his end of the deal — and even delayed the Dallas Stars from selling Noggins because he wanted an exclusive selling period for his Mavericks.

The Noggin Boss founders purposely came into the Tank with a very low company valuation — realizing that what John and Cuban could offer them was much more valuable than money.

“These professionals have more connections than we could possibly ask for,” says Cooper, “so why would we disrespect them with an offer that we wouldn’t even give to a friend if we were trying to invite them into the business?”

Those connections are already paying dividends: Besides the Dallas teams, Noggin Boss has sold hats — through approved buyers — to the Arizona Cardinals, New Jersey Devils, New York Islanders, and San Jose Sharks.

Cooper also says that the company will have a strong presence during college football bowl season — and that it is finalizing licensing for a much more expansive offering.

How It All Started

But for all of its high-profile moments in the last few months, Noggin Boss’ story really began in early 2020 at the notorious Waste Management Phoenix Open. The raucous atmosphere of the golf tournament provided the perfect proving ground for the product.

“[It] was just such a huge hit, and that was the validation of like, ‘Okay, this is the good kickoff that we needed,’” Cooper says.

That success began to roll over into MLB Spring Training in Arizona — but then, of course, the world shut down because of COVID-19.

But that didn’t dampen Cooper or Starner’s spirit in the slightest. The pair knew they had something here — and they believe it could last in the long term.

Outside of the sports world, Noggin Boss has had a strong presence at bachelor and bachelorette parties, college campuses, and charity events — where Cooper says the hats get auctioned off for over $1,000.

He says the product’s universal appeal will keep it relevant for years to come.

“It just brings so much joy to people,” says Cooper. “We call it the Noggin Boss effect: When they wear it, they have so many smiles and so many conversations with complete strangers. It’s better than any medicine out there.”

The post How Noggin Boss Became the Next Big Thing in Sports Apparel appeared first on Front Office Sports.

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First-ever social responsibility report of Chinese enterprises in Saudi Arabia incorporates BGI Genomics projects

On December 1, 2022, the Social Responsibility Report of Chinese Companies in Saudi Arabia was officially launched, which is the first such report released…

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On December 1, 2022, the Social Responsibility Report of Chinese Companies in Saudi Arabia was officially launched, which is the first such report released by the Contact Office of Chinese Companies in Saudi Arabia. BGI Genomics projects in the Kingdom have been incorporated into this report.

Credit: BGI Genomics

On December 1, 2022, the Social Responsibility Report of Chinese Companies in Saudi Arabia was officially launched, which is the first such report released by the Contact Office of Chinese Companies in Saudi Arabia. BGI Genomics projects in the Kingdom have been incorporated into this report.

This event was attended by around 150 representatives of Chinese and Saudi enterprises, Saudi government officials, experts in the field of sustainable development, CCTV, Xinhua News Agency, Saudi Press Agency, Arab News and other media professionals. This Report presents the key projects and best practices of Chinese enterprises to fulfil their social and environmental responsibilities while advancing the Kingdom’s industry development.

Chen Weiqing, the Chinese ambassador to Saudi Arabia, said in his video speech that the Report highlighted Chinese enterprises’ best practices in serving the local community, safe production, green and low-carbon development and promoting local employment. The release of the Report helps Chinese enterprises in the Kingdom to strengthen communication with the local community, laying a stronger foundation for future collaboration.

Epidemic control and accelerating post-COVID 19 recovery

BGI Genomics has been fulfilling its corporate social responsibilities and worked with the Saudi people to fight the COVID-19 epidemic.

In March 2020, Saudi Arabia was hit by the pandemic. The Saudi government decided to adopt BGI Genomics’ Huo-Yan laboratory solution in April 2020. At the forefront of the fight against the epidemic, the company has built six laboratories in Riyadh, Makkah, Madinah, Dammam and Asir within two months, with a total area of nearly 5,000 square meters and a maximum daily testing throughput of 50,000 samples.

By the end of December 2021, BGI Genomics had sent 14 groups of experts, engineers and laboratory technicians to Saudi Arabia, amounting to over 700 people, and tested more than 16 million virus samples, accounting for more than half of the tests conducted during this period. The company has successfully trained over 400 qualified Saudi technicians, and all laboratories have been transferred to local authorities for the operation.

In the post-epidemic era, the Huo-Yan laboratories can continue to make positive contributions to public health, working with local medical institutions and the public health system to make breakthroughs in areas such as reproductive health, tumour prevention and control, and prevention.

Enhancing genomic technology localization and testing capabilities

In July 2022, BGI Almanahil and Tibbiyah Holdings, a wholly owned subsidiary of the Saudi Faisaliah Group, announced a joint venture (JV) to establish an integrated, trans-omics medical testing company specializing in genetic testing.

This JV company will help improve Saudi Arabia’s local clinical and public health testing and manufacturing capabilities, promote the localization of strategic products that have long been imported, contribute to the implementation and realization of the Kingdom’s Vision 2030 roadmap, and significantly enhance local capacity for third-party medical testing services as well as local production of critical medical supplies.

BGI Genomics attaches great importance to fulfilling its corporate social responsibility and has released its social responsibility report for four consecutive years since 2017. Since its establishment, the company has always been guided by the goal of enhancing health outcomes for all, relying on its autonomous multi-omics platform to accelerate technological innovation, promote reproductive health, strengthen tumour prevention and control, and accurately cure infections, and is committed to becoming a global leader in precision medicine and covering the entire public health industry chain.

The company will continue to work together with all stakeholders to contribute to the Kingdom’s Vision 2030 and the Belt and Road Initiative and looks forward to growing with our partners.

 

About BGI Genomics

BGI Genomics, headquartered in Shenzhen China, is the world’s leading integrated solutions provider of precision medicine. Our services cover over 100 countries and regions, involving more than 2,300 medical institutions. In July 2017, as a subsidiary of BGI Group, BGI Genomics (300676.SZ) was officially listed on the Shenzhen Stock Exchange.

 


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