FirstFT: Today’s top stories | Financial Times

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Melvin Capital, the hedge fund that was wrongfooted by retail traders who drove up shares in GameStop and other companies it had bet against, lost 53 per cent in January, according to people familiar with the firm’s results.

The New York-based hedge fund sustained a $4.5bn fall in its assets from the end of last year to $8bn, even after a $2.75bn cash injection from Steve Cohen’s Point72 Asset Management and Ken Griffin’s Citadel.

Melvin became the target of retail traders who co-ordinated to drive up the share price of GameStop on online message boards such as Reddit, after the firm disclosed its bet against the company in regulatory filings.

The Securities and Exchange Commission announced on Friday it was looking into trading curbs imposed by online brokerages and act on any evidence of market manipulation after Reddit users drove shares of companies including the games retailer dramatically higher, but lawyers doubt it will lead to prosecutions.

Retail traders have now targeted the silver market, causing the metal’s price to shoot higher in Asia after the world’s largest silver-backed exchange-traded fund recorded almost $1bn in inflows on Friday. (FT, Bloomberg)

Further reading

Meet the Reddit traders of the r/WallStreetBets forum at the eye of a market hurricane.

Renowned short-seller Jim Chanos said the GameStop saga has been the most “surreal” episode in his career and he was worried about populist politicians looking to capitalise on the situation.

It is important to remember that short sellers play an important role in the financial ecosystem, writes Michael Mackenzie.

The FT View: Amid the market frenzy, there is a palpable sense of anger among many traders, who feel that older generations have cheated them of wealth by mismanaging the economy since the financial crisis. (FT)

Coronavirus digest

Doctors in the New Delhi area treating Covid are now getting an unexpected respite
Doctors treating coronavirus in the New Delhi area have gotten an unexpected respite © Rafiq Maqbool/AP

Should Covid-19 vaccines be mandatory at work? Few companies have introduced “no jab, no job” policies, but it is unclear if such steps are lawful. Keep up with the latest on our live blog. Take a closer look at the UK’s vaccine supply chain.

In the news

Exclusive: Simpson Thacher plans EU office New York-based legal group Simpson Thacher is opening an office in Brussels after finding that the UK’s exit from the EU has impeded its ability to advise clients on the bloc’s antitrust, competition and regulatory law.

  • Boris Johnson is coming under pressure from Tories and leading Northern Ireland politicians to overhaul the region’s post-Brexit trade arrangements.

  • The FT View is that there are clear downsides from Britain’s departure from the EU, but one advantage is the leeway for regulators to act unilaterally. (FT)

Myanmar military coup Myanmar’s military has seized power in a coup, detaining 75-year-old state counsellor Aung San Suu Kyi and other senior members of the country’s ruling party after several days of rising tensions over the results of a recent election. (FT)

Myanmar’s military steps in after alleging irregularities in November election when its party lost heavily
Myanmar’s military stepped in after alleging irregularities in November election, when its proxy party lost heavily © AFP via Getty Images

BoE to hold on economic stimulus The Bank of England is expected this week to hold back on providing further stimulus for the economy, even as the central bank is poised to downgrade its forecast for growth in 2021. (FT)

Exclusive: Ark Investment outguns Wall Street titans Ark Investment Management, founded by a longstanding Tesla bull, outpaced BlackRock and State Street last month, with the asset manager’s actively managed exchange traded funds attracting $8.2bn this year after bets on disruptive tech companies. (FT)

Bar chart of ARK's flows in January rise above State Street and Blackrock's iShares ($bn)* showing Investors flock to ARK's thematic ETFs

North Sea gas fight flares The Labour party has called for a ban on UK North Sea oil operators burning or releasing gas “except in dire safety emergencies” after data showed the practice is responsible for a coal plant’s worth of carbon emissions each year. Too many boardrooms are still climate incompetent, writes Pilita Clark. (FT)

Exclusive: Hong Kong to be written out of legal contracts Large international corporations doing deals in Asia are considering excluding Hong Kong from legal contracts over concerns that China’s tightening grip may impact rule of law in the territory, according to interviews with corporate advisers. (FT)

Kremlin cracks down on anti-Putin protests Tens of thousands of people in cities across Russia defied a heavy police presence to protest on Sunday in support of jailed opposition activist Alexei Navalny for the second straight week, with at least 4,710 protesters detained. The protests have breathed new life into anti-Putin sentiment. (FT)

Thousands defy warnings and arrest to show support for imprisoned activist Alexei Navalny
Thousands defied warnings and arrest to show support for imprisoned Russian activist Alexei Navalny © AP

The day ahead

UK trade talks Liz Truss, UK trade secretary, is due to speak with ministers in Japan and New Zealand on Monday to request to join an 11-member Pacific trade group. Formal negotiations are set to start this year. (FT)

Economic data Germany is set to release retail trade figures for December 2020. The Institute for Supply Management’s manufacturing index for January is expected to show continued expansion in US factory activity. (FT, WSJ)

Earnings round-up Nintendo, Ryanair, Hargreaves Lansdown, Banco Sabadell and Japan Airlines are set to report. (FT)

India budget release Finance minister Nirmala Sitharaman will unveil the country’s annual budget, with fiscal policy expected to play a lead role in generating growth as the central bank seeks a return to a more normalised monetary policy. (FT)

What else we’re reading

What has changed one month after Brexit? The Financial Times looks at five different areas of Brexit-related disruption from agriculture and fishing to the impact on small businesses. While some are teething problems, others risk becoming long-term issues unless changes are made. (FT)

Chart of UK port activity in terms of delays and transits showing that Brexit's impact has been muted so far relative to Covid-19 which caused greater disruption

Lunch with the FT: Bellingcat’s Eliot Higgins The internet investigator and his collaborators have proved Syria’s regime used chemical weapons against its citizens and unmasked Russia’s “kill teams” who poisoned defector Sergei Skripal and critic Alexei Navalny. Peering into the internet’s dark corners has allowed Mr Higgins to find himself. (FT)

Eliot Higgins is one of the internet’s good guys — a champion of truth in a post-truth world. Is he destined to be outnumbered?
Eliot Higgins is one of the internet’s good guys — a champion of truth in a post-truth world. Is he destined to be outnumbered? © James Ferguson

Can US shale oil ever lure back investors? When the worst oil crash in decades struck last year, operators were forced to slash capital expenditure, sack tens of thousands of workers, idle rigs and cut production. Now, promise shale executives, a more resilient industry is emerging from the ashes and aiming to woo investors. (FT)

Line chart of Barrels a day of oil (m) showing US oil production boomed over the past 10 years

What’s stopping India’s recovery India’s economy is experiencing the worst contraction in decades. But even if the threat of the virus fades, India’s medium-term growth prospects will be hindered by high tariffs and loose bankruptcy rules, writes Urjit Patel, former governor of the Reserve Bank of India. (FT)

Cabling Africa: the great data race Africa’s internet capacity is exploding — becoming faster, denser and more local, which has profound implications for the continent’s economies. Google and Facebook in particular have gone to extreme lengths to bring connectivity to the “last billion” worldwide who have yet to be properly connected to the internet. (FT)

A Kenyan boy examines a fibre optic cable in Mombasa, Kenya. Africa’s internet capacity is expanding rapidly
A boy examines a fibre optic cable in Mombasa, Kenya. Africa’s internet capacity is expanding rapidly © Joseph Okanga/Reuters

Video of the day

SoftBank: piecing the puzzle together What exactly is SoftBank? The FT explains why the Japanese multinational is like a jigsaw puzzle, with the enigmatic founder and chief executive Masayoshi Son at its core. (FT)

Video: SoftBank: piecing the puzzle together | FT Film

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