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On March 4th, Daiwa Research reported that it expects Baidus (09888.HK) Kunlun Chip IPO valuation to be higher than its peers due to its larger revenue scale and better profitability. Currently, Kunlun Chip derives most of its revenue from external demand, with major clients including Tencent and a large telecommunications operator. Management stated that chip production capacity constraints are not a short-term concern for the company, as Kunlun Chip has secured sufficient supply to support development over the next two years. The bank reiterated its "Buy" rating on Baidu with a target price of HK$175 and maintained its earnings forecasts for this year and next. Recent catalysts include the Kunlun Chip listing and details of the 2026 dividend plan.Bank of Japan Governor Kazuo Ueda: It is crucial for the government to ensure market confidence in long-term fiscal sustainability.On March 4th, Jefferies Group released a report estimating that memory chip costs will surge 3.6 times this year for the vast majority of smartphone OEMs. Therefore, the bank estimates that Xiaomi-W (01810.HK) smartphone sales will plummet by 55%, partially offset by a 31% increase in average selling price. The main cuts are concentrated in mid-to-low-end phones, and approximately 60% of Xiaomis shipments have an average selling price below US$150. The bank forecasts that Xiaomis smartphone gross margin will drop by 7 percentage points this year to a record low of 4%. Coupled with a downward revision of its gross margin forecast for Xiaomis automotive business, the banks revenue and EBIT forecasts for Xiaomi this year are 16% and 34% lower than its market peers, respectively. Using a sum-of-the-parts estimation method, the bank drastically cut its target price for Xiaomi from HK$43.36 to HK$30.45, a reduction of nearly 30%, maintaining a "hold" rating, citing overly high market expectations for the company and the downside risk to earnings from persistently high memory costs.March 4th - Magdalene Teo, a fixed-income analyst at Julius Baer, stated that risk premiums, as measured by credit default swap (CDS) spreads, have widened due to increased uncertainty regarding the trajectory and duration of the Middle East conflict. CDS spreads in Asia are rising because prolonged disruptions to global shipping routes could exacerbate inflation and other problems, leading to tighter financial conditions. Teo stated, "The combination of rising oil prices and a stronger dollar is not an ideal situation for many Asian economies."Bank of Japan Governor Kazuo Ueda: Compared to the past, companies are more actively passing on costs affected by exchange rate fluctuations, and we remain highly vigilant about this when formulating policies.

The Russian Ministry of Finance Has Completed A Bill To Regulate Cryptocurrency Mining

Cory Russell

Apr 18, 2022 10:54

The draft legislation of the crypto bill "On Digital Currency" by the Ministry of Finance (MoF) emphasizes mining and trading laws.


Operators of exchanges and digital trading platforms will be licensed and regulated by a Russian government entity.


The new rule comes as a result of a rising desire for mining among Russian ministers.


Russia's new crypto regulatory law, according to information supplied by Russian news source Kommersant, would be rigorous in its approach.


The most current version of the draft legislation covers the new trading and mining laws for cryptocurrencies (Bitcoin, Ethereum, Litecoin, and others) introduced under the bill "On Digital Currency."

Russia Creates New Crypto Bill

The bill's additional standards for exchange and digital trading platform providers were one of the bill's centerpieces. According to Kommersant, these operators will now work as a team.


The exchange operators will be the ones to buy and sell cryptocurrencies on their own behalf and at their own cost, while the operators of digital trading platforms will be in charge of the organized bidding.


Additionally, these operators will be required to establish a distinct structural unit, produce yearly reports, meet the needs of new management bodies, perform internal control and auditing, and more.


They will also need to be classified as an AML/CFT organization, and their operations will be regulated and licensed by a Russian government authority.


Finally, for the first time, the measure will concentrate on the crypto mining process and companies. After registering with the appropriate authorities, legal companies, and individual miners, the law specified that crypto mining might be done.


These operations will be taxed individually, and data centers will be made available for mining if the owner is a Russian legal company.

Mining is in high demand

While the Russian government was planning to take cryptocurrency in January, things started to pick up pace once the Russian-Ukraine conflict erupted. Not only was the demand for cryptocurrencies increasing, but so was the need for mining.


Russia's Deputy Energy Minister, Evgeny Grabchak, stressed that the legal void around crypto mining must be filled as quickly as possible, with a clear set of laws and regulations in place.


To make the process more efficient, he advised decentralizing it by choosing mining locations on a more regional level rather than at the federal level.


With these rules about to take effect in the near future, it seems that the transition from calling for a mining ban to accepting controls is more of a necessity than a natural shift of attitude.

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