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CNBC
2 days ago
- Business
- CNBC
Trump's visa ban could be Britain's big break in the race for top Chinese talent
British universities are preparing to attract international Chinese students after President Donald Trump's administration cracked down on visas for Chinese students studying in the U.S. U.S. Secretary of State Marco Rubio said in a statement Wednesday that the U.S. will start "aggressively" revoking visas for Chinese students in the U.S., including those with connections to the Chinese Communist Party, in efforts to curb immigration. It comes after the Trump administration also blocked Harvard University's ability to enroll or retain international students, accusing the elite Ivy League institution of "coordinating with the Chinese Communist Party on its campus." U.K. universities are now set to profit as they snatch up Chinese students who have been disrupted by this development and are likely to pivot from the U.S. to other study destinations, according to Sankar Sivarajah, head of Kingston Business School. Sivarajah said the U.S. policy is "disappointing" and "not forward-looking" at a time when higher education institutions should be fostering more diverse talents and perspectives. The total number of international Chinese students at higher education institutions in the U.K. in the 2023 to 2024 academic year came to 149,885, according to the latest figures from the Higher Education Statistics Agency. This was down from 154,260 in the previous academic year, and 151,700 in the 2021 to 2022 academic year. However, change is underway as a Knight Frank analysis of UCAS's January 2025 Cycle Application found an 8.9% surge in Chinese international student applications, with 31,160 applicants from China by January 2025 compared to 28,620 at the same time last year. The U.K. is an attractive study destination for international Chinese students amongst competitors like the U.S., Canada, and Australia, Sivarajah said. It's appeal is rooted in shorter degree durations, affordable living costs, and global recognition. "These are quite attractive factors in general for the U.K. being a destination of choice for higher education and the current post-study work opportunities as well places the U.K. at a forefront to seize this opportunity," Sivarajah said. André Spicer, executive dean at Bayes Business School, said on CNBC's "Squawk Box Europe" that there's been a "slow decline in the number of U.S. institutions which are in the top 100," and it comes down to international institutions upping their game, including in Europe. "So here in the U.K., we've sort of held our own, so if you get on a LimeBike from here ride 10 to 15 minutes, you're going to find a bunch of globally, leading institutions, leading business schools like my own, like Imperial like London Business School," Spicer said Friday. "So, we're one of the highest concentrations of fantastic business schools, but also great universities in Europe." British universities are also heavily reliant on funding from international students because undergraduate fees for domestic students are a "loss-making product," as the tuition fee is frozen and hasn't kept up with inflation, Sivarajah said. "So to fund higher education, the model in the U.K. is that universities really rely on international student funding to make sure that they're financially sustainable ... International student funding is quite crucial for the U.K. University's financial sustainability." Chinese students bring in about £5.5 billion ($7.4 billion) in fees across 158 U.K. universities, according to a recent Telegraph analysis. The British newspaper found that 21 universities rely on students from China for at least a tenth of their income, including the Royal College of Art, University College London and the University of Manchester. Michael Spence, UCL president and provost, said in a statement to CNBC that it highly values its international students. "International students bring far-reaching economic, social, and cultural benefits to the UK, and we remain dedicated to welcoming the brightest and the best to study with us now and in the future," Spence said. With many students set to begin the academic year in September, British universities will be ramping up efforts to make studying in the U.K. more attractive for Chinese students, including creating initiatives with Chinese institutions. "There might be an increase in the number of strategic level partnerships, working with Chinese institutions to build that so it's not a short term but a long-term look at how they can build that bridge," Sivarajah said. This includes pushing schemes such as 2 + 1 articulation programs where students are able to begin their studies in China for two years and complete the final year in the U.K. Other avenues to attract talent include offering financial incentives such as scholarships, Sivarajah added. Bayes Business School's Spicer pointed out that there are long-term benefits to Chinese students pivoting to the U.K. including growth of the European startup ecosystem. "There's some economic research which came out last year which showed that the larger percentage of high growth startups in the U.S. are founded by basically foreign nationals who had gone to U.S. universities, either in engineering, sometimes in business schools," Spicer said. "Now the question is that, if we can attract that talent here, use the ecosystems that we have in places like London, places like Berlin, places like Paris, to kind of boost those high growth startups, it's certainly going to benefit," he added.
CNBC
2 days ago
- Business
- CNBC
Shein's embattled IPO signals mounting troubles for fast fashion giant
Fast fashion giant Shein's troubles continue to mount after its much anticipated London initial public offering (IPO) reportedly hit a fresh roadblock. The e-commerce behemoth is now aiming for a Hong Kong listing after failing to receive approval from Chinese regulators for its much hyped London IPO, Reuters reported Wednesday. A London listing had been seen as a boon for the 16-year-old Chinese-founded company, providing international legitimacy and access to a deep and mature pool of Western investors. Analysts nevertheless said they were unsurprised by the move given ongoing scrutiny surrounding the firm. "We've always said that we thought Hong Kong would be a safer IPO option for Shein," Samuel Kerr, head of global equity capital markets at Mergermarket, told CNBC's "Squawk Box Europe" on Thursday. "For international investors, this was always going to be an IPO that had a lot of hair on it, and perhaps it's going to play better to a domestic audience," he added. Neither Shein nor Chinese regulator China Securities Regulatory Commission (CSRC) responded to CNBC's request for comment on the plans. Hong Kong Exchanges and Clearing Limited said it does not comment on individual companies. Shein has faced an uphill battle in its listing ambitions as it seeks to shake allegations over the use of forced labor to produce its $5 t-shirts and $7 shoes. While it vehemently denies the claims, Shein last year shifted its focus from a New York listing to London after facing continued pushback on such issues from U.S. lawmakers. Meanwhile, concern over its commercial practices prompted an EU investigation, which earlier this week found the company in breach of consumer protection laws, including the use of fake discounts, pressure selling and misleading shoppers over sustainability claims. The closure this month of the U.S.'s de minimis loophole for low cost goods — and possible similar measures by the EU and the U.K. — have only added to the company's woes. "The barrage of criticism, which looked set to intensify leading up to a London listing, is considered to be partly why Chinese regulators were reluctant to give the IPO the green light," Susannah Streeter, head of money and markets at Hargreaves Lansdown, wrote in a note Wednesday. Shein's proposed London listing was also seen as providing a much needed boost to the U.K.'s lackluster IPO market after a string of delistings and defections amid intense competition from other financial markets. "This will be a blow for London's ambitions to attract bigger names to list in the capital, but given the obstacles piling up, it's not surprising [that] the company seems to be veering off in another direction," Streeter said. Still, some expressed worry that positioning the controversial listing as the face of London's IPO revival could send the wrong signal to investors. "There was a bit of concern from some in London that Shein would be seen as a benchmark barometer for the future of the London Stock Exchange and for IPOs coming back to London. I think that would have been problematic," Kerr said. Additional scrutiny in the U.K. was also seen as piling pressure on Shein's valuation amid comparisons to other listed retail peers, such as Asos, Next and Boohoo. The company was already reportedly under pressure to cut its London listing valuation to around $30 billion, according to Bloomberg, down from a previously estimated $50 billion. "Going away from the U.K. and away from those U.K. peers will probably allow it to get a higher valuation," Kerr noted. Meantime, a Shein listing could market a further boon for Hong Kong in what is shaping up to be a strong year for the market following fresh flows of capital from on- and offshore investors. "It would have been a meaningful milestone for Shein to list in either London or New York, given the maturity, depth, and valuation potential of those markets," Rui Ma, founder and analyst at Tech Buzz China, told CNBC via email. "That said, markets are ultimately shaped by the quality of their listings and participants. Shein's listing is a win for Hong Kong — but not yet a turning point," she added. Shein investors CNBC spoke to declined to comment on the listing's reported relocation.
CNBC
3 days ago
- Business
- CNBC
A ‘perfect storm' has set this sector up to benefit if Trump's tariffs go ahead, Bank of America says
U.S. President Donald Trump's tariffs regime has rocked international markets in recent weeks, sparking massive selloffs and rallies in stocks across the globe. Certain tariff-sensitive stocks, such as those in the autos, mining and pharmaceuticals sectors, have seen particularly volatile trade. In a Wednesday ruling , however, the U.S. Court of International Trade blocked the Trump administration from imposing his so-called reciprocal tariffs . Still, many experts expect that the government will manage to circumvent the ruling – which it has already appealed against – and forge ahead with its trade policies. One European sector could be poised for upside even if the new import duties are enacted, according to Sebastian Raedler, Bank of America's head of European equity strategy. "The main contrarian trade right now is to be overweight [on] pharma in Europe," he told CNBC's "Squawk Box Europe" on Thursday. "This is a defensive sector that hasn't participated at all in the defensive outperformance we saw earlier [this year]." While some sectors typically seen as safe investments amid market turbulence – like utilities – have seen huge gains in Europe this year, the regional Stoxx Pharmaceuticals index has shed almost 5%. Raedler told CNBC that European pharmaceuticals had "collapsed on the basis of … a perfect storm" – but he argued investors had significantly overpriced the risk Trump's tariffs posed to the sector. " Novo [Nordisk] collapsed . The [U.S.] dollar was weak. You had the fear of sector-specific tariffs . You had the fear of lower drug prices in the U.S.," he said. "As a consequence, you now have the lowest valuations since 2009." However, he said that for the region's pharma sector to outperform, there needed to be "some form of global growth slowdown." "So we will see whether the tariffs still come through. If there's any damage from the tariffs, if there's any slowdown, pharma is miles away from pricing that," he said. "Investors have really given up on the sector." Tariffs aside, Raedler argued that investors were underestimating major industry player Novo Nordisk . "You're effectively pricing for them not even to get the cash flow from the existing product, let alone any upgrade that they can do in terms of oral product," he said, referring to the company's blockbuster weight loss drugs like Wegovy. "You're basically pricing a scenario where [U.S. competitor] Eli Lilly eats the whole market, and Novo doesn't get anything." Copenhagen-listed shares of Novo Nordisk have lost almost 30% of their value since the beginning of the year. 'Rich pickings' in Switzerland Elsewhere, Swiss stocks could be well-positioned for upside, Raedler said, noting that the country's equities were "close to a record low relative to the European market." This was, in part, because of the country's large pharmaceuticals industry, he added. "Over the past month, cyclical as well as defensives in Europe are at a 30-year high, that means it's not just pharma that weighs on the Swiss market. It's also food and beverages," he said. "Risk premia are back to the lows, plus you've got the idiosyncratic pharma story. So the key question is, [we've] had for three years a global cycle that hasn't slowed. Will you finally get the slowdown? If so, there are very rich pickings in the Swiss market, in pharma and in food and beverage."
CNBC
22-05-2025
- Business
- CNBC
Summer travel demand is soaring — but airlines are short on planes
Airlines are facing an uphill battle during peak travel season as delivery delays at Boeing and Airbus fuel a commercial jet shortage. The ongoing capacity issue remains a cause of concern for the industry even as many appear upbeat on the demand outlook. "Demand looks good for the summer," EasyJet CEO Kenton Jarvis told CNBC's "Squawk Box Europe" on Thursday. "As you said, our book position for both our third quarter, which ends in June, and our fourth quarter, which ends in September, are ahead of where they were this time last year. We're also seeing very positive bookings in our holidays position." His comments come shortly after the British low-cost carrier reported a pre-tax loss of £394 million ($529 million) for the six months through to the end of March, compared with a £350 million loss for the same period in 2024. EasyJet said current bookings indicate it will meet expectations for full-year profit, although investors appeared to be disappointed by the results. Shares of the company were trading down 4% at around 1 p.m. London time. Looking ahead, EasyJet's Jarvis singled out airline deliveries as one of the firm's key challenges. "The main capacity constraints are around airline deliveries, with both Airbus and Boeing not meeting their original delivery schedules and therefore all airlines receiving their aircraft later. And that's why we only see kind of [a] 1%, 2%, 3% increase in capacity this summer," Jarvis said. "We can see that there is more demand in the market and yet the supply from the airlines will be more modest this year," he added. Aviation experts told CNBC at the start of the year that delivery delays at Boeing and supply chain problems were likely to take years to resolve. Boeing, which has been beset by a series of crises and production problems in recent years, said last week that it had delivered 45 commercial jets in April, nearly twice as many it delivered during the same month a year ago. The upswing in deliveries takes place as the U.S. planemaker scrambles to stabilize production. European rival Airbus, meanwhile, said it had delivered 56 jets last month, down 8% from the same period a year earlier. Aviation analytics firm Cirium said last month that first-quarter delivery totals for Boeing and Airbus suggested that both companies were likely to face "significant challenges" if they were to achieve their respective 2025 targets. Ryanair CEO Michael O'Leary said there were some early signs of improvement regarding aircraft deliveries. "Boeing, to be fair, have improved significantly. We had the last five of this summer's deliveries in April. Every single one of these aircraft came a couple of days early, which is a good sign," O'Leary told CNBC's "Europe Early Edition" on Friday. He was also optimistic about the outlook for the broader aviation industry. "I think the airline sector generally, this summer, is looking at strong demand, reasonable pricing but with a real tailwind of declining oil prices coming through," O'Leary said.
Business Mayor
19-05-2025
- Business
- Business Mayor
Wealthy shoppers are splashing the cash on jewelry — so long as it's the right brand
A shopper passes a jewelry display in the window of a Van Cleef & Arpels luxury goods store, operated by Cie. Richemont SA, on via Montenapoleone in Milan, Italy. Bloomberg | Getty Images With a diamond encrusted ring here and a rare gemstone necklace there, the world's wealthiest are continuing to adorn themselves with the finest jewelry even as broader luxury shoppers pull back. But make no mistake, one mother-of-pearl bracelet is not to be confused with another. As the super rich grow even more selective, increasingly only the best will do. That spells positive news for Swiss luxury group Richemont , which boasts some of the luxury jewelry market's most sought-after brands, including Van Cleef & Arpels, Buccellati and Cartier. 'Richemont's jewelry brands are really at the top of consumer desirability,' Luca Solca, sector head for global luxury goods at Bernstein, told CNBC's 'Squawk Box Europe.' 'There's no debate. Despite the efforts by LVMH to challenge this leadership, I think that other brands are clearly behind.' Richemont on Friday reported better-than-expected fiscal fourth-quarter sales, led by 11% growth within its Jewellery Maisons division. For the full year, jewelry was also the group's strongest segment, growing 8%. The results round off a results season in which major luxury names from LVHM to Kering and Burberry reported a slowdown in sales in the quarter to March, dashing earlier hopes of a turnaround in the embattled sector. Sales within LVMH's watch and jewelry division, specifically, were flat year-on-year in the first quarter, having declined 2% on an organic basis in 2024 amid softer demand for key brands such as Tiffany & Co, Bvlgari, TAG Heuer and Hublot. 'We are gaining market share in jewelry, from branded and non-branded companies,' Richemont's chairman Johann Rupert said during an earnings call Friday. Watches fall out of fashion Despite the continued allure of its jewelry brands, however, Richemont is not entirely immune to wider sectoral headwinds. The performance of its Specialist Watchmakers division, which features Piaget and Roger Dubuis, paints a more nuanced picture. Richemont's watch sales fell 13% in 2024, led primarily by weakness in China. That rate of decline eased only slightly in the second half of the year, thanks to recovering strength in the Americas. 'The global watch market experienced a slowdown affecting volumes. This was led by demand weakness in China, with greater resilience of high-end price segments,' the company said in its report. Everybody and their dog has bought a watch out of Covid-19 and that will take a while to digest. Luca Solca sector head for global luxury goods at Bernstein Clouding the picture further, many other premium Swiss watchmakers including Rolex, Patek Philippe and Audemars Piguet, are privately owned, making their performance difficult to decipher. Macroeconomics aside, however, Bernstein's Solca said the fundamental nature of the luxury watch market — where products are typically positioned as long-term, if not lifetime, purchases — inevitably makes it slow to rebound. 'Everybody and their dog has bought a watch out of Covid-19 and that will take a while to digest. So I expect watches to be on the backfoot for a while longer,' he said. 'People buy jewelry more frequently, and jewelry has become also cheaper relative to handbags last year, hence the better dynamic in that category.' Read More Holidaymakers face big rise in car hire costs abroad this summer Possible headwinds The growth of the high-end jewelry market versus other haute couture staples such as fashion and leather goods could stand Richemont in good stead amid resurging global trade headwinds. Richemont's Rupert said Friday that the company would not take price increases that it cannot sustain, contrasting warnings of prices rises from other luxury and jewelry players. Cartier, a unit of Cie. Richemont SA, luxury watches sit on display in a store front. Bloomberg | Getty Images 'The business is increasingly reliant on its jewellery arm and will hope the strength of its brands in this area will sustain it,' Russ Mould, investment director at AJ Bell said in a note Friday. Nevertheless, analysts warn that the company may yet face challenges that threaten market dominance. 'Richemont continues to face several significant headwinds including the strength of the Swiss franc against the dollar, higher gold prices and the impact of tariffs,' Mould added.
