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Wirecard postpones publication of 2019 results due to € 1.9 billion missing

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Wirecard postpones publication of 2019 results due to € 1.9 billion missing
Wirecard postpones publication of 2019 results due to € 1.9 billion missing

EY Auditor Says You Must Double Check Custody Accounts And Shares Plummet

The promise of the German fintech companies, Wirecard, informed its shareholders that it cannot publish its annual accounts for the 2019 financial year. It is the third time that the publication of these results has been postponed for reasons related to a six-month investigation carried out by the KPMG auditor. According to the concise note to shareholders, the company indicates that the EY auditor informed it that it must proceed to new audit procedures on a certification because the two banks that were to notify the existence of “funds in custody accounts affirm that the numbers of those accounts don’t match. ” The note states that “the trustee in charge of the custody accounts is in continuous contact with Wirecard and the banks.” Both the trustee and the banks were appointed in 2019, according to the company, but omits to say in the note that this is so because the previous trustee disappeared. “Wirecard’s respective subsidiaries have paid substantial security deposits of € 1.9 billion in those escrow accounts to ensure risk management of participating merchants. Custody accounts are managed by two Asian banks with a high ‘rating’. The trustee who has been in charge since 2019 has numerous mandates in Asia, ”says the company. In other words, the banks in which the custody accounts are supposed to be say that the accounts do not exist and, as a result, 1.9 billion euros are missing.

Wirecard CEO Marcus Braun notes that: “We are in contact with the trustee present on the site. Confirmations previously issued by banks are no longer recognized by the auditor. All parties involved strive to clarify the matter as soon as possible. It is not clear now whether fraudulent transactions have been made to the detriment of Wirecard. Wirecard is going to file a lawsuit against unknown persons (SIC). ” A six-month investigation carried out by KPMG last year failed to establish the operations that bear part of the benefits that the company attributes to itself between 2016 and 2018. According to said investigation, part of the profit obtained in the suspicious operations has gone to stop custody accounts held by a trustee. KPMG said in its special audit published in April that it was unable to establish the existence of € 1 billion in such accounts and that the trustee in charge of them severed its relationship with Wirecard when the audit began.

The announcement of the new postponement of the accounts that should have been published in March, together with the unknown whereabouts of 1.9 billion euros, precipitated a 70% drop in the bank’s shares. The capitalization of the same went from 24,000 million euros two years ago to 5,000 million this week. The hope of German fintech companies has left their survival in a shadow cone. The payment company channels operations with credit cards for tens of billions of euros and participates in the payment systems of the Visa and Mastercard networks. One of the benchmark shareholders of the bank-licensed payments company, Deka Investments, had already requested the removal of Marcus Braun from his position and from the board of directors. Given the current situation, some shareholders have redoubled their call for a renewal of the company’s controls and council. However, independent analysts consider the company’s situation to be extreme. Creditor banks can claim the return of financing lines of up to 2,000 million euros if the annual accounts are not published today, June 19.

Sources with access to the company’s internal documentation and aware of its operations, have leaked incriminating data last year against the procedures used by Wirecard to inflate its results. Last October the Financial Times analyzed documentation from which it was deduced that the company had illegitimately inflated profits in Dubai and Dublin through intervening companies that at least apparently lacked relevant activity. The data suggested that the company had misinformed and misled its auditor, EY, for a decade. In December, the same media reported that the so-called custody accounts managed by trustees were used to increase the company’s cash positions on its balance sheets. The observation by KPMG that it had not been able to verify the existence of the balances that would exist in those accounts and that, according to its verification procedures, there would be an imbalance of 1,000 million euros, triggered the alarms. The observation now by EY that the certifications requested from the banks seem to demonstrate the absence of 1.9 billion euros has underlined suspicions about Wirecard’s accounting.

The bank faces multiple investigations. About their accounting practices. On information to shareholders. On the operations in shares of the company by its CEO Braun. Markets supervisor BaFin said this week that it will take the latest developments into account in its investigation into the potential manipulation of the market in the value of shares by Wirecard. Suspicions about the manipulation of the company’s accounting sparked downward speculation about the company’s shares, operations in which the hedge funds were primed and made strong profits. Last year Wirecard’s offices in Singapore were searched by the police, and its executives were required to testify for operations suggesting that money had been put into capital accounts to strengthen local financial positions, and then went out to do the same at other affiliates of the company in Asia. Following the incident, BaFin suspended the shorts on Wirecard’s shares. Observers believe that the surprises about the company’s accounting practices have not yet come to an end.

COVID-19 (coronavirus) plunges world economy into worst recession since World War II

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COVID-19 (coronavirus) plunges world economy into worst recession since World War II
COVID-19 (coronavirus) plunges world economy into worst recession since World War II

Per capita income will decrease in all regions

The sudden and widespread impact of the coronavirus pandemic and the measures to suspend activities that were adopted to contain it have caused a drastic contraction in the world economy, which, according to World Bank forecasts, will decrease by 5.2% this year. year 1]. According to the June 2020 edition of the Bank’s World Economic Outlook report, it would be the worst recession since World War II, and the first time since 1870 that so many economies would experience a decline in output per capita.

Following severe distortions to domestic supply and demand, trade and finance, economic activity in advanced economies is forecast to contract by 7% in 2020. Emerging markets and developing economies are expected to ( MEED) contract 2.5% this year, their first contraction as a group in at least 60 years. The projected decline in per capita income of 3.6% will push millions of people into extreme poverty this year.

The effects are being particularly profound in the countries most affected by the pandemic and in those that depend heavily on international trade, tourism, commodity exports, and external financing. While the magnitude of the shocks will vary by region, all MEEDs report vulnerabilities that are compounded by external shocks. Likewise, the suspension of classes and the difficulties of accessing primary health care services are likely to have long-term repercussions on the development of human capital.

“The prospects give a lot to think about, as the crisis is likely to leave scars that are difficult to erase and pose complex global challenges,” said Ceyla Pazarbasioglu, vice president of Equitable Growth, Finance and Institutions at the World Bank Group. “Our first priority is to address the global health and economic emergency. Beyond that, the world community must come together to achieve the strongest recovery possible and prevent more people from falling into poverty and unemployment. ”

According to the baseline forecasts – according to which the remission of the pandemic will allow the national mitigation measures to be lifted mid-year in the advanced economies and a little later in the MEEDs, the negative repercussions worldwide will lose intensity during the In the second half of the year and the disturbances to the financial markets will not last over time— world growth would pick up 4.2% in 2021, namely 3.9% for advanced economies and 4.6% for the MEEDs. However, the outlook is highly uncertain and there are risks that the situation will worsen, for example, the possibility that the pandemic will last longer, that there will be financial upheavals or that a drop in international trade and supply relationships. In that scenario, the world economy could contract as much as 8% this year, to recover just over 1% in 2021, while the MEED product would decrease almost 5% this year.

The United States economy is forecast to contract 6.1% this year as a result of shocks linked to measures to control the pandemic. As for the euro area, it is estimated that the product will fall 9.1% in 2020 due to the serious repercussions that the general outbreaks had on activity. In addition, a 6.1% retraction is expected in the Japanese economy, whose economic activity has slowed down as a result of prevention measures.

“The recession caused by COVID-19 is unique in several respects, and is likely to be the deepest for advanced economies since World War II and the first contraction in output in emerging and developing economies in at least the past few years. six decades, ”said Ayhan Kose, director of the World Bank’s Outlook Group. “There are no records of downward corrections as sudden and drastic in global growth forecasts as those seen today. If the past serves as a benchmark, the forecasts could worsen further, implying that policy makers must prepare for the possibility of having to take additional measures to support the activity. ”

The key sections of this unprecedented economic upheaval are addressed in the analytical sections of this edition of the Global Economic Outlook:

How deep will the recession caused by COVID-19 be? An investigation of 183 economies during the period between 1870 and 2021 offers a historical perspective on world recessions.

Hypothesis of Possible Growth Results: Short-term growth projections are subject to an unusual degree of uncertainty; alternative hypotheses are examined.
How does informality intensify the effects of the pandemic? The health and economic consequences of the pandemic are likely to be more profound in countries where informality is widespread.
Prospects for low-income countries: The pandemic is wreaking havoc on the economic and human planes in the poorest countries.
Regional macroeconomic consequences: Each region has unique vulnerabilities to the pandemic and the economic slowdown it produces.
Effects on global value chains: Disruptions to global value chains can exacerbate the effects of the pandemic on trade, production and financial markets.
Long-term consequences of the pandemic: Deep recessions, in general, have detrimental and long-term effects on investment, they are detrimental to human capital due to unemployment that cause and cause a withdrawal of international trade and supply relations. (Posted June 2).
The consequences of falling oil prices: The drop in oil prices generated by the unprecedented decline in demand is unlikely to moderate the effects of the pandemic, although it could be positive during the recovery. (Posted June 2).
The pandemic highlights the pressing need to promote policy measures in the health and economic fields, including international cooperation initiatives, in order to mitigate its effects, protect vulnerable populations and strengthen the capacity of countries to prevent similar situations in the future and face them. In view of their particular vulnerability, it is essential that MEEDs strengthen their public health systems, that they face the challenges of informality and gaps in safety nets, and that they promote reforms that promote firm and sustainable growth after the crisis.

MEEDs that have fiscal maneuvering capacity and that can access affordable financing conditions could consider using additional incentives if the effects of the pandemic continue over time. Such a strategy should be accompanied by measures that credibly restore medium-term fiscal sustainability, including those aimed at strengthening fiscal frameworks, increasing the mobilization of internal revenue and spending efficiency, and improving fiscal and fiscal transparency. debt. Transparency of all financial commitments, analogous debt instruments, and government investments is a key factor in creating an enabling environment for investment; substantial progress could be made in this regard this year.

Download the June 2020 World Economic Outlook Report here (i).

Regional perspectives:

East Asia and the Pacific: The region is projected to grow just 0.5% in 2020, the lowest rate since 1967 and a reflection of the pandemic-related disruptions. For more information, see regional overview (i).

Europe and Central Asia: It is estimated that the region’s economy will contract 4.7% and that practically all countries will go into recession. For more information, see regional overview (i).

Latin America and the Caribbean: The shocks caused by the pandemic will cause economic activity to drop 7.2% in 2020. For more information, see the regional overview.

Middle East and North Africa: Economic activity in the Middle East and North Africa is forecast to contract 4.2% in the wake of the pandemic and its effects on the oil market. For more information, see regional overview (i).

South Asia: Economic activity in the region is expected to contract 2.7% in 2020 as a result of the negative effects of pandemic mitigation measures on consumption and service activity and uncertainty about the course of the disease, which will discourage private investment. For more information, see regional overview (i).

Sub-Saharan Africa: Economic activity in the region is on the way to contracting 2.8% in 2020, the deepest slowdown on record. For more information, see regional overview (i).

World Bank Group response to COVID-19

The World Bank Group, one of the main sources of financing and knowledge for developing countries, is taking rapid and wide-ranging measures to help those countries strengthen their response to the pandemic. To this end, it supports public health interventions, works to guarantee the sum

China and the United States prepare a high-level meeting in Hawaii to iron out rough edges

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China and the United States prepare a high-level meeting in Hawaii to iron out rough edges
China and the United States prepare a high-level meeting in Hawaii to iron out rough edges

After completing these contacts, it will be the first time that senior officials from both countries meet in person to try to address the multiple points of friction that confront them.

The governments of China and the United States are finalizing preparations to hold a high-level summit in Hawaii in an attempt to resolve the multiple tensions that have deteriorated relations between the two countries at their coldest moment in recent decades, according to sources close to negotiations to the Political portal and the ‘South China Morning Post’.

The American delegation would be led by Secretary of State Mike Pompeo, who would face each other with a figure close to the United States, the former Foreign Minister and current director of the Foreign Commission of the Communist Party Yang Jiechi.

After completing these contacts, it will be the first time that senior officials from both countries meet in person to try to address the multiple points of friction that confront them.

In early June, US President Donald Trump threatened to revoke Hong Kong’s special status after China passed a resolution to enact a national security law in the territory, a decision Washington understands as interference. in the partial independence that the city enjoys.

However, the main friction occurred due to the coronavirus pandemic that originated in the Chinese city of Wuhan. Trump, who has described the epidemic as “the Chinese plague”, denounced that the Asian giant hid the true impact of the disease until it was too late to contain it.

These statements angered the Chinese government, which accused the United States of launching unfounded criticism to hide its poor response to the crisis.

These crossings of accusations took place amid delicate talks to solve the trade conflict that both countries have held for months, and which was the main topic of the last high-level meeting, on January 15 in Washington, when the deputy prime minister Chinese Liu He and President Trump ratified some relief from the tension with the signing of a new preliminary trade agreement.

The approximate date the Hawaii meeting would take place is unknown.

KLM and Transavia still give customers money back instead of voucher

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KLM and Transavia still give customers money back instead of voucher
KLM and Transavia still give customers money back instead of voucher

KLM and its subsidiary Transavia are adjusting their policy regarding vouchers. Where they had previously decided to only offer travelers with a canceled flight the option to get their money back immediately after mid-May, they now do so retroactively for all canceled flights.

The companies announced this on Thursday. As a result of the outbreak of COVID-19 and the associated travel restrictions, all airlines have had to cut numerous flights since mid-March. They offered travelers a voucher as compensation, instead of their money back, which passengers are legally entitled to.

The Dutch government tolerated the voucher construction, but later came back to it after Brussels made it clear that travelers should always have the choice between a voucher or a refund. Both KLM and Transavia responded to this at the time, but only for flights booked after 15 May.

Now they come back to that, a claim agency had meanwhile filed a lawsuit against, among others, KLM and Transavia to claim money back for duped travelers.

EU supports request from aviation to UN to relax emissions regulations

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EU supports request from aviation to UN to relax emissions regulations
EU supports request from aviation to UN to relax emissions regulations

The European Union (EU) supports a request from the aviation industry to relax rules on CO2 emissions laid down in the United Nations’ CORSIA system. This would allow airlines that have joined CORSIA to emit more CO2 next year than previously thought.

CORSIA, which stands for Carbon Offsetting and Reduction Scheme for International Aviation, will commence on January 1, 2021 and states that airlines’ CO2 emissions should not exceed the average levels of 2019 and 2020. Any emissions above that level, must be purchased through emissions trading. The scheme is still voluntary until 2027, after which it will become mandatory.

The EU now wants CORSIA to be adjusted due to the corona crisis. This will mean that the average CO2 emissions will be considerably lower this year, so that airlines will be able to emit considerably less in 2021 than previously thought. This would hit aviation again, while the sector is already in the corner where the blows fall.

Brussels therefore proposes not to take the average emissions of 2019 and 2020 for CORSIA, but only those of 2019. Aviation industry organization IATA expects this step to save the sector nearly 17 billion in costs. The UN Aviation Agency will meet in the next three weeks and will then address the issue.

NGOs and environmental groups are not happy with the EU’s move. The German environmental think tank Öko-Institut says in a response that a change in CORSIA “will postpone the greening of aviation by several years”.

Nasdaq and its 10,000 points raise doubts about its recovery in ‘V’

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Nasdaq and its 10,000 points raise doubts about its recovery in ‘V’
Nasdaq and its 10,000 points raise doubts about its recovery in ‘V’

The Nasdaq and its 10,000 points raise doubts in the market since the powerful recovery in ‘V’ recorded by the index does not attend to fundamental and technical reasons as it lacks a previous comparison to explain this situation.

The annual rise for this Wall Street selective is 10% after rising 42% from the annual lows in March. Now, at the gates of the psychological barrier of 10,000 integers, it is time to check whether it is capable of sustaining this level or the corrections will appear again

“This situation is not supported by fundamentals, but by an excessive feeling of attraction towards financial markets,” says XTB analyst Darío García.

And it is that, if the situation of global companies is taken into account, or the worsening of the world economy, it is difficult to understand the revaluation of the technological index.

It would be by its composition where the rises could be understood, since the technological ones are the most benefited from this crisis: “Investors have thought throughout the pandemic that the technological ones are not only not going to be harmed by the crisis, but they are going to to benefit, ”says IG Spain analyst Sergio Ávila.

More is needed

Although this statement is a reality that the market does not question, for García it is insufficient and provides an example that also helped Nasdaq in its recovery: “It is known that the latest reports and surveys carried out in the United States show how many citizens have invested the government aid check ”.

The XTB analyst would see in this the origin of a recovery in the prices that he describes as “excessive”, not forgetting the liquidity injections by the Federal Reserve that “have filled the market with steroids”.

This analyst does not appreciate clear technical figures of relevance “beyond Fibonacci levels between the annual highs of February 19 and the lows of March 23”.

García insists on breakouts of levels that are not “totally contrary” to the theory and that, therefore, we could expect a first drop to the previous maximum to confirm the break of the new support above 9,767 points. ”

For Ávila, “it would not be surprising” to see any type of correction, “either in lateral range or a broader correction.” Of course, it ensures that it is “evident” that the Nasdaq is currently “the strongest index in the market and will probably continue to be so in the medium and long term.”

Have to wait

The director of Admiral Markets Spain, Juan Enrique Cadiñanos, opts for prudence and the waiting time until prices are consolidated and the situation is maintained in the short term, “but it will be an arduously complicated task,” he added.

The accumulated overbought is important and Cadiñanos observes how the contracting volumes fall as prices rise. This situation, he explains, may be “normal” in stocks, but not for indices. This makes him estimate that “there is not much interest in consolidating levels in the short term.”

The perfect drawing of ‘V’

From the highs in February to the lows in March, a period that coincides with the toughest moments of the crisis for world parks, the Nasdaq lost 31.89%. Losses that were sustained by the unstoppable advance of the virus from China to the rest of the world.

But from there it recovered in the same way until it rose 42% and entered the current 10% gains for the year. Thus, they recall on IG Markets, the falls began on February 20 at the highs of 9,733 points and, after three bearish impulses, made ground at 6,642.7 points, “with the indicator of CNN fear and greed coming at levels of panic never seen before ”, adds Ávila.

It is from a point when the rebound reached 8,015.6 points, the first resistance after the correction. After a pause, the increases began again to exceed the previous highs and the bullish target was set at 8,768.76 integers

He touched a correction that was settled later with a third bullish momentum to the area of ​​9,733.71 points, which he already exceeded.

With the breaking of resistances and supports it is now time to check how they are located. For IG the first support has it at 9,733.71 points, and the next ones would be at 9,140.8 and 8,950 points. Above, the only resistance he has is at 9,912.5 points and then he would be on a free climb.

Back to normal

There is consensus on the importance of technology companies for the future and their positive prospects, although this does not imply that they continue to project themselves with the same power as today.

This analysis is shared by Cadiñanos, assuring that the return to normality “will leave the technology sector in a growth situation, but not at the same speed as the current one, so it is probable that prices will go to a more reasonable level.”

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Wirecard postpones publication of 2019 results due to € 1.9 billion missing

Wirecard postpones publication of 2019 results due to € 1.9 billion missing

EY Auditor Says You Must Double Check Custody Accounts And Shares Plummet The promise of the German fintech companies, Wirecard, informed its shareholders that it...
COVID-19 (coronavirus) plunges world economy into worst recession since World War II

COVID-19 (coronavirus) plunges world economy into worst recession since World War II

Per capita income will decrease in all regions The sudden and widespread impact of the coronavirus pandemic and the measures to suspend activities that were...
China and the United States prepare a high-level meeting in Hawaii to iron out rough edges

China and the United States prepare a high-level meeting in Hawaii to iron out...

After completing these contacts, it will be the first time that senior officials from both countries meet in person to try to address the...
KLM and Transavia still give customers money back instead of voucher

KLM and Transavia still give customers money back instead of voucher

KLM and its subsidiary Transavia are adjusting their policy regarding vouchers. Where they had previously decided to only offer travelers with a canceled flight...
EU supports request from aviation to UN to relax emissions regulations

EU supports request from aviation to UN to relax emissions regulations

The European Union (EU) supports a request from the aviation industry to relax rules on CO2 emissions laid down in the United Nations' CORSIA...