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EUROPEAN MIDDAY BRIEFING: Stocks Slump on China -2-

Vivendi SE's spinoff of Universal Music Group, expected Tuesday, will leave the French conglomerate bereft of its most lucrative business and will test the market's appetite for music as an asset class.

The world's largest music company, behind stars including Taylor Swift, Drake and the Beatles, will debut on Amsterdam's Euronext stock exchange with shares to be distributed to Vivendi's investors. The move comes amid rising interest in the resurgent music business as an investment and following a recent boom in the value of music catalogs, music-streaming companies and technology for creators.

   
 
 

Shell to Start Making Lower-Carbon Jet Fuel as Regulations Loom

Royal Dutch Shell PLC is the first major oil company to announce targets for low-emission jet-fuel output and sales as airlines look to buy more of the fuel to meet climate-change goals and get ahead of proposed European Union regulations.

The Anglo-Dutch energy giant, a top provider of jet fuel, said it plans to produce 2 million metric tons of so-called sustainable aviation fuel a year by 2025, up from none today. It wants SAF to account for at least 10% of the jet fuel it sells by 2030, including fuel it sources from outside suppliers. A Shell spokesman declined to say how much SAF it sells now.

   
 
 

Nigeria's State Oil Firm Incorporated Under New Oil Law

Nigerian National Petroleum Corp., which has been run as a state enterprise since 1977, is to be incorporated as a company with a board.

An official statement on Sunday said the Nigerian President Muhammadu Buhari, who is also the country's Minister of Petroleum, has directed the incorporation as stipulated in the Petroleum Industry Act 2021.

   
 
 

Europe's OVHcloud Readies Possible $4.7 Billion IPO

European cloud-services provider OVHcloud plans to launch a possible initial public offering, the company said Monday, a deal that could value the business at more than $4.7 billion.

Based in Roubaix, France, OVHcloud rents computing, storage and networking capability to users, overseeing a network of dozens of data centers across North America, Europe, Singapore and Australia. It also operates its own fiber-optic network globally that the company claims gives it a competitive edge.

   
 
 

Investment Firms Tiedemann and Alvarium Near Deal to Merge, Go Public Via SPAC

Investment firms Tiedemann Group and Alvarium Investments Ltd. are close to a deal to merge and go public through a special-purpose acquisition company, people familiar with the matter said.

The combined investment firm would be called Alvarium Tiedemann Holdings and be valued at roughly $1.4 billion in the deal with the SPAC Cartesian Growth Corp., the people said. The merger could be announced as soon as this week.

   
 
 

U.S. Spat With France Shows Challenge of Keeping Allies Unified

France stepped up its opposition to a security agreement the U.S. crafted with Australia and the U.K., criticizing the Biden administration's failure to keep its allies apprised of sweeping foreign policy initiatives after the pact led to the loss of a lucrative French submarine deal.

On Sunday, French Foreign Minister Jean-Yves Le Drian discussed "the strategic consequences of the current crisis" with its ambassadors from the U.S. and Australia who were recalled for consultations. French President Emmanuel Macron is also expected to speak in the coming days with President Biden, officials from both countries say, in a sign of the depth of France's frustration over the security pact. Mr. Le Drian likened French anger over the security pact to the blowback from American allies over the Biden administration's abrupt and messy withdrawal from Afghanistan.

   
 
 

Russia's Ruling Party Leading in Elections as Putin Looks to Tighten Grip

MOSCOW-Russia's ruling party appeared on course to maintain its majority in parliament, preliminary results showed, in an outcome that would cement President Vladimir Putin's control over his country's main levers of power.

The initial tally showed pro-Kremlin United Russia won 50% of votes cast, followed by the Communist Party of the Russian Federation with 20% and the Liberal Democratic Party of Russia with around 8%, according to early results from Russia's electoral commission based on 85% of the ballots counted.

   
 
 

Russia's Deepening Belarus Ties Squeeze Western-Backed Ukraine

BRUSSELS-Russia's deepening integration with Belarus is presenting a fresh military threat to Western-backed Ukraine, which Moscow is trying to draw back into its orbit.

Russia has been conducting large joint military exercises with Belarus, whose authoritarian leader, Alexander Lukashenko, weakened by mass street protests and Western sanctions, has ceded much political and economic control of his country to Moscow. The exercises, which Russia says are defensive in nature and involve some 200,000 troops, showcased closer military ties on Ukraine's northern flank.

   
 
 
   
 
 

GLOBAL NEWS

More CFOs Add Sustainability Targets to Corporate Loans

An increasing number of companies are tying the interest rates on their corporate loans to environmental and other sustainability targets as they face pressure from investors and regulators to go green.

Sustainability-linked loans carry interest rates that adjust based on whether a company meets a predetermined environmental, social or governance goal, such as reducing carbon emissions. U.S. companies took out $83.8 billion in such loans through Sep. 16, up from $2.5 billion during the same period in 2020, according to Dealogic, a data provider. U.S. corporate loan volume, including sustainability-linked loans, was $1.7 trillion as of Sep. 16, Dealogic said.

   
 
 

Chinese Property Sector Selloff Continues as Evergrande Worries Mount

Shares of Chinese property developers continued to slide Monday as worries mounted that China Evergrande Group is moving closer to a default, signaling the potential for a wider contagion in the sector.

The Hang Seng Mainland Properties Index plunged more than 6.0% on Monday morning, taking year-to-date losses to 33%. Evergrande fell 17% to HK$2.11, while Sunac China Holdings Ltd. slid 10% and Guangzhou R&F Properties Co. fell 7.3%. Property-management companies also tracked lower, with Country Garden Services Holdings Co. retreating 12%.

   
 
 

RBA's Dovish Convictions May Be Challenged by Soaring Shipping Costs

The Reserve Bank of Australia's confidence that interest rates won't be raised in the next two years is set to be tested as soaring shipping costs and a weaker exchange rate push core inflation back within the target of 2%-3% in 2022.

Marcel Thieliant, senior economist at Capital Economics, said Monday that shipping costs from China to Australia are now around 250% higher than before the pandemic.

   
 
 

Economy Week Ahead: Central Banks, Home Sales, Purchasing Managers

The Federal Reserve's policy statement and Chairman Jerome Powell's press conference on Wednesday highlight this week's slate of economic news.

   
 
 

Democrats Press Ahead With Debt-Limit Vote Amid Standoff With GOP

WASHINGTON-A partisan fight over raising the government's borrowing limit is expected to ratchet up this week, with Democrats moving ahead with a vote in the face of strident GOP opposition, raising doubts about whether Congress will take action before the federal government runs out of cash.

The standoff has alarmed Wall Street analysts and business leaders, who in recent weeks have issued warnings about a rising risk of a technical default, in which the government might be unable to make all of its regular payments in full and on time. The threat of such a default could derail markets and hit U.S. economic growth.

   
 
 

Junk-Debt Sales Soar Toward Record Year

The $3 trillion market for low-rated companies' debt is having its best year ever, powered by a rebounding economy and investors' demand for any extra yield.

U.S. companies including Crocs Inc. and SeaWorld Entertainment Inc. have sold more than $786 billion of junk-rated bonds and loans so far in 2021, according to S&P Global Market Intelligence's S&P. That tops the previous high for a full year in data going back to 2008.

   
 
 

Covid-19 Vaccinations Boost the Global Economy, but May Not Cure It Alone

The global recovery is slowing as Covid-19 resurges, spurring governments to try to raise vaccination rates in hopes of fueling stronger economic growth.

The thinking is, first, that vaccinations will ease consumers' worries about infection, prompting them to spend more on travel, dining out, going to concerts and other activities that involve proximity to other people. Second, reduced Covid-19 case counts would mean fewer government shutdowns of ports, factories and other operations critical to global supply chains.

   
 
 

Natural-Gas Prices Surge, and Winter Is Still Months Away

Natural-gas prices have surged, prompting worries about winter shortages and forecasts for the most expensive fuel since frackers flooded the market more than a decade ago.

U.S. natural-gas futures ended Friday at $5.105 per million British thermal units. They were about half that six months ago and have leapt 17% this month.

   
 
 

As Congress Debates Trillions in Spending, Voters' Minds Are Elsewhere

FORT WAYNE, Ind.-Sen. Todd Young warned the few dozen conservatives gathered this month in the basement of a sushi restaurant that their activism could be the only thing to stop Congress from spending trillions of dollars of tax money.

"You flooding the zone with your concerns will amplify for members just how serious they are," the Indiana Republican said.

   
 
 

Afghan Valley Legendary for Resisting Soviets, Taliban Empties Out

BAZARAK, Afghanistan-What's missing these days in the capital of Panjshir, the only Afghan province that resisted the Taliban after last month's fall of Kabul, are the Panjshiris.

   
 
 

Health Experts Urge Patience on Wider Use of Covid-19 Booster Shots

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September 20, 2021 06:25 ET (10:25 GMT)

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