Toshiba’s largest investor escalates clash with management

Toshiba’s largest investor has significantly escalated its clash with management by calling for an extraordinary general meeting and an independent investigation into allegations that a knife-edge shareholder vote was conducted unfairly.

The move by Effissimo, a secretive Singapore-based activist fund that owns 9.9 per cent of Toshiba, breaks almost three months of stalemate that followed the company’s July 31 annual shareholder meeting. 

Despite the steady rise of activism in mainstream Japanese corporate life over the past three years, the threat of the EGM remains powerful and rare. Toshiba now has eight weeks to respond to the request, after which Effissimo can take the matter to court.

Toshiba said it would “carefully review” the request and consider how to deal with it.

In a statement issued along with its demand for the EGM, Effissimo highlighted big concerns surrounding the July shareholder meeting, at which Toshiba’s chief executive, Nobuaki Kurumatani, survived a vote on his reappointment with just 58 per cent support.

Effissimo initially raised these concerns in a letter to the company in September, where it also called for a third-party committee to be established to investigate. That committee has not been formed and, according to people close to the fund, there has yet to be an adequate explanation from Toshiba.

“It remains opaque whether the 181st AGM was conducted in a fair and impartial manner, and this situation has not been rectified,” said Effissimo in its December 17 letter to Toshiba requesting the EGM.

It added that in the name of transparency and the fair and impartial operation of shareholder meetings, it was necessary to “bring to broad daylight the actual state of the 181st AGM through an investigation conducted by independent investigators”. Effissimo offered the names of three senior Japanese corporate lawyers to form the committee.

In September the Financial Times revealed that, ahead of Toshiba’s July AGM, the former head of Japan’s $1.3tn Government Pension Investment Fund (GPIF) held private discussions with Harvard Management Company, which subsequently abstained from voting.

At the same time, Toshiba had engaged Goldman Sachs to defend it against activists, as part of what some investors described as a campaign that deployed “all the dark arts”. 

Ahead of its call for an EGM, Effissimo said it had interviewed dozens of other Toshiba shareholders and discovered that some had felt pressured to abstain from exercising their voting rights.

Also in September, another large Toshiba shareholder, 3D, discovered that the votes on about 5m of its shares had not been counted by Sumitomo Mitsui Trust, the shareholder services firm that administered the voting for Toshiba.

In an admission that sent shockwaves across the Tokyo market, Sumitomo Mitsui Trust later said it had probably miscounted votes at the AGMs of more than 1,000 Japanese companies over the years. It remains under investigation by the Financial Services Agency.

Toshiba’s AGM in July followed a series of disagreements between Toshiba and Effissimo, which led to the fund and others leading an investor rebellion against Mr Kurumatani.

Unlike the CEOs of other large Japanese companies, Mr Kurumatani’s position was particularly vulnerable to such a move.

In the wake of the 2017 financial crisis that brought Toshiba to the brink of bankruptcy, the group issued $5.4bn in new equity — a move that was strongly resisted in some quarters of the Japanese government and which abruptly filled the Toshiba shareholder register with an unusually large number of foreign hedge funds and activists.

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FedEx results show scale of online shopping boom

FedEx has laid bare the scale of the online shopping boom in the run-up to the peak US holiday season, producing its highest quarterly sales on record after the logistics group handled millions of additional packages and implemented surcharges on shipments.

Earnings released on Thursday showed FedEx Ground, the company’s small-package ground delivery business in North America, handled an average of 12.3m packages every day in the three months to the end of November, up from 9.6m for the same period a year ago.

FedEx, whose global network spans 680 aircraft, 200,000 vehicles, and 600,000 employees, also carried 6.2m pounds of freight daily through its “international priority” freight service — 19 per cent more than 2019 levels.

Demand for parcel delivery has meanwhile boosted the pricing power of FedEx, which has introduced a range of peak charges of more than $1 per package. Revenue per package at its Ground division rose from $8.80 a year ago to $9.42.

“Peak surcharges for the holiday season are the new normal for our industry,” said Brie Carere, executive vice-president. “There’s been some fundamental shifts in the market.”

The results cement the status of FedEx as one of the biggest corporate winners from the coronavirus crisis, with quarterly revenues across the group up 19 per cent year-on-year to $20.6bn. Net income more than doubled to $1.23bn.

Raj Subramaniam, chief operating officer, said FedEx was reaping the rewards from investments it had made in ecommerce, including expanding deliveries on Sundays.

“In many ways, we have been operating at peak-like level since March due to surges in ecommerce volume,” he said.

FedEx shares have gained 88 per cent this year, giving the Memphis-based company a market capitalisation of $77bn. The shares slipped 3.7 per cent in after-hours trade after it declined to provide a financial outlook.

Michael Lenz, chief financial officer, said the resurgence of coronavirus infections added “significant uncertainty” to the company’s ability to predict demand, and “cloud our ability to forecast full-year earnings”.

FedEx also incurred a $215m increase in variable staffing expenses and $50m worth of Covid-19 related costs in the quarter.

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Moderna approval to make US first to authorise two Covid vaccines

The US drugs regulator will grant emergency approval to a second coronavirus vaccine in the coming days, a decision that will make it the first country to have authorised two inoculations against the virus.

The US Food and Drug Administration decided on Thursday night to approve Moderna’s vaccine on an emergency basis, according to people close to the process, following the recommendation to do so by a panel of outside experts.

Stephen Hahn, the head of the FDA, and Peter Marks, the head of the regulator’s vaccine division, issued a statement on Thursday night that said they had informed Moderna they would work towards the “finalisation and issuance” of an emergency approval. Officials close to the process said they had made the decision to authorise the vaccine, and were now working on the written information to doctors and patients to accompany it.

The move will make the US the first country to have approved the vaccines from both Pfizer/BioNTech and Moderna, and will help the Trump administration meet its goal of producing enough doses to vaccinate 20m people by the end of the year.

Moderna’s vaccine, which will be the drug company’s first to gain any kind of regulatory approval, is similar to Pfizer/BioNTech’s, using the same technology and boasting a similar efficacy rate, at 94.1 per cent. An FDA report published earlier this week found it was “highly effective” and raised no significant safety concerns.

Unlike Pfizer’s vaccine however, which is available to anyone over the age of 16, Moderna’s inoculation is only being authorised for over-18s.

But the Moderna shot may prove more widely available in the US than the Pfizer/BioNTech jab, as the government has signed deals for 200m doses, twice many as it has secured from Pfizer so far. The Moderna vaccine also does not need to be kept in ultra-cold storage, so it may be able to be distributed more broadly. 

FDA scientists met to make the decision on Thursday evening following the vote by a group of outside experts to move ahead with approval. All but one of the panel voted in favour of authorisation, with the other member abstaining. 

An emergency use authorisation is not a full approval, which may follow in a matter of months, but it would allow widespread distribution of the vaccine, with only children excluded. 

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Some US states claim Pfizer vaccine allocations have been cut

Several US states have complained that their allocation of Pfizer’s coronavirus vaccine has been suddenly cut, as tensions build between the pharmaceutical company and government officials who claim they are not being given enough information about production.

Jay Inslee, the governor of Washington state, on Thursday said that he had been told his state would receive considerably less vaccine than expected over the coming weeks.

Mr Inslee tweeted: “@CDCgov [the US Centers for Disease Control and Prevention] has informed us that WA’s vaccine allocation will be cut by 40 per cent next week — and that all states are seeing similar cuts. This is disruptive and frustrating. We need accurate, predictable numbers to plan and ensure on-the-ground success. No explanation was given.”

Other states have also reported they have been told to expect similar cuts. JB Pritzker, the governor of Illinois, said on Wednesday his state’s allocation for each of the next two weeks had been halved, down from about 8m doses each week to just 4.3m. The Michigan state health department said on Thursday its allocation had been cut by 29 per cent, while Iowa said it was facing a reduction of up to 30 per cent.

Mr Inslee’s comments came hours after Alex Azar, the US health secretary, called for Pfizer to be more transparent about its production processes.

“We don’t have complete visibility into their manufacturing because they have kept that a bit more arm’s length,” Mr Azar told CNBC on Thursday.

Pfizer said in a statement that its manufacturing process was running to schedule and that it had not encountered delays: “We have millions more doses sitting in our warehouse but, as of now, we have not received any shipment instructions for additional doses.”

The CDC did not respond to a request to comment, but the US health department insisted on Wednesday that official allocations had not changed.

The US government authorised Pfizer’s vaccine for emergency use last week and has already bought 100m doses. It plans to distribute 40m of those doses before the end of the year, and is in talks with the company to buy 100m more.

The department said in a statement that states had only been provided official allocations up until the end of next week, and that it remained on course to vaccinate 20m people in the US by the end of the year.

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Coronavirus latest: FedEx revenues hit quarterly record in online shopping boom

Greece announced tighter restrictions in three towns in western Attica following a jump in coronavirus cases even though the country is in the sixth week of a nationwide lockdown. The night-time curfew will begin at 6pm on Friday in Eleusis, Mandra and Aspropyrgos, three hours earlier than before.

Hospitalisations related to coronavirus have climbed to record levels in Arizona. The state’s hospitals were treating 3,884 patients with positive or suspected cases of Covid-19, up from 3,809 the day before, data from the state health department showed on Thursday.

Pfizer said it has millions of doses of its Covid-19 vaccine sitting in warehouses awaiting delivery instructions, denying reports that the company is having production problems. The US drugmaker said on Thursday that no shipments have been held or delayed. Pfizer said it sent 2.9m doses across the country last week.

Poland will go into lockdown from December 28 to January 17 in a bid to regain control of the pandemic, the country’s health minister said on Thursday. Under the new restrictions, hotels, shopping centres — with the exception of food stores and pharmacies — and ski slopes will close.

Another 885,000 Americans filed for first-time unemployment benefits last week, as fresh restrictions to fight the resurgence in coronavirus cases continue to strain the jobs market. Weekly jobless claims increased by 23,000, from 862,000 last week. Economists had expected claims to moderate to 800,000.

The Bank of England kept monetary policy unchanged on Thursday as it cited an “unusually uncertain” outlook for the UK economy. The BoE’s Monetary Policy Committee decided to leave interest rates at 0.1 per cent and the target for its asset purchasing programme at £895bn by the end of 2021.

The UK government has placed parts of East and South East of England under the toughest coronavirus restrictions from Saturday while it has eased the rules for Bristol. Infection numbers in the South East region have increased 46 per cent, health secretary Matt Hancock said, while cases in the east have risen two-thirds from last week.

Government incentives for employers in England to take on apprentices have failed to offset a near 46 per cent decline in on-the-job training since the first lockdown. The chancellor’s Plan for Jobs scheme led to 11,520 new apprenticeships since it launched in August, Department for Education figures showed.

Chancellor Rishi Sunak is planning to extend the UK’s £68bn coronavirus emergency loan schemes to help support businesses struggling with the combination of further pandemic restrictions and a disruptive end to the Brexit transition, according to Whitehall sources.

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FDA advisory panel backs Moderna’s Covid-19 vaccine

A panel of scientific experts has endorsed Moderna’s Covid-19 vaccine, paving the way for it to become the second jab to receive emergency authorisation for use in the US by the end of the week.

All but one of the 21-member panel voted that the available evidence indicated the vaccine’s benefits outweighed its risks for people aged 18 and older, with one member abstaining.

The Food and Drug Administration could announce an emergency use authorisation by the end of the week. The FDA granted the first EUA for a coronavirus vaccine to Pfizer and BioNTech last week.

Hayley Gans, a Stanford professor on the panel, said the evidence had been studied “in great detail” and outweighed any issues. “I think it really supports us being able to get the pandemic in the background . . . and finally, provide a safe and effective way to get to herd immunity,” she said.

Doran Fink, deputy clinical director of the FDA’s vaccine division, kicked off Thursday’s meeting by saying Covid-19 continued to worsen in the US and worldwide. Even though the Pfizer/BioNTech vaccine is available in the US, it remains “unapproved and its quantity is not sufficient for mass vaccination needed to address a pandemic in the US”, he added.

The US is in the midst of the deadliest surge of coronavirus infections yet. On Wednesday, a record new 3,400 deaths were attributed to Covid-19, while hospitalisations continued to increase, compounding the strain on states’ healthcare systems.

Dr Fink said the FDA and the Centers for Disease Control and Prevention are investigating two incidents of healthcare workers in Alaska suffering serious allergic reactions to the Pfizer/BioNTech vaccine. The FDA is working with Pfizer to revise factsheets given to providers to ensure they are able to monitor and treat such reactions. 

“The totality of data at this time continues to support vaccinations under the Pfizer EUA without new restrictions,” he said. “These cases underscore the need to remain vigilant during the early phase of the vaccination campaign.”

Last week, the FDA decided not to exclude people with a history of serious allergic reaction from receiving the vaccine, even though the UK regulator has done so. Instead, the US regulator warned against administering it to people who had previously had a reaction to the vaccine components. 

In a report issued this week ahead of the meeting, the FDA’s scientists found that the Moderna vaccine was “highly effective” and there were no significant safety concerns.

Moderna’s vaccine is based on the same messenger ribonucleic acid technology — known as mRNA — as Pfizer/BioNTech’s. A genetic code to the virus’s spike protein is delivered into the body in a bubble of fat, to teach the immune system to respond to the virus.

But there are some differences. Moderna is applying for an EUA for over-18s only, whereas Pfizer and BioNTech’s vaccine was approved for 16- and 17-year-olds, even though some outside advisers were concerned about the lack of evidence regarding the vaccine’s use in that age group.

Moderna’s vaccine can be stored at normal medical freezer temperatures, so does not require the same special equipment to transport and store as Pfizer/BioNTech’s inoculation. 

The US government has secured a larger supply of Moderna’s vaccine. It signed a second deal with the company last week, bringing its total pre-order to 200m by the second quarter of 2021.

It has pre-ordered 100m doses of Pfizer/BioNTech’s vaccine and is trying to help the partners increase production in order to secure another 100m. 

Alex Azar, health secretary, told CNBC on Thursday that the US was poised to ship 5.9m doses of Moderna’s vaccines to states once it was approved.

“We’re ready to start shipping this weekend to them for rollout Monday, Tuesday, Wednesday of next week. We’re ready to go,” he said.

Additional reporting by Matthew Rocco in New York

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US Treasury seeks to water down Trump’s Chinese securities ban

The US Treasury department is attempting to water down an executive order from Donald Trump that bars Americans from investing in Chinese companies with suspected ties to Beijing’s military.

The effort has been met with furious opposition from the Pentagon and state department, opening up a heated dispute over one of the last big anti-Beijing policies of the Trump era.

Mr Trump last month issued an order barring US investors from investing in Chinese companies that the Pentagon put on a list of groups suspected of helping the Chinese People’s Liberation Army.

The effort is part of a broad push to counter China’s “military-civil fusion” strategy which compels Chinese companies to share technology with the PLA. The Trump administration argues that the strategy means US investors who invest in Chinese companies are helping Beijing and damaging America’s national security.

MSCI, an index provider, this week removed the Chinese companies from its indices in response to the order, following a similar move by rivals including FTSE Russell.

But many investors have been waiting for guidance from Treasury’s Office of Foreign Assets Control to determine if they need to sell shares in the 35 Chinese companies on the Pentagon list, and their subsidiaries.

Three people familiar with the internal debate said Treasury wanted to exclude Chinese subsidiaries from the ban, but that the effort is being fiercely resisted by the state department and Pentagon, which have argued that not including the subsidiaries would significantly weaken the overall impact of Mr Trump’s order.

The state department and National Security Council declined to comment, while Treasury did not respond to a request for comment.

Mike Pompeo, secretary of state, last week raised concerns about the number of subsidiaries of the blacklisted companies that are included in stock and bond indices. He said the subsidiaries of 24 of the 35 Chinese companies on the Pentagon list were included in a major securities index.

“The money flowing into these index funds . . . supports Chinese companies involved in both civilian and military production,” he said. “Some of these companies produce technologies for the surveillance of civilians and repression of human rights, as is the case with Uyghurs and other Muslim minority groups in Xinjiang, China.”

Mr Pompeo said some of the Chinese companies in the MSCI indices presented “significant national security and humanitarian concerns for the United States” which exposed them to possible US sanctions.

One of the people familiar with the situation said the debate was the last big fight over China inside the Trump administration before the president leaves office on January 20 and is replaced by Joe Biden. 

The Pentagon list includes large companies, such as Aviation Industry Corporation of China. But according to the state department, there were at least eight Avic subsidiaries still included in major indices from MSCI and FTSE at the beginning of December. A number of subsidiaries of China Railway Construction Company are also included in the indices from the two providers.

Roger Robinson, a former NSC official who believes the US should take a tougher stance on allowing Chinese companies in its capital markets, said Treasury was trying to dilute the impact of the executive order.

“Treasury is reportedly insisting on narrowing, diluting and otherwise defanging key provisions of the order],” said Mr Robinson, who runs RWR Advisory Group, a risk consultancy. “It appears to demonstrate more interest in protecting Wall Street’s fees and Beijing’s interests than scores of millions of unwitting American retail investors and our national security.”

China hawks frequently accuse Steven Mnuchin, Treasury secretary, of being weak on China due to his efforts to resist some of the more hardline measures proposed during the four years of the Trump administration. His defenders privately say that Mr Mnuchin is adopting a balanced approach that takes into account the effect on the US economy.

After three years of resisting lobbying by his more hawkish officials, Mr Trump recently gave the green light for a string of assertive measures against China as he blamed Beijing for the global spread of Covid-19.

The Financial Times reported earlier this year that the White House had told the Pentagon to publish a list of Chinese companies with alleged ties to the military, which was required under a two-decades old law that was not being complied with.

Congress last week passed a defence spending bill that would require the Pentagon to produce a comprehensive list every year, but Mr Trump has threatened to veto the bill over unreleased measures.

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Congress hashes out final stimulus details in race to strike deal

Congressional leaders vowed they would soon complete negotiations on a $900bn fiscal stimulus deal to bolster the US economy, although talks could stretch into the weekend to resolve the last sticking points.

“While many, if not all, of the difficult topics are behind us, a few final issues must be hammered out,” Chuck Schumer, the top Democrat in the Senate, said on Thursday. “We are very close to an agreement, but the details really matter.”

Democratic and Republican lawmakers in Congress had been hoping to reach a compromise by Friday night, when funding for government operations is due to expire. But they said they might have to extend the deadline by a few days in order to allow more time for negotiations.

“We are going to stay right here until we are finished, even if that means working into or through the weekend,” Mitch McConnell, the Republican Senate majority leader, said. “Our citizens can’t afford for us to get bogged down in the back-and-forth. Let’s finish up our bipartisan framework. Let’s make law as soon as possible.”

The agreement being discussed would be the largest economic relief package in US history after the $2.2tn Cares Act, which was passed in late March during the early stage of the pandemic in the US. It would exceed the $787bn price tag of the stimulus plan enacted by Barack Obama in 2009, after he took office in the midst of the financial crisis.

The need for additional stimulus has become more acute in the wake of the recent surge in coronavirus infections. There have also been some glaring warning signs for the US recovery, including weakness in retail sales and rising unemployment claims.

Expressing hope that a deal would be reached soon, Jay Powell, chairman of the Federal Reserve, said on Wednesday: “The case for fiscal policy right now is very, very strong, and I think that is widely understood.”

Democrats had for months pushed Republicans to embrace large-scale fiscal stimulus, without any success, and were eventually forced to lower their aspirations for the deal after a series of fraught and erratic negotiations.

The package that is being discussed was developed by a group of centrist bipartisan senators, and includes about $300bn for small businesses, as well as an extension of federal unemployment benefits and a new round of direct payments for adults and children. Those payments were added in the final stretch of the talks to avoid a backlash from progressive Democrats and even some Republicans.

The last-minute haggling involves the final terms of both the jobless benefits and the direct-payment cheques, as well as the inclusion of disaster relief aid for the benefit of cities and states and a special pot of money for independent entertainment venues.

Pat Toomey, the Republican senator from Pennsylvania, has also been pushing for restrictions on the Fed’s ability to revive its emergency lending programmes after they lapse at the end of the year, which Democrats dislike because it could tie the hands of the incoming Biden administration.

“I think we have very, very broad agreement among Republican senators that this is the right approach, and [Treasury] secretary [Steven] Mnuchin shares that view,” Mr Toomey told reporters on Thursday.

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Brexit trade talks hit by fresh dispute over state aid

A row over Brussels’ €750bn Covid recovery package has become a sticking point as UK trade talks go to the wire, after Boris Johnson warned that EU-level spending should not be exempt from state-aid restrictions in a post-Brexit agreement.

Mr Johnson’s concerns over EU state-aid policy have increased the late-stage brinkmanship over a trade deal, adding to fears that a longstanding row over fishing access could yet derail an agreement, and a renewed sense of gloom in London.

On Thursday evening, the UK prime minister and Ursula von der Leyen, European Commission president, held a stocktaking call on the talks. Both sides “welcomed substantial progress on many issues”, according to a statement issued by Ms von der Leyen.

But the commission president acknowledged that “big differences remain to be bridged, in particular on fisheries”. She added: “Bridging them will be very challenging. Negotiations will continue tomorrow.”

The UK’s assessment of the call was bleaker. A government spokesperson said that Mr Johnson had told Ms von der Leyen that “the negotiations were now in a serious situation”. 

Some “fundamental areas remained difficult” on the issue of fair competition between EU and UK companies, the UK spokesperson said. On fisheries, Mr Johnson had made clear that the EU position was “simply not reasonable and if there was to be an agreement it needed to shift significantly”.

Mr Johnson told Ms von der Leyen that he would not accept a Brussels demand for EU fishing boats to be given guaranteed access to UK waters for eight years, according to officials.

The UK has offered a transition that would ensure that EU boats could continue to fish in the country’s waters for three years, with pre-agreed quota rights, after Britain leaves the EU’s Common Fisheries Policy on January 1. Britain’s stance has been that, after that period, access should depend on successful annual negotiations.

But EU leaders, including France’s Emmanuel Macron, who on Thursday tested positive for Covid-19, have said this would not provide enough medium-term certainty for their national fleets.

Mr Johnson also warned Ms von der Leyen that EU-level spending, including the Covid recovery fund agreed by the bloc’s 27 leaders earlier this year, could not be exempt from enforceable principles on state aid that would be set out in the trade deal.

Brussels has argued that such spending should not be bound by the common principles, because EU-managed programmes, such as regional aid funds, are exempt from the bloc’s state-aid rules. Britain has maintained that this line of argument is irrelevant in the context of an international agreement.

The EU’s recovery fund will involve an unprecedented amount of borrowing by the European Commission to support economies struck by the pandemic.

“If the EU decided to put money into developing electric cars, for example, using this fund, it would totally distort the level playing field and we would have no right to retaliate,” said one British official close to the talks.

An EU official said the state-aid dispute was in the process of being solved.

Money markets remain convinced there will be a deal in time for the end of the year, when Britain will leave the EU single market and customs union. The pound rallied as investors rushed to bet on a Brexit trade deal, putting the currency on course for its best week since March. 

Markets responded positively to comments earlier on Thursday by Michel Barnier, EU chief negotiator, that “good progress” was being made, although he said there remained some “last stumbling blocks”.

Meanwhile, Jacob Rees-Mogg, leader of the House of Commons, put MPs on standby for an emergency sitting next week to approve a deal. The European parliament wants a deal agreed by Sunday to allow it to ratify it before the end of the year.

Some British officials warn of the risk of “an accidental no deal” if Mr Johnson and the EU, especially Mr Macron, misunderstand each other’s room for manoeuvre.

Mr Johnson has told colleagues that he is “not bluffing” about taking Britain out of its transition period on January 1 without a deal, unless the EU softens its demands on fisheries and state aid.

Officials in Downing Street say that Mr Johnson is relaxed about the talks failing, joking that British people will be “eating fish for breakfast, lunch and dinner” when the UK takes back control of its fishing grounds.

The prime minister is also said to have added to his repertoire of Australian songs — a reference to what he calls an “Australian-style” no-deal exit — humming “Tie Me Kangaroo Down Sport” in his office.

Mr Johnson’s allies say that EU leaders would be mistaken if they thought he would be back in Brussels next year seeking a deal, if Brexit ends in acrimony on January 1. “He won’t be going near the place,” said one official.

On fisheries, negotiators are exploring the idea of a multi-stage transition period, with a review after several years, as a possible solution for bridging the difference between the EU and UK positions, according to two people close to the talks.

But the length of this transition is just one of several key sticking points in the negotiations, with a number of EU coastal nations such as the Netherlands, France, Denmark and Belgium deeply concerned about their future rights.

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Coinbase files for US listing in a first for a cryptocurrency exchange

The cryptocurrency exchange Coinbase has filed with US regulators to go public, in a move that could capitalise on the recent rally in bitcoin and other digital tokens.

Coinbase said in a short statement it had submitted a confidential draft registration statement for a public offering with the Securities and Exchange Commission. The statement did not provide additional details about the timing or size of the company’s prospective listing.

Cryptocurrency advocates have eagerly awaited Coinbase’s listing, believing it could help the sector gain legitimacy in the eyes of regulators and the public. A stock market debut would make Coinbase the first big public cryptocurrency exchange in the US.

The San Francisco-based company’s move came after a run of large tech initial public offerings, including from the short-term rental site Airbnb and meal delivery company DoorDash, and could position it as one of the first big US listings next year.

Meanwhile, the price of bitcoin has surged to new highs in recent weeks, surpassing $20,000 for the first time on Wednesday during a broader market rally that has lifted everything from junk bonds to hard-hit travel companies.

Founded in 2012 by the former Airbnb engineer Brian Armstrong and former Goldman Sachs trader Fred Ehrsam, Coinbase has become the largest US-based cryptocurrency exchange, helping widen adoption and trading of digital tokens.

Investors led by Tiger Global Management valued the company at $8bn in a $300m round of funding in 2018, making it one of the most valuable cryptocurrency companies.

The recent cryptocurrency bull market has been driven in part by growing interest from professional investors and central banks, and suggestions digital currency could benefit as coronavirus-related lockdowns accelerate the shift from cash toward digital payments. In October, PayPal announced that it would start offering support for cryptocurrencies.

Coinbase is also one of the founding members of the Facebook-led global digital currency project Diem, formerly known as Libra, which is on track to launch next year.

Still, Mr Armstrong recently cautioned investors about the rally, saying the company takes a “long-term view of the market”.

“While we’re always excited to see increased interest in crypto, it’s also important to point out that this is not only a time of high volumes, but also price volatility,” Mr Armstrong wrote in a blog post.

Coinbase said this week it had added the venture capitalist Marc Andreessen and former Cisco chief financial officer Kelly Kramer as board directors. Mr Andreessen, whose group Andreessen Horowitz was one of the first investors in Coinbase, had previously served as a board observer.

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