TikTok rival Kuaishou to raise up to $6.3bn in Hong Kong IPO

Chinese livestreaming and short video group Kuaishou is set to raise up to $6.3bn in a Hong Kong initial public offering in a test of investor appetite for China’s tech sector as it faces growing regulatory scrutiny.

The deal could value Kuaishou, which competes with ByteDance’s TikTok, at up to $61.7bn and would be the largest tech IPO since ride-hailing company Uber went to market in 2019.

The listing will raise between $4.9bn and $5.4bn, but that could rise to $6.3bn if bankers exercise an overallotment option to increase its size, according to a term sheet seen by the Financial Times. Shares are expected to price on Friday between HK$105 (US$13.55) and HK$115 (US$14.84) and begin trading on February 5.

The flotation comes as Chinese tech companies face an increasingly uncertain regulatory environment. The $37bn Hong Kong and Shanghai IPO of payments firm Ant Group was halted by Beijing at the last minute in November, while its ecommerce affiliate Alibaba is subject to an antitrust investigation.

Kuaishou, which is backed by Chinese internet group Tencent, earns most of its revenues from users sending virtual gifts to livestreaming hosts. The company takes roughly half of the gift price, which can range from a few cents to Rmb2,000 (US$309). 

Livestreaming rules announced in November ban teenagers from purchasing virtual gifts on platforms such as Kuaishou and limit total spending by any single user. The regulations also tighten controls on livestreaming ecommerce, where video hosts promote goods to shoppers, a growing business for Kuaishou.

Kuaishou competitors including TikTok have faced controversy over their operations and use of data amid tensions between the US and China. In December, a deadline for ByteDance to restructure TikTok’s US operations passed without a deal, and the company remains in negotiations about the short video app’s status in the country. 

Kuaishou’s app had about 262m daily viewers in the first nine months of last year, who on average spent 86 minutes per day watching videos. The company reported an operating loss of Rmb9bn on Rmb41bn in sales during the same period.

The company has spent heavily on bringing in new users as it faces an increasingly crowded online video market in China.

Cornerstone investors in Kuaishou’s IPO include asset managers Invesco and Fidelity as well as Singaporean state-backed investors Temasek and GIC, which will together buy shares worth up to $2.5bn with a six-month lock-up period.

“The quality and size of cornerstone investors are some of the highest we have seen in Chinese tech companies to come to market,” said one banker on the deal. “It shows that the market is still crying out for more liquidity in sizeable, high-growth tech companies.”

Kuaishou will use the funds for purposes including research and development, acquisitions and investment and expanding its ecosystem, according to the term sheet.

Tencent holds a roughly 22 per cent stake in Kuaishou after leading a $3bn financing round last year. As the number-two player in China’s online video market after Douyin — the Chinese version of TikTok — “Kuaishou is less susceptible to political noise”, according to one banker working on the IPO.

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Mexico’s Covid-sceptical president tests positive

Mexico’s president Andrés Manuel López Obrador, who has refused to wear a face mask, has tested positive for coronavirus days after dining with some of the nation’s leading industrialists.

“I am sorry to inform you that I have caught Covid-19. The symptoms are light but I’m having medical treatment. As ever, I’m optimistic. We’ll all get through this,” he wrote on Twitter on Sunday.

Mr López Obrador, 67, has been criticised for playing down the severity of the pandemic in Latin America’s second-biggest economy. He has continued to hold meetings across the country despite record deaths and infections in recent days.

Hospitals in Mexico City are almost full and many infected people have struggled to obtain access to oxygen tanks.

The Mexican leader follows other Covid-19 sceptics, such as Jair Bolsonaro of Brazil and Donald Trump in the US, in contracting the virus. At a news conference last year, Mr López Obrador displayed an amulet that he said protected him from the pandemic.

He said he would still hold a scheduled call with Vladimir Putin on Monday morning to discuss procuring Russia’s Sputnik V vaccine and bilateral ties.

The Mexican president said he intended to continue following public affairs from the National Palace, but that Olga Sánchez Cordero, the interior minister, would replace him at his daily morning news conference.

Mr López Obrador, who suffered a heart attack in 2013 and suffers from hypertension, has repeatedly sent an upbeat message that Mexico was coping well with the pandemic and has refused to enforce lockdown measures, despite more than 1.7m confirmed cases and almost 150,000 deaths.

Mexico’s low testing rate and high excess deaths point to a far bleaker picture. Its rolling seven-day average of new deaths, at 0.962 per 100,000, is higher than that of the US, with 0.935, and Brazil, at 0.474.

On Friday night, Mr López Obrador spoke by telephone with US president Joe Biden and posted a photograph to Twitter of himself around a table with Marcelo Ebrard, foreign minister, and former cabinet chief Alfonso Romo. Hugo López-Gatell, the country’s coronavirus tsar, attended the president’s daily morning news conference on Friday.

On López Obrador also dined on Friday with eight senior business leaders, as well as Mr Romo, his economy minister Tatiana Clouthier and Mr Ebrard in Monterrey, the country’s business capital.

A person close to the business leaders said none had displayed Covid symptoms and they were taking all precautions.

The president, who travels on commercial airlines, spent the weekend touring the states of Nuevo León and San Luis Potosí, where he inaugurated National Guard installations and supervised welfare projects.

José Luis Alomía, Mexico’s director-general of epidemiology, told a daily Covid-19 news conference that “fortunately [Mr López Obrador] is stable, his signs and symptoms are light, he is at home” under the care of a multidisciplinary medical team led by Jorge Alcocer, the health minister.

Contact tracing of people with whom the president had been in contact was under way, he added. This month, Jesús Ramírez, the president’s press chief, tested positive for the virus.

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Samsung is set to emerge stronger from scandal

In its half-decade of escalation, South Korea’s most recent chaebol scandal has lurched between spectacle, shame and Samsung. Pique over an unattended puppy; vast cash-for-favours payments; a shaman at the heart of government; the historic impeachment and jailing of a president; a showjumping gift-horse; million-strong protests in the streets.

Last week, in a denouement that underscored the scandal’s dimensions, the authorities reimprisoned Lee Jae-yong, de facto head of the Samsung group and the nation’s most powerful business leader, for bribery. It was an outsized debacle for a supremely outsized company.

It is tempting, say Samsung-watchers, to view the whole protracted affair as corporate Korea’s Ragnarok moment: a messy downfall of the industrial gods and the glittering structures they built, from which a new, cleaner world might be born. The reality is that Samsung could emerge from all this even more powerful and more central to Korea’s national project.

Lee’s enforced membership in the club of jailed Korean corporate supremos reignites the debate over the extraordinary position of Samsung, the largest family-owned chaebol business empire, representing more than a quarter of the value of the Seoul stock market. The nation’s sharply defined love-hate relationship with the company has become more deeply entrenched.

The scandal has galvanised critics who say Samsung’s scale over-concentrates talent and suppresses innovation elsewhere in Korea. But the company’s appeal to the nation’s best graduates survives, and many view the attack on Korea’s most precious gem as politically motivated. At its most fundamental level, the scandal raises the question of how far Samsung — as the world’s biggest maker of memory chips and smartphones — should simultaneously define the Korean economy’s ambitions and be reined in by the state.

There are a number of arguments, says Sea-jin Chang, a professor at the National University of Singapore, to support the theory of scandal as turning point and the view that Samsung’s importance will decline from here. The sprawling business system that the group represented, and which was worshipped as a tool of nation-building, has been made to look outdated, slavishly attached to non-core parts of the empire and vulnerable to disruption in a digital world. Particularly so if the government cools its endorsement of its global corporate champion.

At the same time, attitudes towards Samsung may harden as the heirs of the group’s late patriarch face an inheritance tax bill for about $10bn that could force the sale of large parts of the business, diminishing its sense of impregnability. Furthermore, the 18-month imprisonment of Mr Lee, 52, leaves Samsung exposed. While not necessarily reducing his overall influence on the conglomerate, it removes him from the kind of split-second decision-making that global business demands. 

Perhaps the hardest blow, though, lies in the roots of the scandal: the machinations demanded by the cross-shareholding structure through which the Lee family maintains control of the group. Lee said in May he had no plans to pass control to his children. His comments were greeted with scepticism. In fact, said Geoffrey Cain, author of Samsung Rising, the means by which he could do that have probably been closed even if he wanted to. That leaves Lee in a prison cell with the devastating, face-losing thought that, after him, Samsung may become the first major chaebol without a family owner.

In the face of all of this, said Jun Kwang-woo, South Korea’s former chief financial regulator, Samsung’s market power and significance to the economy is set to grow. The sale of businesses would force Samsung on to a learning curve of divestment and streamlining that it should have embraced long ago.

The Covid-19 pandemic has created stupendous demand for the main products — TVs, smartphones and displays — of Samsung’s flagship electronics business. A worldwide chip shortage attests to surging demand for products in which Samsung is dominant. Its investments in artificial intelligence look prescient. The global rollout of 5G mobile services is a chance for Samsung to grab even greater market share.

Under strict theories of portfolio management, said Mr Jun, South Korea’s dependence on Samsung might look like an unwise concentration of resources — until it pays off stunningly and insulates the economy from a crisis that has battered other countries.

It is easy to forget how close Samsung, and other chaebol, such as LG Electronics, came to collapse during the 1997 Asian financial crisis. In fact, they emerged markedly stronger. That was not Ragnarok; nor is this.


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Panasonic enters $22bn vaccine storage race with freezer boxes

Panasonic has received a deluge of requests from European and US logistics companies to trial an ultra-cold freezer box it has developed for the transportation of Covid-19 vaccines, the Japanese group said.

The Tesla supplier’s entry into the race to develop products for the fast-growing global vaccine storage business comes as the Japanese government prepares to roll out its Covid-19 inoculation programme from late February. Public criticism is mounting in Japan over the slow pace of the scheme.

“There is a serious shortage of freezer boxes even as the vaccine rollout has started globally,” Shinya Kojima, chief engineer at Panasonic’s appliance unit, said in an interview. “We’ve already received so many inquiries from all over the world including Japan, the US, Singapore, France, South Korea and China.” 

Mr Kojima adapted Panasonic’s technology for conserving energy in refrigerators to develop a portable box that can be used to transport vaccines and other materials at a temperature of minus 70C. 

Of the two types of boxes, the larger 120-litre box is capable of storing 5,000 vaccine doses at the ultra-cold temperature for 18 days by packing it with 34kg of dry ice. 

The company had already made a similar product in 2019 but Mr Kojima launched a new project in December to improve storage conditions to fit the unique requirements of the Covid-19 vaccines under development.

With the upgrades, the boxes can now be used to store the vaccine developed by Pfizer and Germany’s BioNTech, which must be transported at minus 70C. Last week, the Japanese government secured a deal with the US pharmaceutical company for 144m doses of its shot, enough to inoculate about half of the country’s population. 

Panasonic plans to distribute samples of its boxes, called Vixell, to pharmaceutical and logistics companies from the end of March. It will begin selling or leasing them shortly afterwards.

The group has not disclosed pricing and production plans for the boxes, but Mr Kojima said it would start producing several thousand per year and boost its capacity depending on demand. 


Expected size of the global vaccine storage and packaging business by 2027

Shares in Panasonic have risen 8.4 per cent since the company unveiled the technology on Thursday, underscoring strong investor interest in the growth potential of the vaccine storage business.

With the scale Panasonic is considering, the storage boxes are unlikely to have a big impact on its earnings in the short term. But it has a long history in refrigeration and freezing technology as well as a minority stake in PHC Holdings, its former healthcare unit and a big participant in vaccine storage that is now controlled by private equity group KKR.

The global market for vaccine storage and packaging business is expected to grow from $22.3bn last year to $43.3bn by 2027 with storage accounting for the largest revenue, according to US-based market research firm Grand View Research. Other key players in the medical freezer market include Thermo Fisher Scientific of the US and Chinese appliance maker Haier.

Beyond vaccines, Mr Kojima also said the boxes could be used to store other medical drugs as well as semiconductor materials that required stringent temperature control. “We will study the market reaction and consider how to expand this business,” he said.

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Deutsche probes alleged mis-selling of investment banking products

Deutsche Bank is investigating whether its staff mis-sold sophisticated investment banking products to clients in breach of EU rules and then colluded with individuals within these companies to share the profits.

The internal probe — codenamed Project Teal — was triggered by client complaints last year, according to people familiar with the process. It initially focused on a desk in Spain, which sells hedges, swaps, derivatives and other complex financial products.

The audit found that Deutsche had wrongly categorised client firms under the Markets in Financial Instruments Directive (Mifid) rules. These require banks to separate their clients by levels of financial sophistication, such as retail investor, professional investor or counterparty, which means another bank or financial institution.

Deutsche believes that some of its staff knowingly sold inappropriate or unsuitable products to customers who may not have been able to understand and shoulder the risk they were taking with these positions, the people said. The German lender is not just looking at a few isolated cases, but at what appears to be a broader pattern of misconduct over several years, the people said.

Project Teal is also looking into allegations that there was collusion between Deutsche employees and staff at some of the clients who bought the inappropriate products. One suggestion being explored is that the two sides shared some of the proceeds of the transactions, the people said.

“We initiated an investigation in relation to our engagement with a limited number of clients,” the bank said in a statement. “We cannot comment on details until all aspects of the investigation are complete.”

While Project Teal focused initially on Spain, the scope of the probe was subsequently extended to the rest of Europe, but it is believed only Spain and Portugal-based clients were affected, one of the people said. At the centre is one former employee who has already left the bank, the person added.

The investigation is drawing to a conclusion and the bank will have to soon make final disclosures to regulators about what happened and any measures it plans to take.

Deutsche’s primary regulators, BaFin and the European Central Bank, have been informed. Both supervisors declined to comment.

The focus of the Project Teal probe is part of Deutsche’s investment bank, which was the sole driver of the lender’s earnings growth in the first nine months of 2020. Buoyed by a global bond-trading boom, the unit’s revenue shot up 35 per cent year on year.

Over the past decade, Deutsche has become renowned for repeated breaches of compliance rules. It has forked out billions of euros in fines and settlements for misconduct that included rigging benchmark interest rates, selling toxic mortgage securities, and shortcomings over money laundering. 

Chief executive Christian Sewing, in charge since April 2018 and the board member who is responsible for the investment bank, has pledged to improve the lender’s internal control and compliance functions.

Earlier this month, Deutsche agreed to pay US authorities nearly $125m to resolve allegations that it breached bribery and fraud laws by using a network of business development consultants to funnel kickbacks to clients. 

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Portugal’s president re-elected in pandemic-hit election

Portugal’s centre-right president was re-elected to a second five-year term on Sunday after a campaign fought amid one of the world’s worst outbreaks of coronavirus.

Exit polls by three national broadcasters gave Marcelo Rebelo de Sousa, a former leader of the opposition Social Democrats (PSD), 55-62 per cent of the vote, enough to win an outright victory without having to face a runoff ballot.

Ana Gomes, a member of the governing Socialist party (PS) running as an independent, was projected to win 13-17 per cent, the second-largest share of the vote. André Ventura, leader of Chega (Enough), a rightwing populist party, finished in third position with 9-14 per cent, according to exit polls.

In the week before the election, Portugal reported the highest daily averages in the world for new coronavirus cases and deaths per 100,000 inhabitants, according to data compiled by Johns Hopkins University.

As voters wearing masks formed socially-distanced queues at polling stations, health officials reported 275 Covid-19 deaths in the previous 24 hours, the highest daily number of fatalities since the beginning of the pandemic.

Turnout was projected to be less than 48 per cent, which would be a record low for a presidential election. A drop in voters was widely forecast for a ballot held during national lockdown amid the worsening health crisis.

Some candidates had been willing to postpone the election and almost two-thirds of voters thought it should have been delayed, according to a recent poll.

However, Mr Rebelo de Sousa, with the support of a majority of political parties, said there had not been enough time to effect the change in the constitution that a postponement would have required.

Pressure is also mounting for a constitutional change that would allow postal and other forms of remote voting, which are currently prohibited in presidential elections.

Election volunteers wearing protective equipment collected votes from thousands of people in quarantine. Almost 200,000 people out of more than 10m registered voters took advantage of a special measure allowing people to vote at polling stations a week early. 

Large numbers of Portuguese emigrants, who would have had to travel long distances to vote in person at consulates in the countries where they live, were also reported to have stayed at home.

Mr Rebelo de Sousa has been supportive of the minority PS government of António Costa, the prime minister, over the past five years, citing the need for political stability. The PS did not field its own candidate and gave its members freedom to back any of the runners.

Portugal’s president can dissolve parliament, call general elections and appoint prime ministers — powers that could prove crucial to the survival of the PS government amid growing rifts within the leftwing pact that supports it.

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Colin Fan to leave SoftBank’s Vision Fund role

Colin Fan, a former senior executive at Deutsche Bank, is stepping down from his role as managing partner at SoftBank’s Vision Fund, marking the latest shake-up at the fund’s tumultuous US operations. 

Mr Fan, who joined the Vision Fund in 2017, is moving to an advisory role within the unit that manages the investment arm of the Japanese group, according to people with direct knowledge of the matter. 

A trader who rose to co-head investment banking at Deutsche Bank before his exit in 2015, Mr Fan played a leading role in the Vision Fund’s investment in Greensill Capital, a controversial UK-based firm that specialises in supply-chain finance. Other investments he led in the robot pizza delivery business Zume and car leasing start-up Fair have soured.

One person said Mr Fan will continue to work closely with Rajeev Misra, who runs the Vision Fund and filled its ranks with a number of his former Deutsche Bank colleagues.

Munish Varma, another Deutsche Bank alum, will relocate from London to Silicon Valley to assume some of Mr Fan’s responsibilities as managing partner. 

Mr Fan’s departure comes just weeks after SoftBank confirmed that Jeffrey Housenbold, one of the fund’s top investors in the US, plans to leave later this year. Mr Housenbold oversaw some of the fund’s largest bets, including in the meal delivery company DoorDash, whose valuation has soared to more than $60bn following a public listing last month.

Michael Ronen, another managing partner at the Vision Fund in the US, left last year after he said he had expressed concerns about “issues” at the fund. 

The Vision Fund has been a source of tumult within SoftBank, undergoing multiple reorganisations since chief executive Masayoshi Son formed the group to place big bets on artificial intelligence and other emerging technologies.

Last year, the investment arm of SoftBank, which manages the Vision Fund, laid off about 15 per cent of its 500 global staff.

The Japanese group’s first $100bn Vision Fund has recovered recently after experiencing early struggles from a series of troubled investments, such as the property group WeWork. SoftBank said it had booked a cumulative gain of $9.6bn on the fund’s investments at the end of the third quarter. 

However, the negative publicity associated with some of its bad bets including WeWork and dog walking app Wag has hindered Mr Son’s plans to raise external capital for subsequent funds. SoftBank has launched a second Vision Fund, but it is currently only spending money provided by the company itself.

SoftBank declined to comment. Bloomberg first reported on Mr Fan’s new role.

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Coronavirus latest: US hospital admission rates ease amid significant decline in new cases

Joe Biden’s administration has taken its first steps to revive the flagging US economy but warned the moves were “not a substitute” for a large stimulus package, as it increased pressure on Congress to pass a $1.9tn Covid-19 relief bill. Mr Biden on Friday signed two executive orders to broaden access to food stamps and unemployment benefits.

US equities slipped on Friday as euphoria over Mr Biden’s spending plans gave way to concerns that the final package may be pared down in order to pass through Congress. On Wall Street, the blue-chip S&P 500 slipped 0.3 per cent, the first time in a week the index has closed lower. The tech-heavy Nasdaq Composite, meanwhile, traded flat.

Switzerland’s drug regulator said it has received 42 reports of suspected adverse reactions in connection with Covid-19 vaccinations. “So far this analysis has not resulted in any change in the positive benefit/risk ratio of the vaccines,” the federal council said in a statement. Switzerland has approved both the Pfizer/BioNTech and Moderna vaccines.

New Zealand has instituted a “one-way travel bubble” with the coronavirus-free Cook Islands, a self-governing Pacific Island territory. Cook Islanders will now be able to skip quarantine requirements on Auckland-bound flights after a 10-month pause, enabling family reunions with the 60,000 islanders who work in New Zealand.

The Carnival cruise ship Panorama is docked in Long Beach, California

Carnival, the world’s largest cruise operator, has extended its suspension of all US departures until the end of April and cancelled its Australian operations until mid-May in response to rising Covid-19 cases around the world. It has also cancelled European cruises on its Carnival Legend ship and pushed back the launch of its Mardi Gras ship.

Morgan Stanley’s chief executive, James Gorman, will receive $33m in total compensation for 2020, a 22 per cent increase over 2019’s $27m. In a regulatory filing, the US investment bank said 2020 “was a record year … in terms of financial performance and in terms of advancement of the firm’s long-term strategic goals”, despite the global pandemic.

Shares in GameStop went on a wild ride on Friday, surging nearly 80 per cent after the struggling US video games retailer found itself at the centre of a battle between short-sellers and amateur online traders. The company, which has struggled for sales in the pandemic, has been a favourite of day traders, which has helped double the value of the stock since the start of the year.

UK bowling alley chain Hollywood Bowl has endured a bruising pandemic. Its chief people officer Melanie Dickinson has sold £181,420 worth of shares “for the purpose of settling personal tax liabilities”. This follows chief executive Stephen Burns, chief financial officer Laurence Keen, and their spouses offloading a little over £800,000 worth of shares.

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Two Austrians arrested for organising escape of Wirecard’s Jan Marsalek

Vienna police have arrested two men — a former senior official of the Austrian secret service and a former rightwing MP — who are accused of having organised the escape of Wirecard’s former second-in-command Jan Marsalek to Belarus last summer.

Mr Marsalek absconded in June 2020, shortly after he was suspended from Wirecard and days before Munich prosecutors issued an arrest warrant against him. The former chief operating officer of the disgraced German payments firm is seen as a mastermind of an accounting fraud that brought down Wirecard last year.

Prosecutors suspect that the 40-year-old Austrian citizen, who is on Interpol’s most-wanted list, personally embezzled hundreds of millions of euros. Mr Marsalek’s whereabouts is still unknown. A police document seen by the Financial Times is the first official confirmation that he escaped to Belarus via Austria last summer using a private jet he paid for with cash.

Austrian prosecutors last week arrested two men they believe organised the jet, after months of surveillance by Vienna police, people familiar with the investigation told the Financial Times.

Vienna criminal prosecutors on Sunday confirmed that two people were in police custody over Mr Marsalek’s escape but declined to comment on their identities.

According to the official police document, one of the men arrested is a former Austrian secret service official who has been a long-term confidant of Mr Marsalek and met him for dinner at a Munich restaurant on the evening of June 18, hours after Mr Marsalek was suspended at Wirecard.

On the following day, Mr Marsalek took a taxi to a private airfield in Bad Vöslau in Austria. After arriving late because the taxi driver struggled to find the entrance to the small airport, Mr Marsalek paid two pilots in cash and boarded a chartered Cessna Citation Mustang 510 that flew him to Minsk in Belarus, according to the document.

On Sunday, another employee of Austria’s secret service BVT was arrested, Vienna prosecutors told the FT. This person is alleged to have misused official authority by passing on confidential information to the payments company. 

The collapse of Wirecard is one of Europe’s biggest postwar accounting frauds that was triggered by the disclosure that €1.9bn of corporate cash was missing. Former chief executive Markus Braun and several other former Wirecard managers have been in police custody in Germany for months over the fraud. Mr Braun denies any wrongdoing.

They are accused of faking Wirecard’s balance sheet and defrauding creditors who lent the company €3.2bn.

A Munich-based lawyer for Mr Marsalek did not respond to an FT request for comment.

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Democrats push for stimulus deal before Trump impeachment trial

Joe Biden, the US president, faces a narrow window to clinch bipartisan support for his $1.9tn stimulus plan, after congressional Democrats said they wanted a deal before the impeachment trial against Donald Trump begins the week of February 8.

On Sunday, Brian Deese, the director of the National Economic Council in the White House, was due to host a meeting with 16 senators, including eight Republicans, to jump-start talks on Mr Biden’s relief package, which is the new president’s top early legislative priority.

Although Mr Biden has promised to make bipartisan unity a defining trait of his presidency, a number of Republicans have dismissed elements of his relief plan, criticising it for excessive spending and for including provisions such as an increase in the federal minimum wage.

Given that scepticism, Democrats want to quickly gauge Republicans’ appetite for serious negotiations on the stimulus package — which includes direct payments to individuals, aid to states and extra jobless benefits — or move on to try to pass it only with lawmakers of their own party.

Dick Durbin, the Illinois senator and second-highest ranking Democrat in the upper chamber said in interview with NBC News on Sunday that the objective of the call with Mr Deese was to see “if there’s an area of agreement” on the rescue package.

“I am hopeful that we can show right off the bat that bipartisanship is alive in the Senate,” Mr Durbin said.

“The rescue package that President Biden has sent to us is one of the highest importance . . . So, I hope we can really roll up our sleeves and get that done in that period of time [before Mr Trump’s trial].”

Democrats need at least ten Republican senators to endorse the relief plan if they are to pass it using the current practice in the Senate, which requires a supermajority to advance legislation. But failing that, Democrats could pass a relief plan with a simple majority by using a parliamentary process called “budget reconciliation” which is reserved for bills involving taxes and spending. The Senate is evenly split with 50 senators backing each party, but Kamala Harris, the vice-president, can cast tiebreaking votes, handing control to Democrats.

Mike Rounds, a Republican senator from South Dakota, told NBC on Sunday that Democrats should drop their insistence on boosting the federal minimum wage to $15 per hour from $7.25 to help reach a deal.

“I really don’t think we’re that far off with regard to the direction for Covid relief, specifically in targeted areas,” he said. “The real challenge is whether or not Democrats are prepared to perhaps release some of the items that are not specifically targeted to Covid relief.”

The push for a quick stimulus agreement came on the eve of Monday’s expected move by the Democratic-controlled House of Representatives to transmit its article of impeachment against Mr Trump for inciting the January 6 assault on the US Capitol.

Ordinarily, this would trigger the start of the Senate trial against the former president the following day, but Republicans and Democrats reached a deal to delay the core of the proceedings until the week of February 8. For Republicans this is will allow Mr Trump more time to prepare his defence, and for Democrats it will help confirm more of Mr Biden’s cabinet appointees and pass the relief package.

Speaking on Fox News Sunday, Mitt Romney, the Republican senator from Utah, showed he was leaning towards convicting Mr Trump, saying “impeachable conduct” was plausible given Mr Trump’s actions and it was important to have “accountability, for truth and justice”.

But there is unlikely to be enough Republican support to secure that conviction in the upper chamber. Marco Rubio, the Florida Republican senator, told Fox News Sunday that Mr Trump bore “responsibility for some of what happened” at the Capitol but he did not agree with impeachment.

“I think the trial is stupid. I think it’s counterproductive. We already have a flaming fire in this country and it’s like taking a bunch of gasoline and pouring it on top of the fire,” he said.

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