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UK military research boss on nerve agent made in Russia

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After the first known use of a military-grade nerve agent on European soil since World War Two, Britain blamed Russian President Vladimir Putin for the attempted murder, and the West has expelled around 130 Russian diplomats.

Aitkenhead said the British government had “other inputs” it could use to determine the origin of the nerve agent, some of them intelligence-based.

“It is our job to provide the scientific evidence of what this particular nerve agent is – we identified that it is from this particular family and that it is a military grade, but it is not our job to say where it was manufactured,” Aitkenhead added.

He reiterated that the substance could not have come from Porton Down. Russia’s EU ambassador Vladimir Chizhov noted in an interview with the BBC last month that the British research lab is only eight miles (11 km) from Salisbury, insinuating that may have been the source.

The Foreign Office has said there was “not an ounce of truth” in his implication the nerve agent could have been linked to Porton Down.

Skripal’s daughter Yulia is getting better after spending three weeks in critical condition due to the nerve toxin attack at her father’s home in Salisbury, the hospital where she is being treated said last Thursday.

Her father remained in a critical but stable condition.

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Silicon Valley’s quest to live forever could benefit the rest of us

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Jeff Bezos pops champagne after emerging from the New Shepard capsule after his spaceflight on July 20, 2021.

Blue Origin

All things must die, according to the poet Alfred Lord Tennyson, but that could be about to change.

A growing number of tech billionaires have decided they want to use their enormous wealth to try to help humans “cheat death.”

Amazon‘s Jeff Bezos, Alphabet‘s Larry Page, Oracle‘s Larry Ellison and Palantir’s Peter Thiel are just a few of the super-rich who have taken a keen interest in the fast-emerging field of longevity, according to interviews, books and media reports.

While breakthroughs are far from guaranteed, they hope that various medicines, therapies and other life science technologies will enable humans to live well beyond 100 years old and possibly to 200, 300, or even longer.

But are their efforts going to benefit humanity as a whole or just an elite few? It’s a tricky question that divides opinion.

The filter down effect

“Technologies that initially are only affordable to the rich typically become more widely available with time,” Stefan Schubert, a researcher at the London School of Economics and Political Science who specializes in “effective altruism,” told CNBC. Indeed, this is true of everything from air travel to smartphones and medicine.

Tech investor Jaan Tallinn, the co-founder of Skype, told CNBC that Silicon Valley’s quest to live forever will eventually benefit humanity as a whole.

“I think involuntary death is clearly morally bad, which makes the quest for longevity a morally noble thing to engage in,” Tallinn said. “Early adopters always tend to pay more and take larger risks than the ‘mass market,’ so if therapies start off on the expensive/risky side, that’s to be expected.”

Tallinn added that he thinks it’s “counterproductive” to require that a new service be available to everyone before anyone is allowed to use it, but he said he understands the instinct.

Sean O hEigeartaigh, co-director of Cambridge University’s Center for the Study of Existential Risk, told CNBC that many advances in longevity science could have broad benefits, adding that they could reduce the occurrence or severity of older age-related diseases including dementia and heart health.

“Extending max lifespan significantly in the near-term seems unlikely to me; but identifying and arresting aging-related factors that increase preponderance and severity of age-related conditions is more plausible,” Ó hÉigeartaigh said.

Some are concerned that the Earth’s finite resources could come under strain if people live longer, healthier lives.

However, by the time meaningful life extension advances are made, Ó hÉigeartaigh expects population numbers to be more stable in more parts of the world.

“I expect meaningful lifespan extension to be a century or more away, and by then I expect a parallel change in societal attitude towards euthanasia,” he said, adding that he thinks euthanasia will be more acceptable and more common in the coming years.

What about climate change?

While some believe that billionaires should be able to spend their money on what they see fit, not everyone thinks tech billionaires should be using their money to fund life extension research.

Jon Crowcroft, a computer science professor at Cambridge University, told CNBC they’d be better off pumping more of their billions into climate change mitigation technologies instead of longevity research.

“It’s a bit pointless living forever on a dying planet,” said Crowcroft.

But Tallinn told CNBC he finds the tech billionaire’s efforts to support longevity research “commendable.”

“I think it’s generally unfair to pit good causes against each other in a world where most resources are wasted on morally unimportant or even reprehensible things,” Tallinn said.

Billionaire’s chasing immortality

Bezos, the second richest man in the world behind Elon Musk, has invested some of his $199 billion into a new “rejuvenation” start-up called Altos Labs, according to a report from MIT Technology Review earlier this month.

The anti-ageing start-up, which is said to be pursuing biological reprogramming technology, is reportedly also backed by Russian-Israeli venture capitalist Yuri Milner, who made a fortune as an early investor in Facebook.

Elsewhere, Oracle founder Ellison has donated more than $370 million to research about aging and age-related diseases, according to The New Yorker.

Meanwhile, Google founders Sergey Brin and Larry Page helped launch Calico, a secretive venture that’s tracking mice from birth to death in the hope of finding markers for diseases like diabetes and Alzheimer’s, according to a report in The New Yorker. Calico is part of Alphabet, the holding company that also owns Google.

One of the biggest advocates for life extension among the tech billionaires is Thiel, who co-founded PayPal and Palantir and backed Donald Trump’s 2016 presidential campaign.

Peter Thiel, co-founder of PayPal Inc.

VCG | Getty Images

In 2006, he donated $3.5 million to support anti-ageing research through the non-profit Methuselah Mouse Prize foundation. “Rapid advances in biological science foretell of a treasure trove of discoveries this century, including dramatically improved health and longevity for all,” he said at the time. Thiel had upped his investment in Methuselah Mouse Prize foundation to $7 million by 2017, according to Time.

According to The New Yorker, Thiel and Bezos have both invested in San Francisco-based Unity Biotechnology, a company whose founder reportedly said he wants to “vaporize a third of human diseases in the developed world.”

Life extension stocks?

On the other side of the Atlantic, British billionaire Jim Mellon told CNBC last September that he was planning to take Juvenescence, his own life extension company, public in the next six to 12 months.

It’s yet to happen, but Juvenescence is continuing to invest in a wide range of anti-ageing therapies that it thinks have the potential to extend the human life.

One of those investments is Insilico Medicine, which aims to use artificial intelligence for drug discovery. Juvenescence has also backed AgeX Therapeutics, a California-headquartered firm trying to create stem cells that can regenerate ageing tissue, and LyGenesis, which wants to develop a technology that uses lymph nodes as bioreactors to regrow replacement organs.

Other billionaires, including Mike Cannon-Brookes, the co-founder of Australian software firm Atlassian, and NEX Group founder Michael Spencer, have invested in Juvenescence.

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interest payments on bonds,impact on investors

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Vehicles drive near unfinished residential buildings from the Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China September 16, 2021.

Carlos Garcia Rawlins | Reuters

The first test for Evergrande’s debt crisis comes this week — investors will be watching to see if the embattled Chinese property developer is able to pay out its interest due on a bond, or default on it.

The firm is due to pay interest worth $83 million on Thursday, according to data from S&P Global Ratings.

Evergrande’s 5-year, U.S.-dollar denominated bond, had an initial issue size of around $2 billion, according to market data provider Refinitiv Eikon – although the price has plummeted now.

Yields on this bond have skyrocketed to 560%, from just over 10% earlier this year, according to Refinitiv Eikon. The bond is due to mature in March 2022.

Another interest payment on a 7-year U.S. dollar bond is due next Wednesday.

“What happens on Thursday promises to be a seminal event for markets, one way or the other, bigger perhaps than the FOMC outcome which will have occurred just a few hours before,” Ray Attrill told CNBC, referring to the U.S. central bank’s meetings which are closely watched by investors.

Analysts and market watchers largely expect Evergrande to miss the interest payment on Thursday. However, it will not technically default unless it fails to make that payment within 30 days.

S&P Global Ratings said Monday that a default was “likely.”

Read more about China from CNBC Pro

“Fact is, Evergrande is already in technical default having missed bank interest payment,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank. He was referring to reports that the Chinese government told major banks that the real estate giant will not be able to pay interest on its loans that were due earlier this week on Monday.

“With risks of missing a bond coupon later this week, the capacity to spook capital markets remains significant; considering Evergrande accounts for ~11% of all Asia high-yield bonds,” Varathan wrote in a note on Tuesday.

Foreign investors, offshore bonds may be hit first

If these initial defaults happen, institutional and other foreign investors will likely be more affected compared to domestic investors in China, analysts said.

It’s possible that onshore, yuan-denominated bonds may take priority over offshore, dollar denominated bonds. Offshore bonds are mostly held by institutional or foreign investors, whereas domestic retail investors in China are more likely to own onshore bonds.

“Clearly, the optics of bond investors getting paid when retail wealth management product holders and home-buyers are a long way off clarity, much less, resolution, do not sit well,” Varathan told CNBC in an email.

The case for treating the obligations owed to retail investors of wealth management products more favorably is therefore “strong given the social stability angles on this,” he said.

Protests by angry homebuyers and investors have broken out in recent week in some cities, and social unrest is a key concern.

Last week, around 100 investors turned up at Evergrande’s headquarters in Shenzhen, demanding repayment of loans on overdue financial products — forming chaotic scenes, according to Reuters.

The priority on domestic investors will therefore have implications on the default risks for offshore dollar-denominated bonds — mostly held by institutional or other foreign investors — versus onshore bonds, mostly held by domestic investors.

“An additional point of interest though is whether the coupon due on offshore bonds will get a less preferential treatment to onshore bond coupons — especially given the asymmetric arrangement whereby offshore default does not trigger cross-default (whereas onshore default triggers cross-default for offshore),” Varathan told CNBC. A cross default occurs when a default triggered in one situation spreads to other obligations, leading to a broader contagion.

“In other words, will Evergrande choose to just default on offshore bonds while honouring onshore commitments?” Varathan asked.

Which funds own Evergrande bonds?

UBS, HSBC and Blackrock have been accumulating Evergrande bonds over the past few months, according to Morningstar Direct data.

“We’ve seen a few funds adding to China Evergrande between July and August 2021, given widening spreads and attractive valuations,” said Patrick Ge, manager research analyst at Morningstar.

Here are the top funds with the highest exposure to Evergrande bonds, according to Morningstar.

  • Fidelity Asian High-Yield Fund
  • UBS (Lux) BS Asian High Yield (USD)
  • HSBC Global Investment Funds – Asia High Yield Bond XC
  • Pimco GIS Asia High Yield Bond Fund
  • Blackrock BGF Asian High Yield Bond Fund
  • Allianz Dynamic Asian High Yield Bond

CNBC’s Brittany Dawe contributed to this report.

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Don’t expect Beijing to provide direct support to Evergrande, says S&P

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Outside the China Evergrande Group Royal Mansion residential development under construction in Beijing, China, on Friday, Sept. 17, 2021.

Gilles Sabrie | Bloomberg via Getty Images

The Chinese government is not likely to step in to give direct support to debt-ridden developer China Evergrande Group, according to S&P Global Ratings.

“We do not expect the government to provide any direct support to Evergrande,” said the S&P credit analysts in a Monday report. “We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.”

“Evergrande failing alone would unlikely result in such a scenario,” they added.

Even in Evergrande’s home province, the developer is insignificant to Guangdong’s vast local economy — it is not too big to fail.

Fears over a potential contagion from Evergrande into the broader Chinese economy and beyond dragged down the Hang Seng index in Hong Kong by more than 3% on Monday. The sell-off continued across the globe.

Evergrande is the world’s most indebted developer and has racked up about $300 billion in debt. It is due to make a number of interest payments for its bonds starting Thursday. S&P said a “default is likely” on those payments.

“We believe the Chinese banking sector can digest an Evergrande default with no significant disruption, although we will be mindful of potential knock-on effects,” S&P said.

In Tuesday morning trade, shares of Evergrande in Hong Kong fell about 4% — its seventh straight session of declines, though far less than the over 10% decline on Monday.

Evergrande’s chairman tried to reassure markets on Tuesday, and said the firm will fulfill its responsibilities to property buyers, investors, partners and financial institutions, Reuters reported Tuesday citing local media.

‘Not too big to fail’

S&P analysts likened the Evergrande fallout to the case of Chinese bad debt manager Huarong, which sparked a market rout earlier this year when it failed to report earnings on time and its U.S. dollar-denominated bonds plunged.

“We don’t expect government actions to help Evergrande unless systemic stability is at risk,” S&P said. “A government bailout would undermine the campaign to instill greater financial discipline in the property sector.”

Read more about China from CNBC Pro

Instead of a bailout, Beijing might facilitate negotiations negotiations and funding to ensure individual investors and homebuyers are “protected as much as possible,” the analysts said.

“The government is willing to help, but also wants events to take their course. Even in Evergrande’s home province, the developer is insignificant to Guangdong’s vast local economy — it is not too big to fail.”

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