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Hyperloop coming to Abu Dhabi by 2020



Hyperloop Transportation Technologies (HTT), one of the firms developing the super-fast transport method, will begin building a track in Abu Dhabi with the aim of having it operational by 2020.

The company signed an agreement with Aldar Properties PJSC, the developer behind Yas Island’s Formula 1 racing circuit, to begin construction of the hyperloop system.

It will be developed close to the site of Expo 2020 and Al Maktoum International Airport, on the border of the Abu Dhabi and Dubai emirates. Abu Dhabi is the capital of the United Arab Emirates.

HTT plans construction of the 10 kilometer line in several phases.

“This agreement creates the basis for the first commercial Hyperloop system in the world here in the Emirates, with the goal of connecting Abu Dhabi to Al Ain, Dubai, and Riyadh, Saudi Arabia.” Bibop Gresta, chairman of HTT, said in a press release Wednesday.

“With regulatory support, we hope the first section will be operational in time for Expo 2020.”

Expo 2020 is a big festival being held in Dubai which is expected to draw millions of visitors between its opening day on October 20, 2020 and closing on April 10, 2021.

HTT CEO Dirk Ahlborn told CNBC in January that the company would announce its first track location this year, and said the Middle East was a leading candidate. Wednesday’s announcement confirms this.

A hyperloop would work by propelling pods through a large tube at speeds of 750 mph using magnets, and was originally thought up by billionaire Elon Musk in 2013.

HTT has been working with a number of governments to try to commercialize its technology. But so far it has just been carrying out so-called “feasibility studies” — with the aim of exploring if a hyperloop system is economically viable in some countries. The Abu Dhabi announcement appears to be the first real outcome of those studies.

The company is also working on building a passenger capsule that would run on its track and Ahlborn told CNBC in January that it should be ready by “mid-year”.

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Bank of England holds rates but warns of ‘unusually uncertain’ outlook



Mounted police officers sit in outside the Royal Exchange and the Bank of England in London on June 17, 2020.

TOLGA AKMEN | AFP via Getty Images

LONDON – The Bank of England on Thursday left interest rates unchanged and maintained its current level of asset purchases, but warned that the outlook for the economy remains “unusually uncertain.”

All members of the Monetary Policy Committee (MPC) voted to keep the main lending rate at 0.1%, with the central bank having cut rates twice from 0.75% since the beginning of the pandemic. The MPC also voted unanimously to maintain target for the total stock of its bond purchases at £745 billion ($960.8 billion).

Sterling was trading around 0.5% lower against the dollar shortly after the announcement.

Britain faces concurrent risks of a no-deal Brexit, a spike in coronavirus cases leading to the reintroduction of some social restrictions, and the end of the government’s furlough scheme next month, which had supported millions of dormant workers during the pandemic.

After plunging a record 20.4% in the second quarter to officially enter recession, the U.K. economy saw signs of recovery with a 6.6% monthly expansion in July, after nationwide lockdown measures were gradually lifted.

However, a spike in cases to more than 3,000 per day has forced the government to implement new rules on social gatherings and implement localized lockdowns in certain regions, casting doubt over the country’s recovery.

“The recent increases in Covid-19 cases in some parts of the world, including the United Kingdom, have the potential to weigh further on economic activity, albeit probably on a lesser scale than seen earlier in the year,” the Bank said in its summary.

It added that there remains a risk of a “more persistent period of elevated unemployment than in the central projection.”

Despite stronger-than-expected domestic economic data in recent months, the central bank said the economic outlook remains “unusually uncertain,” as its central assumptions include a free trade deal with the European Union coming into effect on January 1 and a gradual dissipation of the impact of Covid-19.

The MPC also said it does not intend to tighten monetary policy until there is “clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”

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BioNTech buys German site from Novartis to boost vaccine output



The headquarters of German immunotherapy company BioNTech stands on April 22, 2020 in Mainz, Germany.

Thomas Lohnes | Getty Images

Germany’s BioNTech is purchasing a German biotech production site from Swiss drugs giant Novartis to boost output of the coronavirus vaccine hopeful it is developing with Pfizer.

The transaction, for which the price tag was not disclosed, is part of a push to prepare for a global roll-out of the pair’s experimental vaccine that could be reviewed by regulators as early as next month, among the first in the Western world.

The facility in the German city of Marburg will be converted to be fully on stream in the first half of 2021 with an annual production capacity up to 750 million doses of the inoculation, based on the so-called messenger RNA (mRNA) technology.

The two companies were previously aiming to supply up to 100 million doses worldwide by the end of this year and an additional 1.3 billion doses by the end of 2021.

The new site, with its 300 staff that will join BioNTech, will allow for a larger 2021 output target but it is not yet clear by how much on balance, a company spokeswoman said.

The biotech firm said the facility will be one of the largest mRNA manufacturing sites in Europe, alongside two of BioNTech’s existing vaccine production sites. Pfizer has at least four production sites in the United States and Europe, it added.

Vaccine to be fridge-stored for 2 weeks

Separately, BioNTech said it expects that the experimental Covid-19 vaccine it is developing with Pfizer will be able to be stored at refrigerator temperatures for at least two weeks, seeking to allay concerns that the compound may have to be deep-frozen.

Speaking at an online media briefing on the purchase of an additional German production site, Chief Executive Ugur Sahin said tests have recently confirmed the genetic compound remains stable at 2 to 8 degrees Celsius for five days but he expects storability at those conditions to be two weeks or longer.

He added that a good vaccine should have an efficacy of at least 70% to 75% for it to quell the pandemic and that was also the yardstick that BioNTech had set itself.

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Oil sector could face more distress as it struggles to draw investments



SINGAPORE — Oil prices have plunged during the pandemic and the sector’s crisis could get worse as new investments are unlikely to flow in, experts said at an energy conference this week.

Pandemic-related movement restrictions stopped people from commuting and traveling, drastically reducing oil usage. Earlier this year, the May contract for U.S. benchmark West Texas Intermediate crude plunged deep into negative territory for the first time in its history. Overall, oil prices have dropped around 40% since the start of the year.

With the poor performance across the industry, analysts at the S&P Global Platts’ Platts Asia Pacific Petroleum Virtual Conference (APPEC) 2020 this week flagged that drawing investment to the sector would be a problem.

Who is going to fund our next investment cycle? Indeed, is anyone going to be incentivized to fund us? Returns on the E&P companies as an investment have been poor.

Ben Luckock

co-head of oil trading at Trafigura

Ben Luckock, co-head of oil trading at commodity trading company Trafigura, said that it might be “hard to see where the investment comes from.”

Speaking at the APPEC conference, he pointed out that, as a result of the fall in oil prices and corporate valuations, capital expenditure in exploration and production (E&P) companies in the energy sector have plummeted. Such companies are involved in the early stages of energy production, which includes searching and extracting oil and gas.

“Who is going to fund our next investment cycle? Indeed, is anyone going to be incentivized to fund us? Returns on the E&P companies as an investment have been poor,” Luckock said. While returns on the S&P 500 have boasted a 70% increase since 2015, he pointed out returns of E&P companies fell by 70% over the same period.

Ahmed Ali Attiga, the chief executive officer of the Arab Petroleum Investments Corporation (Apicorp), said that the energy sector is set to see a “huge hit” on investments.

“From a funding perspective, the energy sector in general faces two key problems. One is the relatively low shareholder return, and the second is the squeezed margins across the value chain,” he said at the conference. “This phenomena in the energy sector … poses key challenges for where financing is going to come from, and particularly so in a period of acute crisis.”

In a report earlier this year, research firm Rystad Energy projected that E&P companies could lose as much as $1 trillion in revenues this year — a 40% decline year on year. Last year, the industry made $2.47 trillion in revenues.

“It doesn’t bear comparison, people don’t want to put their money into the E&Ps with good reason. That still leaves the world with a major problem,” Luckock said.

“Regardless of when peak demand happens, which is now harder to forecast than ever, we’ll still need tens of millions of barrels of oil a day for years to come. And we need to see investment happen in order to find, develop and produce those barrels,” he concluded.

The International Energy Agency on Tuesday cut its forecast for 2020 oil demand growth, trimming its outlook for worldwide oil demand growth to 91.7 million barrels per day (bpd). That marks a contraction of 8.4 million bpd year on year — more than the previous forecast for a 8.1 million contraction.

But Attiga told CNBC on Wednesday that investors should view times of crises as also investment opportunities.

“Crises like this in the energy sector, in particular, provide opportunities to invest. Distressed assets affect valuations and presents opportunities for new investments, and providing what we call patient capital — capital that can go in and stay there until the role is satisfied,” he said.

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