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Iranian fast-boats stopped tug boat salvage mission



WASHINGTON — In the wake of an attack on two oil tankers in the Gulf of Oman, Iranian military fast-boats prevented privately owned tug boats from salvaging one of the damaged vessels, two U.S. officials aware of the situation told CNBC.

The latest conflict from the world’s most important oil choke point brought oil prices up about 1% on Friday and as much as 4% the day prior on renewed fears of conflict in the Middle East leading to global oil supply disruptions.

America’s top diplomat, Secretary of State Mike Pompeo, blamed Iran for Thursday’s attacks without citing specific evidence as to why Tehran was responsible.

“Iran is lashing out because the regime wants our successful maximum pressure campaign lifted,” Pompeo said Thursday. “No economic sanctions entitle the Islamic Republic to attack innocent civilians, disrupt global oil markets and engage in nuclear blackmail.”

Iranian Revolutionary Guards drive speedboats in front of an oil tanker at the port of Bandar Abbas 

Atta Kenare | AFP | Getty Images

President Donald Trump said Friday that if Iran were to block the Strait of Hormuz, “it’s not going to be closed for long,” but did not elaborate on what potential steps the U.S. would take in response. “They’re not going to be closing [the strait],” Trump reiterated during a telephone interview with Fox News.

Earlier this year, Iran threatened to close the strait in response to a U.S. decision to end waivers on reimposed sanctions for companies that export oil from Iran. The Strait of Hormuz is a gateway for almost a third of all seaborne crude oil.

In an exclusive interview with CNBC on Friday, Trump’s energy secretary called Iran the “bad neighbor in the neighborhood.”

“Iran should be thinking about how do we maintain our market share, how do we act like good neighbors, how do we continue to be a part of the global community instead of these obvious acts of treachery in the Strait of Hormuz,” Energy Secretary Rick Perry said.

At the Pentagon, acting Secretary of Defense Pat Shanahan called the matter an “international problem,” adding that his role would be to “set the conditions for diplomacy.” He added that he was in close coordination with U.S. Central Command to verify whether forces in the region had necessary resources and support for their missions.

In a statement Friday, the board of directors for Frontline Ltd. said that all 23 crew members of the Front Altair oil tanker were unharmed and that the cause of the explosion is unknown. “The incident will be thoroughly investigated by the Company along with third parties, including governmental officials, to determine the cause,” the statement said.

Meanwhile, the Japanese owner of one of the oil tankers said the vessel was damaged by a projectile, not by a mine, which is what U.S. officials assessed as the source of the blast.

“We received reports that something flew towards the ship,” Yutaka Katada, president of Kokuka Sangyo, said at a press conference Friday. “I do not think there was a time bomb or an object attached to the side of the ship,” he said, adding that a projectile landed above the waterline.

On Thursday, U.S. Central Command said in a statement that the Japanese oil tanker, Kokuka Courageous, had an “unexploded limpet mine on their hull following an initial explosion.”

The Pentagon did not immediately respond to CNBC’s request for comment.

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Sequoia, Lightspeed India on startup outlook during coronavirus



A man scans an Alipay QR code to get e-vouchers at a store on March 27, 2020 in Hangzhou, Zhejiang Province of China.

Shang Zeyang | China News Service | Getty Images

Like most businesses around the world, start-ups are encountering challenging times as the coronavirus hurts business sentiment and dries up funding. Small- and medium-sized businesses have been more adversely affected in most places, but large corporations have also started slashing jobs.

Entrepreneurs currently trying to build their businesses have to understand how the pandemic is going to shift user behavior in the future and adapt, Rajan Anandan, a managing director at Sequoia Capital India, told CNBC.

He oversees the venture firm’s Surge program which provides seed capital of up to $2 million and community access to selected start-ups in Southeast Asia and India.

In the first quarter of the year, as infection cases around the world began ticking up, there was an overall decline in fundraising activities, data from CB Insights and Crunchbase showed. The data points to worse times ahead as the current quarter could see a more pronounced slowdown.

Currently, there are more than 5 million people worldwide who have been infected by Covid-19, the respiratory disease caused by the coronavirus. The pandemic has pushed the global economy into a downturn as most governments clamped down on business activities to contain the virus.

Make sure you don’t run out of cash

For start-up founders, the immediate priority is to ensure there is sufficient “runway” — the amount of time they have before their businesses run out of cash, said Anandan.

“Once you have adequate runway, focus on reimagining your business. If you’re in a sector that’s been deeply impacted, you may consider … pivoting to an entirely different segment,” Anandan said. He explained start-ups may also need to revamp the way they sell, where they spend their marketing dollars and where they can find new customers.

“Try to understand how the consumer and buying behaviour is likely to change in light of COVID-19 and align your strategies in line with what the likely new scenario is going to be,” Anandan said by email. “If you have runway, then this is also the time to build – to set yourself apart from your competition.”

Complete funding rounds quickly

Hemanth Mohapatra, a partner at venture capital firm Lightspeed India, said that start-ups currently raising funds need to close their rounds as soon as they can.

“Our advice to founders is to close their rounds as quickly as possible, not to wait on multiple term sheets, not to wait on the best possible terms they can possibly get, not to shop around and just close the round quickly,” he told CNBC’s “Street Signs” last Thursday. He added that in the current climate, valuations for start-ups will likely fall, but he predicted the market will bounce back faster than expected. 

Find opportunities as behaviors change

While the pandemic derailed several sectors including travel and tourism this year, other areas — such as e-commerce, digital payments, remote work, online learning, and health-care technologies — have seen a positive impact.

Vinod Nair, an angel investor in early-stage start-ups, told CNBC the ongoing crisis has led to two types of changes in behavior: First, a tactical shift in consumption habits that is expected to last up to two years. Secondly, there are some structural changes taking place — like more people will probably be working from home even after the pandemic is over, according to Nair.

Having been through multiple crises — back in late-90s and also in 2008 — we have seen the best companies and the best founders come out of these crises.

Hemanth Mohapatra

partner at Lightspeed India

“I look for (investment) themes where there is either a structural change or where a change that was already anticipated has just got accelerated a lot,” he said.

For example, the use of online marketplaces, digital payments and electronic health services — from online workout classes to consulting with doctors over the internet — will likely increase, he said.

Look for growing trends

Sequoia India’s Anandan said that alongside changing consumer behavior, the pandemic has accelerated the pace of digitalization. In India, that is evident in the kind of growth seen in areas like education technologies and digital health, he pointed out.

“The number of online learners in education has doubled over the past two months. Telemedicine, which was virtually non-existent in India months ago, is now growing at an exponential rate,” he said.

Lightspeed India’s Mohapatra pointed to a silver lining amid the challenging business environment at the moment.

“Having been through multiple crises — back in late-90s and also in 2008 — we have seen the best companies and the best founders come out of these crises,” he said. “We think calamity leads to creativity.”

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Asia set to open higher as China’s annual parliament meeting continues



Futures pointed to a higher open on Monday for Australia and Japan as investor sentiment remained somewhat resilient despite growing concerns over the U.S.-China relationship. 

SPI futures in Australia were up more than 1% at 5,574, which was a touch higher than the benchmark ASX 200’s last close at 5,497. 

Nikkei futures traded around 20,590, pointing to opening gains for the Nikkei 225 index. 

Markets in Singapore, India and Indonesia were shut due to public holidays. 

Asia Pacific markets declined on Friday after China announced a new national security law, which, if implemented, would give Beijing more control over Hong Kong and may incite further pro-democracy protests in the city. The draft measure was announced as China’s National People’s Congress (NPC) — the country’s parliament — kicked off its annual session and will last until May 28. 

“Risk sentiment proved resilient, on Friday night, to concerns about the fallout from China introducing national security legislation in Hong Kong. Weakness in Asian equities gave way to a flattish European session, and mild positivity in the US,” Hayden Dimes at ANZ Research said in a Monday morning note. 

Still, China’s announcement drew criticism from U.S. officials. White House national security advisor Robert O’Brien said on Sunday that if Beijing goes ahead with implementing the controversial law, the U.S. government will likely impose sanctions on China

Chinese Foreign Minister Wang Yi told reporters on Sunday that some political forces in the United States were taking the bilateral relation “hostage” and pushing the two economic powerhouses to the brink of “a ‘new Cold War’,” according to an official English translation of his remarks posted by the foreign ministry. 

The U.S. dollar traded at 99.750 against a basket of its peers at 7:16 a.m. HK/SIN versus its previous close at 99.863. 

Currency strategists at the Commonwealth Bank of Australia said in a morning note that the dollar faces upside risks this week. “Rising tensions can put the US-China Phase One trade deal at risk. Although not our central scenario, if the US or China were to withdraw from the Phase One deal, (the dollar) would sharply appreciate,” they wrote. 

The Japanese yen changed hands at 107.69 per dollar, strengthening from levels near 108 in the previous week. Meanwhile, the Australian dollar traded near flat at $0.6537. 

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Trump suspends travel from Brazil as coronavirus pandemic worsens in South America



US President Donald Trump arrives to take part in a joint press conference with Brazil’s President Jair Bolsonaro in the Rose Garden at the White House on March 19, 2019 in Washington, DC.

Jim Watson | AFP | Getty Images

President Donald Trump is suspending travel from Brazil to the U.S. as the coronavirus pandemic worsens in Latin America’s largest nation and economy. 

The president’s order, published Sunday, denies entry to “all aliens” who were in Brazil two weeks prior to their attempted entry into the United States. The order takes effect May 28 at 11:59 pm ET. 

Brazil has rapidly become one of the hardest hit countries in the world as the World Health Organization warns that the epicenter of the pandemic has shifted from Europe and the U.S. to South America. 

“We’ve seen many South American countries with increasing numbers of cases and clearly there’s a concern across many of those countries, but certainly the most affected is Brazil at this point,” Mike Ryan, executive director of the WHO’s emergencies program, said Friday during a news briefing at the organization’s Geneva headquarters. 

Brazil has more than 347,000 confirmed cases of the virus and at least 22,013 people have died, according to data from Johns Hopkins University. At this point only the United States is harder hit in terms of total positive cases. 

Brazil President Jair Bolsonaro has repeatedly downplayed the virus, dismissing it as a “little flu” and attacking stay-at-home orders imposed by governors as a “crime.” He is a close ideological ally of Trump. 

Bolsonaro’s own press secretary tested positive for the virus in March after attending a gathering with the Brazilian president and Trump at Mar-a-Lago. The incident raised concern about the health of Bolsonaro and Trump at the time, though both leaders have tested negative for the virus.  

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