In a deal that could value the ride hailing start up DidiChuxing at around $30 billion, Taiwanese electronics giant Foxconn have announced they will invest over $100 million in the Chinese Uber look-a-like.
The investment will be carried out using one of Foxconn’s subsidiaries Foxteq Holdings Inc.
Didi now have a host of influential tech companies under their list of investors which includes Uber themselves. Other notable names include Apple Inc and Alibaba Group Ltd.
Hai Precision Industry Co Ltd, the trading name for Foxconn, announced the deal in a stock exchange filing, and they said the company would own a third of a percent of Didi, one of China’s highest valued tech ventures. The cash injection would give Didi a market capitalization of over $30 billion.
The two firms said they are “looking at a range of possibilities although plans are not finalized as yet.”
Uber have had a torrid time in China, going through three years of court battles which resulted in them being bought out by Didi. In return, Uber acquired a 20% stake in the Chinese firm.
“Uber were fighting a losing battle and I think they chose the smartest way out,” said Global Co-Head of the Investment Management Division of Shizuoka Capital Wealth Management, Michael Lane, commenting on the news.
“With their $8 billion valuation, Uber would have been hit very hard if they got tied up in further litigation. Now they are part of a $30 billion company and can leave the handling of the Chinese government regulations to the local firm.”
Foxconn have also been making moves in the electric auto industry, with a significant investment in Future Mobility, a firm that is looking to rival U.S. company Tesla Motors and recently took on several executives jumping ship from BMW’s electric car unit. Environmentally friendly car sales are booming right now in China with very favourable initiatives for both manufacturers and buyers.
Apple Inc has close ties with Foxconn, being the U.S. firm’s main assembler of its iPhones. Apple came in with a $1 billion investment in Didi and they are interested in getting into the auto-industry next year, with Silicon Valley abuzz with rumours of an iCar.
Monday, September 12, 2016
Friday, September 9, 2016
Google look to firm up cloud operations with Apigee deal
Google will be looking to strengthen their cloud business as it goes into final talks with software development firm Apigee Corp over a possible merger worth around $600 million.
Apigee assists companies communicate with their customers using innovative technology focused primarily on mobile devices and web based applications.
“It’s a brave new world when it comes to how businesses interact with their customer base,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a phone interview. “Home visits and even phone calls are dated, with API’s taking over more and more these days.”
The announcement regarding the possible deal was made late Thursday afternoon and a short statement included details on the ratios.
Alphabet Inc's Google would give Apigee shareholders $17.42 for each of their shares, representing around a 7 percent premium to the share’s Thursday close, and their stock was trading slightly up on the offer price the next morning.
Apigee have a host of big name clients including Vodafone, AT&T and the World Bank. The company’s IPO was a year ago in May, and shares have jumped half a dollar since then.
Dianne Greene, who is in charge of Google’s cloud unit, has been pushing to make the company a top player in fintech and other corporate computing services, and she was central in a deal only days ago with online cloud storage firm Box Inc which will be used to integrate Google Docs into the cloud.
Apigee assists companies communicate with their customers using innovative technology focused primarily on mobile devices and web based applications.
“It’s a brave new world when it comes to how businesses interact with their customer base,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a phone interview. “Home visits and even phone calls are dated, with API’s taking over more and more these days.”
The announcement regarding the possible deal was made late Thursday afternoon and a short statement included details on the ratios.
Alphabet Inc's Google would give Apigee shareholders $17.42 for each of their shares, representing around a 7 percent premium to the share’s Thursday close, and their stock was trading slightly up on the offer price the next morning.
Apigee have a host of big name clients including Vodafone, AT&T and the World Bank. The company’s IPO was a year ago in May, and shares have jumped half a dollar since then.
Dianne Greene, who is in charge of Google’s cloud unit, has been pushing to make the company a top player in fintech and other corporate computing services, and she was central in a deal only days ago with online cloud storage firm Box Inc which will be used to integrate Google Docs into the cloud.
Thursday, September 8, 2016
Bank of England say they will “give fintech space to grow”
The Chief Cashier of the Bank of England (BoE) Victoria Cleland has said publicly that the central bank will not stifle financial technology innovation as the central bank attempts to keep up with new developments in the field.
According to Cleland, the BoE will customize its new upcoming regulations in order to “give fintech space to grow” and that understanding technological innovation was a priority at the bank.
Most of the recent news surrounding fintech has been focused on digital currencies, like bitcoin, and a high security online ledger called blockchain, which can automate transactions and could be hugely beneficial in the financial industry in the future. The BoE has been looking at benefits, and also the risks of using such systems.
The comments from the senior BoE employee are seen by many observers as an attempted reassurance to fintech firms that their businesses are safe in London, which has been a hub of the industry.
“After the Brexit, policymakers are doing all they can to pander to certain industries they feel are important, and fintech is definitely one of those” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in an email to clients.
“Companies have been worried about having their client base limited and being cut off from the euro zone market after the UK leaves the financial bloc.”
Cleland said she understands the concerns and will work with companies to make it clear where the goalposts are. “Obviously with a technology that is moving at such a fast pace it’s very difficult to draw up regulations for it,” she said in a press meeting. “Seeing that this is a global industry, we really need to see some parity from regulators around the world.”
With the alternative financial industry growing by a massive 80 percent last year alone, all eyes have been on the BoE and the Financial Stability Board, which is headed by Mark Carney the BoE Governor, to see what kind of rules are going to be enforced.
According to Cleland, the BoE will customize its new upcoming regulations in order to “give fintech space to grow” and that understanding technological innovation was a priority at the bank.
Most of the recent news surrounding fintech has been focused on digital currencies, like bitcoin, and a high security online ledger called blockchain, which can automate transactions and could be hugely beneficial in the financial industry in the future. The BoE has been looking at benefits, and also the risks of using such systems.
The comments from the senior BoE employee are seen by many observers as an attempted reassurance to fintech firms that their businesses are safe in London, which has been a hub of the industry.
“After the Brexit, policymakers are doing all they can to pander to certain industries they feel are important, and fintech is definitely one of those” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in an email to clients.
“Companies have been worried about having their client base limited and being cut off from the euro zone market after the UK leaves the financial bloc.”
Cleland said she understands the concerns and will work with companies to make it clear where the goalposts are. “Obviously with a technology that is moving at such a fast pace it’s very difficult to draw up regulations for it,” she said in a press meeting. “Seeing that this is a global industry, we really need to see some parity from regulators around the world.”
With the alternative financial industry growing by a massive 80 percent last year alone, all eyes have been on the BoE and the Financial Stability Board, which is headed by Mark Carney the BoE Governor, to see what kind of rules are going to be enforced.
Wednesday, September 7, 2016
All eyes on Fed as traders hold back
As traders and investors gauge the outlook regarding future interest rate hikes, U.S. stocks flattened out on Tuesday although the Nasdaq somehow managed another record high close.
Grocers results were poor, with sprout farmers the hardest hit. There was a 14 percent drop for sprout shares to $19.69, Kroger shares were down 5 percent to $31.33 and Whole Foods shares dropped 6 percent to $29.09.
Investors have been focused on the Federal Reserve, trying to ascertain how close the central bank is to raising interest rates. Most expect the Fed to hold back on any major changes due to the disappointing jobs report last week together with other discouraging data.
The Fed has been coy on any firm change date, recently commenting on a decent economic expansion in the last quarter.
“After the past week’s moderate jobs report, most observers are getting the distinct impression rates will remain low for the foreseeable future,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management. “We are probably going to see the same story at the ECB [European Central Bank] where policymakers will be tempted to keep rates at rock bottom.”
The largest company in the world by market capitalization, Apple Inc, saw its shares jump 0.8 percent to $108.35 after they unveiled their brand new iPhone 7.
After a health scandal, Chipotle Mexican Grill shares began to see some improvement rising 6 percent to $438.44. The chain was given fresh momentum with a 10 percent stake buy in from Pershing Square Capital owned by William Ackman, who said he would restructure the company at the executive level.
Leading the way on the trading floor yesterday were Delta Air shares, after the company announced better-than-expected sales for the last quarter. They were also helped by rival Southwest revealing they would cut their growth in chartered flights to South America next year.
However, share trading was the lowest seen for 30 days yesterday at around $5.9 billion compared to the $6.7 billion daily average. The Dow Jones average slumped 12 points to 18,526.15 and the S&P 500 index lost 0.32 points to 2,186.16. The Nasdaq result of an 8 point gain was a record close yet again for the benchmark gauge, a surprise for such a slow day.
Grocers results were poor, with sprout farmers the hardest hit. There was a 14 percent drop for sprout shares to $19.69, Kroger shares were down 5 percent to $31.33 and Whole Foods shares dropped 6 percent to $29.09.
Investors have been focused on the Federal Reserve, trying to ascertain how close the central bank is to raising interest rates. Most expect the Fed to hold back on any major changes due to the disappointing jobs report last week together with other discouraging data.
The Fed has been coy on any firm change date, recently commenting on a decent economic expansion in the last quarter.
“After the past week’s moderate jobs report, most observers are getting the distinct impression rates will remain low for the foreseeable future,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management. “We are probably going to see the same story at the ECB [European Central Bank] where policymakers will be tempted to keep rates at rock bottom.”
The largest company in the world by market capitalization, Apple Inc, saw its shares jump 0.8 percent to $108.35 after they unveiled their brand new iPhone 7.
After a health scandal, Chipotle Mexican Grill shares began to see some improvement rising 6 percent to $438.44. The chain was given fresh momentum with a 10 percent stake buy in from Pershing Square Capital owned by William Ackman, who said he would restructure the company at the executive level.
Leading the way on the trading floor yesterday were Delta Air shares, after the company announced better-than-expected sales for the last quarter. They were also helped by rival Southwest revealing they would cut their growth in chartered flights to South America next year.
However, share trading was the lowest seen for 30 days yesterday at around $5.9 billion compared to the $6.7 billion daily average. The Dow Jones average slumped 12 points to 18,526.15 and the S&P 500 index lost 0.32 points to 2,186.16. The Nasdaq result of an 8 point gain was a record close yet again for the benchmark gauge, a surprise for such a slow day.
Wednesday, August 24, 2016
Italy looks to expand EU deficit allowances
Italy’s Industry Minister Carlo Calenda said on Friday that if the country can introduce a new corporate spending strategy they may be able to convince the European Commission (EC) to increase its budget deficit.
The comments came in an interview with la Repubblica daily, where the minister called for a rethink on flexibility rules that reward economic reforms with increased deficit margins only for 12 months.
Italy has previously expanded its 2016 deficit goal by over $10 billion using the EC’s clauses. But due to a major slowdown in this year’s economic growth, mainly because of terrible Q2 figures, the government’s deficit targets are seen to be a high level risk.
Although the nation’s treasury department have said it’s too early to forecast budget effects for next year, it is rumoured that Rome will be petitioning the EC for added budget expansion. This was confirmed by Minister Calenda, who said the country would “almost certainly seek extra flexibility in our budget margins”. The treasury declined to comment on the minister’s remarks.
“What the EC and the euro zone markets need to see is some kind of credible plan from Rome,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a phone interview. “It’s clear the fiscal authorities of Italy want to develop the scope of the EC’s clauses both in size and duration.”
It may not be easy to get the grants however, as the EC has said publicly in a meeting last month that Italy has already received “more flexibility than any other country in the region”.
The European markets have traditionally kept Italian public finances at arm’s length due to the country’s terminally stagnant economic expansion and enormous level of public debt that are nearly double the domestic output.
Calenda is insistent that demand stimuli are a lost cause in the current climate and tired tax break initiatives simply aren’t working. The government, he says, needs to focus on the supply side of the equation and wants the budget expansion to increase competition and corporate investment.
The comments came in an interview with la Repubblica daily, where the minister called for a rethink on flexibility rules that reward economic reforms with increased deficit margins only for 12 months.
Italy has previously expanded its 2016 deficit goal by over $10 billion using the EC’s clauses. But due to a major slowdown in this year’s economic growth, mainly because of terrible Q2 figures, the government’s deficit targets are seen to be a high level risk.
Although the nation’s treasury department have said it’s too early to forecast budget effects for next year, it is rumoured that Rome will be petitioning the EC for added budget expansion. This was confirmed by Minister Calenda, who said the country would “almost certainly seek extra flexibility in our budget margins”. The treasury declined to comment on the minister’s remarks.
“What the EC and the euro zone markets need to see is some kind of credible plan from Rome,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a phone interview. “It’s clear the fiscal authorities of Italy want to develop the scope of the EC’s clauses both in size and duration.”
It may not be easy to get the grants however, as the EC has said publicly in a meeting last month that Italy has already received “more flexibility than any other country in the region”.
The European markets have traditionally kept Italian public finances at arm’s length due to the country’s terminally stagnant economic expansion and enormous level of public debt that are nearly double the domestic output.
Calenda is insistent that demand stimuli are a lost cause in the current climate and tired tax break initiatives simply aren’t working. The government, he says, needs to focus on the supply side of the equation and wants the budget expansion to increase competition and corporate investment.
Monday, August 22, 2016
Local authorities may fund Chinese steel bailout
Online economic website Caixin has reported that embattled state owned Bohai Steel Group may be the beneficiary of a local government fund initiative which would allow the company to restructure its debt obligations, which total nearly $30 billion.
The company, which came about through the merger of four smaller firms in 2010, owes over a hundred creditors debt and have only just enough assets to cover it.
The plan is to set up a local asset management company in Tianjin, which can handle the debts. The new firm will also assist other indebted companies in the region.
“The debt restructuring is probably the biggest we’ve seen in China since the 2008 economic meltdown. It’s a big effort by the authorities to clear the heavy governmental slate,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management who is advising the Tianjin government on the plan.
Most of the creditors involved are Beijing-based banks and trust firms, the magazine reported.
China has been attempting to keep in check an increasing state sector debt level for many years.
The main strategy has been to encourage creditors to accept debt-for-equity swap deals through newly formed specialist debt management firms such as China Reform Holdings Co., which is spearheading the debt re-shuffling of many state-owned companies.
The government have accelerated the debt repayment plans for the steel sector in particular as the flagging real estate market causes a decline in the demand for basic construction materials.
The company, which came about through the merger of four smaller firms in 2010, owes over a hundred creditors debt and have only just enough assets to cover it.
The plan is to set up a local asset management company in Tianjin, which can handle the debts. The new firm will also assist other indebted companies in the region.
“The debt restructuring is probably the biggest we’ve seen in China since the 2008 economic meltdown. It’s a big effort by the authorities to clear the heavy governmental slate,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management who is advising the Tianjin government on the plan.
Most of the creditors involved are Beijing-based banks and trust firms, the magazine reported.
China has been attempting to keep in check an increasing state sector debt level for many years.
The main strategy has been to encourage creditors to accept debt-for-equity swap deals through newly formed specialist debt management firms such as China Reform Holdings Co., which is spearheading the debt re-shuffling of many state-owned companies.
The government have accelerated the debt repayment plans for the steel sector in particular as the flagging real estate market causes a decline in the demand for basic construction materials.
Friday, August 19, 2016
Governor of BOJ says rates can go even lower
Although a controversial negative rate policy has so far failed to encourage any real economic expansion or inflation, Bank of Japan (BOJ) Governor, Haruhiko Kuroda, has announced that the central bank could be willing to cut rates even further.
Kuroda was quoted in an interview with Sankei newspaper saying that rates have not reached their basement levels yet.
“If we look at the action by the U.S. Federal Reserve and the ECB [European Central Bank] they have gone much lower than we have with their rates so we cannot rule out expansion of the policy,” he said.
There were more than a few raised eyebrows at the start of the year when the BOJ set a minus 0.1 rate for certain deposits in their vaults in the hope that the move would encourage banks and corporations to increase expenditure and spur inflation, but that has not materialized.
The bank will carry out a full assessment of its annual fiscal policies next month, and only then will they make a decision on whether to adjust their huge asset purchasing plan, which has seen them buy up over 90 trillion yens worth of bonds on a yearly basis.
“Despite all this easing of the monetary base we haven’t seen any solid results,” said Michael Lane - Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in an email to investors.
“It’s been going on now for about 3 years and Prime Minister Abe is starting to get called out on his failed policies. The aim is to get up to 2 percent on inflation but the level hasn’t budged, with the economy as stagnant as ever,” Lane added.
The financial world will know more when the BOJ release their annual report on the same day as their meeting next month.
Kuroda was quoted in an interview with Sankei newspaper saying that rates have not reached their basement levels yet.
“If we look at the action by the U.S. Federal Reserve and the ECB [European Central Bank] they have gone much lower than we have with their rates so we cannot rule out expansion of the policy,” he said.
There were more than a few raised eyebrows at the start of the year when the BOJ set a minus 0.1 rate for certain deposits in their vaults in the hope that the move would encourage banks and corporations to increase expenditure and spur inflation, but that has not materialized.
The bank will carry out a full assessment of its annual fiscal policies next month, and only then will they make a decision on whether to adjust their huge asset purchasing plan, which has seen them buy up over 90 trillion yens worth of bonds on a yearly basis.
“Despite all this easing of the monetary base we haven’t seen any solid results,” said Michael Lane - Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in an email to investors.
“It’s been going on now for about 3 years and Prime Minister Abe is starting to get called out on his failed policies. The aim is to get up to 2 percent on inflation but the level hasn’t budged, with the economy as stagnant as ever,” Lane added.
The financial world will know more when the BOJ release their annual report on the same day as their meeting next month.
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