Sunday, January 29, 2017
Microsoft beats Q2 forecasts; UK bankers' exodus exaggerated; When Asean hits 50
1 Microsoft beats Q2 forecasts (San Francisco Chronicle) Microsoft Corp. reported yet another quarter of stronger-than-expected results, thanks to its focus on online services and business software rather than its legacy Windows operating system.
Microsoft says it earned $5.2 billion, or 66 cents per share, in the final three months of the year, up from $5.02 billion a year earlier. Earnings, adjusted for non-recurring costs, came to 84 cents per share. The average estimate of 16 analysts surveyed by Zacks Investment Research was for 79 cents per share.
The software maker posted revenue of $24.1 billion in the period. Adjusted revenue was $26.1 billion, also topping Wall Street forecasts. Nine analysts surveyed by Zacks expected $25.2 billion.
As sales of Windows PCs decline, CEO Satya Nadella has been pouring money and resources into remote data centers that deliver the company's services online to smartphones, tablets and other devices. Businesses and government agencies are increasingly turning to such "cloud computing" services, which again helped boost Microsoft's revenue, just as it did in the previous quarter.
2 UK bankers’ exodus exaggerated (Simon Jack on BBC) Is the UK witnessing a sudden exodus of bankers in the wake of Theresa May's confirmation that the UK will be leaving the European single market? In a word, no. At least not yet.
Yes, HSBC has confirmed it wasn't bluffing about moving 1,000 jobs to Paris. Yes, the chief executive of UBS has said it will "definitely" move up to 1,000 bankers. Yes, Goldman Sachs has slowed planned investment in London from New York.
So, Paris, Frankfurt and New York will all benefit from these firm commitments. But to describe the news of the last few days as an exodus is overdoing it. Some 360,000 people in Greater London work in financial services, for the whole of the UK, that number rises to over a million. So far we have seen definite plans to move up to 2,000 jobs. A trickle, so far, rather than a flood.
Nevertheless, there are some big players out there who are weighing up more radical moves. Goldman Sachs is contemplating moving thousands (reports of 3,000 were dismissed today as speculation) of staff back to the European centres whence they came to huddle under a consolidated London roof.
JP Morgan is considering moving 4,000 staff - maybe more, according to CEO Jamie Dimon - to Europe or the US. In both these cases - it's clear neither would rather move anyone. If a satisfactory deal is done between the EU and the UK on access to European customers, they would be happy to stay.
3 When Asean hits 50 (Tommy Koh in Straits Times) Over the past 50 years Asean has overcome many challenges. It has grown from strength to strength. It is today one of the world's most successful regional organisations. I would highlight three of its most important achievements.
Asean has transformed South-east Asia from a region of war and conflict to a region of peace and stability. It is not yet possible to say that war between Asean countries is unthinkable. However, when an armed conflict occurred along the Cambodian-Thai border, Asean intervened by trying to calm the situation and urging the two sides to show restraint. Indonesia offered to send observers to the border. The UN Security Council outsourced the management of the crisis to Asean.
The second achievement is economic. The rise of Asean in the world economy is one of the three biggest growth stories of human history. The ambition is to create a single market and production base by eliminating tariffs and other trade barriers. With 620 million consumers, Asean has a combined GDP of $2.3 trillion, making it the seventh- largest economy in the world. The combined GDP is projected to increase by more than fourfold to $10 trillion by 2030. This will make Asean the fourth-largest economy in the world.
The third achievement of Asean is perhaps the most remarkable. The 10 member states of Asean have been able to unite and act as one. It has established fruitful relations with its 10 dialogue partners, which include all the major powers. It has established several forums to promote dialogue, mutual trust and cooperation, such as the Asean Regional Forum, Asean Plus Three, the East Asia Summit and the Asean Defence Ministers Plus. Asean chairs all these forums.
I think Asean has a bright future but it faces several important challenges. The first is to ensure that it is securely anchored in the hearts and minds of the 620 million citizens of Asean. Asean must not be seen by the people as a project of the elite and of big business.
The second challenge is for the individual governments of the 10 countries to take good care of the people who will be adversely affected by trade liberalisation and economic integration. The third challenge is to stay united in the face of intensified competition by the major powers, especially between the US and China.