Friday, June 30, 2017

China factory output picks up; Hong Kong's 20 years with China; India's sweeping tax reform

1 China factory output perks up (Straits Times) China's manufacturing sector expanded at the quickest pace in three months last month, buoyed by strong production and new orders, reassuring news for the authorities trying to strike a balance between deleveraging and keeping the economy on an even keel.

The official manufacturing Purchasing Managers' Index (PMI) was at 51.7 last month, the eleventh straight month of expansion, and up from 51.2 in May, a monthly survey by the National Bureau of Statistics showed. It was the fastest pace since March.

The survey supports broad consensus that China's economy is stabilising at a moderate pace rather than slowing sharply, suggesting that it is on track to meet its annual growth target of 6.5 per cent for this year.

Still, most China observers agree that the world's second-biggest economy will continue to cool as the authorities reduce high levels of debt across many of the heavy industries, crack down on financial risks and tighten monetary conditions.

2 Hong Kong’s 20 years with China (BBC) The Chinese president has sworn in the new leader of Hong Kong, Carrie Lam, as the territory marks 20 years since its handover to China from Britain. Xi Jinping joined a series of lavish events, including a flag-raising ceremony, amid tight police security.

But clashes have taken place between pro-democracy and pro-Beijing demonstrators close to the site, with several arrests made. Many parts of the city were shut down as part of the security operation.

The pro-democracy party, Demosisto, said police had arrested five of its members, and four members from the League of Social Democrats. Among those said by the group to have been arrested was Joshua Wong, the leader of the so-called umbrella protest movement.

3 India’s sweeping tax reform (Financial Express) India introduced a historic tax reform, bringing in the Goods and Services Tax. The GST regime would subsume various taxes and there would be a single tax law and four tax rates—5%, 12%, 18% and 28%—that would be charged by the federal government and the states.

Also, a number of goods and services have been exempted from the tax structure. Tax rates under GST have been largely kept at existing levels for most sectors, barring a few. The threshold limit for exemption from levy of GST is Rs 2 million for the states except for the special category northeastern states, where it is Rs 1 million.

A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28% to recover amount for compensation to the states. In fact, GST will bring in transparency and encourage investments in organised sectors, helping the economy gather growth momentum.

GST will create a level playing field between unorganised and organised segments. Moreover, GST will lower logistics costs due to the decline in transit time because of elimination of multiple check points – octroi, state borders.

Thursday, June 29, 2017

Stocks flying, oil crying at 2017 halfway; 'Hearables' market set to take off; OED lists zyzzyva as last word

1 Stocks flying, oil crying at 2017 halfway (Khaleej Times) World stocks could be about to record their best start to a year since 1998, when global markets were recovering from the Asian crisis, while oil and the dollar are facing their worst first-half in years.

It has been a six months marked, first, by the crumbling of so-called Trump trades that were premised on US President Donald Trump's pledges of multi-trillion dollar spending. The second feature has been a political and growth outlook shift in Europe which has lured investors back to the continent.

Emerging markets and Europe have seen 16 to 17 per cent gains on a dollar-adjusted basis. This has boosted world stocks around 10 per cent so far this year. Oil on the other hand is 2017's worst performer, despite almost 2 million barrels-per-day of Opec supply cuts. Brent crude futures have slumped 20 per cent in their biggest first-half drop since 1997.

But equities have held up well despite a hefty tech share selloff earlier in June and a run of softer US economic data which hint at slowing price growth and a major setback for the 'Trumpflation' trades in vogue at the start of 2017.

2 ‘Hearables’ market set to take off (Sean Hargrave in The Guardian) When you’ve invested in a set of ‘hearables’, you might handle earphones more carefully. These in-ear computers could help you get fit, improve your hearing and translate foreign languages.

The global market for Bluetooth-connected and wireless earbuds and headphones will be worth $40bn by 2020, calculates Nick Hunn, an analyst and chief technology officer at WiFore Consulting. His figures show a surge in the sales of Bluetooth-connected devices, which surpassed wired headphone sales, the former market leader.

It’s tempting to suggest this is thanks to Apple’s decision to ditch the headphone socket in its latest iPhone in favour of AirPods (Apple-branded wireless earbuds). But it seems this merely accelerated an existing trend: people started buying these wireless devices two to three years ago, before AirPods launched.

3 OED lists zyzzyva as last word (Johannesburg Times) The Oxford English Dictionary identified more than 600 words, phrases and senses that have relatively recently entered common parlance. They include zyzzyva, a genus of tropical weevil native to South America. The word replaces zythum - an ancient Egyptian malt beer - as the OED's final entry.

The name was apparently coined by the US entomologist Thomas Lincoln Casey, who described the bugs in a 1922 work, the OED said. The quarterly update includes "post-truth", previously announced by the OED as its word of the year for 2016 following Britain's Brexit referendum and Donald Trump's presidential victory.

Other new senses this time include "thing", as in "a genuine or established phenomenon or practice", often used when you're incredulous about something. Further additions to the English lexicon are chana dal, the Hindi phrase for chickpeas, and doenjang, a paste made from fermented soya beans used in Korean cookery. A gin daisy is a cocktail.

Friday, June 23, 2017

WhatsApp rises as news media; Opec caught in oil bear market; Uber to run McDonald's UK deliveries

1 WhatsApp rises as news media (Leo Kelion on BBC) WhatsApp is becoming one of the prevailing ways people discover and discuss news, according to a study. But use of the messaging app appears to vary widely between countries.

In Malaysia, more than 50% of those surveyed said they used WhatsApp for news at least once a week. But in the US, the figure was only 3%, and in the UK it was 5%. The Digital News Report also indicates the Brexit debate has led to growing mistrust of the UK's media.

It said only 43% of respondents declared that the news could be trusted - down from 50% last year - with the BBC in particular criticised for having both a pro-EU bias and failing to expose the "distortions" of the leave campaign.

The research was carried out by the Reuters Institute for the Study of Journalism and covered 34 countries in Europe, the Americas and Asia, in addition to Taiwan and Hong Kong. It was sponsored by the BBC and Google among others.

The results indicate that Facebook remains the most popular social media and messaging service for news engagement in all but two countries - Japan and South Korea - where, respectively, YouTube and Kakao Talk dominate.

But it adds that use of Facebook for news had dipped in more than half of all the territories where a year-on-year comparison was possible. By contrast, sharing news stories and chatting about them appears to be on the rise within private instant messaging apps, and WhatsApp in particular.

2 Opec caught in bear market (Gulf News) Oil’s back in a bear market and investors remain unmoved by last month’s agreement to prolong supply cuts, leaving Opec and its allies with few remaining tools to boost prices.

As Saudi Arabia, Russia and their allies reduce output, supply that’s beyond their control keeps rising. Libya and Nigeria — Opec members exempt from the curbs — and US shale producers are resurgent, undermining efforts to tame a global glut. Prices are back below where they were when the Organisation of Petroleum Exporting Countries first struck its historic deal last year.

Cutting even deeper — an idea rejected just a month ago — still looks unlikely. For now at least, the Saudi pledge to do “whatever it takes” to stabilise prices looks like not much at all.

Further curbs could be necessary, but reaching a consensus will be difficult, Iran’s Oil Minister Bijan Namdar Zanganeh said. A committee meeting in Vienna this week gave only cursory attention to the possibility of deepening the existing cuts, focusing instead on the problem of rising output in Libya and Nigeria.

Russia has indicated on several occasions that it’s opposed to any additional reductions, said one delegate. Nations that have made the production cuts already appear to be ceding ground as rival supplies grow.

Next year, new oil supplies from Opec rivals, chiefly the US, will be more than enough to meet demand growth, the International Energy Agency said. As a result, demand for the group’s crude will be about 200,000 barrels a day lower than this year, the agency said.

3 Uber to run UK McDonald’s delvieries (The Guardian) McDonald’s has launched its long-awaited ‘McDelivery’ trial in the UK after teaming up with Uber’s food delivery service, UberEats.

McDonald’s will offer the service from 22 outlets across the capital and another 10 restaurants in Leeds and Nottingham – although customers will have to live within a 1.5 mile radius of a restaurant. Customers can place orders through the UberEats app between 7am and 2am.

McDonald’s said it would be monitoring the trial closely to see whether it proved popular. Mathieu Proust, general manager of UberEats, said the trial would let people “get the food they want” quickly and reliably.

The launch comes after KFC launched home deliveries from 30 outlets in greater London via the Just Eat platform earlier this year. The McDonald’s move follows similar tie-ups with Uber in the US, while the chain already delivers in China and Singapore.

Thursday, June 22, 2017

Smartphones may be cause for low inflation; Qatar Airways seeks 10% in American Airlines; Divorce rate falls as couples wait

1 Smartphones may be cause for low inflation (Khaleej Times) Americans' love of their smartphones and apps may be contributing to the sluggish pace of inflation that is worrying Wall Street and the Federal Reserve, a top bond manager at BlackRock, the world's biggest asset manager, said.

Consumers are relying less and less on devices such as cameras, radios and televisions, and services such as taxis and stores, replacing them with programs in their iPhones and other high-end phones, according to Rick Rieder, BlackRock's chief investment officer of global fixed income.

Companies like, Netflix and Uber Technologies have enticed consumers with convenience and low prices through their phones. As a result, they have upended traditional retailers, entertainment outlets and transportation services, Rieder said in an article.

Some of the recent pullback in inflation also stemmed from lower energy prices resulting from global oversupply, analysts said. The recent softening of inflation has raised speculation on the timing on the US central bank's next rate increase. A few policymakers including Evans have said it may be worthwhile for the Fed to wait until year-end before considering another rate hike.

2 Qatar Airways seeks 10% in American Airlines (Gulf News) State-owned Qatar Airways is attempting to buy a 10 per cent stake in American Airlines, triggering US antitrust oversight of deals that size.

American said in a regulatory filing that the bid was unsolicited, but that the CEOs of both airlines have spoken. Qatar submitted a filing under the Hart-Scott-Rodino Act, which is subject to review by the Justice Department’s Antitrust Division.

American and Qatar are already members of the Oneworld marketing alliance, which allows passengers to earn and redeem points on each other’s flights. An expanded partnership could make it easier for American passengers to get to smaller cities in India, and developing countries in Southeast Asia.

3 Divorce rate falls as couples wait (Johannesburg Times/The Telegraph) Analysis suggests the plummeting divorce rate is partly being driven by sensible couples who are now more likely to wait longer before they marry.

New figures from the UK Office of National Statistics show that in 2015 101,055 couples divorced, the lowest number since 1971. The number of opposite-sex couples divorcing fell by more than a third between 2003 and 2015 and by 9.1% between 2014 and 2015, the biggest drop in more than 40 years.

The report says: "Age at marriage is considered to be linked to the risk of divorce with those marrying in their teens and early 20s being at greater risk of divorce."

Tuesday, June 20, 2017

Oil slips to 9-month low; Ford to move US unit to China; FB 'bots' start communicating sans humans

1 Oil slips to nine-month low (Straits Times) Oil tumbled to the lowest level in nine months, pulling energy stocks down, amid growing concerns that Opec-led output cuts are failing to ease a global supply glut.

Futures declined 2.2 per cent in New York, entering a bear market for the first time since August, as investors focus on rising production from countries that are not part of Opec's deal. Libya is pumping the most crude in four years, and the amount of oil stored in tankers reached a 2017 high earlier this month. US drillers have added oil rigs for 22 straight weeks.

West Texas Intermediate crude, the US benchmark, dropped 21 per cent from a close of $54.45 Feb. 23, entering a bear market, which kicks in when settlement prices fall at least 20 per cent from their peak.

Oil has stayed below $45 a barrel since last week as supplies in the US remain plentiful and the oil rig count rises to the highest since April 2015. WTI for July delivery, which expires Tuesday, fell 97 cents to settle at $43.23, the lowest since mid-September. Total volume traded was about 35 per cent above the 100-day average.

2 Ford to move US unit to China (BBC) Ford is to move US production of its new Ford Focus car to China in 2019, despite having faced pressure to keep manufacturing jobs in America. The carmaker said the decision would not lead to layoffs in the US.

But the move marks another change to its plans for producing the new Focus. The firm in January scrapped plans to move US production to a new $1.6bn plant in Mexico after criticism from Donald Trump. Currently, Ford makes its Focus cars in Michigan, Germany and in China.

But it has seen sales of the model fall in the US, while demand for larger vehicles remains. It was planning to move US production of the Focus to a new factory in Mexico. That decision drew fierce criticism from the US president, who has routinely blasted car makers and other companies for importing goods from other countries, including China and Mexico.

3 FB ‘bots’ start communicating sans humans (Khaleej Times) Adding to the fear that full artificial intelligence (AI) could spell the end of the human race, researchers from the Facebook Artificial Intelligence Research lab (FAIR) have found that while they were busy trying to improve chatbots, the “dialog agents” were creating their own language.

Soon, the bots began to deviate from the scripted norms and started communicating in an entirely new language which they created without human input, The Verge reported. Using machine learning algorithms, the “dialog agents” were left to converse freely in an attempt to strengthen their conversational skills. The researchers also found these bots to be incredibly crafty negotiators.

“After learning to negotiate, the bots relied on machine learning and advanced strategies in an attempt to improve the outcome of these negotiations,” the report said. “Over time, the bots became quite skilled at it and even began feigning interest in one item in order to ‘sacrifice’ it at a later stage in the negotiation as a faux compromise,” it added.

Although this appears a huge leap for AI, several experts including Professor Stephen Hawking have raised fears that humans, who are limited by slow biological evolution, could be superseded by AI. AI is now being used in applications from facial recognition software and cybersecurity to self-driving vehicles.

Monday, June 19, 2017

India, China top remittance recipients; Jaguar Land Rover to hire 5,000; First flying car in 2018

1 India, China get most remittances (Cleofe Maceda in Gulf News) Families and dependents in Asia remain the biggest beneficiaries of money sent home by expatriates working in the UAE and around the world, with India, China, Philippines and Pakistan emerging in the top five biggest recipients of remittances in 2016.

A new report from the United Nations International Fund for Agricultural Development (IFAD) showed that India took home the crown as the top-receiving country for earnings made by migrants, recording a total of $62.7 billion in wire transfers from abroad.

Chinese dependents and families received the second-highest amount of money sent home by expats at $61 billion, followed by Filipinos ($29.9 billion), Mexicans ($28.5 billion) and Pakistanis ($19.8 billion).

Exchange houses have reported that money flows from the UAE continued to increase in 2016 amid sluggish economic growth and weak oil prices, with the volume of outgoing cash transfers increasing by 10 per cent to 12 per cent last year compared to 2015.

2 Jaguar Land Rover to recruit 5,000 (Katie Allen in The Guardian) Jaguar Land Rover has unveiled plans to recruit 5,000 new engineers over the next year in a boost for British industry as the Brexit talks begin. The carmaker has just enjoyed a record year of sales bolstered by demand for luxury cars in China and North America, and needs thousands of new recruits, predominantly in the UK, to help develop new models, including electric cars.

JLR is UK’s biggest car manufacturer and has been held up by ministers as a poster child for British industry. It is also one of the UK’s largest exporters, with about 80% of its £24bn annual revenues generated from cars sold abroad.

Its expansion plans will bolster hopes that the UK’s export sector can help offset some of the domestic pressures on the economy in the years ahead as household budgets continue to be squeezed by weak pay growth and rising inflation on the back of the slide in sterling triggered by Brexit.

JLR, owned by India’s Tata group, said that more than 1,000 of the new 5,000 engineering recruits would be electronic and software engineers. Faced with chronic skills shortages in the sector, the carmaker believes it has come up with an innovative way to reach candidates from a wider pool, and is working with Gorillaz to recruit people via the virtual band’s app.

3 First flying car in 2018 (Khaleej Times) While several futuristic flying car projects are underway in different countries, a Dutch design may be the first one sold and soaring into the skies.

After years of testing, the PAL-V company aims to pip its competitors to the post. It is poised to start production on what they bill as a world first: a three-wheeled gyrocopter-type vehicle which can carry two people and will be certified for use on roads and in the skies.

"This kind of dream has been around for 100 years now. When the first airplane was invented, people already thought 'How can I make that driveable on the road?'," chief marketing officer Markus Hess said.

The PAL-V (Personal Air and Land Vehicle) firm, based in Raamsdonksveer in the Netherlands, is aiming to deliver its first flying car to its first customer by the end of 2018. The lucky owner will need both a driving licence and a pilot's licence. But with the keys in hand, the owner will be able to drive to an airfield for the short take-off, and after landing elsewhere drive to the destination in a "door-to-door" experience.

It won't be cheap. The first edition, the PAL-V Liberty, costs $599,000. PAL-V was founded in 2007 by Robert Dingemanse and pilot John Bakker.

Saturday, June 17, 2017

Japan's biggest bank plans to cut 10,000 jobs; Spotify has more than 140m users; Amazon to buy Whole Foods Market

1 Japan’s biggest bank plans to cut 10,000 jobs (Straits Times) Japan's biggest bank is set to undergo the most dramatic reduction in headcount since it was formed after the nation's banking crisis shook the industry almost 20 years ago.

Mitsubishi UFJ Financial Group is considering eliminating about 10,000 positions - about 7 per cent of its workforce - over a decade as low interest rates and intensifying competition squeeze profit, people with knowledge of the matter said. That's more than double the 3,500 full-time roles that President Nobuyuki Hirano said last year MUFG would cut from its main banking unit through natural attrition and less hiring.

The move is a striking example of how Japanese banks are struggling with an increasingly challenging business environment as the central bank's negative-rate policy erodes margins and a shrinking population curtails credit demand. MUFG is seeking to reshape itself by closing branches and boosting technology investment - a strategy that peers at home and abroad are also pursuing as digital advancements transform the financial industry and provide an opportunity to save costs.

MUFG, established in 2005 from a merger, employs about 147,000 people worldwide. MUFG's main lending unit had 766 branches in Japan and 75 abroad as of March 2015, according to its website. The group projects net income will climb 2.5 per cent to 950 billion yen in the year ending March, the first increase in three years.

2 Spotify hits more than 140m users (BBC) Spotify now has more than 140 million active monthly users, but the music streaming firm is still deeply in the red. The Swedish firm had revenues of more than 2.9bn euros (£2.6bn) last year, up more than 50% compared with 2015.

However, operating losses rose at nearly the same pace to 349.4m euros (£305.7m). Spotify is considering going public and listing on the stock market, so its latest figures will be under scrutiny.

Spotify reported a net loss of 539.2m euros (£471.6m), more than double the figure for 2015. 
Nevertheless the number of people listening to music on the platform continues to rise rapidly. Paying subscribers to its premium service, which does not have advertising, rose by 20 million to 48 million.

Apple Music, a key competitor, now has 27 million subscribers, almost double the number 12 months ago. Unlike Spotify it does not offer a free tier. More than 30 million tracks are available on Spotify, which has signed deals committing it to to pay a minimum of 2bn euros in royalties to record companies over the next two years.

3 Amazon to buy Whole Foods Market (Sarah Butler & Zoe Wood in The Guardian) Amazon, the world’s most powerful online retailer, has taken a giant stride into traditional retailing, spending $13.7bn to take over organic food chain Whole Foods Market.

The all-cash deal could be game-changing for the traditional supermarket business. Amazon has long had ambitions to move into the grocery business and launched its food delivery service, Fresh, in the US 10 years ago. It introduced the service in the UK last year after signing a wholesale deal with British supermarket Morrisons.

Amazon is the fourth biggest business in the US and accounts for 43% of online sales there. Whole Foods, founded in 1980, has about 460 stores, including nine in the UK where it has operated since 2004.

“This deal is potentially terrifying for other grocers,” said Neil Saunders from retail analysis firm GlobalData. “Although Amazon has been a looming threat to the grocery industry, the shadow it has cast has been pale and distant. Today that changed: Amazon has moved squarely onto the turf of traditional supermarkets and poses a much more significant threat.” Until now, Amazon has had a limited impact on the grocery market. In the US, it still only accounts for less than 0.5% of grocery spending, according to GlobalData.

Wednesday, June 14, 2017

US Fed hikes rates; Mini helicopters to challenge flying cars; Qatar pulls out troops from Africa

1 US Fed hikes rates (BBC) The US Federal Reserve has said it would raise its key interest rate by 0.25%, the second rise this year. The central bank voted to raise its key rate target to a range of 1% to 1.25%. That's the highest level since 2008, when policymakers cut rates to encourage borrowing and spending after the financial crisis.

The bank also said it would begin cutting its bond holdings and other securities this year. It cited continued US economic growth and job market strength as reasons for raising its benchmark interest rate. "Our decision ... reflects the progress the economy has made and is expected to make," said Federal Reserve Chair Janet Yellen.

The rise was widely anticipated after a low unemployment rate, but other economic indicators, including inflation, have been weaker. The Fed's statement noted that price rises have slowed recently. Inflation is below the target of 2%. But then Fed Chair Janet Yellen thinks a large part of that is down to falls in specific prices.

2 Mini helicopters to challenge flying cars (Khaleej Times) As global automakers compete to bring the first flying car to market, Czech pilot Pavel Brezina is trying a different tack: instead of creating a car that flies, he has made a "GyroDrive" -- a mini helicopter you can drive.

The engineer and owner of Nirvana Systems, a company producing motors for small flying machines, insists his vehicle is the first in the world authorised to operate both on roads and in the air. "Everyone is trying to make a high-speed car that can fly, but this is a different thing," said the tall, bespectacled 51-year-old, who has 30 years' experience as a pilot under his belt.

His GyroDrive vehicle is based on a gyroplane -- a mini-helicopter -- that uses a copter-style rotor to move up and down, and an aeroplane-type "pusher propeller" to go forward. Brezina's company buys gyroplane kits from a German firm, and then assembles and equips them with a system allowing the pilot-driver to switch between a petrol engine propelling the rotors and an electric engine that drives the wheels.

The two-seat GyroDrive has a maximum driving speed of just 40 kmph (25 mph) and can take its crew of two on short drives to a petrol station or a hotel. It needs less than 100 metres (110 yars) to take off and reaches a top speed of 180 kmph in the air. Its flying range is 600 kilometres.
After landing, the pilot only has to fix the main rotor blades along the axis of the GyroDrive and pull out a built-in licence plate to transform it into a road vehicle. Prices start at $63,500.

3 Qatar pulls out troops from Africa (San Francisco Chronicle) Qatar said Wednesday it has pulled all of its troops from the border of Djibouti and Eritrea, east African nations that have a long-running territorial dispute which Doha had helped mediate.

Qatar offered no explanation for the move, though it comes amid a diplomatic dispute with other Arab nations that have cut diplomatic ties and now are trying to isolate Qatar from the rest of the world. While the dispute hasn't escalated to a military confrontation, Qatar's military is dwarfed by neighboring Saudi Arabia and the United Arab Emirates, two of its biggest opponents in the crisis.

The 450 Qatari troops controlled a mountainous border crossing between Eritrea and Djibouti, said Nasredin Ali, a spokesman for Eritrea's biggest armed group, known as the Red Sea Afar Democratic Organization. Eritrean forces moved in after the troops departed, Ali said.

Doha mediated the conflict between the two countries in 2010. Gulf nations have stationed troops in both African countries, using that as a jumping-off point for the ongoing Saudi-led war in Yemen.
Saudi Arabia, Egypt, the United Arab Emirates and Bahrain have accused Qatar of supporting terrorism and severed ties with Doha last week. Qatar denies the allegations, but its ties to Iran and embrace of various Islamist groups have put the country under intense scrutiny.

Tuesday, June 13, 2017

Alibaba sales forecast tops estimates; Global coal demand falls for second year; Uber boss to stay away

1 Alibaba sales forecast tops estimates (Straits Times) Alibaba Group Holding forecast sales growth that topped every analysts' estimate, defying expectations that growth must slow by dint of a decelerating economy and its own sheer scale.

China's largest e-commerce company forecast 45 to 49 per cent revenue growth in the year ending March, sustaining a near-unbroken run of 40 per cent-plus annual rises and underscoring how investments into businesses beyond its bread-and-butter of online shopping are paying off.

Alibaba and Tencent Holdings - which dominate online shopping and social media, respectively - have ventured deeper into new areas from cloud computing services to streaming music and video as the country's economy slows. The online shopping giant founded by billionaire Jack Ma is capturing more digital advertising spending by incorporating social elements like video in its shopping sites.

Alibaba is spending billions of dollars on new businesses in part to counter Tencent's increasing dominance of online social media and entertainment through WeChat, a messaging and networking powerhouse.

Considered a barometer of Chinese consumer sentiment, Alibaba has also expanded abroad since buying control of Lazada Group SA to establish a foothold in South-east Asia, potentially setting up a clash with Inc. Its AliExpress site remains for now the main window through which it targets foreign shoppers.

2 Global coal demand fall for second year (Adam Vaughan in The Guardian) Global demand for coal has fallen for the second consecutive year, according to a BP study, helped by the US and China burning less of the dirtiest fossil fuel.

The UK was described as the “most extreme example” of the trend away from coal, which has resulted in use of the fuel returning to levels not seen since the start of the industrial revolution. The 1.7% fall in worldwide consumption in 2016 marks a striking reversal of fortune for coal, which was the largest source of energy demand growth until four years ago, BP said.

Presenting the 66th edition of BP’s annual statistical review of energy, the oil company’s chief economist, Spencer Dale, said: “It feels to me like we’re seeing a decisive break with coal, relative to the past. I think the big story here is coal getting squeezed.”

In the US, coal has been crowded out in power generation by cheaper, cleaner gas from the fracking boom and even US coal executives believe Donald Trump’s promise to bring back jobs in the industry cannot succeed. Coal consumption has now been declining for three years in China, as its economic boom and output has tailed off in energy-intensive sectors such as iron, steel and cement.

3 Uber boss to stay away (BBC) Uber boss Travis Kalanick plans to take time away from the company, and could return in a diminished role. The move comes after a review of management and practices at the firm, which is facing a number of scandals.

The review was sparked by a former employee's claims the company ignored her complaints about sexual harassment. Uber's board voted in favour of the recommendations from the review. Another board member resigned Wednesday after a sexist remark. Some of Mr Kalanick's responsibilities could be shifted to other executives.

In the email to staff, Mr Kalanick said the decision to take leave, which also comes after the sudden death of his mother in a boating accident, is part of an effort to create "Uber 2.0". Mr Kalanick's email did not say how long he would be away from the firm.

Monday, June 12, 2017

Qatar banks face headwinds; Tech shares keep falling; 'No' as the new key to success

1 Qatar banks face headwinds (Issac John in Khaleej Times) The sanctions imposed on Qatar by the UAE and several other Arab countries might result in an outflow of external funding for Qatari banks, which are already under mounting pressure amid worsening cash crunch, lower credit rating and hike in cost of funding, financial analysts said.

Following the recent breakup of diplomatic, trade and transport links with Qatar by Saudi Arabia, the UAE, Bahrain, Egypt, Libya and Yemen, the creditworthiness of the Gulf state has became vulnerable to a potential risks. These include domestic political risks, a spike in government debt, significantly higher contingent liabilities, and scarce external funding sources, credit analysts said.

S&P Global Rating, however, noted that Qatari banks' current liquidity profiles should help them absorb a moderate drop in external funding. Overall, Qatari banks' net external debt totalled about $50 billion at the end of April 2017.

Garbis Iradian, chief economist, Mena, at the Washington-based Institute of International Finance, said while the Qatari banking sector is well positioned, with a capital adequacy ratio of 16.1 per cent and non-performing loans to total loans of 1.2 per cent at the end of 2016, risks and uncertainty from the sanctions by neighbouring countries could have serious repercussions.

2 Tech shares keep falling (Dominic Rushe in The Guardian) Shares in technology companies – the driver behind recent record stock market gains – has kept falling as investors worried the sector was running out of steam.

Technology stocks have done far better than the rest of the market this year and they were trading close to all-time highs before Friday’s drop. The S&P 500 technology index shed 2.7% on Friday for one of its worst days of the year.

The climb has made fortunes for investors, and for tech entrepreneurs. Amazon founder Jeff Bezos has seen his net worth soar by almost $20bn in the past five months to $85.2bn. Bezos’s fortune is closing in on that of Bill Gates, the co-founder of Microsoft, whose net worth is $89.3bn, according to the Bloomberg Billionaires Index.

3 ‘No’ as the new key to success (Lucy Kellaway in Straits Times/Financial Times) No is the new yes. It is the most fashionable answer for successful people. There is even a How To Say No colouring book for adults, as well as books of more niche interest, like Say No To Arthritis.

Yet last week "no" reached cult status. In a blog post for the Harvard Business Review, a management coach suggested that it is not enough simply to say no, we must also start celebrating whenever we do so.

No is thus granted the same giddy status as failure, which everyone has been doggedly celebrating for a decade at least. The Museum of Failure was opened last week in Sweden; give it a year or two and the Museum of No is bound to follow.

On the Entrepreneur website is a blog post that argues saying no is good, as it creates space for junior people to step up. And declining things at work allows you to spend more time at home tending to your family.

I can think of something even better about it. If enough people were to say no to pointless things often enough it would lead to a more efficient allocation of resources. If we all refused boring meetings and events, eventually the penny would drop and people would stop arranging them.

The main difference between yes and no is that one is easy and the other hard. Yes can be said by any old fool, while no requires character, commitment and courage. Saying no gets easier as you get older.

Saturday, June 10, 2017

Global growth headed for six-year high; UK poll unnerves investors; Trump points finger at Qatar

1 Global growth headed for six-year high (Khaleej Times) The global economy is on course this year for its fastest growth in six years as a rebound in trade helps offset a weaker outlook in the US, the OECD has forecast.

The global economy is set to grow 3.5 per cent this year before nudging up to 3.6 per cent in 2018, the Paris-based Organisation for Economic Cooperation and Development said, updating its forecasts in its latest Economic Outlook.

That estimate for 2017 was not only a slight improvement from its last estimate in March for 3.3 per cent growth, but it would also be the best performance since 2011. Yet despite this brighter outlook, growth would nonetheless fall disappointingly short of rates seen before the 2008-2009 financial crisis, OECD Secretary General Angel Gurria said.

The improvement would also not be enough to satisfy people's expectations for better standards of living and reduce growing income inequality, he said. Among the risks to the OECD's outlook, it warned that the growing divergence between monetary policy rates among the major central banks raised the chances for financial market volatility.

2 UK poll unnerves investors (BBC) Fears that political uncertainty will hurt consumer spending have hit shares in UK retailers and housebuilders. The prospect of a hung parliament and speculation about the election result's impact on Brexit saw the value of sterling slide against the dollar.

"Disposable incomes will be stretched," said analyst Nicholas Hyett The weakening pound makes imported goods' prices higher and squeezes consumers' ability to spend.

Mr Hyett, from Hargreaves Lansdown, ran through the affected sectors: "Housebuilders are down across the board, but they're joined by restaurants, high street banks, fashion retailers and media outlets. Investor sentiment was not helped by the latest UK industrial production figures, which showed output rose by less than had been expected.

3 Trump points finger at Qatar (David Smith, Sabrina Siddiqui & Peter Beaumont in The Guardian) Donald Trump has accused Qatar of sponsoring terrorism at the highest levels, in an extraordinary escalation of the diplomatic row with one America’s most important military partners in the Middle East.

Trump said he had decided “the time had come to call on Qatar to end its funding … and its extremist ideology.” His comments marked his most forthright intervention in a crisis triggered on Monday when Saudi Arabia and its Gulf allies launched a co-ordinated diplomatic and economic campaign to isolate Qatar.

Trump’s intervention came after Saudi Arabia and its allies on Friday sanctioned a dozen organisations and 59 people it accused of links to Islamist militancy – a number of them Qataris or with links to Qatar. The Qatari government said in a statement: “We do not, have not and will not support terrorist groups.”

US relations with Qatar have long been complicated by Doha’s promotion of a conservative form of Sunni Islam, but the tiny Gulf state is also a close military partner. More than 11,000 US and coalition forces are at al-Udeid air base outside Doha, which is the centre for US air operations over Syria, Iraq, Yemen and Afghanistan.

Thursday, June 8, 2017

UK economy at bottom of EU growth league; Softbank buys Google robot-maker; Oil stabilizes but glut stays

1 UK economy at bottom of EU growth league (Katie Allen in The Guardian) The UK economy was the worst performer in the European Union in the opening months of 2017 as the Brexit vote took its toll, according to official statistics that underscore the challenge facing the next British government.

With economic growth of just 0.2% in the first three months of this year, the UK was well behind its European neighbours. Official EU figures showed the growth for the whole of the EU was 0.6% in the first quarter. The eurozone single currency bloc also grew 0.6% in the opening quarter, buoyed by strong domestic demand.

The Eurostat figures showed every nation in the 28-member bloc reported first-quarter GDP figures growing faster than the UK. The strongest expansion was in Romania at 1.7%, followed by Latvia at 1.6% and Slovenia at 1.5%. The closest countries to the UK’s weak pace of growth were France and Greece, with GDP growing 0.4% in both.

However, in year-on-year terms the UK was closer to the EU performance and ahead of the 19-nation eurozone. After a strong second half to 2016, when the economy defied predictions of a post-referendum slump, UK GDP was still 2% bigger in the first quarter of 2017 than a year earlier. The EU’s economy was 2.1% bigger on the year while the eurozone was up 1.9%.

2 Softbank buys Google robot-maker (BBC) Shares of Japan's Softbank have surged to their highest in nearly two decades after the firm bought robot-maker Boston Dynamics from Google's Alphabet. Boston Dynamics, known for its robots such as Atlas and BigDog, has struggled to commercialise its inventions and was put up for sale more than a year ago.

Softbank also announced it is buying robotics group Schaft. The terms of the deals were not disclosed. Softbank shares rose by more than 7% in Tokyo. Softbank began as a Japanese telecoms company but moved into robotics and developed the human-like Pepper in 2014.

Founder Masayoshi Son has since built the Japanese firm into a massive technology conglomerate through some big deals. They range from buying UK chip firm ARM Holdings for $32bn) investing $1bn in satellite startup OneWeb, to setting up a venture fund with Saudi Arabia. Mr Son is known to have an eye for potentially transformative industries and trends. He was an early investor in Alibaba.

3 Oil stabilizes but glut stays (Straits Times) Oil prices stabilised on Friday following steep falls earlier this week, but they were still pressured by evidence of an ongoing fuel glut despite efforts led by OPEC to tighten the market by holding back production.

Brent crude was at $47.86 per barrel, unchanged from its last close. It still puts Brent almost 12 per cent below its opening level on May 25, when an Opec-led pledge to cut production was extended into 2018. US West Texas Intermediate (WTI) crude was at $45.63, also virtually unchanged from the last close, but almost 11 per cent below May 25.

The slump was a result of oversupply despite the effort led by the Organization of the Petroleum Exporting Countries (Opec) to cut almost 1.8 million barrels per day (bpd) of production until the first quarter of 2018. US Energy Information Administration data showed a surprise build in commercial crude oil stocks to 513.2 million barrels this week.