Friday, September 19, 2014

Alibaba shares soar after biggest IPO; Falling unemployment isn't lifting wages; Selfie addiction and low self esteem

1 Alibaba shares soar after biggest IPO (San Francisco Chronicle) Shares of Chinese e-commerce giant Alibaba opened at $92.70 apiece Friday morning, 36 percent above their initial public offering price of $68. They quickly zoomed to as high as $99.70 before dropping back to close at $93.89, a gain of 38 percent above the IPO price.

Order imbalances delayed opening on the New York Stock Exchange for more than two hours. The company raised $21.8 billion, making it the biggest US IPO ever. The IPO price valued Alibaba at $168 billion. At the close of trading, it was worth $231.4 billion. If it was a US company, it would rank 10th in market value, below Chevron and above JPMorgan Chase.

Yahoo, which owned 22.4 percent of Alibaba before the offering, planned to sell at least 121.7 million of its 523.5 million shares in the IPO. It could sell an additional 18.3 million shares if underwriters exercise their option to purchase additional shares within 30 days. At $68 each, Yahoo would make roughly $8 billion to $9.5 billion on its share sales.


2 Falling unemployment isn’t lifting wages (Larry Elliott in The Guardian) The year of the pay rise. That was the way 2014 was billed back in January, when the view was that rapidly falling unemployment would force bosses to grant more generous wage settlements. It simply hasn't happened. The economy generated more than 750,000 net jobs over the past 12 months, but earnings are rising at half the rate of inflation.

A number of conclusions can be drawn from the latest labour market data. The first is that the old relationship whereby falling jobless numbers led to employers being forced to pay more for a shrinking pool of talent has broken down. Weaker trade unions, less collective bargaining, an increase in the percentage of the workforce that is part-time or self-employed: these are all factors keeping the lid on wage increases.

Eventually, the traditional pattern will re-emerge. At some point, unemployment will fall to a level that does lead to such intense competiton for labour that the balance of power in wage negotiations will shift. But the current data suggests we are not at that point yet.

When the Bank of England announced its forward guidance policy in August 2013, the unemployment rate stood at 7.8% and Threadneedle Street said it would only start to contemplate a rise in interest rates when it had dipped below 7%, something it did not envisage until early 2016.

UK jobless rate fell below 7% in early 2014 and currently stands at 6.2%. The Bank of England has been busily cutting its estimate of the equilibrium level of unemployment, and on today's evidence will need to continue doing so. That's not just because earnings growth remains weak but because there is tentative evidence that the great British job creation machine is slowing down. 2014 will not be the year of the pay rise. Nor will it be the year of the rate rise.


3 Selfie addiction and low self esteem (Khaleej Times) Those who are habitual selfie takers are prone to having low self-esteem, says a study. The research, conducted by money-saving app VoucherCloud, found that over half of young people take selfies at least once a week. Nearly 60 per cent of youngsters admitted that behind their smile is a low self-esteem. Only 13 percent said they felt “confident in my own skin”.

“A selfie is subject to lighting, Photoshop and a whole host of other factors so often people actually look very little like they do in real life,” Matthew Wood, managing director of vouchercloud.com was quoted as saying in media reports.

The study, involving 2,071 British men and women aged 18-30, revealed that 39 per cent preferred taking pictures of themselves rather than their family, partner or pets. “It seems as if the selfie trend is just growing more and more. This is a phenomenon which will be around for some time,” Wood added.

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