Emerging markets to stay relevant in 2017; Madrid bans half of cars to fight pollution; 'Bosses don't deserve big pay packets'

1 Emerging markets to stay relevant (Jim O’Neill in Gulf News) Casual observers might think that 2016 was a disappointing year for so-called emerging markets. In fact, some of these countries have delivered the year’s best investment returns, while certain developed-country markets have fared poorly.

Right now, the prevailing emerging-market outlook predicts that under Donald Trump’s administration the US will expand its fiscal-stimulus policies, and that the Federal Reserve will tighten monetary policy. This, in turn, will strengthen the dollar, which could create widespread problems in emerging markets.

But there are four reasons to doubt the conventional wisdom. For starters, while markets have performed well in the weeks since Trump’s election, investors should be wary of any apparent consensus. No one can confidently predict what shape Trumponomics will actually take.

Second, while the decades-long rally in government bonds might finally be coming to an end, it is not obvious that the dollar will remain strong indefinitely, even if it does appreciate relative to other currencies in the near term.

A third consideration for 2017 is that fiscal expansion in the US could benefit commodity-producing countries, by strengthening cyclical and global growth. If commodity prices rise, as they have in recent weeks, emerging-market currencies could appreciate as their terms of trade move in a positive direction.

Finally, any forecast must account for China, the emerging-market juggernaut. The rise of the Chinese consumer is surely the single most important economic trend in the world today, and trade-bashing populists in the West, such as Trump, would do well to pay attention.

http://gulfnews.com/business/analysis/the-emerging-markets-story-will-remain-relevant-1.1953251

2 Madrid bans half of cars to fight pollution (The Guardian) Madrid has ordered half of most private cars off the roads on Thursday to tackle worsening air pollution, a first in Spain. The restrictions will operate between 6.30am and 9pm and will be re-evaluated daily depending on pollution levels.

The measure is activated when levels of harmful nitrogen dioxide in the atmosphere go above 200 microgrammes per cubic metre in at least two measuring stations for two days running, and if the air is unlikely to clear imminently. There are exceptions to the ban, such as for mopeds, hybrid cars, those carrying three people or more or used by disabled people. Buses, taxis and emergency vehicles are also exempt.

With 3.2 million residents and 1.8m cars, Madrid often suffers from bad bouts of pollution. The move to ban half of cars is level three on a scale of four anti-pollution measures. Level four bans taxis from the city, except those that are hybrid cars.

https://www.theguardian.com/world/2016/dec/29/madrid-bans-half-of-cars-from-roads-to-fight-air-pollution

3 ‘Bosses don’t deserve big pay packets’ (BBC) The link between what bosses are paid and a company's financial performance is "negligible", new research finds. The median pay for chief executives at Britain's 350 biggest companies was £1.9m in 2014 - a rise of 82% in 11 years - the study by Lancaster University Management School found.

However, performance as measured by return on capital invested was less than 1% during that period. The report's authors said the findings suggested a "material disconnect". The study said the increase in executive remuneration was largely driven by performance-based pay.

It also said the metrics typically used to gauge company performance, such as total shareholder return and earnings per share growth, were too short termist. The research suggested the need for "a more refined discussion about the type of performance measures employed" rather than remuneration levels and performance-related pay arrangements alone.

Prime Minister Theresa May said she wanted to stop an "irresponsible minority" of companies acting badly and ensure "everybody plays by the same rules". Among the measures under consideration are pay ratios, which would show the gap in earnings between the chief executive and an average employee.

http://www.bbc.com/news/business-38449264

Modi own goal dents India outlook; Toshiba in line for big losses on US nuclear unit; Why gender pay equality won't happen in 2017

1 Modi own goal dents India outlook (Gulf News) India started 2016 as the world’s fastest-growing major economy, but at the year’s end the nation faces a significant slowdown and the delay of what’s been hailed as Prime Minister Narendra Modi’s greatest reform — the creation of an integrated marketplace.

Much of the pain is self-inflicted as Modi’s decision last month to drain 86 per cent of currency in circulation stalled spending and caused a political stalemate on a landmark sales-tax reform. It’s an apt end to a busy year that’s included a change of guard at the central bank, the overhaul of a century-old bankruptcy law and the biggest battle to rock corporate India in decades. And it’s sown the seeds for a tumultuous 2017.

“Reforms will have long-term structural benefits but carry short-term execution and adjustment risks,” said Abhishek Dangra, a credit analyst at S&P Global Ratings. Early data back economists’ fears that consumption will be hit, particularly in rural areas, with the dominant services sector absorbing the bulk of the pain. Industrial production and investment are likely to be pressured with subsequent job losses adding to the disruption, according to economists.

Gross domestic product will grow 6.5 per cent this quarter, slowing from 7.3 per cent in the July-to-September period, according to the median estimate in a Bloomberg survey. Demonitisation has sucked momentum from the movement to roll out India’s goods and services tax from April 1.

On the corporate front, a public battle for control of India’s largest conglomerate has played out after family patriarch Ratan Tata replaced Cyrus Mistry as chairman of the Tata Group in October. Both men have traded accusations over missteps at the salt-to-software empire, bringing its governance structure into question.

India introduced a new bankruptcy code this year that’s likely to allow the quick closure of businesses gone bad and prevent the build-up of non-performing loans. Nevertheless, the Organisation for Economic Co-operation and Development says implementation will require an improvement in the nation’s severely back-logged judicial system.

http://gulfnews.com/business/economy/modi-own-goal-swamps-india-s-big-bang-year-clouds-2017-outlook-1.1952442

2 Toshiba in line for big losses on US nuclear unit (Straits Times) Toshiba Corp has said it may have to book several billion dollars in losses related to a US nuclear power acquisition, a shock warning that sent its stock tumbling 12 per cent and rekindled concerns about its accounting acumen.

The Japanese group said cost overruns at US power projects handled by a nuclear construction business newly acquired from Chicago Bridge & Iron (CB&I) would be much greater than initially expected, potentially requiring a huge writedown.

Big losses would be another slap in the face for a sprawling conglomerate hoping to recover from a $1.3 billion accounting scandal as well as a writedown of more than $2 billion for its nuclear business in the last financial year.

Toshiba, led by new chief executive Satoshi Tsunakawa, has positioned its nuclear and semiconductor businesses as key pillars of growth while seeking to scale down less profitable consumer electronics units such as PCs and TV sets.

It has forecast a full-year net profit of about 145 billion yen this financial year, a turnaround from a 460 billion yen loss, on demand for flash memory chips from Chinese smartphone makers. But any big losses are likely to force Toshiba to boost a capital base that has been weakened by a range of restructuring steps taken in the wake of the accounting scandal.

http://www.straitstimes.com/business/toshiba-may-book-billions-in-losses-on-us-nuclear-unit

3 Why gender equality in pay won’t happen in 2017 (Harriet Minter in The Guardian) A great deal is made of the need to encourage women to negotiate more effectively. However, even if we take that into 2017, research suggests it’s not going to help.

While women ask for pay rises as often as men do, they’re much less likely to get them. The reality is we expect men to be pushy about salary, to ask for more money and to vocalise their worth, so when they do it we’re not surprised.

However, society has taught that it’s not polite for women to do the same, so when they do, we tend to see them as pushy and arrogant, and that instantly makes us less likely to reward them. So while it’s useful to encourage women to negotiate their salary more firmly, it’s also not the only way to solve this problem and certainly won’t help women in the coming year.

This doesn’t mean equal pay in 2017 is impossible. We might not be able to achieve it on a worldwide level, but within the UK, the US and Australia it should certainly be achievable. In 2015, Salesforce did an audit of its pay gap. CEO Marc Benioff was so sure the company wouldn’t have a gender pay gap that he made a deal with his senior female employees. If they could prove there was in fact a pay gap he would instantly fix it.

They proved it and Benioff instantly paid out $3m to fix it. He found every woman who was being paid less than a male colleague doing the same job and adjusted her salary accordingly. In the grand scheme of things $3m is not much to a big corporation like Salesforce, but the amount of goodwill it bought was priceless. There’s absolutely nothing stopping other businesses following suit.

And this is the one bright light that has come out of 2016. While it hasn’t been a good year for women’s rights, it has been a great year for women speaking up and making their voices heard. From politics to Hollywood, women around the world have been calling time on the sexist attitudes and experiences they’ve encountered and pushed back against them.

https://www.theguardian.com/sustainable-business/2016/dec/28/2017-wont-be-year-women-paid-same-men-inequality

China to rein in outward investment; Digital data will be king in 2017; Cheetah numbers decline

1 China to rein in outward investment (Rob Davies in The Guardian) Beijing has signalled plans to curb Chinese firms’ investment in foreign assets, after revealing that companies from China are on course to spend 1.12 trillion yuan (£130bn) on everything from British football clubs to a Hollywood film producer in 2016.

Companies from China ramped up their spending on overseas assets during the year, as a weakening domestic economy saw investors turn their attention overseas. A diverse array of targets included the maker of Godzilla, Aston Villa Football Club and the pub in which former prime minister David Cameron and Chinese premier Xi Jinping once shared a pint.

The spending spree boosted non-financial overseas investment 55% in the first 11 months of 2016, putting Chinese companies on course to spend £130bn this year, compared with £86bn in 2015, said commerce minister Gao Hucheng.

While foreign investment has soared, the amount of money flowing into the country is set to remain broadly flat at £92bn. This means the difference between investments abroad and those coming into China has reached an unprecedented £39bn.

The widening gap has triggered concerns about capital flight, where investors send their money out of the country rather than investing it to spur domestic growth. Gao signalled that Beijing would move to address the investment gap by reining in Chinese firms’ overseas spending and making it easier for firms from abroad to access the Chinese economy.

He said the government would “promote the healthy and orderly development of outbound investment and cooperation in 2017”. In November it was reported that China was preparing a clampdown on non-Chinese mergers and acquisitions.

https://www.theguardian.com/business/2016/dec/26/china-to-rein-in-foreign-investment-as-domestic-growth-stalls

2 Digital data will be king in 2017 (Necip Ozyucel in Khaleej Times) There is no question that the amount of digital data has increased drastically. More and more companies are migrating infrastructure and applications to the cloud.

Growing penetration of the Internet, particularly in emerging economies, and the digitisation of several industries have been instrumental in increasing the amount of data being generated online. The amount of digital data continues to rise from 10 zettabytes of digital data to 50 zettabytes of data. In 2020, one million new devices are expected to come online every hour.

The digitisation of things, heightened individual mobility and collaboration continue to accelerate data increase. Thus, big data will continue to be a necessary asset for companies in all sectors in the coming year: from data algorithms to data entry, bringing transformative change in the IT landscape.

2016 has also been a big year for virtual reality, with the emergence of various mixed reality technologies such as Microsoft HoloLens. Augmented reality machines and apps are starting to see massive popularity, bringing millions of users together for a shared physical and digital hybrid experience. Holograms are also being utilised increasingly in the education sector for learning and teaching, making virtual reality a viable consumer product.

The pace of technological change is not expected to slow down in the coming year and the tech sector must continue to innovate and achieve seamless integration between products and platforms. Continued attention to efficiency, privacy and security will remain essential components in the adoption of new tools and services across industries, come 2017.

http://khaleejtimes.com/technology/digital-data-will-be-king-in-2017

3 Cheetah numbers decline (San Francisco Chronicle) Amid population declines for many wildlife species in Africa, conservationists are sounding alarm bells for the cheetah, the fastest animal on land.

An estimated 7,100 cheetahs remain in the wild across Africa and in a small area of Iran, and human encroachment has pushed the wide-ranging predator out of 91 percent of its historic habitat, according to a study.

Consequently, the cheetah should be defined as "endangered" instead of the less serious "vulnerable" on an official watch list of threatened species worldwide, the study said. About 77 percent of cheetah habitats fall outside wildlife reserves and other protected areas, the study said, requiring outreach to governments and villages to promote tolerance for a carnivore that sometimes hunts livestock.

Besides habitat loss, cheetahs face attacks from villagers, loss of antelope and other prey that are killed by people for their meat, an illegal trade in cheetah cubs, the trafficking of cheetah skins and the threat of getting hit by speeding vehicles.

A cheetah has been recorded running at a speed of 29 meters (95 feet) per second. The species may move more slowly while hunting and it can only maintain top speeds for a few hundred meters.

The cheetah population in Zimbabwe declined from an estimated 1,500 in 1999 to between 150 and 170, according to a survey conducted between 2013 and 2015 by a group called Cheetah Conservation Project Zimbabwe. Cheetah experts note that Angola is developing a plan to protect cheetahs and African wild dogs.

http://www.sfgate.com/news/world/article/Cheetah-numbers-decline-as-African-habitat-shrinks-10819477.php

UK growth revised up to 0.6%; Bailout for world's oldest bank; Shanghai water supply hit by 100-tonne garbage wave

1 UK growth revised up to 0.6% (BBC) The UK economy grew by 0.6% in the third quarter, according to official figures, faster than previous estimates. Growth for the July-to-September period had originally been estimated at 0.5%. New data from the Office for National Statistics (ONS) suggested that the business and financial sector was more active than previously estimated.

The ONS also said that growth in the third quarter of the year was helped by "robust consumer demand". However, the ONS trimmed its estimates of growth in the first and second quarter of the year. It now says the economy grew by 0.3% in the first quarter, compared with an earlier figure of 0.4%, and cut its estimate for second-quarter growth to 0.6% from 0.7%.

Ruth Gregory, UK economist at Capital Economics, said the figures suggested that June's Brexit vote had had little impact on the economy and that growth in the final quarter of the year would be positive.

http://www.bbc.com/news/business-38413787

2 Bailout for world’s oldest bank (Straits Times) Italy's government is set to rescue Banca Monte dei Paschi di Siena after the world's oldest lender failed to raise €5 billion from the market, in what would be Italy's biggest bank nationalisation since the 1930s.

Italy will plough as much as €20 billion into its banks, providing both emergency liquidity guarantees and capital injections, as more lenders may seek lifelines soon. Monte Paschi said in a statement that it will ask the government for a "precautionary" capital increase.

"Overall, it's good news. Finally, we are heading toward a solution," Mr Jacopo Ceccatelli, head of broker-dealer Marzotto SIM, said. "Italy is doing now what other countries have done many years ago to sustain their banking system."

Italy's banks are struggling under the weight of €360 billion of bad loans, a plight that has eroded profitability and undermined investor confidence. A nationalisation of Monte Paschi could be followed by rescues for lenders like Veneto Banca and Banca Popolare di Vicenza. One of the world's oldest banks, Monte Paschi failed to raise money from private investors.

The industry's next test will arrive in January when UniCredit, Italy's biggest bank, begins selling €13 billion in shares. The lender's non-performing loans amount to about 15 per cent of its assets.

http://www.straitstimes.com/business/italy-set-to-bail-out-worlds-oldest-bank

3 Shanghai water supply hit by 100-tonne garbage wave (Benjamin Haas in The Guardian) Medical waste, broken bottles and household trash are some of the items found in more than 100 tonnes of garbage salvaged near a drinking water reservoir in Shanghai. The suspected culprits are two ships that have been dumping waste upstream in the Yangtze river. It has then flowed 

downstream to the reservoir on Shanghai’s Chongming island which is also home to 700,000 people.

The reservoir at the mouth of the river is one of the four main sources of drinking water for the country’s largest city, according to local media. China has struggled with air, soil and water pollution for years during its economic boom, with officials often protecting industry and silencing citizens that complain.

China’s cities are often blanketed in toxic smog, while earlier this year more than 80% of water wells used by farms, factories and rural households was found to be unsafe for drinking because of pollution.

Videos circulating on social media showed beaches and wetlands covered in a rainbow of plastic bags. “This is so sad, just humanity digging its own grave,” one commenter on Twitter-like Sina Weibo said. Earlier this year more than 500 students developed nosebleeds, rashes and illnesses, some as severe as leukaemia, in what local media linked to illegal toxic dumping by chemical factories.

The country’s air pollution has been shown to contribute to more than 1 million deaths a year, linked to about a third of deaths in China’s major cities.

https://www.theguardian.com/world/2016/dec/23/shanghai-water-supply-hit-by-100-tonne-wave-of-garbage

US growth revised higher; More Asian defaults loom in 2017; World's first solar panel road

1 US growth revised higher (BBC) The US economy grew even faster than thought in the July-to-September period, latest official figures indicate. The world's largest economy grew at an annualised rate of 3.5% in the quarter, up from an earlier estimate of 3.2%, the Commerce Department said. It was the second time that the figure had been revised upwards, from an initial 2.9%.

The rate of growth in the third quarter was the strongest for two years. The Commerce Department said consumer spending, which accounts for more than two-thirds of the US economy, increased at a rate of 3%, compared with the previous estimate of 2.8% and the initial estimate of 2.1%.

http://www.bbc.com/news/business-38401676

2 More Asian defaults loom in 2017 (Straits Times) As if investors in Asia's troubled corporate bond markets don't have enough to worry about, concern is mounting about whether South Korean shipyards will be able to repay record amounts of debt coming due next year.

Yields on bonds of Daewoo Shipbuilding & Marine Engineering Co and Samsung Heavy Industries Co have shot up this year. The top four Korean shipbuilders have 2.3 trillion won in notes maturing next year, the most in Bloomberg-compiled data going back to 1997.

The bond slump adds to jitters in Asia's debt market, which has seen Chinese defaults climb to 28 this year from seven in 2015 and delinquencies spreading in Singapore as weak commodity markets took their toll. Hanjin Shipping Co sought bankruptcy protection this year and earnings suffered at Korea's top shipyards including Hyundai Heavy Industries Co and Hyundai Mipo Dockyard Co, amid a slump in oil prices and growing competition from China.

Hyundai Heavy, Daewoo Shipbuilding and Samsung Heavy have all posted multiple quarters of losses in the past year-and-a-half amid delivery delays and a plunge in demand for new vessels and oil platforms. Korea Ratings, a local affiliate of Fitch, cut the credit scores of all three shipyards in 2016 and has a negative outlook.

http://www.straitstimes.com/business/companies-markets/more-asian-defaults-loom-in-2017-amid-record-south-korea-shipyard-debt

3 World’s first solar panel road (Kim Willsher in The Guardian) France has opened what it claims to be the world’s first solar panel road, in a Normandy village. A 1km route in the small village of Tourouvre-au-Perche covered with 2,800 sq m of electricity-generating panels, was inaugurated by the ecology minister, Ségolène Royal.

It cost €5m to construct and will be used by about 2,000 motorists a day during a two-year test period to establish if it can generate enough energy to power street-lighting in the village of 3,400 residents.

In 2014, a solar-powered cycle path opened in Krommenie in the Netherlands and, despite teething problems, has generated 3,000kWh of energy – enough to power an average family home for a year. The cost of building the cycle path, however, could have paid for 520,000kWh.

Before the solar-powered road – called Wattway – was opened on the RD5 road, the panels were tested at four car parks across France. The constructor was Colas, part of giant telecoms group Bouygues, and financed by the state. Normandy is not known for its surfeit of sunshine: Caen, the region’s political capital, enjoys just 44 days of strong sunshine a year compared with 170 in Marseilles.

Critics say it is not a cost-effective use of public money. Marc Jedliczka, vice-president of Network for Energetic Transition (CLER) told Le Monde: “It’s without doubt a technical advance, but in order to develop renewables there are other priorities than a gadget of which we are more certain that it’s very expensive than the fact it works.”

https://www.theguardian.com/environment/2016/dec/22/solar-panel-road-tourouvre-au-perche-normandy

Year of tumult for shipping industry; Obama bans oil drilling in Arctic; The bane of plastic rice

1 Year of tumult for shipping sector (Straits Times) For an industry that has seen no end of drama over the past six years or so, 2016 will go down as one of the stormiest 12 months on record. And there is plenty of uncertainty surrounding global trade in 2017 as well, which could continue to weigh on Singapore, given its role as a maritime hub.

The turbulence has been coming from all directions this year, led by an unprecedented wave of mergers and acquisitions, which included the completion of French shipping giant CMA CGM's historic $3.38 billion buyout of Singapore's Neptune Orient Lines.

But what really shook the market was the full-blown bankruptcy of South Korea's biggest shipping line, Hanjin Shipping Company - a catastrophe that triggered a massive disruption in global trade when the group filed for court receivership on Aug 31.

Other players have swiftly moved in to take up the routes left behind by Hanjin, once the world's seventh-largest shipping firm. The debt-laden company faces liquidation while a resolution of its debts, if achievable, could drag on for years.

Mr Andy Lane, partner at shipping consulting firm CTI Consultancy, sums it up: "If 2016 is anything to go by, the year ahead could bring just as much uncertainty. Volatility might subside, now with fewer fingers on pricing buttons. But with a huge idle fleet, revenue levels are not going to skyrocket."

More defaults loom. A recent Fitch Ratings report says muted demand growth will exacerbate overcapacity in the shipping sector in 2017, putting pressure on freight rates, which will drive more M&A activity and defaults in the short and medium term.

http://www.straitstimes.com/business/companies-markets/2016-a-year-of-tumult-for-shipping

2 Obama bans oil drilling in Arctic (BBC) Outgoing US President Barack Obama has permanently banned offshore oil and gas drilling in the "vast majority" of US-owned northern waters. Mr Obama designated areas in the Arctic and Atlantic oceans as "indefinitely off limits" to future leasing.

The move is widely seen as an attempt to protect the region before Mr Obama leaves office in January. Supporters of president-elect Donald Trump could find it difficult to reverse the decision. Canada also committed to a similar measure in its own Arctic waters, in a joint announcement with Washington.

The White House said the decision was for "a strong, sustainable and viable Arctic economy and ecosystem." It cited native cultural needs, wildlife concerns, and the "vulnerability" of the region to oil spills as some of the reasons for the ban. But while Canada will review the move every five years, the White House insists Mr Obama's declaration is permanent.

The decision relies on a 1953 law which allows the president to ban leasing of offshore resources indefinitely. During the election campaign, Donald Trump said he would take advantage of existing US oil reserves, prompting concern from environmental groups.

http://www.bbc.com/news/world-us-canada-38387525

3 The bane of plastic rice (The Guardian) Nigeria has seized over 100 bags of plastic rice smuggled into the country, where prices of the staple food are rocketing ahead of the Christmas and New Year holidays. A suspect has been arrested over the haul of 102 bags of the fake rice, which officials warned was dangerous for human consumption.

They are suspected to have been smuggled or illegally shipped in from China through Lagos port. The 50kg bags, branded “Best Tomato Rice”, had no date of manufacture and were intercepted in the Ikeja area of the sprawling city.

Nigeria has banned rice imports as it seeks to boost local production. The plastic rice was to be sold ahead of Christmas and New Year festivities, with the price for the popular Nigerian staple hitting the roof because of galloping inflation. A 50kg bag now sells for around 20,000 naira ($63), more than double the price in December last year.

Nigeria’s inflation stood at 18.5% in November, its 13th consecutive monthly rise, driven by higher food prices. The customs service has sent the fake rice to the National Agency for Food and Drug Administration and Control for further analysis.

https://www.theguardian.com/world/2016/dec/22/fake-plastic-rice-seized-in-nigeria-amid-rocketing-food-prices

China's different sort of housing bubble; Disney breaks record, takes $7bn in a year; Balochistan rebels protect rare birds from Gulf royals

1 China’s different sort of housing bubble (Noah Smith in Gulf News) Right now, much of the world is in danger from a potential recession in China. China, which still is the biggest contributor to global growth, has been looking shaky for a couple of years now. Growth is down from insanely fast to moderately fast.

It’s the housing sector that will really make or break the country’s economic destiny. Prices fell in 2014 and early 2015, and it looked as if the long-promised Chinese housing crash had finally arrived. If a true crash ever does come, it may well be catastrophic. China doesn’t have well-developed stock markets, so households save a lot of their money, directly or indirectly, in housing and land. Much of the economy itself is based on real-estate development.

Some economists interpret the housing boom as a bubble. Kaiji Chen and Yi Wen of the Federal Reserve Bank of St Louis have a model in which demand for housing as a savings vehicle kicks off expectations of rising prices that then become a self-fulfilling prophecy.

Some other papers take a more agnostic view. Jing Wu, Joseph Gyourko and Yongheng Deng, for example, note that price-to-rent ratios are very high, meaning that small downward revisions in growth expectations could cause prices to fall a lot.

Homebuyers may not be borrowing like crazy, but real-estate developers and many other companies have. If slowing economic growth causes households to pull back on their housing purchases, it could be companies, and the banks that lend to them, that are on the hook. Even if the housing market isn’t a true bubble, a downturn could still wreak a lot of damage on the Chinese economy — and on all the economies around the world that are dependent on China.

http://gulfnews.com/business/analysis/china-s-will-be-a-different-sort-of-housing-bubble-1.1948865

2 Disney breaks record, takes $7bn in a year (Mark Sweney in The Guardian) Disney has become the first film studio to take $7bn in global ticket sales in a year, with Star Wars spin-off Rogue One joining the hit factory production line alongside Marvel superheroes and animated children’s movies.

With Rogue One: A Star Wars Story, the spin-off tale of the mission to steal the plans for the Death Star, taking almost $300m globally on its opening weekend, Disney has easily shot past the previous $6.9bn annual ticket sales record set by rival Universal last year with hits including Jurassic World and Furious 7.

With almost two weeks of the year left, the momentum generated by the most famous sci-fi franchise in the world and the popularity of the studio’s animated film Moana ($282m and counting) is likely to push Disney’s overall takings closer to $8bn.

Disney has already released the four top-grossing films of the year so far with Captain America: Civil War, Finding Dory and Zootopia taking more than $1bn at the global box office, while a live-action version of The Jungle Book fell just short. Doctor Strange, starring Benedict Cumberbatch, released in November, has made more than $650m to date.

The record haul is the crowning achievement of a decade long strategy to reinvigorate Disney’s film division by buying up blockbuster franchises, characters and talent. In 2006, Disney spent $7.4bn buying Apple founder Steve Jobs’ Pixar, the hit factory behind Finding Nemo, its sequel Finding Dory, Toy Story and The Incredibles, to help revive its once proud tradition of producing hit animated films.

This was followed in 2009 by the surprise $4bn purchase of Marvel Comics’ superhero universe, bringing in characters including X-Men, Iron Man and Captain America, which took Disney into new live action territory. The third transformational deal was snapping up George Lucas’ Lucasfilm, maker of Star Wars and the Indiana Jones franchises, in a $4bn deal in 2012, with a plan to vastly expand the sci-fi franchise starting with 2015’s The Force Awakens.

https://www.theguardian.com/film/2016/dec/20/walt-disney-sets-7bn-box-office-record-2016-star-wars-rogue-one

3 Balochistan rebels protect rare birds from Gulf royals (BBC) Suspected rebels have attacked a hunting party of Gulf royals in the Pakistani province of Balochistan. The gunmen let the men off with a warning not to hunt in the area, after firing bullets into their vehicle, officials said.

Hundreds protested in Balochistan on Tuesday against Arab hunting parties, which travel to Pakistan every year. Farmers say the hunts endanger the birds and damage crops. Pakistan issues dozens of permits every winter to the royal families of the Middle East to hunt rare Houbara bustards in its southern plains. The princes and their wealthy friends consider the bird's meat to be an aphrodisiac.

The Supreme Court lifted a ban on hunting the birds earlier this year, after the government argued it helped build diplomatic relationships with Arab dignitaries. The shooting incident happened in the remote hilly tracts in Gichk area, some 90km south of Panjgur.

The Balochistan Liberation Front (BLF) said it carried out the attack. "Our fighters let the sheikhs go unharmed in view of our ancient mutual links and values and in the hope that in future they won't obtain lease of any area of Balochistan for hunting from the occupying country, Pakistan," a statement said.

http://www.bbc.com/news/world-asia-38381113

Asia faces funds flight; Uber loses $800m in third quarter; Dubai opens world's largest VIP terminal

1 Asia faces funds flight (Chia Yan Min in Straits Times) Asian currencies have weakened considerably against the surging greenback in the wake of the US Federal Reserve's decision last week to raise a key interest rate for the first time in a year.

This is prompting investors to shift money out of emerging markets and into US dollar-denominated assets, putting pressure on Asian currencies and asset markets. The US central bank also signalled that interest rates will go up in the coming year faster than previously expected - a policy stance set to result in regional currencies staying soft against the US dollar.

Regional currencies have been depreciating sharply against the greenback on expectations that higher interest rates, as well as US President- elect Donald Trump's policies to ramp up government spending, will trigger capital outflows from emerging-market economies, said United Overseas Bank currency strategist Peter Chia.

In addition, Mr Trump's campaign promises to ramp up government spending - if translated into actual policies - are expected to increase inflation and boost growth in the US. This would put pressure on the Fed to hike interest rates more aggressively to keep prices under control.

http://www.straitstimes.com/business/economy/asia-faces-flight-of-funds-as-greenback-strengthens

2 Uber loses $800m in third quarter (Fortune) The finances of ride-hailing giant Uber improved after the sale of its China business to rival Didi Chuxing, but it still managed to lose a huge amount of money.

Uber lost more than $800 million in the third quarter, according to a report from tech news site The Information, citing anonymous sources. But Uber’s exit from China in the middle of the quarter slowed the growth rate of those losses to less than 25% year-over-year, down from a 34% year-over-year drop in the second quarter, when it lost $750 million, according to a Bloomberg report in August, while still operated in China.

In August, Uber announced that it would sell its Chinese business to Didi Chuxing, based in China, after aggressively competing against it for the last two years. Uber has admitted in the past that it spent $2 billion in total on its Chinese operations, yet was only able to capture a small fraction of the market.

But Uber’s net revenue, which excludes driver payments, actually grew steadily to $1.7 billion in the third quarter, a 240% bump from a year ago. In the second quarter, it had $1.1 billion in net revenue, or 190% more than the year-ago quarter.

In the US, Uber is still locked in a price war with rival Lyft, which costs both companies dearly. In the second quarter, Uber reportedly lost $100 million excluding certain costs, although that’s likely grown in subsequent quarters. Uber declined to comment about its finances.

http://fortune.com/2016/12/19/uber-financials-2016/

3 Dubai opens world’s largest VIP terminal (Edward Clowes in Gulf News) The world’s largest VIP terminal has been officially opened at Al Maktoum International at Dubai South. Inaugurated by Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group, the 5,600-square metre standalone facility is intended to exclusively cater to private, business and government VIP travellers.

The first flight from the VIP terminal took place in April 2016, carrying 13 passengers on an Embraer Legacy aircraft that was headed to the Maldives. Since then, the terminal has witnessed 1,000 flight movements with the number anticipated to grow to 4,000 movements in 2017.

It is the largest of its kind in the world, hosting two Fixed Base Operators (FBOs), JetEx and Falcon Aviation, according to Khalifa Al Zaffin, Chairman of Dubai Aviation City. The terminal is part of Al Maktoum International, the planned largest airport in the world, which will involve the construction of five runways and increase in capacity to handle 160 million passengers a year once complete.

http://gulfnews.com/business/aviation/world-s-largest-vip-terminal-opens-at-al-maktoum-international-1.1948806

India outlook dims after cash ban; Instagram has 600m active users; Savers choking world economy

1 India outlook dims after cash ban (Straits Times) Indian Prime Minister Narendra Modi had touted the surprise move to scrap high-value bills as India's biggest step against unaccounted cash, which the government estimated at 5 trillion rupees. The bulk of this money has already been deposited with two more weeks to go before the deadline lapses, meaning the shock to the system may have been in vain.

The decision sucked out 86 per cent of currency in circulation, akin to withdrawing all US dollar bills except for about half of the $1 notes. Only 50 per cent of this is projected to be replaced by the year-end, leaving the authorities scrambling to push digital payments as public anger rises.

"India's 'own goal' currency swap initiative has put a crimp on the cash-dependent economy," said Singapore-based Paul Gruenwald, chief economist for Asia-Pacific at S&P Global. The government's "well-intentioned but poorly thought through demonetisation programme" is driving down the pace of economic activity, he said.

As investors try to assess the impact of Mr Modi's move, all eyes will be on the government's forecast for the year through March - due on Jan 7. The central bank and private economists have lowered their projections for the economy where 98 per cent of consumer payments are made in cash.

Commercial credit sank to a 19-year low as backlogs piled up at factories and banks stayed busy with the task of exchanging currency notes. Meanwhile deposits surged, pushing the credit-deposit ratio to a six-year low. The trade deficit widened to a 16-month high as export growth slowed in November and imports surged.

Most worryingly, gold shipments jumped 26 per cent in November, triggering speculation that consumers were converting their cash into non-productive holdings of the precious metal. Mr Rafeeque Ahmed, chairman of the council for leather exports, said Mr Modi's move has slashed about 75,000-100,000 jobs from his industry.

http://www.straitstimes.com/business/economy/modis-cash-ban-may-have-been-in-vain-as-india-outlook-dimming

2 Instagram has 600m active users (Emily Price in San Francisco Chronicle) Instagram has announced that it has doubled its number of monthly active users over the past two years. The company reported that it has 600 million monthly daily active users now, 100 million of those added over the past six months.

It’s been a big year for Instagram. The company has evolved from its early days, adding a number of new features to keep it relevant. While once just a photo sharing site, Instagram has since added the ability to share videos on the service, and this summer launched Instagram Stories, a Snapchat-esque way to share moments from your day on the service through posts that can only be viewed for a limited period of time.

This month, Instagram added an easier follower removal process for private account-holders, the ability to filter out language posted by others that one may consider abusive, and the option to use a new live video feature that allows Instagram users to broadcast live. However, unlike other services, those live videos must be viewed while an event is happening, as they can’t be replayed later.

http://blog.sfgate.com/techchron/2016/12/15/instagram-surpasses-600-million-monthly-daily-active-users/

3 Savers choking world economy (Phillip Inman in The Guardian) Saving is always said to be a good thing. But that is about households and their spare cash. And cash accounts for only a small proportion of the savings held by most people. These days our accumulated wealth is our savings – and far from being a way to protect us from financial shocks, they are toxic and slowly killing the world’s economies.

Firstly there is the sheer scale of savings held by individuals, companies and governments. Earlier this year the International Monetary Fund felt the need to add it all up and declared it a savings glut. It says institutional investors such as pension funds, insurance companies and mutual funds, along with the sovereign wealth funds of oil-rich nations and central banks, hold around $100 trillion in assets under management.

This huge sum compares to US GDP of around $18 trillion and the total market value of US-listed companies in 2015 of $19 trillion (which today is more like $25 trillion). Mostly it is invested in stock markets and property or lent to companies and governments in the form of bonds. The remainder is invested in commodities such as oil, or financial derivatives of various assets and insurance products that hedge any potential losses on those assets.

The IMF says governments should work harder to attract investor funds to build vital infrastructure and close their budget deficits. But when investment banks demand between 10% and 15% returns and pension funds think we should be grateful they only want 6% to 9%, the IMF is supporting a rip-off perpetrated by today’s savers on tomorrow’s taxpayers.

Instead it should use its intellectual muscle to shift the debate and support higher taxes on wealth.

https://www.theguardian.com/business/2016/dec/18/savers-slowly-choking-off-life-world-economy

Eurozone ending 2016 robustly; Europe's top 10% earners get as much as bottom 50%; Japan is largest holder of US treasuries

1 Eurozone ending 2016 robustly (San Francisco Chronicle) The eurozone economy is ending 2016 robustly and inflation pressures are growing, a key survey showed, in a combination that suggests the European Central Bank's stimulus efforts are working.

Financial information company IHS Markit said its purchasing managers' index, a gauge of activity in the manufacturing and services sectors, held at 53.9 points in December, the same as in November. The index, which is subject to revision, is on a 100-point scale, with 50 marking the threshold between growth and contraction.

A more detailed look at the survey shows that inflows of new business, employment and backlogs of work remained strong and that the manufacturing sector offset a slight slowdown in services. IHS Markit said the index is pointing to quarterly growth of 0.4 percent, which would be the eurozone's highest rate this year.

Though Chris Williamson, chief business economist at IHS Markit, said the survey puts the eurozone economy on a "strong footing" for 2017, he cautioned that there is "clearly the potential for political uncertainty to derail growth." Next year, there are scheduled elections in the Netherlands, France and Germany. Discussions over Britain's exit from the European Union are also scheduled to commence.

Perhaps more important for officials at the ECB is the intensification in inflation pressures identified by the survey as a result of higher import costs related to the fall in the value of the euro and the recent spike in commodity prices, notably oil. The common European currency has fallen further following the Federal Reserve's rate hike on Wednesday to trade at a 13-year low of $1.0410.

http://www.sfgate.com/news/world/article/Eurozone-business-activity-ends-year-on-upbeat-10797754.php

2 Europe’s top 10% earners get as much as bottom 50% (Katie Allen in The Guardian) The top 10% of highest paid workers in Europe together earn almost as much as the bottom 50%, according to a report from the International Labour Organization that calls on governments and companies to do more to ensure the fruits of economic growth are shared out.

The UN agency used its latest report into global wage trends to examine earnings inequality between different earners within firms and between firms. It also found startling discrepancies between men and women’s salaries at senior level in Europe with a gender pay gap of more than 50% for chief executives.

The report builds on a warning from the ILO director general, Guy Ryder, that income inequality and a rise in casual employment practices risk fuelling nationalist movements. Speaking after Donald Trump won the US election on an anti-globalisation ticket and the UK voted for Brexit, Ryder said people felt they were getting a “raw deal” from the current economic system.

By comparing the wages of individuals in Europe to the average wage of the firms where they work, the ILO’s researchers found that about 80% are paid less than the average for the firm – because the average is skewed upwards by the big payouts to its highest earners.

In the 1% of firms with the highest average wages, the bottom 1% of workers were paid on average €7.10 per hour while the top 1% earned an average €844 per hour, or 118 times more.

https://www.theguardian.com/money/2016/dec/15/top-10-highest-earners-in-europe-paid-as-much-as-bottom-50-report-finds

3 Japan is largest holder of US treasuries (Straits Times) Japan became the largest holder of US Treasuries for October, outpacing China for the first time in nearly two years, data from the US Treasury Department showed.

Japan held $1.131 trillion in US Treasuries, while China's holdings declined to $1.115 trillion, a drop of about $41 billion. China has been dipping into its reserves, selling Treasuries to support the yuan.

Data also showed foreigners bought $9.4 billion in long-term US assets in October, after selling $64.8 billion the previous month. Including shorter-dated securities, overseas investors purchased $18.8 billion in October, after selling a massive $154.4 billion in September.

http://www.straitstimes.com/business/japan-tops-china-as-worlds-largest-holder-of-us-treasuries-data

US Fed raises interest rate by 0.25%; Moody's sees vulnerability in Asia-Pacific; Security of 1bn Yahoo accounts breached

1 US Fed raises interest rate by 0.25% (BBC) The US Federal Reserve has raised its benchmark interest rate by 0.25%, only the second increase in a decade. The central bank voted unanimously to raise the key rate to a range of 0.5% to 0.75%, citing a stronger economic growth and rising employment.

But the central bank said it expected the economy to need only "gradual" increases in the short term. Fed chairwoman Janet Yellen said the economic outlook was "highly uncertain" and the rise was only a "modest shift". However, the new Donald Trump administration could mean rates having to rise at a faster pace next year, she signalled.

The president-elect has promised policies to boost growth through tax cuts, spending and deregulation. Ms Yellen said it was wrong to speculate on Mr Trump's economic strategy without more details. But she added that some members of the Federal Open Markets Committee, the body which sets rates, have factored in to their forecasts an increase in spending.

Rates have been near zero since the global financial crisis. But the US economy is recovering, underlined by recent data on consumer confidence, jobs, house prices and growth in manufacturing and services.

The Fed also published its economic forecasts for the next three years. These suggest that the Federal Funds rate may rise to 1.4% next year; 2.1% in 2018; and 2.9% in 2019. GDP growth will rise to 2.1% next year and stay there, more or less, during those years. The unemployment rate will fall to 4.5% over the 2017-2019 period, the Fed forecast. And inflation will rise to 1.9% next year and hover at that level for the next two years.

http://www.bbc.com/news/business-38323037

2 Moody’s sees vulnerability in Asia-Pacific (Jacqueline Woo in Straits Times) High debt levels and global financial linkages spell vulnerability for a number of Asia-Pacific nations, including Singapore, according to Moody's Investors Service. This comes amid a marked fall in financial asset prices in the Asia-Pacific since the US presidential election last month.

In a report on "sovereign risk" - a reference to the credit standing of sovereign countries, Moody's noted that regional currencies have since depreciated against the US dollar, while equity prices have fallen and portfolio flows have reversed. "If they last more than a few weeks, capital outflows or lower inflows will correspond to a tightening in domestic financing conditions for many Asian countries," the credit ratings agency said.

"For some, (it) could exacerbate difficulties in meeting their current account and external debt payment obligations." Moody's pointed out that direct vulnerability to capital outflows is limited in the Asia-Pacific, though with a few exceptions.

The countries in the region that face external liquidity challenges include Mongolia, Pakistan and, to a lesser extent, the Maldives, Papua New Guinea and Sri Lanka.

Moody's added that for mainland China, the scope to offset a tightening in financing conditions related to capital outflows is still ample, although sustained outflows would erode it. "Increased scrutiny by the Chinese authorities over fixed asset and financial investment abroad indicates their concerns about sustained outflows," it said.

http://www.straitstimes.com/business/moodys-flags-high-debt-risks-facing-asia-pacific-nations

3 Security of 1bn Yahoo accounts breached (Sam Thielman in The Guardian) Yahoo has said it had discovered another major cyber attack, saying data from more than 1bn user accounts was compromised in August 2013, making it the largest such breach in history.

The number of affected accounts was double the number implicated in a 2014 breach that the internet company disclosed in September and blamed on hackers working on behalf of a government. “An unauthorised party” broke into the accounts, Yahoo said. The company believes the hacks are connected and that the breaches are “state-sponsored”.

The hackers used “forged ‘cookies’” – bits of code that stay in the user’s browser cache so that a website doesn’t require a login with every visit, wrote Yahoo’s chief information security officer, Bob Lord. The cookies “could allow an intruder to access users’ accounts without a password” by misidentifying anyone using them as the owner of an email account.

The company is being acquired by Verizon for $4.8bn but the sale has not been an easy one. In October, a report revealed that the company had cooperated with the NSA to scan users’ emails for keywords on behalf of the agency. A Verizon lawyer, Craig Silliman, said that the September breach had clearly damaged Yahoo’s value and hinted that the damage ought to be reflected in the buying price.

https://www.theguardian.com/technology/2016/dec/14/yahoo-hack-security-of-one-billion-accounts-breached