Friday 07/12/18

1. In MARKETS AND OIL NEWS, markets shudder from Huawei drama and an oil production cut might not be a done deal
2. In HUAWEI NEWS, China gets angry and the Japanese government considers cutting Huawei off
3. In SECTOR NEWS, gambling companies restrict TV advertising and carmakers face massive fines
4. In OTHER NEWS, I bring you a sumo wrestler’s autograph technique. For more details, read on…

So markets fret over the US-China truce and OPEC production cuts aren’t a done deal…

Arrest of Huawei CFO sparks rout of stock markets around the world (Daily Telegraph, LaToya Harding) shows the market repercussions of the arrest of Meng Wanzhou, daughter of Huawei’s founder, as investors worldwide show their concern that this could be a hammer blow to the recently-agreed truce between the US and China. Asia markets fell first and were then followed by Europe and the US. The arrest would appear to reinforce two of Trump’s previously stated foreign policy goals – to follow through on the sanctions regime against Iran and to address Chinese companies suspected of corporate espionage.

In Saudi minister casts doubt on planned deal to cut Opec oil production (The Guardian, Adam Vaughan) we see that doubts seem to be creeping in about Opec cutting oil production, as there appears to be a delicate balancing act going on between protecting member revenues and not annoying Trump, who reiterated his calls on Wednesday to keep production as it is in order to keep a lid on prices. Even if production cuts are agreed, there is still the knotty question of how to split it between Opec and non-Opec members as, for instance, Russia (which is outside Opec, but still an ally) is not keen on making a big cut. * SO WHAT? * Khalid al-Falih’s comments have thrown a bit of a cat amongst the pigeons as many observers had been assuming a cut. Still, it’s not over yet – but even if production cuts are made it doesn’t sound like they will be major.

China gets angry about Meng Wanzhou’s arrest and Japan is the latest country to consider its relations with Huawei…

China demands release of Huawei CFO held on US charges (Financial Times, Louise Lucas, Demetri Sevastopulo, James Kynge and David Crow) shows just how angry China is getting about this whole thing as the Chinese embassy in Ottawa said that US and Canadian authorities have “seriously harmed the human rights” of Weng Wanzhou. The CFO of Huawei was detained by Canadian authorities over the weekend on behalf of the US which is seeking her extradition to the Eastern District of New York as part of a criminal investigation related to alleged attempts by Huawei to sell US-made equipment to Iran, flouting sanctions against the country. Supposedly, Trump didn’t know about the extradition request when he was cooking up the truce with Xi Jinping, although the latter apparently did but decided to push past it in the

interests of resolving trade tensions. * SO WHAT? * The fact that Huawei’s founder was an officer in the People’s Liberation Army is making everyone increasingly suspicious about potential links to the military despite strenuous protestations to the contrary. So much so, in fact, that US telecoms networks are banned from using Huawei equipment, with Australia and New Zealand also blocking Huawei and other Chinese suppliers on security grounds. As I said yesterday, I get the feeling that Huawei is going to be used as a bargaining chip with the Chinese – it’s like ZTE all over again.

Talking of which, Japanese government edges closer to restrictions on Huawei and ZTE (Wall Street Journal, Mayumi Negishi) cites a report from the Yomiuri daily newspaper that says Japan will effectively ban Huawei and ZTE equipment from being used in government contracts following the recent America-led anti-Huawei campaign and subsequent meetings between government officials. This is probably particularly pertinent in Japan’s case because of the number of American bases there. * SO WHAT? * I suspect more of this kind of thing to follow – but then it’ll be interesting to see whether China decides to retaliate the other way and how far it decides to push it.

Gambling companies face more restrictions on advertising and carmakers face big emissions fines…

Gambling companies to curb TV advertising during sports games (Financial Times, Camilla Hodgson) heralds an agreement between the UK’s big gambling companies to stop TV advertising during some live sports broadcasts in order to head off potentially more drastic action from regulators. William Hill, Ladbrokes-Coral, Betfred and Bet365 have all agreed to this and although no details are available re timing, it is thought that it could come into force next year. This change will apply to games that start before the 9pm watershed but will exclude horseracing, which relies heavily on ad revenues from betting companies. * SO WHAT? * Shares in William Hill, Ladbrokes-Coral owner GVC and 888 Holdings all fell as it seems to be the latest bit of negative news in the sector following closely on the heels of the maximum stake 

for Fixed Odds Betting Terminals being slashed from £100 to £2 in April. Football is likely to be the most affected by this move, with betting ads being very common during half time. Betting charity GambleAware said that around 90minutes of gambling ads were shown during the World Cup. This sounds like a move in the right direction, but I guess more details are needed in order to gauge whether or not the regulator still has to step in.

Carmakers facing massive CO2 fines (The Times, Graeme Paton) cites a study by PA Consulting – due to be published today – which shows that 8 out of Europe’s 13 big carmakers will face huge fines from the European Union for failing to hit new limits on carbon dioxide emissions. It said that continued reliance on petrol and diesel-powered cars (and of 4x4s in particular) could put them in line for fines worth up to 20% of profits. Fiat-Chrysler, Ford, VW, Mazda, PSA, Hyundai, BMW and Daimler would all breach the new CO2 standards. * SO WHAT? * This is a nightmare for the manufacturers concerned, but they have until 2021 to hit the new standards, which are the most stringent in the world. Talk about incentive to innovate!

And finally, in other news…

Everyone loves an autograph, don’t they? Well I bet you’ve not seen anyone sign them like the guy in Sumo wrestler goes viral with video of him signing autographs (Nextshark, Carl Samson https://tinyurl.com/y72swrn4). This is superb!