Thursday 08/10/20

  1. In TECH NEWS, Arm/Nvidia faces close scrutiny in China, Samsung announces bright forecasts, there’s a new turn in the TikTok saga and Codemasters shines
  2. In PHARMACEUTICAL-RELATED NEWS, Trump announces a “cure”, Lilly seeks emergency approval and it seems there are limits to AstraZeneca’s generosity
  3. In CONSUMER-RELATED NEWS, UK mortgage costs hit first-timers and recruitment in London continues to drop
  4. In INDIVIDUAL COMPANY NEWS, there’s a game-changing development in whisky going on
  5. AND FINALLY I bring you a dirty secret…



So Arm/Nvidia faces scrutiny by the Chinese, Samsung gets optimistic, TikTok sees new interest and Codemasters shines…

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Arm expects tough scrutiny in China over Nvidia deal (Financial Times, Nic Fildes) highlights something that is hardly surprising given the misgivings that the Chinese chip industry expressed shortly after Nvidia’s proposed acquisition of Arm Holdings was announced. Given these sentiments, Chinese regulator sign off is far from certain as chipmakers do not want to Nvidia to have control over Arm due to the widespread use of Arm’s products in smartphones and data centres. Until now Arm has been seen to be a neutral player in the chip industry, which has allowed it to licence its technology to everyone. * SO WHAT? * Arm is obviously saying that a change of owner does not make any difference (it had to reassure customers back when Japan’s SoftBank bought it in 2016) but I’m sure that the Chinese regulator will subject it to very close examination nevertheless.

Elsewhere in tech hardware, Samsung forecasts highest operating profits in two years (Wall Street Journal, Elizabeth Koh) shows that the company is benefiting from stronger smartphone and consumer electronics sales,

prompting it to up its profit forecasts for the third quarter. Sales have bounced back in these divisions from lockdown lows and it seems that its 5G networks business is gaining ground as an alternative to Huawei, which is losing ground – fast. Samsung’s full earnings report is expected at the end of this month.

Little-known investment firm Centricus circles TikTok with long-shot bid (Wall Street Journal, Kirsten Grind, Bradley Hope and Georgia Wells) shows that TikTok apparently now has another option as London-based Centricus Asset Management is working on a bid for the viral video app. As things stand at the moment, Oracle and Walmart’s bid is being scrutinised by the relevant authorities and Centricus’ bid is likely to have a low likelihood of success. Having said that, if the Oracle-led bid fails to satisfy the Chinese, Centricus is touting itself as being a viable third option that could satisfy both sides in that it is neither American nor Chinese. * SO WHAT? * There are probably loads of bids going on in the background. I suspect that they will be very much on the back-burner for ByteDance, though, only to be taken seriously if the main bid is not approved. It seems that the Centricus bid leaves a lot of other room for others to join, which would seem like the prudent thing to do given the massive potential risks involved.

Lockdown is a winning formula (The Times, Simon Duke) shows that Codemasters, developer of F1 racing games, said it expects to double its revenues as it benefited from the launch of new games and continued sales of its back catalogue during the pandemic. It added that digital downloads had risen strongly under lockdown – they now account for 73% of total sales. * SO WHAT? * This is good news for the company but I think another thing that is interesting here is the rising trend for downloads – something that will be noted by the likes of Microsoft and Sony as they launch their new consoles next month. Downloads are generally much more attractive than disc sales because downloads cost “nothing” to make whereas discs involve costs from the discs themselves and the packaging. It certainly looks like the days of discs and cartridges are numbered!



Trump announces a “cure”, Ely Lilly wants emergency approval and AstraZeneca’s generosity has limits…

Following his current brush with the coronavirus, Trump calls coronavirus treatment he received a ‘cure’ (Financial Times, Kiran Stacey) shows that the President is back on form as a video went out yesterday evening where he said that his Covid-19 infection was “a blessing from God” because it had led him to the treatment (!). He promised to authorise the Regeneron’s antibody treatment he received for widespread use even though it is only supposed to be used in specific cases. He went on to say “They gave me Regeneron and it was, like, unbelieveable. I felt good immediately. They call them therapeutic, but to me it wasn’t just therapeutic, it made me better. I call that a cure.” Remember that this is coming from a man who thought that injecting Dettol might help. Eli Lilly asks FDA to authorize Covid-19 antibody drug (Wall Street Journal, Peter Loftus) highlights Lilly’s efforts to get permission for emergency use of its experimental antibody-based treatment for patients with mild-to-moderate coronavirus. This treatment is derived from a blood sample of one of

the earliest US survivors of Covid-19 and the company says it could bash out 100,000 doses this month and up to one million by the end of this year. * SO WHAT? * The Trump thing is kind of ridiculous. He has been pushing for a vaccine before the presidential elections, the pharma companies are refusing to play ball and so this seems to be the next best thing. On the Ely Lilly thing, it will be interesting to see if it gets its emergency approval because if it does, it would be the first drug to treat less severe cases and could be the first to not only treat the virus but also give temporary protection to those exposed to it, which would help plug the gap until a vaccine comes along. Interesting!

AstraZeneca vaccine document shows limit of no-profit pledge (Financial Times, Donato Paolo Mancini) is a very interesting article which draws attention to the potential limit of its generosity. The company, which is developing a vaccine candidate with Oxford University, has said that it will not profit from its Covid-19 vaccine “during the pandemic”. However, a memorandum of understanding between AstraZeneca and a Brazilian manufacturer shows that it has a definition of what that time period might be – and it is defining the end of that period as July 1st 2021. * SO WHAT? * It is interesting to see that there are limits to AstraZeneca’s generosity but this end date can be altered. FWIW I think it’s fair enough that the company doesn’t leave something like this open-ended as it is not a charity – but July 1st next year does sound rather close!



UK mortgage costs for first-timers remain steep and London recruitment continues to weaken…

Mortgage costs rise heaps pain on first-time buyers (Daily Telegraph, Russell Lynch and Isabelle Fraser) cites the latest figures from the Bank of England which show that mortgage rates for first-time buyers have shot up due to lenders charging those with small deposits more money. * SO WHAT? * Mortgages are becoming more expensive for ALL borrowers despite record low interest rates as lenders fear that an expected jump in unemployment will hurt their business. Pressure continues to build on the government to come up with more to help buyers.

Then in London a recruiting black spot as rest of UK recovers (Financial Times, Delphine Strauss) we see that demand for employees in the capital continues to fall, according to the latest figures from a report published by the Recruitment & Employment Confederation (REC) and KPMG. Overall, the majority of recruiters saw an increase in activity last month but London has not shared in this growth – it was one of only four English regions where a majority of recruiters reported a decline in activity. * SO WHAT? * This corresponds to recent findings by Indeed which said it saw a rise in job-searches outside London as well as online real estate agents reporting more interest in suburbs than city centres. I would have thought this is likely to persist as people continue to work from home. This survey also showed that competition for jobs is intensifying across the country as the supply of candidates has risen with the increasing prevalence of reduncancies. This has, in turn, led to a sharp drop-off in starting salaries for permanent staff and a small reduction in temp rates.



A Silicon Valley solution for impatient whisky drinkers…

Silicon Valley start-up launches ‘Nespresso machine’ for whisky (Financial Times, Judith Evans) highlights something that could strike fear into the hearts of whisky (or whiskey!) makers around the world as Silicon Valley

start-up Bespoken Spirits has come up with tech that can make whisky, rum or brandy taste like it’s been barrel aged for years in a matter of three to five days! It launched publicly yesterday. * SO WHAT? * This could be ground-breaking in terms of environmental impact as it uses a fraction of the wood and energy of barrel ageing and reduces the wasted product that evaporates during the process. Bespoken has won a few blind-tasting competitions, so the product is there or thereabouts. This could turn the whole industry on its head! 



…in other news…

Today, I thought I’d bring you something to ponder – and perhaps act upon – in Disturbing amount of dirt that’s lurking on your jewellery – and how to clean it (The Mirror, Courtney Pochin). Yuck!

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