Tuesday 16/07/19

  1. In TECH NEWS, US senators grill the tech titans with Facebook in line for Libra inquisition
  2. In CAR-RELATED NEWS, Yandex and Uber buy Russia’s #1 taxi company and Jaguar Land Rover gets a loan
  3. In DEAL NEWS, AB InBev gets canned and Thomas Cook’s deal looks shakey
  4. In INDIVIDUAL COMPANY NEWS, Sports Direct postpones its results and GSK has good news on an ovarian cancer drug
  5. In OTHER NEWS, I bring you some amazing examples of anamorphic art…



So senators get to grill the tech giants on everything including Libra…

In US senators to question tech titans on ‘tremendous’ power (Daily Telegraph, Laurence Dodds) we see that Apple, Google and Amazon are going to have to defend themselves in front of a Senate justice committee today who will accuse them of using their dominance to obliterate any competitors both domestically and in Europe. This comes a week after the Federal Trade Commission (FTC) approved a $5bn settlement with Facebook regarding the Cambridge Analytica scandal and amid rumours that the FTC and US Justice Department are looking into conducting competition inquiries. Critics of big tech say that they should be broken up. There will also be a separate hearing for Facebook who will be in front of the Senate banking committee to answer questions about Libra, as per Facebook confronts bipartisan resistance to cryptocurrency plans (Wall Street Journal, Dave Michaels,Kate Davidson and Sam Schechner), which highlights the

enormity of the task for Facebook convincing the naysayers of its proposed new cryptocurrency. The G7 industrialised nations will also be discussing Libra and other cryptocurrencies this week in France. * SO WHAT? * Big Tech is facing a wave of vocal criticism concerning its enormous power and stranglehold on the markets in which it operates as well as how the data it collects is utilised and protected. Having said that, I really don’t know how one would go about breaking up a company like Google, for example – and I imagine that, given that the companies concerned are unlikely to be willing participants, any efforts to do so will be dragged out by lawyers for as long as possible. As far as Libra is concerned, Facebook is going to take a lot of heat given its reputation for what it does with the data it skims from users and it seems to me that there are too many parties that stand to lose out from Facebook’s success with Libra. Governments and central banks would have no control over its movements and legislators are worried that Libra – and other cryptocurrencies – could be used for malign purposes. That said, I think it still has some powerful backers and remains an interesting concept, so I would expect some kind of compromise to be reached. It’ll be interesting to see how this all unfolds.



Yandex and Uber buy Russia’s #1 taxi service and JLR gets a loan…

Yandex and Uber buy Russia’s largest taxi company (Financial Times, Max Seddon) heralds the purchase of Vezyot, that will dramatically increase the market share of Yandex Taxi, the joint venture between Russian search giant Yandex and Uber. Vezyot has 12.3% market share versus Yandex Taxi’s 10.4%. * SO WHAT? * This sounds like a bold move and will clearly ruffle the feathers of Mail.ru-backed Citymobil, which has been on a growth track of late. This deal will give Yandex Taxi a big boost outside the big cities.

JLR’s electric dreams get boost from taxpayers (Daily Telegraph, Alan Tovey) highlights a final flourish from Theresa May in her last days in office as JKR will get a £500m loan from UK Export Finance, the state-backed credit agency, that will help to ease the strain on JLR’s balance sheet significantly. The outgoing PM said the loan would help the company to boost exports of its new generation of electric cars. * SO WHAT? * Nice idea, but is this just throwing half a billion quid into a black hole? I also wonder how this would be seen by others – some countries get pretty angsty about governments giving companies “unfair advantages”. Mind you, JLR is a tiddler in the scheme of things, so maybe it’ll just go under the radar.



ABInBev postpones the IPO of its Asian business and Thomas Cook’s rescue looks shakey…

I must admit that I should have put this in yesterday’s Watson’s Daily as I do recall seeing this bit of news over the weekend BUT here it is: AB/InBev/Asia IPO: glass struggle (Financial Times, Lex) highlights the postponement of what would have been the largest Initial Public Offering this year as the parent company decided to pull the sale of a minority stake in its Asian business because investors thought the asking price was too high. The company will wait for better market conditions (presumably once the US-China trade dispute gets sorted) and the share price hardly moved on the news. * SO WHAT? * This is a bit embarrassing for the company and will prompt pessimists

to say that this could stifle its growth prospects, especially in the Asian region. It could have done with getting $10bn from the IPO to pay down some of its $100bn of debt, but clearly it’s going to have to wait.

Thomas Cook rescue under threat (Daily Telegraph, Alan Tovey) shows that the drama ain’t over for the troubled tour operator as Fosun’s offer to take a majority stake to rescue the company still requires the approval of the banks and hedge funds that hold £1.6bn of Thomas Cook debt. Citigroup analyst James Ainley sent Thomas Cook shares off a cliff two months ago when he said that the business was worthless and has since said that its shares would be worth just 3p. * SO WHAT? * Thomas Cook must have been relieved with the lifeline thrown to them by Fosun given the turbulent time it’s been having and any uncertainty thrown up by a City analyst will obviously not be welcome at all. It just goes to show that this is not yet a done deal and Thomas Cook could yet come crashing down.



Sports Direct has a shocker and GSK announces a breakthrough…

Sports Direct delays results amid House of Fraser woes (The Guardian, Sarah Butler and Julia Kollewe) highlights woes at Sports Direct as it postponed its results, warning that it could miss its profits forecasts due to the impact of its acquisition of House of Fraser. Investors took fright at the news, selling the stock down 10% and Appetite for acquisitions: Ashley’s new interests (The Guardian, Sarah Butler) highlights other acquisitions/investments that the company has made that are still being digested and that could also cause it problems. They include Evans Cycles, Sofa.com, Game Digital, Goals Soccer Centre, French

Connection and Findel. * SO WHAT? * This is very bad news – companies don’t do this unless something really serious is going to happen. If Ashley goes down, there’s a chance that he could take a big chunk of the UK high street down with him. Yes, he’s only one guy, but he’s the face of the company and very much the one in charge of his sprawling empire.

GSK hails encouraging trial of new drug to fight ovarian cancer (Daily Telegraph, Julia Bradshaw) shows that GSK had some promising results from a late-stage trial of cancer drug Zejula, which it inherited when it bought US oncology biotech firm Tesaro for over $5bn last year. The price it paid then raised eyebrows, but these latest results seem to have vindicated their decision to invest. Ovarian cancer is the fifth most common cause of cancer death among women, so this breakthrough could be big.



And finally, in other news…

I thought I’d leave you today with this: Anamorphic art makes the beach your canvas (Stars Insider, https://tinyurl.com/yyg4fkzf). Inspiration for when you next go to the sea-side!

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Some of today’s market, commodity & currency moves (as at 0851hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!

FTSE 100 *Dow Jones *S&P 500 *Nasdaq**DAX *CAC-40 *Nikkei **Shanghai **
7,532 (+0.34%)27,359 (+0.10%)3,014 (+0.02%)8,25712,387 (+0.52%)5,578 (+0.10%)21,535 (-0.69%)2,938 (-0.16%)
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

(markets with an * are at yesterday’s close, ** are at today’s close)