- In MARKETS & CURRENCIES NEWS, the prospect of Xi-Trump talks buoys markets, UK flotations look thin on the ground and Facebook launches Libra
- In TECH NEWS, Niantic buys Sensible Object and Twitch buys Bebo
- In INDIVIDUAL COMPANY NEWS, UBS’ pig nightmare continues and Boeing gets an order boost
- In OTHER NEWS, I bring you cat sandals. For more details, read on…
MARKETS & CURRENCIES NEWS
So Xi-Trump talks look like happening next week, UK IPOs get rarer and Facebook launches Libra…
Trump-Xi talks fire up European rally (Daily Telegraph, Tom Rees) flags a tweet by Trump which said that he will be meeting Chinese president Xi Jinping about trade at next week’s G20 summit, although he added that he will decided whether or not to go ahead with imposing tariffs on the remaining $300bn of Chinese imports following the meeting. * SO WHAT? * European markets strengthened on the news (everyone’s hoping for a resolution and talks between the two leaders could break the deadlock) but they had already received a boost from ECB president Mario Draghi hinting about more stimulus for the Eurozone.
Domestic & General flotation is shelved (The Times, Alex Ralph) doesn’t look like a major story at first glance, but what it does do is highlight the fact that the postponing of a planned flotation or sale of home appliance insurer Domestic & General by its private equity owner, CVC Capital Partners, is part of a broader reluctance for British companies to list on the stock exchange at the moment. Flotations have slowed down to their lowest level until at least 2009, according to Dealogic. There have only been 14 IPOs (raising $3.1bn) on UK exchanges this year versus 65 (raising $18.3bn) in the same period in 2014. * SO WHAT? * Clearly, the uncertainty of Brexit has got to be a factor in
the scarcity of flotations and I suspect that there are many potential deals waiting in the background for some kind of clarity on the situation. For now, though, only the very brave, the desperate or the very competent dare to put their heads above the parapet.
Facebook could change the face of digital coins (Daily Telegraph, James Titcomb) does a really good job of trying to explain new cryptocurrency, Libra, and what its impact may be. Facebook’s blockchain project that started a year ago has attracted the backing of a number of high-profile companies and launched yesterday to great fanfare. WhatsApp and Facebook Messenger will support peer-to-peer payments using Libra and Facebook will launch a digital wallet, Calibra, where customers can store coins. Facebook is trying to help facilitate the exchange of cash for Libra in emerging markets and could potentially give discounts to advertisers who pay their bills in Libra in order to kick-start usage of the cryptocurrency. Libra is expected to be more stable than Bitcoin and, unlike other “stablecoins” won’t just be pegged to the dollar – it’ll be pegged to a basket of currencies, which should also help to reduce volatility. * SO WHAT? * On the one hand, you could say that Libra will be more successful than Bitcoin because one of Bitcoin’s weaknesses has been that it has not been accepted by major retailers. However, Facebook/Libra: pros and coins (Financial Times, Lex) points out that punters are increasingly reticent about giving their phone numbers to Facebook – let alone their money – and that regulators will be poring over every tiny detail before it is properly released, so it is not yet a done deal.
Pokemon Go’s developer buys Sensible Object and Twitch buys Bebo…
Niantic buys London games developer Sensible Object (Financial Times, Tim Bradshaw) highlights the purchase of London-based games studio Sensible Object by the Silicon Valley company that brought you Pokemon Go. This is part of the development of its “augmented reality” gaming platform and comes on the eve of the release of its next AR game Harry Potter: Wizards Unite. Niantic was valued at around $4bn at its latest funding round earlier this year and has made a number of acquisitions over the last 18 months to enhance its capabilities. * SO WHAT? * Let’s hope, for Niantic’s sake, that the game is a success as there are plenty of one-hit-wonder gaming companies that
have struggled with that “difficult second album”. At least they are trying to enhance their offering via acquisitions and AR gaming still appears to have a way to go yet in terms of development. I believe that Wizards Unite will launch this Friday, FYI.
Video site Twitch snaps up social media pioneer Bebo (Daily Telegraph, Olivia Rudgard) highlights Twitch’s acquisition of Bebo – remember them?? Bebo was founded in 2005 and at its peak had 45m users. Since then, it was sold to AOL in 2008 for $850m but struggled and the founders bought it back for $1m in 2013 as it suffered from market share being taken by MySpace and then, of course, the mighty Facebook. * SO WHAT? * Twitch specialises in video game live streams and Bebo is currently a video game streaming site, so I guess the acquisition just enhances Twitch’s existing capabilities. Twitch didn’t give any more details.
INDIVIDUAL COMPANY NEWS
UBS has China problems and Boeing gets some orders for its troubled 737MAX…
I thought I’d mention UBS was riding high in China – until Swinegate (Financial Times, Don Weinland, Patrick Jenkins and David Crow) because it is a story that’s taking up a lot of column inches at the moment. Basically, UBS economist Paul Donovan released a report last Wednesday which touched on the current swine flu epidemic where he said “Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China”. The words “Chinese pig” were seized upon and seen as being racist and UBS then faced a massive sh!tstorm from all sides. * SO WHAT? * This has resulted in Haitong Securities, one of China’s largest securities houses, cutting ties with the bank, and then on Monday, it was also removed as an underwriter from a bond transaction worth up to $1bn for the state-
owned China Railway Construction Corporation. “Swinegate” is continuing to have repercussions, even though Donovan is now on an “indefinite leave of absence”. FWIW, I think that this is one of those “trial by social media” things as I have never come across any analysts that would be racist in a report in my entire City career. I do think, however, that this is being used as an opportunity by some to put pressure on UBS, which was previously sitting pretty as a non-US bank trying to operate in China. That’s probably going to be a lot harder now – at least in the short term.
Boeing ends order drought triggered by 737 MAX crisis (Wall Street Journal, Robert Wall and Andrew Tangel) heralds some rare good news for the aircraft manufacturer as British Airways parent IAG signed a letter of intent for up to 200 Boeing 737 MAX planes. This is a real vote of confidence in Boeing, which has been suffering from the grounding of its plane following two tragic crashes. * SO WHAT? * This will be very important for Boeing and comes just as regulators are getting ready to test Boeing’s fix of the plane.
And finally, in other news…
I know I talk about dogs every now and then – so just to reassure you that I am not “cat-ist” I thought I’d leave you today with Adorable cat sandals from Japan welcome new arrivals to their feline footwear litter (SoraNews24, Casey Baseel https://tinyurl.com/yy3cwgw9). For the catlover in your life…
Some of today’s market, commodity & currency moves (as at hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!
|FTSE 100 *
|Dow Jones *
|S&P 500 *
|Oil (WTI) p/b
|Oil (Brent) p/b
|Gold Per t/oz
(markets with an * are at yesterday’s close, ** are at today’s close)