Tag: Alibaba

July 17, 2018

Worthy Insights / Opinion Pieces / Advice

NYT – Tracking the President’s Visits to Trump Properties – Karen Yourish and Troy Griggs 7/16

Markets / Economy

Bloomberg – Giant Pork Pile Awaits Americans as Trade Wars Risk Exports – Megan Durisin and Justina Vasquez 7/13

  • “American production is poised to reach an all-time high this year, and output is forecast to surge again in 2019. The supply boom comes as tariffs from China and Mexico threaten to curb export demand, leaving Americans with a mountain of cheap meat.”
  • “Total U.S. meat production is forecast at a record in 2018 and is set to climb again next year, the USDA estimates. Cash hogs may average about 42 cents a pound in 2019, down 7.7% from this year, the department predicts.”

NYT – After Storm, Foreclosures in Puerto Rico Stopped. They’re Starting Again. – Matthew Goldstein 7/15

  • Bottom line, the imposed foreclosure moratoriums are ending.

FT – Sovereign wealth funds abandon active managers – Chris Flood 7/15

  • “More problems lie ahead as SWFs look to switch more equity holdings.”

WSJ – Daily Shot: China Beige Book – China Construction Growth YoY Change 7/16

  • “Here is the reason steel rebar futures have been rallying.”

Real Estate

FT – US bankers warn on commercial property risks – Alistair Gray 7/15

  • “US bankers have warned about mounting risks in commercial real estate, with figures showing they are putting the brakes on loans to buyers of office buildings, hotels and shopping malls.”
  • “JPMorgan’s latest quarterly results published on Friday showed its commercial real estate business had its slowest period for at least 10 quarters, with average balances flat from the previous three months.”
  • “Wells Fargo’s CRE loan book shrank by $2.5bn in the second quarter because of declines in construction funding and mortgages on existing properties. In contrast, its non-property commercial portfolio expanded by $1.9bn.”
  • “Default rates remain low but bankers are concerned that CRE loan terms are too loose, especially as the Federal Reserve’s interest rate rises push up their own funding costs.”
  • “Tim Sloan, Wells Fargo’s chief executive, said CRE underwriting standards had been deteriorating ‘for some time’. He added, though, that the slippage was ‘nowhere near what we saw in 2006 and 07’, before the financial crisis.”

Energy

FT – Peak oil demand forecast for 2036 – David Sheppard 7/15

  • “One of the world’s most influential oil consultancies has forecast that global oil demand will peak within 20 years, as a ‘tectonic’ shift in the transport sector towards electric cars and autonomous vehicles gathers pace.”
  • “’A lot of our clients recognize that peak demand is real,’ said Ed Rawle, Wood Mackenzie’s head of crude oil research. ‘It’s just a question of when it arrives.’”
  • “Mr. Rawl at Wood Mackenzie said the consultancy’s thinking on peak demand was driven by a renewed assessment of the impact of not just electric cars but growing signs that autonomous electric vehicles will play a major role in the future of transport.”
  • “In the next 10 years the biggest impact on slowing global oil demand growth — which is expected to hit 100m barrels a day for the first time this year — would be fuel efficiency, Mr. Rawl said.”
  • “The improvement in fuel efficiency standards in conventional cars over the past decade has already had an effect, while the coming years should see the retirement of many older, gas-guzzling cars, leaving a less fuel-hungry fleet on the road.”
  • “Petrol demand is expected to be the first component of oil demand to peak around 2030 as a result.”
  • “Seeing peak oil demand on the distant horizon, does not, however, mean lower prices in the short term, Mr. Rawl said.”

Finance

WSJ – Why a $1 Trillion Mountain of Private-Equity Cash Matters – Ben Eisen 7/10

China

FT – Tencent and Alipay set to lose $1bn in revenue from payment rules – Gabriel Wildau 7/15

  • “China’s two mobile payments giants, Alipay and Tencent, are poised to lose around $1bn in combined annual revenue to a new central bank requirement that third-party payment groups hold all customer funds in reserve.” 
  • “Chinese mobile payment transactions reached Rmb109tn ($16tn) last year, according to research firm Analysys Mason, as consumers switched to smartphones from cash for supermarkets, taxis, and payments to friends. The platforms are also increasingly used to purchase mutual funds, peer-to-peer loans and other wealth management products.” 
  • “Ant Financial’s Alipay and Tencent’s WeChat Pay dominate the industry, with market shares of 54% and 39% respectively in the first quarter. Ant Financial is the finance affiliate of Alibaba.” 
  • “Together the two groups control hundreds of billions of renminbi in customer funds that accumulate on their platforms when users receive payments but do not immediately transfer the funds to a bank account or other investment.” 
  • “Previously, third-party payment groups were permitted to invest customer funds, much as banks use deposits to make loans and other investments, even though unlike banks, the payment groups pay no interest to users.” 
  • “In January 2017, the People’s Bank of China announced that it was requiring third-party payment groups to keep 20% of customer deposits in a single, dedicated custodial account at a commercial bank and specified that this account would pay no interest.”
  • “In April, the ratio was increased to 50%, and last month, the central bank announced that it would raise the reserve requirement to 100% by next January. At that point, payment groups will earn zero interest on all customer funds.”
  • “The ostensible reason for the change is to prevent fraud and protect customers.” 
  • “Large players like Alipay and Tencent handled customer funds conservatively, but they were still able to earn significant revenue by depositing funds in interest-bearing accounts at commercial banks. Tencent earned Rmb3.9bn in interest income in 2017, or 1.7% of total revenues, according to its annual report.” 
  • “The PBoC’s balance sheet shows that ‘deposits of non-financial Institutions’ — a category that mainly includes payment companies — increased from nothing in May 2017 to Rmb501bn by the end of May. Before the implementation of reserve requirements, nearly all that money would have been generating interest for Alipay, Tencent, and their smaller rivals.” 
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November 3, 2017

Perspective

FT – Asian billionaires outnumber US ones for first time – Josef Stadler 11/1

FT – Global gender gap will take 100 years to close, says WEF study – Sarah Gordon 11/1

  • “The global gender gap will take 100 years to close at the current rate of change, according to new World Economic Forum research.”
  • “The WEF’s annual report into gender equality found increasing inequality at the workplace and in political representation, contributing to its calculation that it would take a century to reach overall gender parity compared with its estimate last year of 83 years.”
  • “According to the WEF’s metrics — which take into account disparities between men and women in health and education, as well as politics and the workplace — the world has closed 68% of the gap between total gender inequality and total equality.”
  • “This level is slightly worse than the figures for 2016 and 2015, when the gender gap was 68.3 and 68.1%, respectively, and represents the first widening of the gap since the WEF began such calculations 11 years ago.”
  • “Of the 142 countries covered in the 2017 report, the gender gap had increased in 82, with countries such as Kenya, Brazil, Japan and India regressing in terms of the number of women in ministerial roles, while countries including Mexico, South Africa and Spain made less progress towards offering women equal economic opportunities.”
  • “Iceland remains the world’s most gender-equal country, while the US dropped four places to 49 in the country rankings because, in particular, of a significant decline in the number of women holding ministerial positions. The US’s political empowerment measure is at its lowest level since 2007.”
  • “The top three countries in the index are all Nordic but among the non-European countries in the top ten are Rwanda in fourth place, Nicaragua in sixth place and the Philippines in tenth place.”
  • “The region of the world with the smallest gender gap is western Europe, which has closed 75% of the gap, followed by North America and eastern Europe.”
  • “The Middle East and north Africa is the lowest-ranked region, having closed the gap by an average of 60%, and is home to four of the world’s five lowest-ranking countries on female political empowerment: Kuwait, Lebanon, Qatar and Yemen.”

NYT – Trump’s Female Accusers Feel Forgotten. A Lawsuit May Change That. – Megan Twohey 11/1

Worthy Insights / Opinion Pieces / Advice

Economist – Donald Trump misreads Britain’s crime statistics 10/28

  • “Mr Trump is right to want to ‘keep America safe’ from such influences, even if he muddled his figures. Yet his approach is hardly achieving that. ‘Do you notice we are not having a gun debate right now? That’s because they used knives and a truck!’ he tweeted after the London Bridge attack. True enough. But whereas in the past five years 11 jihadists have launched fatal attacks in America, killing 82 of their 86 victims with bullets, during the same period nine jihadists in Britain, without access to guns, killed only 37, according to the Global Terrorism Database at the University of Maryland. America’s overall homicide rate is five times Britain’s. British crime statistics may well contain lessons for America, but not the ones Mr Trump claims.”

Economist – Apple should shrink its finance arm before it goes bananas – Schumpeter 10/28

  • “The world’s biggest firm has a financial arm half the size of Goldman Sachs.”

Markets / Economy

Economist – The future of online retailing is bright 10/26

  • “E-commerce will not obliterate all retail trade. Stores that are distinctive in one way or another—because they offer excellent service, for instance, or unique products—will remain. But consider the change already wrought in America, where e-commerce accounts for about one-tenth of retail spending. If that share were to rise to one-fifth, let alone one-third, the effects would be vast. In the longer run the impact of e-commerce will not be limited to the conventional retail industry it is increasingly replacing. It will also change how consumers spend their days, transform the landscape, disrupt workers’ lives and reshape governments’ view of corporate power.”
  • “For consumers, e-commerce has ushered in a golden age. They can choose from more products of better quality than ever and spend far less time and effort to get what they want. Once-complacent manufacturers must compete fiercely for their business. No wonder Amazon is the most popular company in America, according to a recent Harris poll.”
  • “As demand for physical shops ebbs, that for warehouses will surge. Citi estimates that 2.3bn square feet (214m square meters) of new warehousing—equivalent to about 20,000 football pitches—will be needed worldwide over the next 20 years.”
  • “The future for ailing stores is less certain. Many shops in big cities will remain, less as sales hubs than as showrooms. Rents for them will probably come down. Retail rents are already falling in America and in much of Asia, according to CBRE, a property agency.”
  • “An even hotter topic is the effect of all this on employment. So far the decline in traditional retail jobs in America seems to have been offset by a rise in warehousing work. Between 2007 and 2017 the number of retail jobs shrank by 140,000 while those in e-commerce and warehousing rose by about 400,000, according to Michael Mandel of the Progressive Policy Institute, a think-tank. But the net gain in jobs may be temporary. Stores are only now starting to close, and those that remain are just testing automation. More robots will be used in warehouses, too, as their costs come down and their picking skills improve.”
  • “Barring any dramatic intervention, however, the biggest e-commerce sites look set to get bigger. Amazon and Alibaba typify a new breed of conglomerate that benefits from network effects. The more shoppers firms can muster, the more sellers will flock to them, attracting yet more shoppers. These effects are turbocharged by the breadth of their businesses and the vast amount of data they generate. This does not mean they will dominate every sector or market, but their mere presence in an industry will reshape it. The question is not if they will keep upending retailing, manufacturing and logistics, but which industry and part of society they will change next.”

Real Estate

WSJ – World Record $5 Billion Skyscraper Sale a Tall Order – Jacky Wong 11/2

  • “Hong Kong’s richest person Li Ka-shing is selling the city’s center—literally.”
  • “The billionaire’s property firm CK Asset has agreed to sell its stake in The Center, a 73-storey skyscraper in Hong Kong’s central business district, for $5.15 billion, making it the world’s most expensive commercial building ever. The sale continues Mr. Li’s retreat from China and Hong Kong in recent years as he invests in sectors like utilities in developed markets such as Australia and the U.K. Last year, he sold a commercial property project in Shanghai for about $3 billion.”
  • “The major shareholder entity buying The Center is an oil company in which the Communist Party of China has an effective 15% stake.”

Finance

NYT – S.E.C. Warns Celebrities Endorsing Virtual Money – Nathaniel Popper 11/1

  • “The S.E.C. said in a statement released on Wednesday afternoon that celebrities who promoted coin offerings could be violating multiple laws, including antifraud regulations and rules that govern investment brokers.”