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ApprovedBusinessBusiness and finance

Jump-start

THE trajectory of Nintendo’s stock price in the past year has been worthy of the vaults and free-falls of a particularly exhilarating round of “Super Mario Bros”. The Japanese video-gaming firm’s hit title helped start the era of living-room gaming over three decades ago, when it introduced Mario, the pudgy Italian plumber, to millions. But recently Nintendo has failed to keep pace with the rise of smartphone gaming.

Many investors hoped that when the firm announced its first-ever game designed for smartphones in autumn 2015, Super Mario would be the one to make its long-awaited mobile debut. The company’s share price tumbled by 10% on the news that it was only Miitomo, a new chatting app. Then came “Pokémon Go”, a location-based game in which players catch virtual creatures on their screens while roaming the real world. Nintendo’s stock price more than doubled to over ¥32,000 ($318) within a few weeks of its release in July. Its market value briefly overtook that of Sony.

Then down again. Nintendo’s shares plummeted by the most since 1990 when the firm made it clear that it had less of a stake in “Pokémon Go”, which…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Cornering the market

IN ARCHITECTURE, a cornerstone is laid where two walls meet, serving as a single point from which the building takes its shape. No one constructs an entire building out of these weighty slabs. So it is meant to be in finance. To perk up interest in initial public offerings (IPOs), companies sometimes invite in “cornerstone investors”: a small number of big investors who promise to buy a stake and hold it for a while, a vote of confidence from which the IPO takes shape. Odd, then, to see a trend in Hong Kong of IPOs constructed almost entirely out of these weighty pledges.

The latest is the Postal Savings Bank of China, a lender with 500m retail customers. Its shares started trading on September 28th, capping a $7.4 billion IPO, the world’s biggest in two years. A share sale of that size would normally dominate headlines in the financial press. But this one passed quietly, and for good reason. Just a small portion of its shares were actually sold to the public. Nearly 80% went to cornerstone investors, just shy of a record. 

Cornerstones, still rare in other markets, have long been a staple in Hong…Continue reading

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ApprovedBusinessBusiness and finance

Blot on the landscape

IT TOOK a while to join the dots. On the morning of September 13th owners of several types of HP OfficeJet, a printer designed for the home and for smaller offices that is manufactured by HP Inc, an American seller of printers and computers, switched on their machines and found them not quite the same. The night before they had been able to print with any sort of ink cartridge. Since that day only machines containing original HP cartridges have churned out copies. The cause, enraged customers came to realise, was the deployment by HP of a firmware update that blocks rival ink.

HP had reason to act as it did. Though its printers business remains profitable, revenues fell by 14% in the year to July. More-paperless offices take most of the blame: printer shipments have tumbled by a fifth since 2007. But rivals in the market for ink squeeze margins. Non-original cartridges now make up about 26% of the trade in Europe, the Middle East and Africa, and 16% in North America.

Dirt-cheap “clone” cartridges, mostly from China, have spread over the past decade. HP’s move obstructs fakes, which do break copyright law (and the odd printer). Also affected are lawful…Continue reading

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ApprovedBusinessBusiness and finance

Not always in clusters

IRELAND’S Atlantic coast is sheep-rearing and pilgrim country. The drive to Tuam, a modest town of 9,550 residents, reveals mostly lush fields, low hills, stone walls and mist. Yet this unlikely spot has a hi-tech industrial side. Off Tuam’s main road a bunch of warehouses contains some 400 software engineers, researchers and artificial-intelligence experts, drawn from 35 countries. Next door is a manufacturing plant employing 650 people churning out circuit boards, cameras and sensors for driverless cars.

The set-up in Tuam is operated by Valeo, a French car-parts firm with a market value of €12 billion ($13.4 billion), which brought in €500m in sales last year from producing 100m such products globally. Tuam is “our biggest R&D centre for surround cameras, with huge production capacity”, says Jacques Aschenbroich, the firm’s CEO. Tuam has also become Valeo’s global mother plant, overseeing its sensor factories in Hungary, Mexico and China.

What possessed the French firm to keep such operations in a spot so far from customers such as BMW, Range Rover and Google, away from big pools of labour, and a lengthy drive from Dublin? History is one…Continue reading

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ApprovedBusinessBusiness and finance

Doesn’t ad up

They drink but you still can’t trust them

ADVERTISING WEEK, an annual stretch of industry meetings that began on September 26th in New York, is usually defined by schmoozing and self-congratulation. This year’s event has been marred by suspicion. In the week leading up to it, Dentsu Aegis, a big agency, admitted overbilling by its digital-ad division in Japan; and Facebook, a tech giant, said it had inflated the average time people spent watching video ads.

Such revelations have reinforced existing concerns among advertisers that they are having the wool pulled over their eyes when it comes to online advertisements. At an Advertising Week panel on “trust” on September 28th, Bob Liodice, the chief executive of the Association of National Advertisers (ANA), spoke of broad doubts among his members.

It was not meant to be like this. Half of an advertiser’s budget is wasted, says the industry’s favourite truism, but no one knows which half. Digital ads were supposed to help. Cookies and other tags would direct the right advertisements to the right people, based on their activity online. Digital tools would…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Slip slidin’ away

INVESTORS in Mexico were among those cheered by Hillary Clinton’s strong performance in the American presidential debate on September 26th. The country’s ailing peso has lost 12% of its value against the dollar this year. But either side of Mrs Clinton’s first joust with Donald Trump it climbed by 2%.

The link between the peso and Mr Trump’s chances of becoming president seems clear enough. The Republican has talked loudly about withdrawing from the North American Free Trade Agreement, raising tariffs on Mexican imports and taxing remittances. How realistic any of this is, and what effect it would have on the Mexican economy, is unclear. But his hawkish trade policy gives investors plenty to worry about.

The peso is a highly liquid currency frequently used to hedge against exposure to global risk. It fell sharply after Britons voted in June to leave the EU, even though Mexico and Britain do little trade. It is now being used as a hedge against the possible turmoil of a Trump presidency. “The peso is seen as the purest proxy for the American election,” says Andrés Jaime of Barclays Capital.

The peso’s…Continue reading

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ApprovedBusinessBusiness and finance

Prick up your ears

The dog heard my homework

WHEN Apple in early September introduced a new iPhone without a jack for headphones, together with pricey wireless earbuds that you speak into, it did not take long for mocking videos to appear online. In one, an enterprising soul reveals a “secret hack” to get back the jack: he drills a hole into a new iPhone. In another video, a fake commercial, the AirPods, as the untethered headphones are called, keep popping out of users’ ears and are eaten by a dog (pictured).

Whatever one thinks of Apple’s AirPods, which cost $159 a pair and are expected to go on sale in late October, they stand not just for one, but two emerging markets in personal technology. One is called “hearables”—meaning “smart” ear devices. The other is “smart speakers”, like Amazon’s popular Echo product, which sits in people’s homes and can respond to voice commands. Both gadgets herald a world in which people communicate with machines by speaking, much like in the movie “2001: A Space Odyssey”, in which the crew talked to HAL, a chillingly sentient computer.

Untethered headphones have been…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Warping the loom

Closed outcry

THE controversies that beset America’s financial markets extend to even the most basic activities, such as trading a security. What was once the preserve of a stockmarket duopoly of the New York Stock Exchange and NASDAQ, and a handful of narrow commodity markets, is now a bewilderingly complex tapestry. It is also subject to incessant reweaving: take this week’s announcement that BATS Global Markets, an operator of four stock exchanges, will be sold to the CBOE, an options exchange, for $3.2 billion.

BATS was founded in 2005 in Kansas by a man whose background was in trading shares from his bedroom. In 2012 it famously botched its first attempt to list its own shares, completing the job only this year. The price it now commands reflects its success in expanding to become America’s second-largest equity market, with a growing presence in options. It brings to the relatively long-established CBOE, founded in 1973, what is seen to be better, low-cost technology. The CBOE said that BATS will also play a role in developing new “tradable products and services”.

This is a crowded field. More than a dozen exchanges deal…Continue reading

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Business and financeGulliver

Donald Trump is right: America’s airports are awful

FACT-CHECKERS had a field day with Donald Trump’s Monday night debate performance, finding fault with his claims on a wide array of subjects, from Barack Obama’s birthplace to whether he has denied climate change. But one statement he made largely evaded scrutiny. “Our airports are like from a third-world country,” he said during a brief exchange on American infrastructure, specifically mentioning New York’s three international airports and Los Angeles International Airport.

More Trump hyperbole? Actually, no. This might be a rare Trump understatement.

Skytrax releases an annual ranking of the world’s top 100 airports. This year’s list puts five airports in developing countries ahead of the top American airport, Denver International, which lies in 28th place. (“Third-world country” is a dated and loaded term, so I am referring…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Fat help

BACK in Syria food was cheap, remembers Maya, as she sits cross-legged in the small flat she shares with her husband, their five children and another couple in Amman, Jordan’s capital. When she first arrived here, she had to cut back. But now, with her husband working and 20 dinars ($28) a month from the World Food Programme (WFP), a UN agency, she can buy the children a treat like fish or chicken.

Scattered across Turkey, Lebanon and Jordan are 4.4m registered Syrian refugees, 90% of whom, like Maya, live outside formal refugee camps. This makes it a logistical nightmare to get the traditional food aid to them—sacks of rice and pulses. The WFP, the world’s largest food-aid provider, has adapted: a decade ago, it doled out aid only in kind. Now just over a quarter of its aid globally is cash-based. Every month Maya gets a text message alerting her that her special debit card, which she can use only to buy food, has been topped up. The WFP reaches around 1.1m refugees like this in Jordan, Lebanon and Turkey.

This week saw the launch in neighbouring Turkey of the largest-ever humanitarian-aid project financed by the EU: a whopping €348m…Continue reading

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ApprovedBusinessBusiness and finance

Mixed messages

LI KEQIANG, China’s prime minister, made a big promise to the world’s leading businessmen at the World Economic Forum’s annual gathering in Davos in January 2015. It was that China would introduce a new legal regime for foreign investment that would “treat Chinese and foreign companies as equals”. Its government has duly unveiled a set of revisions to its foreign-investment laws that come into force on October 1st. The standing committee of the National People’s Congress adopted the laws earlier this month and bureaucrats have drafted detailed rules.

The revisions, and the extent to which they fulfil Mr Li’s grand pledge, are an important indicator of how serious the government is about pursuing other initiatives to liberalise rules on foreign investment. China is currently negotiating a bilateral investment treaty (BIT) with the United States. American businesses hope it will lead to greater market access. A BIT with Europe is scheduled to follow.

How, then, do the changes measure up? On the face of it, they involve a welcome shift away from the current regime, which obliges foreign firms to win numerous approvals and is both…Continue reading

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ApprovedBusinessBusiness and finance

Mixed messages

LI KEQIANG, China’s prime minister, made a big promise to the world’s leading businessmen at the World Economic Forum’s annual gathering in Davos in January 2015. It was that China would introduce a new legal regime for foreign investment that would “treat Chinese and foreign companies as equals”. Its government has duly unveiled a set of revisions to its foreign-investment laws that come into force on October 1st. The standing committee of the National People’s Congress adopted the laws earlier this month and bureaucrats have drafted detailed rules.

The revisions, and the extent to which they fulfil Mr Li’s grand pledge, are an important indicator of how serious the government is about pursuing other initiatives to liberalise rules on foreign investment. China is currently negotiating a bilateral investment treaty (BIT) with the United States. American businesses hope it will lead to greater market access. A BIT with Europe is scheduled to follow.

How, then, do the changes measure up? On the face of it, they involve a welcome shift away from the current regime, which obliges foreign firms to win numerous approvals and is both…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

The little cartel that could

DOES OPEC matter? Those who dismiss the significance of the Organisation of Petroleum Exporting Countries, a producers’ cartel, cite at least three reasons to think not. Its 14 members cannot agree among themselves, not least because they include bitter regional rivals like Iran and Saudi Arabia. Even if the cartel could agree, its pacts would not work, because so much crude oil is now produced outside the club, in the hinterlands of Siberia or the fracking fields of America. And if OPEC’s agreements will not work, its members will have no reason to stick to them.

Those who think OPEC still matters can now make one powerful counterargument: Algiers 2016. On September 28th OPEC members gathered there for an informal meeting and agreed to cut output for the first time since 2008. The agreed cut was modest, limiting production to 32.5m-33m barrels per day, which is between 0.7% and 2.2% below current output. Saudi Arabia’s production was likely to fall anyway as the winter approaches. The agreement was also vague. Members will wait until their formal meeting in November to settle how the overall cut will be distributed among them….Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

The little cartel that could

DOES OPEC matter? Those who dismiss the significance of the Organisation of Petroleum Exporting Countries, a producers’ cartel, cite at least three reasons to think not. Its 14 members cannot agree among themselves, not least because they include bitter regional rivals like Iran and Saudi Arabia. Even if the cartel could agree, its pacts would not work, because so much crude oil is now produced outside the club, in the hinterlands of Siberia or the fracking fields of America. And if OPEC’s agreements will not work, its members will have no reason to stick to them.

Those who think OPEC still matters can now make one powerful counterargument: Algiers 2016. On September 28th OPEC members gathered there for an informal meeting and agreed to cut output for the first time since 2008. The agreed cut was modest, limiting production to 32.5m-33m barrels per day, which is between 0.7% and 2.2% below current output. Saudi Arabia’s production was likely to fall anyway as the winter approaches. The agreement was also vague. Members will wait until their formal meeting in November to settle how the overall cut will be distributed among them….Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Hard bargain

ROBERTO AZEVEDO, the head of the World Trade Organisation (WTO), is not the architect of grand global trade deals that his title suggests. Sitting in his Geneva headquarters, he remembers only too well how the WTO’s Doha round collapsed under the weight of its own ambition. “Let’s do the trade deals that are in reach,” he says. Overambition is not the only problem. “Anti-trade rhetoric is catchy,” sighs Mr Azevedo. So catchy that it has infected deals beyond the WTO. The world’s most trumpeted regional trade deals are drifting out of grasp just when pep is most needed: on September 27th the WTO forecast that for the first time in 15 years, global trade growth this year, at just 1.7%, would not keep pace with global GDP.

The Trans-Pacific Partnership (TPP), a deal between America, Japan and ten other countries around the Pacific, was signed in February but is now faltering. On September 26th Hillary Clinton and Donald Trump, the Democratic and Republican nominees for the American presidency, fought to distance themselves from it in their first televised presidential debate. Mr Trump labelled the deal “almost as bad as NAFTA” (the North…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Hard bargain

ROBERTO AZEVEDO, the head of the World Trade Organisation (WTO), is not the architect of grand global trade deals that his title suggests. Sitting in his Geneva headquarters, he remembers only too well how the WTO’s Doha round collapsed under the weight of its own ambition. “Let’s do the trade deals that are in reach,” he says. Overambition is not the only problem. “Anti-trade rhetoric is catchy,” sighs Mr Azevedo. So catchy that it has infected deals beyond the WTO. The world’s most trumpeted regional trade deals are drifting out of grasp just when pep is most needed: on September 27th the WTO forecast that for the first time in 15 years, global trade growth this year, at just 1.7%, would not keep pace with global GDP.

The Trans-Pacific Partnership (TPP), a deal between America, Japan and ten other countries around the Pacific, was signed in February but is now faltering. On September 26th Hillary Clinton and Donald Trump, the Democratic and Republican nominees for the American presidency, fought to distance themselves from it in their first televised presidential debate. Mr Trump labelled the deal “almost as bad as NAFTA” (the North…Continue reading

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Business and financeGulliver

Another carrier experiments with child-free zones on planes

A FEW years ago a spate of airlines introduced child-free areas on their planes, in order to appeal to business travellers. Now another carrier has joined the list. This week, IndiGo, an Indian operator, said it was designating rows 1-4 and 11-14 (which includes the exit row) as “quiet zones”, out of bounds to children younger than 12. According to the International Business Times, the rows have extra leg space, better armrests and seat cushioning. It goes without saying that they also cost more.

It seems a peculiarly Asian phenomenon. Other airlines to have tested the concept include Scoot, a Singaporean budget carrier and AirAsia X of Malaysia. Back in 2013, Skift, a travel website, polled the big American airlines and found no appetite among them to follow suit. Although it must be said the idea has gained more traction inside The Economist’s editorial meetings. Indeed, in 1998, we wrote a Continue reading

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Business and financeButtonwood's notebook

Interpreting the electorate’s wishes

ANYONE who has lost a close relative will have learned to beware the phrase “It’s what he/she would have wanted”. The deceased, alas, are no longer around to express their wishes. The temptation is to assume that one’s own desires coincide with those of the departed.

When it comes to the views of the electorate, politicians (and newspapers) easily assume that they are in tune with the real desires of the voters. Britain’s recent referendum on membership of the European Union is a case in point. The question was:

Should the United Kingdom remain a member of the European Union or leave the European Union?

That was it. There were no subsidiary questions about how the United Kingdom should leave. But in the wake of the Leave vote, there are plenty of commentators ready to say that the vote “clearly” means Britons have voted to leave the single market, stop freedom of movement etc. Jeremy Corbyn, the Labour leader, has been accused of living in “la-la land” for not realising that free movement had to stop.

But is that what people voted for? Daniel Hannan, a leading eurosceptic MEP, argued Continue reading

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Business and financeGulliver

American carriers are much better at dealing with Twitter complaints than European ones

FRUSTRATED by long wait times on the phone and inadequate responses at airport counters, travellers are increasingly turning to Twitter to lodge complaints with airlines. But before angrily whipping out an iPad while stuck in a departure lounge, it is worth considering one important factor: the continent on which the offending carrier is based.

For those travelling on an American airline, the chances of a fast response are good—much faster, in some cases, than over the phone or in person. But for those using a European carrier, it may be better to stick to the old-fashioned ways of demanding service.

A new report from Conversocial, a social-media customer-service firm, looks at how responsive airlines are to tweets. And while there are stark discrepancies among individual airlines, the most striking thing is the chasm between the two sides of the Atlantic Ocean.

If you tweet at a North American airline, you are likely to get a response in one hour and five minutes on average, according to the report. And a European airline? Be prepared to wait more than three times that…Continue reading

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ApprovedBusinessBusiness and finance

A well-loved monster takes Japan’s box office by storm once again

NOW a battle-scarred 62, Japan’s king of monsters refuses to die. Godzilla is again lumbering across the big screen, menacing Tokyo with his radioactive breath and walloping attendance records. His 29th cinematic appearance, “Shin Gojira” (“Godzilla Resurgence”) has drawn over 4m people and earned ¥6.6 billion ($65m) making it the most-watched film in Japan this year. Fans in America will be able to see the oversized reptile’s latest outing from next month, starting with a premiere in Los Angeles on October 3rd.

Godzilla has mined box-office gold since the early 1950s, partly by channelling the anxieties of successive eras. Initially a repository of fears about the American nuclear bombs that had incinerated Hiroshima and Nagasaki in 1945, he morphed into a family favourite during the optimistic post-war decades, periodically rising from Tokyo Bay to smite external threats.

From the 1980s, amid unease about the suddenness of Japan’s runaway economic growth and the ostentatious displays of wealth that accompanied it, a darker-themed (and much taller) Godzilla challenged the wits of dithering bureaucrats and smashed his way through Tokyo’s new office…Continue reading

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Business and financeGulliver

American flyers have paid billions to check in luggage. Could they have put their money to better use?

SOME frequent travellers have the sense that all the money they have spent on airline baggage fees down the years could have been put to a better use. So allow Gulliver to suggest one: buying an airline.

Thrillist has crunched the numbers and concluded that in the approximately nine years since checked-bag fees started becoming common, American flyers have spent enough putting things in the hold of planes to purchase the country’s most valuable airline.

According to figures from the Department of Transportation, from 2007 through the first quarter of 2016, domestic airlines have collected a total of $26.2 billion in checked-bag fees. That is just shy of the $27.8 billion market capitalisation of Delta Air Lines, as of earlier this week. It is safe to assume that the money splurged in the meantime will have more than made up this shortfall.

Of course, baggage fees are not just an additional charge that airlines skim off the top. If they are functioning as they should, they are an incentive to stop people flying…Continue reading

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ApprovedBusinessBusiness and finance

Split ends

LAST month Intercontinental Exchange (ICE), an American firm that owns financial exchanges, said it would do a stock split, dividing each of its existing shares into five new ones. The split won’t increase ICE’s underlying value—slicing a pizza three or four times doesn’t make it bigger. But an old Wall Street rule of thumb holds that more shares with a lower price means a broader investor base. Retail investors can better afford a $60 stock than a $280 one.

That argument ought to resonate strongly. Share prices are near an all-time high. The average cost to buy a single share for a member of the S&P 500 index is now $88. But ICE is unusual. The incidence of stock splits is near an all-time low. In the past decade only 3% of S&P 500 firms each year split their shares, compared with 13% in the 1980s.

Several factors explain the decline. The more companies finance themselves with debt, and the less equity they raise, the less they care about whether their shares are bite-sized. Today equity raising in America is at subdued levels.   

The proportion of the American stockmarket that is owned by large institutions—as opposed to…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Waking up

Jessica, a unicorn in nappies?

IGNORE the record share prices and what that would seem to suggest about the year unfolding on Wall Street. Activity has been so slow that many bankers off for their August holidays wondered if there would be any reason to return. That has abruptly changed. “Every product we have is busier post-Labour Day than pre-,” says J.D. Moriarty, of Bank of America Merrill Lynch, referring to the holiday on September 5th. Eighteen companies plan to list this month and a further 100 are getting ready, according to Renaissance Capital, a research firm.

Normally, a soaring stockmarket would be a fillip for all corners of finance. But until the holiday, the only consistently busy area this year had been the debt market. Low rates led borrowers to issue as many new bonds and refinance as many old ones as they could.

Elsewhere: no animal spirits. Investors seemed tired of punting or lacked funds. Their brokers were scared to encourage business because of a vastly complex new regulation, known as the “fiduciary rule”, introduced in April. Trading volumes—and commission income—were…Continue reading

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ApprovedBusinessBusiness and finance

Who’s self-driving your car?

But can it fly?

WITH its successful test of robo-taxis on the streets of Pittsburgh last week, Uber has dominated recent headlines on autonomous vehicles. But behind the scenes three groups—technology giants such as Uber, carmakers and a whole fleet of autoparts suppliers—are in a tight race. Each is vying to develop the hardware and software that make up the complex guts of a self-driving vehicle.

A couple of years ago tech firms appeared well ahead in this battle. But, Uber aside, they have dabbed the brakes of late. The recent departure from Google of Chris Urmson, the company’s figurehead for autonomous vehicles and the man who once promised it would put self-driving cars on the road by 2017, is a significant reversal. The recent slimming of the team at Apple that is devoted to building an autonomous electric car, also shows that tech firms are not having it all their own way (though Apple’s possible tie-up with McLaren, a British maker of sports cars and Formula 1 racing team, would be one way to put its carmaking ambitions back on track).

Carmakers, meanwhile, are making more of the running after a…Continue reading

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ApprovedBusinessBusiness and finance

Welding bells

Plenty more where that came from

FEW industries are in worse shape than China’s steel sector. Years of over-investment and a cooling economy have resulted in vast excess supply. Crude steel-making capacity reached a record level of 1.2 billion tonnes at the end of 2015. China’s steelmakers lost some $10 billion last year, with more than 90% of those losses coming from state-owned firms.

This is the background to the news on September 20th that two state-run steel firms, Baosteel and Wuhan Iron and Steel, are to be joined. The two firms are far from being equals. Wuhan is in financial distress; Baosteel, which brings in three times as much revenue and is better-run to boot, has probably been forced into the deal. The bigger firm’s listed arm will issue shares and absorb Wuhan’s publicly-traded division. The parent companies are also expected to merge. The resulting colossus, which the Chinese media has dubbed Baowu, will have over $100 billion in assets. It will produce 60m tonnes of steel a year, making it second only to Luxembourg’s ArcelorMittal.

The reason to cheer is that this deal might spark a wave…Continue reading

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ApprovedBusinessBusiness and finance

The freaks are coming

PowerPoint slide, Berlin style

ROCKET INTERNET has just moved into a splendid, red building in central Berlin, around the corner from Checkpoint Charlie. The lease runs for the next 15 years, a signal of intent from a firm that brags of becoming the biggest online conglomerate outside America and China. Inside, everything is new. Alexander Kudlich, the managing director, jokes he should remove his shoes before stepping on a just-laid, thick, grey carpet in the boardroom.

The timing is awkward. Just as staff entered the building, in early September, Rocket warned about its financial performance this year. It had losses of €617m (just under $700m) in the first six months; the full details came in earnings announced this week. Few are surprised that Rocket, which went public in 2014, had to lower the values of some of its creations. Kinnevik, an investment firm with shares in Rocket that had some of the same holdings, had already done so.

Mr Kudlich claims “we are more bullish than five years ago”. But Rocket is finding life tougher than before its IPO. Its shares are down by almost half in the past year, leaving…Continue reading

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ApprovedBusinessBusiness and finance

Mistry’s elephant

CHIEF executives in the West share some familiar gripes: quarterly-results-obsessed analysts who make it impossible to think about the long term; activists pressing for change before investments come to fruition; and sluggish economic growth. How envious they must be of Cyrus Mistry, the boss of the Tata Group, India’s largest conglomerate. Its central firm, Tata Sons, is unlisted. Tata Trusts, the charities that own two-thirds of Tata Sons, think in terms of decades, not years. India is the world’s fastest-growing large economy. Given such favourable circumstances, Mr Mistry’s peers might well look at the uninspiring financial performance of much of his group since he took over in December 2012 and conclude they could do better.

The firm is rightly admired at home. Founded in 1868, it has long embodied the notion of corporate social responsibility. Employing nearly 700,000 people, it operates in a wide array of industries, among them table salt, IT, steel, watches, power plants, leather goods, a slew of shopping chains, tea, trucks and buses, undersea cables, mobile telephony and luxury cars and hotels. It has not relied on political favours to…Continue reading

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