David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Chevron Buys Anadarko in $33 Billion Bet on Shale Oil, LNG

    This article by By Kimberly Yuen, Javier Blas and Kelly Gilblom for Bloomberg may be of interest to subscribers. Here is a section:

    "Chevron’s deal for Anadarko escalates the race with Exxon Mobil for the Permian and delivery of synergies and efficiencies will be critical in narrowing or overtaking its peer’s returns." --Fernando Valle, industry analyst, and Jonathan Mardini, associate analyst

    The deal may put pressure on Shell to seek assets in the Permian, where the Anglo-Dutch company has said it wants to grow. Oil executives and bankers had in the past speculated that Shell may buy Anadarko because they have adjacent acreage. Shell has in the past several months held talks with Endeavor Energy Resources LP, the largest privately-owned company in the Permian that bankers say might be valued at $10 billion to $15 billion.

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    PBOC Support to Stay Even Amid Credit Upswing

    This article by Chang Shu and David Qu from Bloomberg Economics may be of interest to subscribers. Here is a section:

    The robust rate of credit expansion this year doesn’t rule out continued monetary easing. We think that’s still needed to help the economy find a solid footing, though the focus should increasingly shift to targeted measures.

    Broad-based easing is still needed to provide liquidity to the banking sector so it can sustain the expansion in credit. The need is higher in 1H and we continue to see the possibility of reductions in the reserve requirement ratio, with the first potentially coming as early as in April.

    There’s less of a necessity for an interest rate cut, in our view.

    Targeted measures are important for channeling funding to sectors in greater need of funding -- small, private firms -- to lower their effective borrowing costs.

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    Gold and Other Metals Decline on 'Surprise' U.S. Data

    This article by Marvin G. Perez for Bloomberg may be of interest to subscribers. Here is a section:

    Most measures of the PPI are a bit stronger than expected, as well as jobless claims,” Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets, says in phone interview  With the “surprise positive economic data, especially the PPI, if you are thinking that the Fed’s next move is going to be a rate cut, this moves that further away” “It will probably keep the Fed neutral for longer”

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    Made-in-India iPhone X from July 2019

    This article by Bharani Vaitheesvaran for ETtech may be of interest to subscribers. Here is a section:

    Sustained increase in manufacturing will depend on, among other factors, the continuation of a favourable incentive regime into the next government, the official said. Mails sent to Foxconn and Apple seeking comment remained unanswered.

    The company began its India manufacturing journey through another Taiwanese company Wistron, which had started with the iPhone SE from its factory near Bengaluru two years ago and later advanced to iPhone 6S model. Wistron now makes iPhone 7, a sign analysts foresee as a bump-up in local manufacture of multinational technology companies keen on the Indian market. Around 290 million smartphones were assembled in India in 2018 up from 58 million in 2014, according to data from the Indian Cellular and Electronics Association.

    "In the short-term, the Differential Duty and the Phased Manufacturing Programme worked as far as import substitution is concerned. Now the challenge is to move from 290 million to 500 million phones and then to one billion by 2025," Pankaj Mohindroo, National president for ICEA, said.

    "The National Policy on Electronics, 2019, gives a broad framework, but we will have to put a robust action plan behind it, which will enable exports..."

    The ICEA has as its members brands such as Apple, Xiaomi, Vivo, Oppo, and manufacturers such as Flex and Foxconn.

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    Bezos Just Confirmed Amazon's Growth Is Slowing

    This article by Shira Ovide and Sarah Halzack for Bloomberg may be of interest to subscribers. Here is a section:

    But there’s a dark cloud in Amazon’s figure. The growth of Amazon’s total merchandise sales slowed considerably last year, according to Bloomberg Opinion calculations based on Bezos’s disclosures. This figure is not the first sign than Amazon’s retail juggernaut may have slipped a bit. 

    In 2018, Amazon’s nearly $300 billion in GMV was about a 19 percent jump from the prior year. That was notably slower than the rates of increase of 24 percent and 27 percent, respectively, in 2017 and 2016. 

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    Kids Love These YouTube Channels. Who Creates Them Is a Mystery

    This article by Yoree Koh and Betsy Morris for the Wall Street Journal may be of interest to subscribers. Here is a section:

    Some parents say they find certain YouTube content disturbingly effective in enrapturing young children.

    Johanna Peyton, an Austin, Texas, mother of three, said she initially welcomed YouTube as a distraction for her children—until her daughter, then nearly 2 years old, became fascinated with videos of adults and children opening eggs with surprises inside.

    “It was disturbing to me that somebody was working so hard on the videos—intricately editing them and using so many eggs. I remember thinking, ‘What was their agenda?’ ” Ms. Peyton said. “It just felt odd that somebody would be doing this.” She no longer allows her kids to watch YouTube.

    The CoCoMelon channel joined YouTube on Sept. 1, 2006, according to its “about” page, which says its goal is “to make learning a fun and enjoyable experience for kids by creating beautiful 3D animation, educational lyrics, and infectious, toe-tapping music.”

    The business took off last year, when its view count jumped to 1.96 billion views in October 2018 compared with 123 million views a year earlier. It now has 43 million subscribers, according to Social Blade.

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    Africa's Amazon Set for New York IPO as Online Retail Takes Off

    The company, which has headquarters in Berlin and got early funding from German startup incubator Rocket Internet SE, isn’t profitable. Jumia reported a loss for 2018 of about 170 million euros and has warned prospective IPO investors that it has accumulated losses of 862 million euros since its inception and relies on external financing to compensate for negative cash flow.

    Still, investors tend to give e-commerce companies leeway because customer growth and market share are seen as more important, according to Seema Shah, a consumer analyst at Bloomberg Intelligence in New York. While the company competes with the likes of Amazon’s Souq.com and Naspers Ltd. In individual markets, Jumia has said it believes it’s the only pan-African e-commerce site.

    “If an online retailer develops a name and offers a good consumer experience, people feel safer to use it,” Shah said. For the IPO to be successful, investors will have to see Jumia as “a chance to play in Africa with less risk.”

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