Monday, June 17th, 2019

 

US stocks mostly up as market awaits Fed, G20

NEW YORK, June 17 — Wall Street stocks were mostly higher early today as investors looked ahead to a Federal Reserve meeting this week and the Group of 20 summit later in the month. The Fed has shifted tone in recent weeks, acknowledging rising…


Facebook to unveil new cryptocurrency

LONDON, June 17 — Facebook is set tomorrow to unveil a bid to bring cryptocurrency payments into the mainstream, reportedly with the endorsement of governments and financial giants. The world’s biggest social network is expected to outline…


French billionaire Drahi to acquire Sotheby’s in US$3.7b deal

PARIS, June 17 —French telecoms and media mogul Patrick Drahi is acquiring Sotheby’s auction house, one of the world’s biggest art brokers, in a US$3.7 billion deal, the British-founded company announced Monday. Drahi, the billionaire founder…


Bank Negara: Financial Threat Intelligence Platform operational before year-end

KUALA LUMPUR: Bank Negara Malaysia (BNM) expects to operationalise the Financial Threat Intelligence Platform before the year-end as part of its efforts to strengthen platforms for collaboration in building a safe environment for innovation.

Governor Datuk Nor Shamsiah Mohd Yunus said the central bank, together with the financial industry, is in the process of establishing the platform.

“The platform will collate, analyse and disseminate real-time information on cyber threats and trends to strengthen the detective capabilities of the industry against such threats,” she said at the opening ceremony of MyFintech Week 2019 here today.

The central bank’s ongoing efforts to build an enabling yet safe environment for innovation also include building inter-operable infrastructures. This will start with open and fair access to a shared payment infrastructure for banks and non-banks alike.

“It is also important to recognise the need for other digital public infrastructures as key enablers to harness the full potential of fintech. These include having a national digital identity system, framework for open API (Open Application Programming Interface) and open banking, clear cloud policy and nationwide broadband connectivity.”

Nor Shamsiah said BNM is further differentiating its regulatory and supervisory approach to capture new sources and transmission of risks while allowing room for experimentation and for firms to develop economies of scale.

“An important objective will be minimising regulatory arbitrage, which can lead to risks building up in parts of the financial system that may be subject to differentiated regulations. We anticipate that this will call for a much more dynamic approach to regulation and supervision as well as better communication of regulatory developments going forward.”

Nor Shamsiah called for a financial system that is relevant, safe and socially responsible. For example, as the country moves towards becoming a digital economy, the financial sector must accord adequate support to innovative small and medium enterprises, such as those involved in e-commerce. Equally important, she said, this imperative is not only for banks, but extends to the other parts of the financial sector.

“Non-banks such as venture capital and private equity firms, as well as alternative financiers such as factoring and leasing companies, have an equal stake in this and should also play a more active role in financing the needs of businesses.”

Nor Shamsiah said the ability of finance to mobilise capital, create leverage and distribute risk allows it to be a powerful force for good. But excessive and unbridled risk-taking creates instability which is harmful not only for the particular firm, but the economy and society at large.

She said fintech holds enormous potential to enhance competition, increase productivity, address unfulfilled consumer demand and fundamentally change the way institutions provide financial services.

Similarly for Islamic finance, adoption of technology could present significant opportunities to reduce the cost of financial intermediation and expand access. For example, distributed ledger technology could enable automated execution of contracts through the use of digital protocols, or smart contracts, which can simplify complex syariah contractual processes.

International Monetary Fund financial counsellor and director Tobias Adrian said new technologies, such as blockchain, are at the core extremely safe, but around these safe technologies are business models that are potentially vulnerable.

“Risk managers of financial services companies always say the number one risks are cyber risks. For the moment, we have not seen a systemic failure such as the 2008 crisis due to cyber attracks, but the potential is there. The financial system is only as safe as the weakest link is safe. Cyber risk is certainly one considerations that we must ever mind from policy and business.”

He sees that over the next couple of years, there will be a debate among global regulatary standards for new technologies.

“In most countries, fintech for the moment is not yet systemic and so the regulators have not moved to global regulatory standards for the fintechs. In some countries, we do see large and sometimes systemic risks emerging from new technologies and fintech. Looking at the regulations for fintech around the world, on one hand we see fragmentation, on the other a race to the button in certain jurisdictions,” Adrian said during a panel session at the event.


Jet Airways lenders to go to bankruptcy court

MUMBAI, June 17 —  Lenders to crippled Jet Airways said today they would start bankruptcy court proceedings after failing to find someone to take over the Indian carrier. Once India’s biggest private airline, Jet stopped operating in April…


US businesses beg to be left off Trump’s tariff list

JUNE 17 — Hundreds of US businesses from local bridal shops to multi-billion dollar retailers have submitted comments to the US Trade Representative’s Office opposing President Donald Trump’s plan to slap tariffs on another US$300 billion of…


Huawei founder & CEO: US ban has hit us harder than expected

HONG KONG: China’s Huawei Technologies Co Ltd has taken a harder-than-expected hit from a US ban, the company’s founder and CEO Ren Zhengfei said, and slashed revenue expectations for the year.

Ren’s downbeat assessment that the ban will hit revenue by US$30 billion (RM125 billion), the first time Huawei has quantified the impact of the US action, comes as a surprise after weeks of defiant comments from company executives who maintained Huawei was technologically self-sufficient.

The United States has put Huawei on an export blacklist citing national security issues, barring US suppliers from selling to the world’s largest telecommunications equipment maker and No. 2 maker of smartphones, without special approval. However, the company has been granted a 90-day reprieve.

The firm has denied its products pose a security threat.

The ban has forced companies, including Alphabet Inc’s Google and British chip designer ARM to limit or cease their relationships with the Chinese company.

Huawei had not expected that US determination to “crack” the company would be “so strong and so pervasive”, Ren said, speaking at the company’s Shenzhen headquarters today.

“We did not expect they would attack us on so many aspects,” Ren said, adding he expects a revival in business in 2021.

“We cannot get components supply, cannot participate in many international organisations, cannot work closely with many universities, cannot use anything with US components, and cannot even establish connection with networks that use such components.”

Huawei, which turned in a revenue of 721.2 billion yuan (RM432.7 billion) last year, expects revenue of around US$100 billion this year and the next, Ren said. This compares to an initial target for a growth in 2019 to between US$125 billion and US$130 billion depending on foreign exchange fluctuations.

Ren was asked if he could confirm media reports citing anonymous sources which said its overseas smartphone sales had fallen by up to 40%. “Yes, (sales) have fallen 40%,” he said.

Ren gave no further details on the sales plunge but a Huawei spokeswoman later clarified that he was referring to a 40% fall from May to June in the wake of the US blacklist.

Ren added, however, that sales growth in China’s domestic market remained “very fast”.

Huawei was the world’s number two smartphone producer last year, ahead of Apple and behind South Korea’s Samsung, as well as the largest provider of telecom networking equipment.

Huawei has said it shipped a total of 206 million smartphones in 2018, about half in China and half overseas.

Ren, 74, said Huawei planned to cut production by US$30 billion over the next two years to ride out the storm. He did not specify which lines of business would be hit most.

Huawei earned just over US$100 billion in revenue in 2018, so a US$30 billion reduction would equate to about 30% of last year’s overall business.

But Ren, who compared Huawei to a damaged but still-flying aircraft, added that he expected the company to soon back on track. “In 2021, we will regain our vitality and (continue to) provide services to human society,” he said.

The Trump administration slapped sanctions on Huawei at a time when US-China trade talks hit rough waters, prompting assertions from China’s leaders about the country’s progress in achieving self-sufficiency in the key semiconductor business.

Huawei has also said it could roll out its Hongmeng operating system (OS), which is being tested, within nine months if needed, as its phones face being cut off from updates of Google’s Android OS in the wake of the ban.

But industry insiders have remained sceptical that Chinese chip makers can quickly meet the challenge of supplying Huawei’s needs and those of other domestic technology firms.

Two US tech experts, George Gilder and Nicholas Negroponte, also joined the session.

Negroponte, founder of the Massachusetts Institute of Technology Media Lab, said the US ban was a mistake.

“Our president has already said publicly that he would reconsider Huawei if we can make a trade deal. So clearly that is not about national security,” he said.

“It is about something else,” Negroponte added.

Huawei’s smartphone sales have, however, been hit by the uncertainty. Ren said the firm’s international smartphone shipments plunged 40%. While he did not give the time period, a spokesman clarified the CEO was referring to the past month.

Bloomberg reported on Sunday that Huawei was preparing for a 40-60% drop in international smartphone shipments.

The CEO, however, said Huawei will not cut research and development spending despite the expected hit from the ban to the company’s finances and would not have large-scale layoffs.


UK shares list in China in first for foreign firms

LONDON, June 17 — Britain and China began selling shares in each others’ companies today under a landmark deal, Britain’s Treasury announced, as London looks to remain a leading financial centre post-Brexit. Launch of the London-Shanghai Stock…


From sushi robots to farm drones: Japan Inc innovation thwarts BOJ’s efforts

TOKYO, June 17 — Bakeries in Japan deploy cash registers that ring up pastries by reading their shape and colour, construction robots scurry to lay out the next day’s building materials in the dead of night and machines churn out sushi rice…


Damansara Realty to develop RM771m Negri Sembilan project

PETALING JAYA: Damansara Realty Bhd is partnering state investment arm Menteri Besar Negri Sembilan (Incorporation) (MBNSI) to develop a RM771 million mixed development project in Seri Sendayan, Negri Sembilan.

The project will comprise shop lots, commercial podiums and residential units on 50 acres of commercial land, to be developed over 10 years. Phase 1 will begin in January 2020 upon finalisation of a joint development agreement with MBNSI, with completion targeted in 2022.

“We are very pleased to have MBNSI as our partner, on our first project in Negri Sembilan. Backed by our strong expertise in residential and township development and hospital planning, we’re confident that our combined strengths with MBNSI will deliver added advantages and growth to the state’s economy,” Damansara Realty group managing director Brian Iskandar Zulkarim said in a statement today.

The 50-acre parcel owned by MBNSI is located near the key growth areas of Seremban, Seremban 2, Sepang and Nilai, within drive range to Kuala Lumpur International Airport and klia2.

It is strategically connected to the North-South Expressway and the upcoming Maju Expressway 2 Project which is expected to be completed in 2020.