Thursday, August 9, 2018

Asia Stocks Face Mixed Open; Dollar Strengthens: Markets Wrap

The Chinese Smartphone Upstarts Taking on Apple and Samsung

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- Apple and Samsung’s domination of the smartphone world is being challenged like never before, with Chinese companies muscling in with cheaper and just as innovative devices.

In an ominous sign for the tech titans -- whose iPhone and Galaxy handsets have had a stranglehold on the almost $500 billion market for years -- China’s Huawei Technologies Co. has unseated Apple to become the world’s second-largest smartphone maker. Now, it’s setting its sights on No. 1 Samsung, which has seen disappointing profits as Chinese phones gain share of a market that looks increasingly like it has peaked.

And others are not far behind. Here are the players -- and phones -- to watch:

Huawei: The Big Threat

Based in the southern Chinese tech hub of Shenzhen, Huawei is plowing cash into bolstering its phones’ camera capabilities in a quest to dominate. Its flagship P20 Pro boasts a three-lens camera that was co-engineered with the 104-year-old German camera maker Leica. Huawei also offers a shiny, rainbow-effect handset finish known as Twilight, differentiating their product from the many monotone smartphones on the market.

Like most of the Chinese devices, the P20 Pro is also cheaper. It retails for about $800 in China, compared with the $1,000-plus cost of an iPhone X. Samsung’s Galaxy Note 9 -- which debuts on Thursday in New York -- is expected to be priced at at least $1,200, according to reports in the tech media. Active in more than 170 countries, Huawei has managed to outstrip Apple on smartphone shipments despite being almost entirely absent from the U.S., where it’s failed to strike a distribution deal amid security concerns.

More: Huawei Declares Ambition to be No. 1 After Dethroning Apple

Xiaomi: Bargain-Hunter’s Pick

Beijing-based Xiaomi hasn’t been shy about aping Apple in everything from the appearance of its phones to the look of its flagship stores. Like Apple, Xiaomi has tried to create its own ecosystem, operating its own app stores and music-streaming apps. In recent years, though, Apple has trailed the Chinese company on some design features, with Xiaomi shifting to a full-display screen long before the smartphone titan.

Xiaomi phones are also a lot cheaper than the big names. Its latest model -- the MIX 2S -- sells for around $500, has a dual camera, a ceramic body and what’s known as a bezel-less (read, full) screen. The company has enlisted Kris Wu -- a Chinese-Canadian actor often compared to Justin Bieber -- to market its wares.

More: Xiaomi’s CEO Disses the iPhone in Unveiling $500 Marquee Device

Transsion/Tecno: Africa’s Phone

Consumers in the U.S., Europe -- and even China -- would be lucky to have seen a Transsion phone, but in Africa, the Shenzhen-based manufacturer is king. Founded in 2006, the company made an early bet on the continent’s nascent smartphone market, setting up its first assembly line in Ethiopia. It’s since grown into Africa’s leading mobile device maker, with three in 10 phones sold there from Transsion’s brand Tecno Mobile.

Transsion’s Spark 2 phone has a full display, a face-ID unlocking system and a high-quality camera, but it only retails for about $100 on Jumia, the African online commerce site. Transsion leapfrogged Samsung and Apple to become the largest player in Africa, shipping nearly 12 million smartphones in the first three quarters of last year, according to researcher Canalys.

More: A Chinese Phone Maker Took Over Africa, for Better and Worse

Oppo: The Screen King

Nipping at the heels of Huawei and Xiaomi in its home market, Oppo started life as a manufacturer of MP3 and DVD players before segueing into China’s cutthroat smartphone market. Now it’s got its sights on the U.K. and Europe.

After making their name in China and India with cheaper handsets for first-time smartphone users, Oppo has gone upmarket for its European debut, launching in June its Find X phone for 999 euros ($1,154) in Paris. What stands out with this phone is the screen, which takes up 93.8 percent of the body, compared with 81.5 percent for the iPhone X. Oppo phone cameras are also highly rated, with its sharp, front-facing cameras popular among selfie-loving millennials.

More: Secretive Billionaire Reveals How He Toppled Apple in China

Vivo: Edge on Sound

Oppo and Vivo may be smartphone competitors, but they were both co-founded by serial entrepreneur Duan Yongping. The companies made a splash by selling high-quality phones with good battery life at a cheaper price point to Apple and Samsung in China, and now Vivo is trying to build on that success. It was one of the first Chinese smartphone makers to tap developing countries like India.

Vivo launched the world’s slimmest smartphone -- the X1 -- in 2012, and providing hi-fi level sound on a phone has given it an edge in its main markets of China and Southeast Asia. Oppo and Vivo heavily target millennials, cultivating celebrity endorsements of their phones and fostering an image of affordability. For the average cost of an iPhone X, you could buy four Vivo phones.

The latest Vivo handset -- the NEX -- is priced from around $570 to $730 in China on its website. Its screen-to-body ratio is 91.2 percent, the closest in the market to Oppo’s Find X.

More: Chinese Smartphone Upstart That Beat Apple Is Now Venturing West

OnePlus: Hipster’s Choice

With a sleek look and dual-lens camera capable of producing almost ethereal images, OnePlus has gained a following outside China that’s pretty unique to the country’s smartphone upstarts. By making its OnePlus One invitation-only -- and keeping the price competitive -- the company made the device “the most desirable phone in the world,” according to thenextweb.com.

But it’s the phones’ speed that has made OnePlus, which is also based in Shenzhen, a serious contender. Reckoned in some benchmark tests to be faster than the iPhone X, its latest offering OnePlus 6’s fast pace is made possible by a lighter software system that only carries essential functions. Users can then buy add-ons to the system based on their needs. Like most of the other Chinese smartphones, OnePlus 6 is cheaper than Apple and Samsung’s -- selling for around $500 on its website.

More: OnePlus Shows Apple How to Become India’s Top Smartphone Seller

--With assistance from Gao Yuan.

To contact the reporter on this story: Jinshan Hong in Hong Kong at jhong214@bloomberg.net

To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Emma O'Brien, Edwin Chan

©2018 Bloomberg L.P.

. Read more on Business News by BloombergQuint.

from BloombergQuint https://ift.tt/2McR22s
via

Crypto’s $600 Billion Crash Hits a New Low

Fed Dove Evans Veers in Hawkish Direction Over Rate Outlook

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- The Federal Reserve may need to raise interest rates to “somewhat restrictive” levels to combat the effects of recent fiscal stimulus on the U.S. economy, said Chicago Fed President Charles Evans in hawkish comments from one of the central bank’s most reliable doves.

“If inflation continues to be on the order of 2, 2.2 (percent) -- I’m not expecting it to get as high as 2.5 -- that suggests only a modest amount of restrictiveness above our neutral rate might be called for in 2020,” Evans told reporters Thursday in Chicago.

The Fed under Chairman Jerome Powell has raised rates twice this year and penciled in two more moves in 2018, with investors widely expecting officials to act at their next meeting on Sept. 25-26.

Policy makers have also signaled they expect to raise rates into slightly restrictive territory -- above the “neutral” rate that would neither speed up nor slow down economic growth -- though some officials prefer to pause the hiking campaign when rates reach that point.

Evans, who has long been considered one of the most dovish officials at the U.S. central bank, said “it would not surprise me at all if we make a judgment to move to a somewhat restrictive setting,” citing roughly half a percentage point above his 2.75 percent estimate of neutral.

The tone of his comments mark a shift in his thinking. As recently as December, Evans dissented against rate increases on the grounds that inflation expectations were too low and may prevent inflation from rising to the Fed’s 2 percent target.

Notable Shift

His change in outlook also caught the attention of Fed watchers.

“He’s had a very well-articulated view for many years that has been on one side of the center of gravity of the committee, and the fact that he is now seemingly closer to where the median is, I think that’s notable,” said Lewis Alexander, chief U.S. economist at Nomura Securities International Inc. in New York.

Powell must forge a consensus on the rate-setting Federal Open Market Committee as he steers policy and that task is made easier if an influential Fed official like Evans moves towards the center.

Given the boost to economic growth expected from tax cuts and federal spending increases signed by President Donald Trump, Evans is more confident in the inflation outlook. An inflation gauge watched closely by the U.S. central bank, based on the prices of personal consumption expenditures excluding food and energy, was 1.9 percent in June, up from 1.6 percent a year earlier.

Chicago Fed’s Evans on Unemployment, Restrictive Rates: Excerpts

“I do think that the underlying inflation expectations that sort of underpin the current inflationary environment are a little bit lower than I would like to see,” Evans said. “Given the data -- economy being strong -- I think inflation expectations are going to catch up.”

Evans sees a need for restrictive interest-rate policy in the coming years because he expects unemployment to fall to around 3.5 percent by the end of 2020. It was 3.9 percent in July. The Chicago Fed’s estimate of the so-called natural rate of unemployment -- the rate that policy makers believe would be sustainable in the long run without causing inflation to rise -- is 4.3 percent.

But he cautioned that uncertainty about the natural rate of unemployment is very large, as much as “two percentage points on either side.”

Trade tariffs recently imposed on Chinese imports by the Trump administration seem to be “adding some uncertainty, but it’s uncertainty at a time where the economy is doing very strongly, and the labor market continues to improve,” so it makes sense to continue raising interest rates, Evans said.

Trump recently criticized the Fed’s rate increases, saying he doesn’t “like all of this work that we’re putting into the economy and then I see rates going up.”

When asked about Trump’s comments, Evans said he wasn’t concerned.

“I take a lot of confidence from the way that the Federal Reserve system has been designed by Congress and the president, that we have a certain amount of independence, that we’re allowed to undertake our best decision-making,” he said.

To contact the reporter on this story: Matthew Boesler in Chicago at mboesler1@bloomberg.net

To contact the editors responsible for this story: Alister Bull at abull7@bloomberg.net, Jeff Kearns

©2018 Bloomberg L.P.

. Read more on Global Economics by BloombergQuint.

from BloombergQuint https://ift.tt/2Myaxjd
via

Vietnam Feels the Ripples of the Yuan Rout

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg Opinion) -- Think the latest yuan rout is over? Tell that to Vietnam.

The slide in China’s currency paused this week after jawboning by the central bank, which told commercial lenders it has the tools to stabilize the market and urged them to avoid “herd behavior,” Bloomberg News reported Tuesday. But the ripples of the yuan’s 4.7 percent drop this year may be just starting to spread to the country’s neighbors.

The Vietnamese dong has been moving steadily closer to the edge of its 3 percent daily trading band against the dollar over the past two weeks, as traders bet on faster depreciation.

State Bank of Vietnam guided the official rate 1.1 percent lower this year, causing a 2.7 percent fall in the market rate. Like the yuan, the dong is loosely pegged to the dollar.

Currency traders are speculating on further declines, having seen how Vietnam has reacted in the past when the yuan has slumped. On Aug. 12, 2015, one day after China jolted global markets with a sudden yuan devaluation, Vietnam widened the dong’s trading band.  The currency ended the year with 3 percent depreciation in the official exchange rate, and a 5.1 percent drop in the market rate.

The retreat in the dong’s market rate this year is little more than half the slump in the currency of its bigger neighbor, suggesting further depreciation is possible – particularly if the yuan resumes its decline.

It’s unclear how serious China is about stemming the yuan’s slide. Instead of deploying its $3 trillion of foreign-exchange reserves to sell the dollar, Beijing has largely been using onshore currency swaps to stabilize the spot rate. That’s a less effective tool because traders can simply place bearish bets offshore instead.

Vietnamese traders may also be skeptical of China’s rhetoric. On July 3, People’s Bank of China Governor Yi Gang said the country would “keep the yuan exchange rate basically stable at a reasonable and balanced level.” The currency fell more than 2.5 percent in the ensuing month. The yuan is the worst performer of 12 major Asian currencies against the dollar in the past month.  

State Bank of Vietnam may be forced to yield. In just one week in July, it sold more than $2 billion to banks to meet demand for the dollar, the Saigon Times reported. It’s unclear how much the central bank has shelled out since to prop up the dong. At this rate, it will quickly erode the $12 billion of foreign reserves painstakingly built up last year.

Vietnam is more reluctant to countenance depreciation this time around. Unlike in 2015, inflation is now a problem, with the consumer price index blowing past the central bank’s 4 percent target rate for two months in a row.

Vietnam is Southeast Asia’s most open economy on some measures, with imports accounting for almost 100 percent of GDP. As a result, it’s more vulnerable to price pressures. A 1 percentage point fall in the dong could lead to a 0.25 percentage point increase in headline inflation, HSBC Holdings Plc estimates. 

Two years ago, it took a dovish Federal Reserve to release the pressure on the yuan. Vietnam can’t count on that now, with the U.S. central bank determined not to overheat an already strong economy.

If the market pressure persists, Vietnam will be forced into grudging rate increases, like its Southeast Asian peers Indonesia and the Philippines.

It had better hope the PBOC means what it says.

 

To contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.

©2018 Bloomberg L.P.

. Read more on Global Economics by BloombergQuint.

from BloombergQuint https://ift.tt/2MzKYOH
via

The Other Thing White Nationalists Have in Common

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- America’s white nationalist movement is complex, but there’s a common thread running through the alt-right: economic disadvantage.

A year after the infamous “Unite the Right” rally in Charlottesville, Virginia, University of Alabama political scientist George Hawley has zeroed in on the demographics of white nationalist identification in a new analysis. He dug into survey responses from more than 3,000 non-Hispanic whites taken during the 2016 American National Election Survey.

About 12 percent of respondents expressed strong feelings of white identity, white solidarity, and perceived discrimination against their race, he found -- and economics played a heavy role. People without a college degree, the unemployed, and those with lower incomes were all much more likely to answer positively along all three dimensions.

“It turns out that economic variables are some of the stronger determinants of white attitudes on racial questions,” Hawley said.

The alt-right movement has proved hard to study, because its members are usually anonymous and much of its activity takes place on online discussion boards. Hawley noted that the label itself seems to have taken a hit post-Charlottesville, but “the constituency for explicit white identity politics remains, which is why it is helpful to understand the economic and demographic factors that are correlated with that ideology.”

His research focuses on people who said race was very important to their identity, who thought it was important that “whites work together to change laws that are unfair to whites,” and who said whites face at least moderate discrimination in the U.S.

Neither religion nor marriage and family were closely associated with such responses, but divorcees were more likely to support them. Divorce might make people feel alienated, driving them to extreme views, or the causation could run the other way. Having such attitudes makes people more likely to get divorced, Hawley speculated.

While Democrats rarely expressed racially extreme views, independents and Republicans did so in similar numbers. Gender also failed to explain alt-right identification: a slightly higher percentage of women expressed the attitudes.

“Although the ranks of radical right movements tend to be overwhelmingly male, men are not more likely than women to possess these kinds of feelings about race,” he wrote.

While there’s a clear income and economic divide, there’s no obvious age gap.

“This suggests that the problem of white identity politics is not something that will be resolved by generational replacement,” Hawley said. “However, this also challenges the alt-right’s claim that the youngest whites are becoming increasingly receptive to their ideas.”

The survey might miss some racist views, because respondents might be reluctant to express racism, knowing that it’s socially frowned upon. He also points out that a strong white identity doesn’t necessarily equate to right-wing radical group involvement: the demographics of the movement itself might differ from the demographics of those who share its core beliefs.

To contact the reporter on this story: Jeanna Smialek in New York at jsmialek1@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Alister Bull, Sarah McGregor

©2018 Bloomberg L.P.

. Read more on Global Economics by BloombergQuint.

from BloombergQuint https://ift.tt/2OUjOUf
via

India's Economy Is Elephant That's Starting to Run, IMF Says

Putin Aide Proposes $7.5 Billion Tax Hike for Mining, Chemicals Sectors

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- The top economic adviser to Russian President Vladimir Putin proposed raising taxes on mining companies, including MMC Norilsk Nickel PJSC and Alrosa PJSC, among the largest producers of nickel and diamonds.

Additional budget revenues are needed to help pay for Putin’s promises to boost spending after his re-election this spring, according to the letter, which was addressed to Putin and sent from Andrey Belousov, the Kremlin’s top economic aide.

The tax proposal could raise as much as 500 billion rubles ($7.5 billion) a year, according to the letter which calculated rates based on profits from 2017. It would also affect chemical and fertilizer producers, the letter said. Spokespeople for the Kremlin and the government didn’t immediately respond to requests for comment.

Mining and other non-energy companies have benefited from a rally in commodity prices and drop in the value of the ruble, but aren’t paying taxes on this “excess income,” according to the letter, which was obtained by Bloomberg News.

Putin’s one-word note on the letter didn’t give any further instructions and there was no indication he’d issued any instructions to the government to act on the proposal. People close to the metals and mining companies said they hope to be able to avoid any major tax increases.

Mining Profits

Putin’s signature on the letter was dated July 28, before concern over further U.S. sanctions pushed the ruble and Russian markets sharply lower. Still, Russian miners tend to benefit from a weak ruble, since they sell much of their output to international markets in dollars, while their costs are based in rubles.

Russia’s energy giants, which are key sources of government revenue, have long lobbied for higher taxes on other sectors, particularly mining and metals. Companies in those industries have so far parried those efforts, arguing that their businesses shouldn’t be taxes as heavily as the hugely profitable oil and gas producers.

According to the letter, Norilsk Nickel, Alrosa and petrochemical group Sibur Holding PJSC could pay the highest tax.

The list of companies named in the letter has a few notable omissions. United Co. Rusal, which is struggling under the weight of U.S. sanctions, was not named. Neither was gold miner Polymetal International Plc or fertilizer group Eurochem Group AG.

--With assistance from Jack Farchy.

To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net;Evgenia Pismennaya in Moscow at epismennaya@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net, Lynn Thomasson

©2018 Bloomberg L.P.

. Read more on Business News by BloombergQuint.

from BloombergQuint https://ift.tt/2MdgZir
via

Oil Is Losing Its Grip Over the Currencies of Top Energy Producers

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- The future isn’t in oil -- at least for traders trying to predict moves in currencies of the bigger energy exporters.

Crude has decoupled versus the currencies of Russia, Brazil and Canada, with internal market dynamics pushing them in different directions, according to research from Societe Generale SA, The ruble, real and Canadian dollar have bigger problems right now than a fairly stagnant crude price.

Oil’s typically a key driver of the world economy, and an indicator of the industrial cycle. Higher prices can act as a drag on global growth while enriching nations who suck it out of the soil. When other drivers such as politics take hold of their currencies, crude can become a useful diversifier for a multi-asset portfolio manager, SocGen’s analysts, including Sophie Huynh said in a note.

“The long-term relationship that existed between oil and oil-linked currencies has broken down,” they said on Thursday. “We attribute this to the increasing role of idiosyncratic factors in both oil and currencies price action.”

For more on how OPEC plays the oil market, click here

International disputes, elections and other political shifts have replaced crude as a key driver of the currencies, with Canada and Russia’s relationships to the U.S. among the biggest factors spurring depreciation, according to the analysis. Oil, meanwhile, is increasingly being driven by supply-side factors, with OPEC reasserting its power over the market. Brazil goes to the polls in October.

Nafta, Sanctions

“For the Russian ruble, the sanctions have a more significant impact than oil prices, and for Canada’s dollar, it was overshadowed by uncertainty over Nafta,” Georgette Boele, a commodity and currency strategist at ABN Amro Bank NV, said by email.

Yet SocGen sees the link remaining strong elsewhere -- notably to the Norwegian krone, making it their top pick among producing nations on the prediction that Brent-grade oil prices will rise from about $72.60 now to $78 a barrel by year-end. Oil is up almost 9 percent this year.

The krone should benefit from more expensive oil and strong domestic price growth in coming months, Huynh said. “Norway generates the highest inflation rate among G10 countries with a current-account surplus.”

To contact the reporter on this story: Eddie van der Walt in London at evanderwalt@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Todd White, Sid Verma

©2018 Bloomberg L.P.

. Read more on Markets by BloombergQuint.

from BloombergQuint https://ift.tt/2Mv4KLe
via

Crude Founders as Trade War Outweighs Iranian Supply Concerns

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- Crude dipped to a seven-week low as concerns that the U.S.-China trade war will weaken global energy demand defused apprehension about the fate of Iranian oil exports.

Futures in New York closed down 0.2 percent on Thursday. Iran is in the midst of a currency collapse, water shortages and deadly street protests as U.S. sanctions isolate the regime and some of the Islamic Republic’s biggest oil buyers look elsewhere for supplies. But the intensifying dispute between the world’s largest economies took center stage, imperiling economic growth.

“For every comment on the trade war, there’s also a comment on Iran,” said Bob Yawger, director of futures division at Mizuho Securities USA LLC. “They tend to cancel each other out to a certain degree and the market tends to whipsaw back and forth.”

Crude has traded below $70 a barrel this month in New York as the U.S.-China trade dispute threatened worldwide demand for oil-derived fuels. Iran’s situation is expected to grow more precarious as a November deadline approaches for a more restrictive round of U.S. sanctions.

West Texas Intermediate crude for September delivery slipped 13 cents to settle at $66.81 a barrel on the New York Mercantile Exchange, after trading was confined to a 92-cent range throughout the session. Total volume traded was about 28 percent below the 100-day average.

“We’ve got a lot of weak hands in the market,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto. “People that have less conviction in their trades, as soon as they see any sign of evidence of the market turning against them, they will pull their positions.”

A measure of oil market volatility slipped to the lowest level since March.

Brent for October settlement dropped 21 cents to end the session at $72.07 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.93 premium to WTI for the same month.

China will apply 25 percent tariffs on American diesel, gasoline, propane and other petroleum products, according to the country’s commerce ministry. While U.S. crude was spared in the most recent list of levied products, the Asian nation may impose duties later if U.S. President Donald Trump doesn’t back down, according to Li Li, a research director at ICIS-China.

Oil-market news:

  • Gasoline futures slid 1 percent to settle at $1.9999 a gallon, the lowest since April. An Energy Information Administration report on Wednesday showed gasoline inventories last week rose for the first time since late June.
  • Analysts and traders are neutral on WTI crude futures, according to a Bloomberg survey. Forty-six percent of those surveyed were neutral, while 29 percent were bearish.
  • One of Iran’s biggest oil customers is buying more U.S. crude as Trump sticks to his pledge to squeeze the Persian Gulf nation’s energy trade. State-run refiner Indian Oil Corp. signed a term tender to purchase American oil for delivery every month between November and January.

--With assistance from Tsuyoshi Inajima, Grant Smith, Ellen Milligan and Heesu Lee.

To contact the reporter on this story: Jessica Summers in New York at jsummers24@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Joe Carroll, Joe Richter

©2018 Bloomberg L.P.

. Read more on Markets by BloombergQuint.

from BloombergQuint https://ift.tt/2M6sxF5
via

Get Stuck Into Asia Junk Bonds Now, Says BNP

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- Asia junk bonds may have staged a comeback from beaten-down levels in recent weeks, but they’re still offering enough of a juicy yield premium to lure in investors such as BNP Paribas Asset Management Ltd.

Spreads on Asia dollar high-yield notes average 4.7 percentage points, after reaching a more than two-year high of 5.82 percentage points a month ago, according to a Bloomberg Barclays Index. Investors in the region’s junk bonds got returns of 1.77 percent last month, led by Indonesia and India, at 5.5 percent and 3.1 percent respectively, according to an ICE BofAML index.

BNP Paribas Asset in July added bonds for India and Indonesia high-yield energy companies, which are reporting robust operating profits and reducing leverage, according to Ek Pon Tay, portfolio manager at the firm. The French fund manager joins others such as Goldman Sachs Group Inc., Nomura International (HK) Ltd. and JPMorgan Chase & Co. that have recently given Indonesian junk debt the thumbs up.

“These are the times where you have a lot of opportunities to get in at very good levels,” said Tay, a Singapore-based portfolio manager at the firm, which managed and advised on 560 billion euros ($650 billion) of assets as of June. “We like the valuations in Asia dollar high yield.”

For the right names, Indonesia offers an attractive pick. Investors are better off buying the existing notes of Indonesian issuers with a longer track record in the secondary market, said Trung Nguyen, a senior credit analyst at Lucror Analytics Pte., after real estate company PT Intiland Development pulled its debut dollar bond offering this week.

Chinese Demand

Among Chinese high-yield bonds, BNP Paribas Asset is avoiding the industrial sector, where borrowers “face significant overcapacity” and higher default rates are likely, according to Tay. The firm is also underweight on China’s local government financing vehicles but has increased its exposure to state-owned enterprises involved in strategic industries, he said.

Demand from China’s investors for overseas debt has declined, and Chinese dollar-denominated notes are likely to see a “modest” performance this year, Tay said. Such investors have been key buyers and helped to support valuations for China’s offshore bonds.

China’s measures to boost liquidity in July have brought Asia high-yield bond spreads in from a month ago. However “onshore investors will remain selective and given the deleveraging cycle, the leverage levels employed for such investments will be lower,” said Tay.

In Indonesia and India, though, a recovery in oil prices this year has helped shore up balance sheets of commodity-related issuers. The 2024 dollar bonds of Indonesian coal miner PT Indika Energy have rallied to about 94 cents on the dollar, from 86 cents a month ago. There’s been a 5.5 cent gain to 92.5 cents in the 2024 notes of billionaire Anil Agarwal-controlled Vedanta Resources Plc in that period.

“If you pick the right sectors and names, you should do well over the next 12 months,” Tay said.

--With assistance from Narae Kim.

To contact the reporter on this story: Denise Wee in Hong Kong at dwee10@bloomberg.net

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Beth Thomas, Ken McCallum

©2018 Bloomberg L.P.

. Read more on Business News by BloombergQuint.

from BloombergQuint https://ift.tt/2vypOtM
via

After Sanctions, Iran’s Economy Is Nearing a Crisis

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg Businessweek) -- In the runup to the Aug. 7 resumption of U.S. sanctions against Iran, the country’s beleaguered president, Hassan Rouhani, got stern directives from a few corners of the Islamic Republic. Iran’s Supreme Leader, Ali Khamenei, urged him to deal with corruption. The powerful Revolutionary Guards commander told him to focus on Iran’s slumping currency, the rial, while a sizable chunk of Parliament summoned Rouhani to harangue him about the sinking economy. None of them, however, had any advice on how to ease the growing sense of despair and outrage in the streets.

Over the past few weeks, record temperatures, power outages, and water shortages, along with a 50 percent rise in the price of some food items, have triggered scattered protests. One person was killed and 20 others detained in the city of Karaj, west of Tehran, in a protest on Aug. 3. In a nearby town, about 500 people used stones and bricks to smash the windows of a seminary and tried to set the building on fire, local media reported.

As bad as things are, they’re likely to get worse. The new sanctions ban purchases of U.S. dollars by Iran and prevent the trade of gold, metals, and automobiles. Their mere prospect has fueled a record crash in the value of the rial, down 70 percent since May. Government attempts to stabilize the currency by pegging it at a set rate to the dollar backfired and ended up speeding its decline. The real pain, however, will hit in November, when the U.S. reimposes sanctions on Iran’s oil industry, the economy’s lifeblood, in a bid to bring the country back to the table to renegotiate the 2015 nuclear accord.

This was supposed to be Rouhani’s time to shine. The 69-year-old moderate cleric is a year removed from winning a second four-year term as president on the back of his government’s successful negotiation of the nuclear deal, which he promised would lead to a wave of foreign investment and jump-start an economy weakened by years of isolation.

Only three years after the deal was signed, though, instead of enjoying the fruits of the accord, Rouhani has to explain what went wrong—and how he’s going to fix it. Speaking on state TV on Aug. 6, he indicated the U.S. needs to ease sanctions before he’d agree to any talks. To some observers, Rouhani’s attempts to deal with the situation have been reactionary and not part of a coherent strategy. “They’re dealing with crises as they happen,” says Saeed Laylaz, a pro-reform economist who has advised the government. “The people have lost their trust, and they are craving efficiency. They don’t care if it comes from men with beards or neckties.”

Laylaz is drawing a distinction between the pro-Western, secularist men who governed Iran before the 1979 revolution and the religious, anti-imperialist clerics who replaced them. Although Rouhani has a beard and dresses in the traditional garb of a cleric, he has governed as a moderate. He now finds himself on precarious middle ground. To the right, he faces pressure from conservative clerics who were critical of the nuclear deal to begin with. On the left, he’s blamed for not doing enough to reform the political or economic system during the two years the deal was in effect. Progress was made—oil exports surged, for example—but job creation couldn’t meet demand in a country where more than 60 percent of the population is under 30.

While there’s little to suggest Rouhani’s position is under any threat, the rapid deterioration of people’s prospects would leave any leader vulnerable, let alone one in an environment where Islamic conservatives wield such power. According to a survey early this year by Toronto-based IranPoll for the University of Maryland’s Center for International and Security Studies, more than 58 percent of Iranians thought economic conditions were getting worse, compared with 28.5 percent in August 2015, a month after the nuclear deal was struck.

And yet the political establishment knows that, at least for three more years, Iran is stuck with Rouhani. “There is no real alternative,” says Aniseh Bassiri Tabrizi, a research fellow at the Royal United Services Institute in London. A conservative populist candidate in last year’s elections was roundly rejected. “There is a realization that for now this is the only way forward,” says Tabrizi.

The crisis may actually end up strengthening Rouhani’s hand domestically, with the political elites uniting against the U.S. to ensure the survival of the regime. “Rouhani has had a setback. But now there is no reformist or hard-liner, they are all in the same boat,” says Amir Handjani, a senior fellow at the Atlantic Council. “The time to argue who’s to blame is not now; they can’t play petty politics.”

This moment has seemed inevitable ever since Donald Trump won the U.S. presidential election, in part by vowing to rip up the nuclear pact the minute he took office. After he pulled out in May, encouraged by Iran’s foes in Israel and the Persian Gulf, there was hope that the European signatories (Britain, France, Germany) could save it. It soon became clear how hard that would be, given how closely intertwined their companies are with the U.S. European companies including Peugeot parent Groupe, Total, and Daimler have all announced a halt to activity.

If the U.S. succeeds in shutting in a large portion of Iran’s oil exports, it could tip the country into a full-blown crisis. Consequences would be felt around the world. Denied access to Western finance, Iran is likely to accelerate its efforts to woo China. It’s also vowed to retaliate against any disruption to oil sales, with officials going so far as to suggest it may try to block the Strait of Hormuz—a narrow conduit for about 30 percent of the world’s seaborne-traded crude. Tensions with Persian Gulf nations already fighting proxy wars with Iran would spike.

Meanwhile, in Tehran, despair is setting in. “There’s no hope in general,” says Aliasghar Rezaei, a 58-year-old who used to run a garment factory but now works for a ride-hailing app. Steering his Iranian-made Peugeot through Tehran’s traffic, Rezaei talks about how he supported the 1979 revolution to overthrow the shah. “I fought for the revolution, and I probably still would,” he says, “but something has to change.”

Iman Baik, editor-in-chief of the technology daily Fanavaran-e-Etelaat, says there’s not a lot Rouhani can do to steady the rial or fix the broader economy as long as sanctions are in place. “The reins of the market have been practically in Trump’s hands in recent months,” he says.

On the day the sanctions went into effect, the gold markets in Tehran were packed with people trying to trade in their rials. At the less crowded exchange centers, a woman named Massoumeh said she’s spent months saving up to buy euros to help her daughter pay for dentistry college in Hungary. Now she couldn’t find a trader willing to exchange. “We rushed down here, but there’s nothing,” she said. “I’m desperate.”

To contact the editor responsible for this story: Matthew Philips at mphilips3@bloomberg.net

©2018 Bloomberg L.P.

. Read more on Businessweek by BloombergQuint.

from BloombergQuint https://ift.tt/2vwjItN
via

Ackman Sees Lowe's Upside Like His 2011 Bet on Canadian Pacific

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- Bill Ackman said he sees significant upside for home-improvement retailer Lowe’s Cos., much like he did almost seven years ago with one of his most successful investments, Canadian Pacific Railway Ltd.

When Ackman’s Pershing Square Capital Management took its initial investment in CP Rail in 2011, the company had underperformed its larger rival, Canadian National Railway Co., for more than decade -- much like Lowe’s is now underperforming its rival Home Depot Inc.

At CP, Ackman said managers claimed that structural differences and weather explained the company’s underperformance. “We disagreed, believing that a different management approach would substantially improve the company’s performance,” he said Thursday in a letter to investors.

At CP, Ackman installed Hunter Harrison as chief executive officer. Harrison drove operational improvements at the railway and returned about $2.6 billion to Ackman on his investment. The activist investor said he sees similar opportunities for Lowe’s under its new CEO, Marvin Ellison. He said he expects Ellison to detail his plans for overhauling the retailer in December at the company’s analyst day.

“Mr. Ellison is off to a fast start assembling a new senior executive team to organize the Lowe’s turnaround,” Ackman said. “We look forward to watching him perform.”

The billionaire investor disclosed his $1 billion investment in Lowe’s in May but had said little publicly about the investment since then.

A representative for Lowe’s wasn’t immediately available for comment.

Directors Appointed

Ackmanisn’t the only activist invested in Lowe’s. The retailer said in January that it would appoint three new directors to its board after D.E. Shaw & Co. took an active stake in the company. In the months since, Lowe’s Chief Executive Officer Robert Niblock, a 25-year Lowe’s veteran, announced his retirement, with former J.C. Penney Co. CEO Ellison taking the reins on July 2.

Pershing Square said this week it it had returned 12.7 percent on its investments this year through August 7. The biggest contributors in the first half of the year were its investments in Chipotle Mexican Grill Inc., Automatic Data Processing Inc. and Lowe’s.

Ellison, who was a top-ranked executive at Home Depot until becoming chief of department-store chain J.C. Penney, has re-tooled Lowe’s top management structure with new roles, including ones overseeing merchandising and stores.

Lowe’s, based in Mooresville, North Carolina, said Tuesday that it hired Donald Frieson, a former Walmart Inc. executive, to run supply chain as it puts a renewed focus on improving how its online and physical stores work together.

Shares Up

Lowe’s shares are already trading 15 percent higher than Ackman’s cost, he said in the letter, and currently trades at 18 times Pershing Square’s estimates for earnings this year. Home Depot is trading at 21 times analysts estimates.

“We believe there is large upside potential to Lowe’s if it can narrow the performance gap with Home Depot as it is likely that closing the performance gap will cause the market to reward the company with an increased multiple on higher earnings that reflect the company’s underlying business quality and growth potential," Ackman said.

The deadline for Ackman to nominate directors for the board of ADP is set to pass Thursday without the activist putting forth a slate of nominees. Ackman lost a high-profile proxy fight last year at ADP and warned that if the company didn’t deliver on its promises, he might launch another boardroom battle this year.

Ackman said Thursday that ADP’s new revenue growth and operating margin targets announced during the second quarter were “substantial increases” over management’s prior guidance. While calling that a “positive step,” Ackman said he believes there “continues to be a significant opportunity for additional operational margin expansion in the coming years as ADP closes the gap in employer service relative to its structural potential.”

Shares in ADP have risen about 23 percent since Ackman lost his proxy fight on Nov. 7, more than double the gain in the S&P 500 Index. Ackman has cashed out some of that investment, selling about $125 million worth of his holdings in March.

--With assistance from Matt Townsend.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, ;Anne Riley Moffat at ariley17@bloomberg.net, Michael Hytha, Matthew Monks

©2018 Bloomberg L.P.

. Read more on Business News by BloombergQuint.

from BloombergQuint https://ift.tt/2vxc0Qj
via

Meet the Tesla Board Being Tested Like Never Before by Musk

Tuesday, July 31, 2018

How to ear 34 Cr with just 100rs

Join the group for rs 💯 and make 34 crores in one year . never miss an opportunity...
📢📢 *Take action Get Paid daily like*👆👆📢📢
1⃣🚫 *Risk 💯 rs to Earn 34cr*🚫
2⃣🌹🌹 *💯 rs is nothing matters now a days💐💱 Try once*
3⃣ *First come first serve* 🏇🚴‍♀

4⃣ *Time & Talent = Income*
Presentation video
👇👇👇👇👇

*INVESTMENT RS.100/-*

*EARN UPTO RS.34,0000000/-*

*DAILY PAYMENT*

*JOINING LINK*

👇👇👇👇👇

*FOR E-PIN / JOINING*

*WHATSAPP/CALL*


📞
5⃣🌷 *Payment proof* 🌷

Saturday, July 28, 2018

Work from home make Rs:-34,0000000/-


                        Magic 100

Business offer for Rs:-100/- only can make up to Rs:-34,0000000.



Investment Rs:-100/- earn up to Rs:-34,0000000
First come first serve.
Working and non working income
Five level of income.
(1) DIRECT SPONSOR INCOME Rs 25/-

(2) LEVEL INCOME 34 CRORE

(3) ROYALTY ON 20 DIRECT MEMBER : 5%

(4) PIN FRANCHISE INCOME 10%

(5) REWARD

👉 www.magic100.org 👈

👉 CALL & WHATSAPP 👈

     8639965697

👉 Joining Link 👈


Thanks regards,
Vinay Kumar.

Take risk Rs:-100/- get paid daily








Good opportunity for students, housewives, employees, busines men.anyone can do it .
Just need  a mobile phone and a what's app account.
Take risk of Rs:-100/- help four people and earn up to Rs:-34,0000000/-
 Contact :-8639965697.
Mail:- vinaykumar903055@gmail.com
Join the group for Rs:-100/- and make 34 crores in one year . never miss an opportunity...
Magic 100 gives you the opportunity to get rich. Need to sing up four per person, with 100rs ask them to repeat the same.
 Investment Rs:- 100/-
 Earn up to Rs:- 34,0000000/-
 Daily withdrawal
 Minimum withdrawal Rs:-20/- paytm
Minimum withdrawal bank transfer Rs:-500/-
 It is a simple business anyone can do it,with Rs:-100/-
It's apower of response marketing.
 It has five types of income.
1) Direct sponsor income Rs:-25/-
2) level income up to Rs:-34,0000000/-
3)Royal  income on 20direct member   5%
4) Pin franchise income 10%
5) Rewards.
Get ready for the booom....
Investment only Rs:- 100/-
Earn up to 34,0000000.
Best of luck....





Friday, July 27, 2018

Help four earn money 34 crore

Join the group for rs 💯 and make 34 crores in one year . never miss an opportunity...


📢📢 *Take action Get Paid daily like*👆👆📢📢
1⃣🚫 *Risk 💯 rs to Earn 34cr*🚫
2⃣🌹🌹 *💯 rs is nothing matters now a days💐💱 Try once*
3⃣ *First come first serve* 🏇🚴‍♀
4⃣ *Time & Talent = Income*

*Telugu presentation*

*Hindi presentation*
*INVESTMENT RS.100/-*

*EARN UPTO RS.34,0000000/-*

*DAILY PAYMENT*

*JOINING LINK*

👇👇👇👇👇
*FOR E-PIN / JOINING*

*WHATSAPP/CALL*

*8639965697*
5⃣🌷 *Payment proof* 🌷

Tuesday, June 5, 2018

Help four people and become rich build a team up to unlimited and earn money

Join the group for rs 💯 and make 34 crores in one year . never miss an opportunity...
What's app me:-8639965697


A business offer with Investment Rs.100..








A business offer with Investment Rs.100

No jobs,

Now alternate is network marketing business

to secure your life..

Select best company Earn unlimited..

Invest only 100Rs ocean full income ..34cr in your hands.. now.. plan it how to take it .. Time and talent= Income..

friends don't waste your time.

Magic 100 is simple business plan..

Just u need to complete your 4 directs &&&&

Ask them to repeat the same

It's a power of network marketing

If this is done every day in 1 year you can make 3400,00,000

Hurry up friends

call/ whats app me on 8639965697. My whats app no is same. u may whats app me ur name and ph.no
*STAR LEVEL INCOME* 👇🏻
*Level 1st 3X5 = Rs 15*

*Level 2nd 9X5 = Rs 45*

*Level 3rd 27X5 = Rs 135*

*Level 4th 81X5 = Rs 405*

*Level 5th 243X5 = Rs 1215*

*Level 6th 729X5 = Rs 3645*

*Level 7th 2187X5 = Rs 10935*

*Level 8th 6561X5 = Rs 32805*

*Level 9th 19683X5 = Rs 98415*

*Level 10th 59049X5 = Rs 295215*

*Total amount 442860rs*

-----------------

*Total amount 442860rs

✴✴✴✴✴✴✴✴✴✴✴
*Booster PLAN*

*If 4 days- 4 joining=120₹+1epin free*

*If 4 days- 8 joining=240₹+2epin free*

*If 4 days-12 joining=360₹+4epin free*

*If 4 days-20 joining=600₹+6epin free*

🔰

joining Link
👆👆👆👆👆👆

🎄💐🎄💐🎄💐🎄💐

❌🚫❌🚫❌🚫❌🚫

*cotact call / whatsapp numper:* 8639965697

*YouTube video 📹*
*Presentation video*

*How it's pays 34cr with 100rs investment*

Answer 👇👇👇

*Payment proofs & updates*

Risk 100 get paid daily

Asia Stocks Face Mixed Open; Dollar Strengthens: Markets Wrap