Electronics firm invests heavily in Uber clone

…Uber have had a torrid time in China, going through three years of court battles which resulted in them being bought out by Didi. In return, Uber acquired a 20% stake in the Chinese firm.

“Uber were fighting a losing battle and I think they chose the smartest way out,” said Global Co-Head of the Investment Management Division of Shizuoka Capital Wealth Management, Michael Lane, commenting on the news.

“With their $8 billion valuation, Uber would have been hit very hard if they got tied up in further litigation. Now they are part of a $30 billion company and can leave the handling of the Chinese government regulations to the local firm.”

Foxconn have also been making moves in the electric auto industry, with a significant investment in Future Mobility, a firm that is looking to rival U.S. company Tesla Motors and recently took on several executives jumping ship from BMW’s electric car unit. Environmentally friendly car sales are booming right now in China with very favourable initiatives for both manufacturers and buyers.

Apple Inc has close ties with Foxconn, being the U.S. firm’s main assembler of its iPhones. Apple came in with a $1 billion investment in Didi and they are interested in getting into the auto-industry next year, with Silicon Valley abuzz with rumours of an iCar.

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Google look to firm up cloud operations with Apigee deal

Google will be looking to strengthen their cloud business as it goes into final talks with software development firm Apigee Corp over a possible merger worth around $600 million.

Apigee assists companies communicate with their customers using innovative technology focused primarily on mobile devices and web based applications.

“It’s a brave new world when it comes to how businesses interact with their customer base,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a phone interview. “Home visits and even phone calls are dated, with API’s taking over more and more these days.”

The announcement regarding the possible deal was made late Thursday afternoon and a short statement included details on the ratios.

Alphabet Inc’s Google would give…

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Bank of England say they will “give fintech space to grow”

The Chief Cashier of the Bank of England (BoE) Victoria Cleland has said publicly that the central bank will not stifle financial technology innovation as the central bank attempts to keep up with new developments in the field.

According to Cleland, the BoE will customize its new upcoming regulations in order to “give fintech space to grow” and that understanding technological innovation was a priority at the bank.

Most of the recent news surrounding fintech has been focused on digital currencies, like bitcoin, and a high security online ledger called blockchain, which can automate transactions and could be hugely beneficial in the financial industry in the future. The BoE has been looking at benefits, and also the risks of using such systems.

The comments from the senior BoE employee are seen by many observers as an attempted reassurance to fintech firms that their businesses are safe in London, which has been a hub of the industry.

“After the Brexit, policymakers are doing all they can to pander to certain industries they feel are important, and fintech is definitely one of those” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in an email to clients.

“Companies have been worried…

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All eyes on Fed as traders hold back

As traders and investors gauge the outlook regarding future interest rate hikes, U.S. stocks flattened out on Tuesday although the Nasdaq somehow managed another record high close.

Grocers results were poor, with sprout farmers the hardest hit. There was a 14 percent drop for sprout shares to $19.69, Kroger shares were down 5 percent to $31.33 and Whole Foods shares dropped 6 percent to $29.09.

Investors have been focused on the Federal Reserve, trying to ascertain how close the central bank is to raising interest rates. Most expect the Fed to hold back on any major changes due to the disappointing jobs report last week together with other discouraging data.

The Fed has been coy on any firm change date, recently commenting on a decent economic expansion in the last quarter.

“After the past week’s moderate jobs report, most observers are getting the distinct impression rates will remain low for the foreseeable future,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management. “We are probably going to see the same story at the ECB [European Central Bank] where policymakers will be tempted to keep rates at rock bottom.”

The largest company in the world by market capitalization…

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Italy looks to expand EU deficit allowances

Italy’s Industry Minister Carlo Calenda said on Friday that if the country can introduce a new corporate spending strategy they may be able to convince the European Commission (EC) to increase its budget deficit.

The comments came in an interview with la Repubblica daily, where the minister called for a rethink on flexibility rules that reward economic reforms with increased deficit margins only for 12 months.

Italy has previously expanded its 2016 deficit goal by over $10 billion using the EC’s clauses. But due to a major slowdown in this year’s economic growth, mainly because of terrible Q2 figures, the government’s deficit targets are seen to be a high level risk.

Although the nation’s treasury department have said it’s too early to forecast budget effects for next year, it is rumoured that Rome will be petitioning the EC for added budget expansion. This was confirmed by Minister Calenda, who said the country would “almost certainly seek extra flexibility in our budget margins”. The treasury declined to comment on the minister’s remarks.

“What the EC and the euro zone markets need to see is some kind of credible plan from Rome,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a phone interview. “It’s clear the fiscal authorities of Italy want to develop the scope of the EC’s clauses both in size and duration.”

It may not be easy to get the grants however…

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Local authorities may fund Chinese steel bailout

Online economic website Caixin has reported that embattled state owned Bohai Steel Group may be the beneficiary of a local government fund initiative which would allow the company to restructure its debt obligations, which total nearly $30 billion.

The company, which came about through the merger of four smaller firms in 2010, owes over a hundred creditors debt and have only just enough assets to cover it.

The plan is to set up a local asset management company in Tianjin, which can handle the debts. The new firm will also assist other indebted companies in the region.

“The debt restructuring is probably the biggest we’ve seen in China since the 2008 economic meltdown. It’s a big effort by the authorities to clear the heavy governmental slate,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management who is advising the Tianjin government on the plan.

Most of …

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Governor of BOJ says rates can go even lower

…There were more than a few raised eyebrows at the start of the year when the BOJ set a minus 0.1 rate for certain deposits in their vaults in the hope that the move would encourage banks and corporations to increase expenditure and spur inflation, but that has not materialized.

The bank will carry out a full assessment of its annual fiscal policies next month, and only then will they make a decision on whether to adjust their huge asset purchasing plan, which has seen them buy up over 90 trillion yens worth of bonds on a yearly basis.

“Despite all this easing of the monetary base we haven’t seen any solid results,” said Michael Lane – Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in an email to investors.

“It’s been going on now for about 3 years and Prime Minister Abe is starting to get called out on his failed policies. The aim is to get up to 2 percent on inflation but the level hasn’t budged, with the economy as stagnant as ever,” Lane added.

The financial world will know more when the BOJ release their annual report on the same day as their meeting next month.

You can read the complete article here: http://shizuokacapitalwealthmanagement.blogspot.com/2016/08/governor-of-boj-says-rates-can-go-even.html

EXOR favours foreign HQ for easier access

In order to give Italian investment firm EXOR better access to European acquisitions and fund raising, owners the Agnelli family have decided to move their base of operations to Holland.

The move comes hot on the heels of a similar base transfer by a firm that EXOR controls with a 30 percent stake, Fiat Chrysler Automobiles, who recently registered as a Dutch company and planted a new HQ in Amsterdam.

“Although moves like this might not please everyone, companies need to do anything they can to improve growth opportunities,” says Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management, who have a small stake in Chrysler U.S.

In 2014 Fiat completed the full acquisition of their subsidiary in the United States, Chrysler, to create the world’s seventh biggest auto producer. At that point…

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New York now favourite property target amid Brexit

As sentiment turns negative towards London due to the surprising UK vote to leave the European Union, New York has become the number one location for investors to seek out commercial real estate.

Just before the Brexit referendum there was an indication that investors were starting to feel nervy on London, as fluctuating international property transactions pointed to fears the English capital might lose its appeal as a world economic centre if the British public decided to leave the E.U.

According to investment company Jones Lang LaSalle Inc., compared to the first half of 2015, there was nearly a 50 percent drop in cross-border property transactions. Foreign investors simply didn’t want to risk purchasing property that might be devalued due to a political event beyond their control.

Indeed, one of the UK’s largest foreign investors, Norway’s sovereign wealth fund, said it needed to wipe 10 percent off its British portfolio due to the Brexit.

“There’s no escaping the fact that London has got the sharp end of the Brexit stick,” Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management in a note to clients. “The attraction of London has always been as a world economic hub with a wide base of financial service employment opportunities. Obviously there is concern that London’s profile will be eroded.”

Data from Mr. Lane’s firm, Shizuoka, shows New York nearly doubled London’s total for cross-border real estate investments between January and June this year at $10 billion. In the same period last year London raked in $12 billion compared to…

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Japan leads global bond sell off

This summer’s bond rally is finally unravelling.

Japan has led the global sell off and yields are increasing across every continent. Bank of America Corp.’s G-7 Government Index bond average jumped over half a percentage point, which is its biggest climb in over a month.

While the UK was in the grip of its referendum vote on the E.U. this June, the general sentiment in the financial world was that world economic growth would slow enough to convince the Federal Reserve to leave interest rates unchanged.

It may well be the case that those same analysts are now wondering if yields dipped too far. Presidential candidate Donald Trump said that current interest rates are “at a false low”.

Bill Gross, a prominent financial manager and author, said that bets on the ultra-low yields are too risky. The company Gross founded, Pacific Investment Management Co., said the Japanese government bond rally is most likely at an end.

With the G-7 index now falling, many of the gains in early 2016 are now turning into costly losses. This year’s returns are now at a lowly 5 percent.

Bonds in Japan have declined the largest amount since 2013, according to data released by the Japan Bond Trading Co.

10-year yields gained to minus 0.096 percent from the low set in the summer and Gross said the rally “has most definitely fizzled out” due to the Fed reaching the end of the road with its fiscal stimulus plan.

Another telling indicator was the lack of action from the Bank of Japan, who opted to leave their negative interest rates unchanged, and did not expand the bond purchasing plan they already had in place since their last board meeting in July.

“It’s extremely difficult, even for central banks, to get a handle on the situation with bonds,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management…

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