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Apple-backed DiDi Chuxing has received a license to operate a fleet of self-driving cars on a pilot basis in part of the Jiading district in Shanghai.
Tesla (TSLA) has received outsized attention compared to other businesses of its size. In this article, we’ll explore what makes Tesla such a polarizing company.
A BBC investigation recently discovered dozens of YouTube videos promoting fake cancer cures. Could Google's YouTube lose advertisers?
Tesla (TSLA) is one step closer to producing China-made Tesla Model 3s through its China Gigafactory, also known as its Gigafactory 3.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.The new age in the labor market is shaping up as a missed opportunity in the poorer parts of Europe to stem the outflow of skilled labor.Hundreds of thousands of Serbians, Ukrainians and Romanians make a living through global freelance platforms, working for international clients that pay better than local companies. It could be a perfect way to keep the best minds from leaving their homelands for better opportunities abroad. Instead, outdated regulations force them to live on the edge of legality, and may foil efforts to slow the brain drain.Eastern Europe for centuries has been defined by a desire to catch up with the West. In the past three decades, post-communist countries have transformed their economies and became part of global supply chains. Now the rise of the gig economy offers a chance to take another leap. But the generation that’s grown up since the end of the Cold War is being dragged down by some of Europe’s most corrupt political systems.“This is the moment, just like in Star Wars, when ships make the jump” through hyperspace “from one system to another,” said Branka Andjelkovic, a co-author of Digging Into the Gig Economy in Serbia. “If you want your economy to advance and to have those people stay here, then do something.”It’s already too late for some, like Mateja Miladinovic, a 34-year-old graphic designer in Belgrade. After more than two years as a freelancer, he’s moving to Bali with his wife for a change of lifestyle with less stress from Serbian authorities. The constant pressure of an uncertain tax status within the Serbian system and a lack of access to social, health and retirement benefits were enough to convince him to leave his homeland.“I’m in a gray area,” said Miladinovic, who does magazine layout work for clients from Canada to Ethiopia. He expects to continue the same jobs from his new tropical home.Serbia, along with Ukraine and Romania, is in the vanguard of the gig economy in eastern Europe. The jobs are mostly in technology, graphics, Internet design and media and not necessarily in ride sharing or food delivery that are the hallmarks of the industry, partly because of historically low wages compared to the rest of the continent.They are also among the region’s most unstable politically, which has led to inaction on updating rigid communist-era regulations. Another common thread is widespread graft: Romania ranks 61st, Serbia is 87th, and Ukraine is 120th in Transparency International’s annual corruption perception index.Many western economies already had higher levels of protection and more flexible labor codes when the gig platforms started popping up. And they are going further: the U.K., for example, last year proposed legislation to increase protections for freelancers.California this month passed a bill that could force companies to reclassify gig workers as employees, a move that would secure labor protections. The legislation is emblematic of the debates in countries from Germany to the U.S., which are about defining the industry and regulating employer-employee relations, rather than about the legality of gig work.The good news is that Ukraine, Romania and Serbia have an abundance of high-skill workers in technology. Many of them work remotely, which so far has slowed the brain drain, according to Janine Berg, a senior labor market specialist at the International Labour Organization in Geneva.And the prospect of becoming their own masters as part of a global workforce with seemingly endless opportunities remains seductive.“Every young person that doesn’t have a job wants to be a freelancer, they want to travel the world and still be able to work,” said Belgrade-based tax expert Sofija Popara. “It’s a short-term plan, but young people are doing it more and more.”But the warnings are becoming louder. Romania needs a “redefining and reform of work relations,” according to a European Commission-financed study by the Institute for Public Policy. In Ukraine, the ILO last year urged “policy responses that can enhance the benefits of the work transformation.”The International Monetary Fund in a July study warned that countries in eastern Europe need to do more to “retain and better use the existing workforce” to combat what threatens to become a significant drop in population driven in part by outward migration.Brain drain is a common problem for Romania, Ukraine and Serbia. It contributed to 600,000 people from the three countries combined leaving in 2016 for better jobs and life prospects around the world. That’s three times more than the outflow in 2000, according to the Organization for Economic Cooperation and Development.Serbia hasn’t addressed freelance workers in the labor code and the ministry hasn’t responded to questions from Bloomberg. Ukraine allows them to register and pay taxes at a favorable rate, but no protections. The new government this month promised changes by the end of the year.And while Romania is required to incorporate European Union legislation, the work has been slow amid near-constant political turmoil. The labor ministry in Bucharest said it’s working on implementation, with a deadline of Aug. 1, 2022.Even the highly skilled and technically savvy gig workers are vulnerable in the cutthroat competition for contracts. The lack of other opportunities means they have little leverage against faraway employers.“Freelancing isn’t an easy life and it’s definitely not for everyone,” said Jelena Novakovic, a graphics designer in Belgrade who works for clients typically in the U.S. or Australia.Some gig workers are trying to take control of the process. Tamara Gavric, a Belgrade architect, has also become an activist for promoting safer freelance labor. The lack of state protection is draining the profession even as it becomes more prevalent in the global workforce, she said.“The situation has to be resolved because we do not want to be underground workers,” Gavric said.Online platforms collect as much as 20% on jobs and offer little comfort to workers. A third of Ukrainian freelancers in a recent survey complained about non-payment with no recourse.“If the platform is going to arbitrate, they usually go with the side of the company,” Berg said. “There’s no regulation at all and you have oversupply, so there is a tendency for wage rates to fall.”Serbian gig workers are arguably the worst off. Without legal recognition, they are considered jobless, which can make taking out a mortgage or a credit card impossible. The only option is to register as self-employed entrepreneurs, which often means an immediate 40% tax rate.One option, of course, is trying to find a traditional job with a local company. But for Miladinovic, the magazine designer, that was never going to be the way out.“I still can’t imagine a permanent position with a company,” he said. “For the time being I can see myself only as a freelancer and depending on cash flow, we’ll see.”(Updates with comment in 22nd paragraph)\--With assistance from Irina Vilcu, Daryna Krasnolutska and Peter Laca.To contact the reporters on this story: James M. Gomez in Prague at firstname.lastname@example.org;Gordana Filipovic in Belgrade at email@example.comTo contact the editors responsible for this story: Balazs Penz at firstname.lastname@example.org, Andrew LangleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Just as the Fed is set to ponder an interest rate cut amid fears of a US slowdown, the People’s Bank of China has kept its one-year interest rate steady.
Tesla (TSLA) seems to have realized how important service centers and customer experience are to its sales, especially in the wake of service issues.
(Bloomberg) -- Marco Krapels left Tesla Inc. and started a battery company in a place that’s a hemisphere away from California’s rarefied clean-energy scene: Brazil.Krapels, Tesla’s former vice president for international expansion of solar and storage, now runs Sao Paulo-based MicroPower-Comerc. The company, backed by Siemens AG, is pushing to use big mobile batteries to wean Latin America’s largest economy off oil-fired generators during blackouts.It won’t be easy. Brazil offers almost no government subsidies for renewable energy and imposes stiff import taxes. The nation’s market for big batteries, meanwhile, is hardly existent. Nonetheless, Krapels sees opportunity in a place with an occasionally unstable power grid and a robust market for wind and solar.“This is not for the faint of heart, but I think there’s an advantage on being the first to move into a market,” Krapels said by phone.Much of Brazil’s power sector is already carbon-free, with about two-thirds of electricity coming from hydropower. Developers have also aggressively developed wind farms in recent years, including in the breeze-rich region of Serra Branca. But businesses regularly turn to diesel generators during blackouts that are endemic in some areas.Krapels began exploring the potential for batteries in Brazil when he worked for SolarCity, which Tesla acquired in 2016. He wanted a large market with an unreliable power system and no significant government subsidies, which force companies to depend on political cycles. Brazil checked all those boxes.MicroPower, founded last year, offers to deliver on-site lithium-ion storage systems to big-box stores, hotels and other large commercial and industrial customers to use instead of diesel when lights go dark. The systems, which MicroPower owns and maintains, also allow customers to save money by storing up electricity at night when it’s cheap, then using it during the day when prices spike. The company has installed pilot systems at a Coca-Cola bottling plant and a McDonald’s restaurant.Comerc Energia, a Sao Paulo-based energy trading and management company, took an undisclosed stake in the company about 18 months ago. In July, Siemens’s investment arm took a 20% stake.One of MicroPower’s primary challenges is navigating Brazil’s complex tax and regulatory structure. The company doesn’t manufacture its systems, and Brazil’s import taxes tack on about 65% to its battery costs. To get around that issue, MicroPower is exploring buying battery components abroad and assembling them in Brazil, said Peter Conklin, a former SunEdison Inc. executive who co-founded MicroPower and is its chief operating officer.BloombergNEF expects cumulative global battery storage capacity to soar from 29.4 gigawatt-hours this year to 710.6 gigawatt-hours in 2029. The amount of storage in Brazil, however, is negligible, according to BNEF. While investors have begun to take interest in the market, storage companies have not gained much traction.“Intuitively it sounds quite attractive to combine resiliency with economic advantage within the commercial and industrial segment,” BNEF analyst Logan Goldie-Scot said. “But in practice that’s been quite hard to get off the ground.”To contact the reporter on this story: Laura Millan Lombrana in Santiago at email@example.comTo contact the editors responsible for this story: Luzi Ann Javier at firstname.lastname@example.org, Joe Ryan, Pratish NarayananFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- President Donald Trump’s administration has sent a letter to Saudi Arabia that sets out requirements the kingdom needs to follow in order to get U.S. nuclear technology and know-how.The baseline for any agreement between the U.S. and Saudi Arabia will be tougher inspections by the International Atomic Energy Agency, U.S. Energy Secretary Rick Perry said at briefing in Vienna on Tuesday. The kingdom must adopt the IAEA’s so-called Additional Protocol, a set of monitoring rules followed by more than 100 countries that give inspectors wide leeway in accessing potential atomic sites.“We have sent them a letter laying out the requirements that the U.S. would have, certainly in line with what the IAEA would expect from the standpoint of additional protocol,” said Perry, who’s attending the IAEA’s annual meeting this week. “An additional protocol is what is going to be required, not only because that’s what the IAEA requires but because that’s what Congress requires. This isn’t just the Trump administration unilaterally deciding.”The remarks put pressure on the Saudi government to embrace broader monitoring of its atomic program or face difficulty fueling its first major reactor. The country is nearing completion of a low-powered research unit being built with Argentina’s state-owned INVAP SE, which needs an inspections agreement in place before it can access the low-enriched uranium it needs to operate.In the rarefied world of nuclear monitoring, the IAEA is responsible for sending hundreds of inspectors around the world to look after and maintain a vast network of cameras, seals and sensors. Their job is to account for gram levels of enriched uranium, ensuring that the key ingredient needed for nuclear power isn’t diverted into building weapons. Without submitting to tighter IAEA monitoring, the kingdom would struggle to fuel its reactor.So far, Saudi Arabian officials have declined to answer questions about when they may conclude a new IAEA safeguards deal.Saudi Arabia “supports and endorses active international cooperation with regard to the transfer of nuclear technology and expertise,” Khaled Bin Saleh Al-Sultan, president of the King Abdullah City for Atomic and Renewable Energy, said on Monday in a statement.Saudi Arabia is currently signed up to the IAEA’s so-called Small Quantities Protocol, a set of rules that will become obsolete once it needs atomic fuel for a working reactor. It hasn’t adopted the rules and procedures that would allow nuclear inspectors to access potential sites of interest.The IAEA is currently in talks with Saudi Arabia about signing a Comprehensive Safeguards Agreement. That set of rules would allow the kingdom to fuel its research reactor but falls short of the Additional Protocol demanded by the U.S. for a full-scale plant, according to two diplomats familiar with the negotiations.“There’s still a period of edification that needs to go on with both citizens of the kingdom and leadership, so that they’re comfortable,” Perry said. Getting a new IAEA agreement done would show “we’re big guys and we know the requirements to play at this level.”Enrichment of uranium into nuclear fuel is at the heart of the U.S. conflict with Iran because of the technology can be easily adapted to military purposes. A tighter inspections system in Saudi Arabia would give the IAEA insight into exactly how that country’s capabilities and intentions are evolving.Perry confirmed reports that Saudi Arabia has indicated it’s interested in producing its own nuclear fuel.“I consider this to be a form of negotiation,” said Perry, who spoke with Saudi Crown Prince Mohammed Bin Salman before joining this week’s IAEA talks. “We have a really good professional and personal relationship.”To contact the reporter on this story: Jonathan Tirone in Vienna at email@example.comTo contact the editors responsible for this story: Reed Landberg at firstname.lastname@example.org, Andrew ReiersonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- In 2014, the big U.S. tech companies did something surprising: They told the world how few women they employed. Men comprised 70% of Google’s workforce; Facebook, Apple, and Twitter looked similar. The mix was even more lopsided in more senior leadership and technical roles.Most of the business world has come to believe that workforce diversity is good for the bottom line, and tech companies hoped their new transparency would lead to more equality. It didn’t. But new research suggests that investors were paying attention.In a study published today by the Stanford Graduate School of Business, researchers there and at Northwestern found that share prices jumped when companies reported better-than-expected gender diversity; they fell when firms announced demographics that underwhelmed. The same pattern held when the academics turned their attention to finance companies. A lab experiment demonstrated the same trends, and participants reported a handful of beliefs that explained why they were more likely to invest in companies with more gender diversity.Google was the first to release its figures, and after accounting for other factors, the researchers calculated that the company’s stock fell 0.39 percentage points on the news. They projected that if Google had reported that women made up 31% of its workforce, instead of 30%, it could’ve added $375 million in market value. “This is a huge response,” said Margaret A. Neale, one of the researchers and a distinguished professor at Stanford.They also used Google as a benchmark to see how the market reacted when firms reported more or less diversity compared with an industry leader. The stock price was “affected strongly” by how companies looked compared to Google, they found. A tech firm whose workforce was 1 percentage point more diverse than Google’s saw shares gain, on average, 1.91% in the short term.After the first year companies released diversity reports, the stocks didn’t react much at all, which Neale attributed to the fact that the demographics hadn’t changed much. “Their bad news has already been priced into the stock,” Neale said.Next, the researchers turned their attention to the banks and financial firms. The researchers used data 50 financial institutions shared with the Financial Times in 2017. The big banks looked more equal than the tech companies: Women made up 54.4% of employees at JPMorgan Chase, according to the report; Bank of America was split about equally. Companies without a retail presence, like Morgan Stanley, are more lopsided.The researchers found companies with greater gender diversity saw shares rise relative to companies that reported having fewer women, the same trend they saw in the tech industry.The initial findings didn’t explain why investors reacted positively to companies with more gender balance, so the researchers devised a third lab study to try to parse the reasons. In it, they simulated the diversity report experiment, giving a dollar to participants to invest in companies based on their diversity announcements. As they’d observed in finance and tech, participants were more willing to invest in companies with more gender equality.When they measured participants’ existing ideas about diversity, they found investors’ interest in companies with more gender equality was based in beliefs that those companies are more likely to innovate, less likely to attract negative regulatory attention and less likely to settle lawsuits, among other beliefs.Considering the market benefits, the researchers conclude that organizations are systematically under-investing in gender diversity. Despite public commitments, these figures haven’t budged since companies started publicly reporting. This year, Google said women made up 31.6% of its company, up just 1.6% from five years ago.“People are not confused. They know the population of women is greater than 30%,” Neale said. “If Google moved up to 40%, there would be champagne toasts.”To contact the reporter on this story: Rebecca Greenfield in New York at email@example.comTo contact the editor responsible for this story: Janet Paskin at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Some of Europe’s top luxury brands are targeted in President Donald Trump’s latest tariff salvo, which could affect billions of dollars in exports of American-bound whiskeys, wine, Champagne, handbags and men’s suits.A panel of three World Trade Organization arbiters, as expected, said Friday the U.S. can legally impose tariffs on an array of European exports in retaliation for Europe’s illegal government aid to Airbus SE. EU sources say they expect the WTO arbiters to publicly circulate a report by month’s end that will allow new U.S. duties on a range of goods worth $5 billion to $7 billion per year, while Trump has threatened tariffs on $11 billion.Shares of French luxury conglomerate LVMH fell as much as 4.4% on Monday in Paris, with Airbus dropping as much as 5.4%. Continuing political turmoil in Hong Kong and a slowing Chinese economy have also weighed on European fashion and drinks companies.Washington’s response is expected within days after the WTO’s green light for retaliation. The U.S. has identified possible targets -- with tariffs potentially as high as 100% -- on a list of goods with a total export value of $25 billion a year. Though the most valuable goods on the U.S. list are exports of European aircraft and parts, the tariffs could also hit products made by Europe’s most recognized high-end brands.LVMH is particularly vulnerable to the proposed U.S. levies, which target two of its primary product lines -- wine and spirits like Dom Perignon, Moet & Chandon and Hennessy -- and leather goods under labels such as Givenchy, Kenzo and Louis Vuitton.Expensive TastesThe U.S. market for luxury goods is among the top destinations for European companies like LVMH where the U.S. made up almost a quarter of its total global sales last year. American shoppers bought 11.2 billion euros ($12.4 billion) worth of goods from LVMH in 2018, according to Bloomberg data.LVMH Chief Financial Officer Jean-Jacques Guiony said that the company is “sensitive to tariffs and trade barriers,” during a conference call in July.New tariffs will increase costs that will undoubtedly be passed on to U.S. consumers, said Luca Marotta, the CFO of Paris-Based Remy Cointreau SA, which produces Remy Martin cognac, Cointreau, Passoa and Mount Gay rum.“If the tariff increase will happen, I repeat myself, we will increase prices at the same moment,” Marotta said during a July 17 conference call.Trump’s planned EU tariffs are unique for his administration because, unlike the trade war he started against China, the U.S. will be applying duties explicitly authorized by the WTO, an organization he’s threatened to withdraw from if it doesn’t reform.The dispute between Toulouse, France-based Airbus and Chicago-based Boeing Co. encapsulates a criticism from Trump and others -- that the WTO is a slow-moving bureaucracy -- because it’s a case that’s taken about 15 years to resolve.European beverage producers are already reeling from the uncertainty stemming from Trump’s repeated threats to slap new tariffs on wine, liquor and other alcohol.The Trump administration is currently evaluating whether to penalize French wine and other goods in response to France’s tax on digital companies like Amazon.com Inc., Facebook Inc., and Alphabet Inc.’s Google.“The degree of uncertainty has somewhat notched up a little bit,” said Pernod Ricard SA Chief Executive Alexandre Ricard on an Aug. 26 conference call.Paris-based Pernod Ricard produces top-shelf wines, bitters, whiskeys, spirits, cognac, brandies and rum.The impact of Trump’s tariffs will also have an unwelcome effect on Scotch whisky producers, which are already girding for the fallout of a potentially messy no-deal Brexit.The EU exported $2.1 billion worth of Irish and Scotch whiskeys to the U.S. in 2018, according to data provided by the Geneva-based International Trade Center.Many U.S. exporters oppose the Trump administration’s proposed tariffs, which they say could boomerang and jeopardize thousands of American jobs.Whiskey ShotU.S. whiskey producers have already become collateral damage from Trump’s steel and aluminum tariffs -- which spurred the EU to retaliate with a 25% tariff on U.S. bourbon and whiskey. What’s more, the EU has threatened further penalties on $12 billion worth of whiskey and other U.S. exports stemming from a related WTO dispute over U.S. subsidies to Boeing Co.“Depending on the level of tariffs imposed on EU spirits and wine, we estimate it could negatively impact U.S. businesses, leading up to a loss of jobs from 11,200 to even 78,600 jobs across the United States,” said Chris Swonger, the president and CEO of the Distilled Spirits Council.There are two ways the EU can avoid new tariffs from the long-running aircraft dispute with the U.S.: by ending its illegal subsidies for Airbus, or reaching a settlement agreement.Though U.S. Trade Representative Robert Lighthizer and the current European Trade Commissioner Cecilia Malmstrom have both welcomed the idea of negotiating a settlement, talks to resolve the issue haven’t begun.Those negotiations could become more difficult after Malmstrom cedes her post on Nov. 1 to Phil Hogan, a hard-nosed Irish trade negotiator who’s pledged to take a more pugnacious approach to EU-U.S. trade relations.In a Sept. 10 interview with RTE radio, Hogan said “we are going to do everything we possibly can to get Mr. Trump to see the error of his ways.”(Removes reference in fifth paragraph to Donna Karan, which LVMH sold in 2016, in story published Sept. 16.)\--With assistance from Thomas Mulier, Chris Middleton and Birgit Jennen.To contact the reporter on this story: Bryce Baschuk in Geneva at email@example.comTo contact the editors responsible for this story: Richard Bravo at firstname.lastname@example.org, Sarah McGregor, Brendan MurrayFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Trump administration will take steps to try to block California from setting its own vehicle emissions standards, the head of the US environmental regulator has said, as the row between the federal government and the state over green regulations intensifies. Andrew Wheeler, the head of the Environmental Protection Agency, said on Tuesday that the national government would move to prevent California enacting tougher standards than President Donald Trump plans to impose on a national level. President Barack Obama granted California special licence to set it own emissions rules in 2013.
The small print of the Google Home announcement, however, reveals that the latest move is not quite so ambitious as the first. Vijay Sankaran, chief information officer at TD Ameritrade, says the slimmed down capabilities of Google Home were partly down to the firm's experience of how clients used Alexa, Apple Business Chat and Facebook Messenger.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Bill Gates, who knows a thing or two about antitrust investigations, doesn’t think it’s a good idea to break up the biggest U.S. tech companies as some politicians have suggested.The Microsoft Corp. co-founder and former chief executive officer battled the Justice Department for years in the late 1990s in a bruising antitrust case. At issue was the software giant’s bundling of its Internet Explorer browser to Windows as a way to maintain its dominance in PC operating systems. Ultimately Microsoft remained intact.Two decades later, Microsoft is one of the few big U.S. technology companies not under regulatory scrutiny in Washington. The Justice Department, the Federal Trade Commission, state attorneys general and a congressional committee are all scrutinizing so-called Big Tech -- companies from Alphabet Inc.‘s Google to Facebook Inc. and Amazon.com Inc. -- that Washington has concluded have gotten too big and too powerful. Senator Elizabeth Warren, a presidential candidate, has made a forceful and detailed plan about how she would go about breaking them up.Gates disagrees. “You have to really think; is that the best thing?” Gates said in an interview on Bloomberg TV. “If there’s a way the company’s behaving that you want to get rid of, then, you should just say, ‘Okay, that’s a banned behavior.’ But splitting the company in two, and having two people doing the bad thing-- that doesn’t seem like a solution.”Microsoft narrowly avoided a breakup when a federal appeals court reversed a lower court ruling ordering the software company to be split. The company has bounced back to top Apple Inc. and Amazon as the stock market’s most valuable company, buoyed by optimism about its cloud business, and on some investors’ belief that Microsoft is a safe haven as U.S. and European regulators sharpen their scrutiny of others in the sector.Lawmakers including David Cicilline, who is leading the House antitrust subcommittee’s inquiry into large internet companies, has asked them for detailed information about acquisitions, business practices, executive communications, previous probes and lawsuits. The panel has also asked for information from customers of those big companies, asking about mobile apps, social media, messaging, cloud computing and more. Virtually every aspect of the companies’ business is under the microscope.“It’s a pretty narrow set of things that I think breakup is the right answer to,” Gates said. “These companies are very big, very important companies. So the fact the governments are thinking about these things, that’s not a surprise.”Gates said Microsoft’s own antitrust scrutiny has made the company “more thoughtful about this kind of activity.” In his view, companies like Google and Amazon the rest are “behaving totally legally. They’re doing a lot of innovative things.”To contact the reporters on this story: Molly Schuetz in New York at email@example.com;Erik Schatzker in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Sara FordenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- India’s fragile financial system is swinging between despair and hope. Two separate incidents — both featuring the lender Yes Bank Ltd. — recently underscored the drag of past underwriting follies as well as the lift from a digital reset. It will take time, but good things will come to Indian banking as a result of the present crisis. Start with the sudden default by financier Altico Capital India Ltd. on a 199.7-million-rupee ($2.8-million) interest payment to Dubai-based Mashreqbank PSC. Clearwater Capital Partners-backed Altico, which borrows money from banks and mutual funds to make loans to property developers, called the situation a “liquidity crisis.” And that made Yes Bank investors gloomy. Based on January data, the midsize Indian bank had a 4.5-billion-rupee exposure to Altico, the third-highest after Mashreq and HDFC Bank Ltd. While HDFC Bank, the country’s most valuable lender, has the capital — and current profit — to take the occasional credit hit, Yes’s capital cushion is already frayed by dodgy loans to beleaguered shadow banks and troubled tycoons. Both these borrower groups have found it hard to refinance debt since the collapse last year of IL&FS Group, a large Indian infrastructure financier and operator. Altico’s unraveling shows that an end to credit woes is not yet in sight. At more than $200 billion, India’s world-beating pile of bad loans is bigger than Italy’s. State-run Indian banks are carrying the bulk of the burden, but at least they’re getting dollops of taxpayers’ money and being merged into fewer banking groups. A private-sector lender like Yes doesn’t have a formal public backstop. If it can’t fend for itself, the central bank could step in and force an arranged match with a better-run bank. The terms won’t be favorable to Yes shareholders. To avoid such a fate, Yes needs to raise growth capital by convincing new investors that the worst is over. And that brings us to the week’s other big incident. Yes shares jumped 13.5% after reports that One97 Communications Ltd., which owns the Indian digital payments network Paytm, may buy out a 9.6% stake in Yes from Rana Kapoor, the lender’s co-founder. Kapoor was forced to step down as CEO early this year by the Reserve Bank of India amid a controversy over bad-debt accounting. New CEO Ravneet Gill, brought in to clean up the mess, told Reuters last week that Yes was looking to sell a minority stake to “one of the world’s top three technology companies that had not previously invested in a bank.”Investors pushed the stock higher despite their many misgivings. Only two years ago, Yes had a high price-to-book multiple and an even bigger price-to-truth ratio, a term I’d coined to describe shareholders’ refusal to question the subterfuge at India’s private-sector banks. Although the banking regulator had found bad loans to be four times what Yes had disclosed in audited results, very few analysts believed something could go seriously wrong given Kapoor’s substantial stake — his skin in the game. That was then. Now, Yes is a battered lender gasping for capital. Despite the many regulatory hurdles on the way to a possible alignment with Paytm, which the latter hasn’t confirmed, a deal could help the bank break free of its checkered past — and reemerge as a digital lender. If Paytm can monetize the data of its 350 million mobile wallet users by giving them point-of-sale loans using the balance sheet of a bank — whether Yes or someone else — the payment firm will get a second wind. Paytm founder Vijay Shekhar Sharma had an early advantage as India’s mobile payments pioneer, but Walmart Inc.-owned PhonePe as well as Alphabet Inc.’s Google Pay are giving him stiff competition. Paytm’s losses are ballooning and it’s becoming evident that without old-fashioned lending, there may be no other path to profitability for a pure payments business. Mukesh Ambani, India’s richest tycoon, plans to use his rapidly growing Jio telecom network to offer customers discounts and vouchers that would be honored even by neighborhood stores. But for extending point-of-sale credit, Ambani would also need to borrow the balance sheet of a bank. For Yes, point-of-sale financing could be a growth avenue at a time when the turmoil in India’s formal and shadow banking sectors refuses to end. It’s put the brakes on what authorities were until recently claiming to be the world’s fastest-growing major economy. But alongside the despair, hope is building for a new model led by supply-chain credit, asset securitization, digital lending, and joint underwriting by finance companies (which know their borrowers) and banks (which have stable deposits). The tug of war between the past and the future of banking in India is getting interesting. What happens to Yes could be a gauge of which way the balance of power is shifting.(Corrects location of Mashreqbank PSC in 2nd paragraph to say Dubai. )To contact the author of this story: Andy Mukherjee at firstname.lastname@example.orgTo contact the editor responsible for this story: Patrick McDowell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
In a research note released yesterday, Apple (AAPL) analyst Ming Chi Kuo noted that more people from the US could choose the iPhone Pro than the iPhone 11.
(Bloomberg) -- Oracle Corp. unveiled an operating system that runs without the need for human oversight, part of a raft of new software tools meant to ease the company’s rocky transition to cloud computing.The operating system expands Oracle’s line of autonomous products beyond databases, the company’s flagship software. Chairman Larry Ellison announced the new Linux-based product Monday during remarks at OpenWorld, Oracle’s annual user conference in San Francisco.“If you eliminate human error in autonomous systems, you eliminate data theft,” Ellison said on stage. The feature makes Oracle’s products more secure than those sold by cloud leader Amazon Web Services, he said.Ellison said the operating system, which the company’s Autonomous Database runs on, will update itself without any downtime.The world’s second-largest software maker has sought to revive sales growth after years of almost stagnant revenue. Oracle hopes that a lineup of “self-driving” programs could help differentiate the company’s offerings against products from Amazon.com Inc. and Microsoft Corp. Those companies are the top two in the market to rent storage and computing power, which is projected to reach almost $39 billion in 2019. The tools may also entice longtime Oracle customers to upgrade their technology to take advantage of artificial intelligence and machine learning capabilities.Oracle disclosed last week that Mark Hurd, one of the company’s two chief executive officers, would take a leave of absence to treat an unspecified illness. Ellison and Oracle’s other CEO, Safra Catz, said they would fill in for Hurd, who has overseen the company’s sales and marketing efforts.The Redwood City, California-based company also announced a variety of changes and new programs to bolster its partner ecosystem:Oracle unveiled an agreement with VMware Inc. to bring virtualization software to Oracle’s cloud, similar to deals VMware has signed with Microsoft and Google.Customers will be able to buy software made by other companies in the Oracle Cloud Marketplace, which may help company partners including Cisco Systems Inc. and Palo Alto Networks Inc.Oracle also said it expanded a relationship with cybersecurity company McAfee Inc. to bring its security incident software to Oracle’s infrastructure cloud.Ellison said Oracle would offer a free version of its Cloud Infrastructure, giving developers, students and others perpetual access to the company’s autonomous database, computing and storage.The company plans to launch 20 additional cloud data-center hubs, called “regions,” by the end of 2020. Ellison said the company would have more regions around the world than AWS.Oracle will let customers run the autonomous database in their own data centers next year, and unveiled new servers with updated memory components from Intel Corp.To contact the reporter on this story: Nico Grant in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.