The ‘biggest change in oil market history’ is less than six months away

The rule change is designed to significantly curb pollution produced by the world’s ships. But, starting next year, the shipping industry will have to comply with rules that should dramatically reduce sulfur emissions. “It is the biggest change in oil market history,” Steve Sawyer, senior analyst at energy consultant Facts Global Energy, told CNBC. More than 170 countries, including the U.S., have signed on to the fuel change. The proposed rule change comes at a time when the stakes are high for


The rule change is designed to significantly curb pollution produced by the world’s ships. But, starting next year, the shipping industry will have to comply with rules that should dramatically reduce sulfur emissions. “It is the biggest change in oil market history,” Steve Sawyer, senior analyst at energy consultant Facts Global Energy, told CNBC. More than 170 countries, including the U.S., have signed on to the fuel change. The proposed rule change comes at a time when the stakes are high for
The ‘biggest change in oil market history’ is less than six months away Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: sam meredith
Keywords: news, cnbc, companies, shipping, ships, emissions, fuel, away, imo, change, history, biggest, worlds, market, oil, sulfur, months, industry


The 'biggest change in oil market history' is less than six months away

The International Maritime Organization (IMO) will enforce new emissions standards on January 1, 2020. The rule change is designed to significantly curb pollution produced by the world’s ships. Arterra | Universal Images Group | Getty Images

Tens of thousands of ships sailing the world’s oceans burn more than 3 million barrels of sludge-like high-sulfur fuel every single day. But, starting next year, the shipping industry will have to comply with rules that should dramatically reduce sulfur emissions. “It is the biggest change in oil market history,” Steve Sawyer, senior analyst at energy consultant Facts Global Energy, told CNBC. “It is going to affect crude oil producers, traders, ship owners, refiners, equity investors, insurance companies, logistical businesses, banks… Who’s left? I’m struggling to think of anyone it might not affect. That’s why it is a huge transition,” Sawyer said. With less than six months to go before the new rules on marine fuels come into force, CNBC takes a look at the far-reaching consequences of the coming changes.

What is IMO 2020?

On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships. Amid a broader push towards cleaner energy markets, the IMO is set to ban shipping vessels using fuel with a sulfur content higher than 0.5%, compared to levels of 3.5% at present. The most commonly used marine fuel is thought to have a sulfur content of around 2.7%.

There is a brick wall coming at the end of December which has been built for over two years. I think you can either run into it head first and say: ‘that hurts,’ or you can find a way around it. ” Steve Sawyer Senior analyst at Facts Global Energy

The new regulations are the result of a recommendation that came from a subcommittee at the United Nations (UN) more than a decade ago and was adopted in 2016 by the UN’s IMO, which sets rules for shipping safety, security and pollution. More than 170 countries, including the U.S., have signed on to the fuel change. Starting in 2020, ships found in violation of the new laws risk being impounded and ports in cooperating countries are expected to police visiting vessels.

Why does it matter?

“It is an enormous switch. If you considered shipping alongside all of the oil consuming nations, it would be number four or five on the list — so it is an enormous amount of consumption,” Anthony Gurnee, CEO of Ardmore Shipping, told CNBC’s “Squawk Box Europe” last week. Ardmore Shipping is a U.S.-listed company based in Ireland, with a business of owning and operating a fleet of tankers that move refined oil products. “We are going to a fundamentally different type of fuel. It is having a bigger impact actually on the refining industry than it is on shipping,” Gurnee said.

The forthcoming measures are widely expected to create an oversupply of high-sulfur fuel oil while sparking demand for IMO-compliant products — thus ratcheting up the pressure on the refining industry to produce substantially more of the latter. This is especially important, energy analysts say, because Middle Eastern oil producers — such as OPEC kingpin Saudi Arabia — are likely to lose out given their over-reliance on crude with a high-sulfur content. The shipping industry is under intense pressure to slash its sulfur emissions, given the pollutant is a component of acid rain, which harms vegetation and wildlife, and contributes to the acidification of the oceans. The proposed rule change comes at a time when the stakes are high for the world’s shipping vessels. Late last year, analysts at UBS estimated the green shipping market could be worth at least $250 billion over the next five years.

Is there any chance it could be delayed?

In a word: no. The IMO has said there can now be no change to the implementation date, as it is too late for any revisions to take place before January 1, 2020.

What must ships do to meet the new regulations?

Ship owners can significantly reduce their sulfur emissions by using low-sulfur fuel, traveling more slowly, installing exhaust gas cleaning systems or opting for other — more expensive — clean fuels such as liquefied natural gas. Some ships will chose to limit the air pollutants by installing exhaust gas cleaning systems, known as “scrubbers.” These are designed to remover sulfur oxides from the ship’s engine and boiler exhaust gases. A ship fitted with a scrubber could continue to use heavy oil, since the sulfur oxide emissions would be reduced to a level equivalent to the required limit.

A support vessel flying an Iranian national flag sails alongside the oil tanker ‘Devon’ as it prepares to transport crude oil to export markets in Bandar Abbas, Iran, on Friday, March 23, 2018. Ali Mohammadi/Bloomberg via Getty Images


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: sam meredith
Keywords: news, cnbc, companies, shipping, ships, emissions, fuel, away, imo, change, history, biggest, worlds, market, oil, sulfur, months, industry


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British government won’t try to stop Facebook’s new Libra digital coin, says UK finance minister

Regulators, not lawmakers, should decide whether Facebook needs a banking license to launch the new digital currency Libra, according to Philip Hammond, Britain’s outgoing finance minister. Hammond also told CNBC on Monday that the British government will “engage” with Libra and won’t try to stop it. This week in the U.S., Senate and House committees are due to examine Facebook’s proposed Libra currency and how it might impact consumers, investors and the U.S. financial system. The social networ


Regulators, not lawmakers, should decide whether Facebook needs a banking license to launch the new digital currency Libra, according to Philip Hammond, Britain’s outgoing finance minister. Hammond also told CNBC on Monday that the British government will “engage” with Libra and won’t try to stop it. This week in the U.S., Senate and House committees are due to examine Facebook’s proposed Libra currency and how it might impact consumers, investors and the U.S. financial system. The social networ
British government won’t try to stop Facebook’s new Libra digital coin, says UK finance minister Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: david reid
Keywords: news, cnbc, companies, finance, banking, libra, minister, world, stop, uk, coin, viewed, digital, currency, wont, facebooks, facebook, week, try


British government won't try to stop Facebook's new Libra digital coin, says UK finance minister

Regulators, not lawmakers, should decide whether Facebook needs a banking license to launch the new digital currency Libra, according to Philip Hammond, Britain’s outgoing finance minister.

Hammond also told CNBC on Monday that the British government will “engage” with Libra and won’t try to stop it.

This week in the U.S., Senate and House committees are due to examine Facebook’s proposed Libra currency and how it might impact consumers, investors and the U.S. financial system.

The social network’s digital token is being launched as a solution for the number of people in the world currently operating without access to banking services. It is also viewed as a potential moneymaker for Facebook that would likely compete with the multibillion-dollar remittance market.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: david reid
Keywords: news, cnbc, companies, finance, banking, libra, minister, world, stop, uk, coin, viewed, digital, currency, wont, facebooks, facebook, week, try


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Medical cannabis is gaining momentum in Asia

In Western markets, recreational cannabis is expected to outperform medicinal cannabis in market forecasts, but in Asia the opposite is likely to be true. Still, Prohibition Partners estimated that Asia’s medicinal cannabis market could by 2024 be worth $5.8 billion. “In Western markets, recreational cannabis is expected to outperform medicinal cannabis in market forecasts, but in Asia the opposite is likely to be true,” the consultancy said. “Chinese investors are warming up to the cannabis mar


In Western markets, recreational cannabis is expected to outperform medicinal cannabis in market forecasts, but in Asia the opposite is likely to be true. Still, Prohibition Partners estimated that Asia’s medicinal cannabis market could by 2024 be worth $5.8 billion. “In Western markets, recreational cannabis is expected to outperform medicinal cannabis in market forecasts, but in Asia the opposite is likely to be true,” the consultancy said. “Chinese investors are warming up to the cannabis mar
Medical cannabis is gaining momentum in Asia Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: grace shao
Keywords: news, cnbc, companies, gaining, plant, research, drugs, recreational, momentum, medical, according, asia, market, medicinal, japan, cannabis


Medical cannabis is gaining momentum in Asia

Hemp plants are grown for medical research purposes in Chiang Mai province, Thailand. Taylor Weidman | Bloomberg | Getty Images

With Thailand’s legalization of medical cannabis in February, some experts predict that other Southeast Asian countries may move to decriminalize the plant. If that happens, it could prove a significant opportunity for investors interested in the space. Many countries in Asia have made headlines for strict punishments for possessing, trafficking and consuming cannabis — including, notable, the ongoing bloody war on drugs in the Philippines. But some nations are nevertheless softening their attitude toward the once-taboo drug, and bringing it to hospitals in the region. The global legal marijuana market — including recreational use — was estimated to be worth $13.8 billion last year and is projected to reach $66.3 billion by the end of 2025, according to a 2018 report from California-based market research firm Grand View Research. There are two widely studied components of the cannabis plant: CBD, a non-hallucinating compound sold in bud, oil and tinctures, used for calming inflammation and the nerves; and THC, the psychoactive constituent that is more often used for recreational purposes and is still illegal in most countries. According to a 2018 report by the European Monitoring Centre for Drugs and Drug Addiction, both CBD and THC ingredients are applied in medicinal practices but used to treat different symptoms.

Momentum in the region

Currently, Canada and Uruguay are the only two countries that have fully legalized the recreational use of cannabis. But the piecemeal legalization of medicinal marijuana has been spreading across the world, including, notably, nations such as Israel, Australia, and Germany.

In Asia, Seoul and Bangkok look to be leading the way in the normalization and legalization of medical marijuana with government license. Thailand is the only country that has fully legalized medicinal cannabis with others actively looking into the plant’s health-care applications, according to Prohibition Partners, an international cannabis industry consultancy. Thailand, for its part, unveiled its first legal cannabis greenhouse in February. “The attitude is that it’s already a part of traditional medicine … and we should ensure that Thais can control their own industry, ” said Jim Plamondon, marketing head of Thai Cannabis Corporation said to Reuters last December. South Korea surprised many by being the first East Asian nation to legalize medical marijuana last November. The policy came to effect in March this year with the goal of expanding treatment options for patients with epilepsy, chronic pain and other conditions. In the same month, Japan approved clinical trials for the cannabis compound Epidiolex, a CBD oral solution used in treating epileptic patients.

In Western markets, recreational cannabis is expected to outperform medicinal cannabis in market forecasts, but in Asia the opposite is likely to be true. Prohibition Partners The 2019 Asian Cannabis Report

In late June, Malaysian Health Minister Dzulkefly Ahmad said in a statement, “Drugs have destroyed many lives, but wrongheaded governmental policies have destroyed many more. I think it’s obvious that after 40 years of war on drugs, it has not worked. There should be decriminalization of drugs.” He added that legalizing medicinal cannabis would be a “game changer.” Even famously strict-on-drugs nations including Singapore and China have been involved in research into medical applications for cannabis.

Investment opportunities in Asia

That all indicates a softer tone than those countries have traditionally taken, but the plant remains illegal in the majority of Asian nations. Still, Prohibition Partners estimated that Asia’s medicinal cannabis market could by 2024 be worth $5.8 billion. “In Western markets, recreational cannabis is expected to outperform medicinal cannabis in market forecasts, but in Asia the opposite is likely to be true,” the consultancy said. Japan, for one, will very likely become a big consumer of medical cannabis. “Japan currently has the largest population of elderly people at 33.1% and this is set to bring about an unprecedented rise in healthcare costs in the long term,” the group’s 2019 report said. “The region’s spending on healthcare is estimated to reach US$2.7 trillion by 2020.” And Japan is not the only one faced with an aging population. By 2030, 17.8% of China’s population is expected to be above 65 years old, according to The Economist Intelligence Unit. The report added that Asia is on track to have the oldest population in the world very soon and with old age comes many chronic disease. As for investing opportunities, many are still reluctant to actively bet on the commodity due to the social stigma around the plant, according to Prohibition Partners. Still, Hong Kong saw its first-ever Cannabis Investor Symposium in November last year. “Chinese investors are warming up to the cannabis market,“ the consultancy said, noting that despite its illegality in China, medical cannabis research has received some government encouragement. In fact, China is not only involved in the research but also heavily in production. Asia’s largest economy currently grows nearly half the world’s legal hemp, a strain of cannabis that contains almost no hallucinogens, according to China’s National Bureau of Statistics.

A distributor holds a jar of medicinal cannabis in Buriram, Thailand. Lillian Suwanrumpha | AFP | Getty Images

Hanma Investment Group (HMI) is the first company to receive permission to extract CBD in China. The country’s largest hemp production firm has been advocating for the benefits of the plant and trying to change the negative connotation most Chinese hold toward it. The company currently exports 90% of its production, mostly to the United States, Germany, the U.K., the Netherlands, and increasingly to Japan. “(Chinese) people’s perception of cannabis is no longer as negative as before. We have been reiterating the uses cannabis can be utilized in the medical and health sector,” Tan Xi, HMI’s president, told CNBC in a Chinese-language text message. Tan added in a phone interview there had been an increase in Chinese companies getting involved in industrial cannabis. Since the start of 2019, he claimed, there’s been significant traction in China’s capital market for such companies. Tan said he was encouraged by the increasing number of American states legalizing medical cannabis, but he said China appears nowhere close to legalizing it anytime soon.

‘Bleak on the earnings front’


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: grace shao
Keywords: news, cnbc, companies, gaining, plant, research, drugs, recreational, momentum, medical, according, asia, market, medicinal, japan, cannabis


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Britain faces its highest risk of recession since the crisis, new study warns

The U.K. is facing the highest risk of recession since the financial crisis due to Brexit uncertainty and a global economic slowdown, a new study has warned. The Resolution Foundation’s “recession risk” indicator, which uses government bond yields to assess the threat from a recession, projects that Britain’s recession risk has now reached its highest level since 2007. Britain experiences technical recessions, in which output contracts for two consecutive quarters, roughly once a decade. The ove


The U.K. is facing the highest risk of recession since the financial crisis due to Brexit uncertainty and a global economic slowdown, a new study has warned. The Resolution Foundation’s “recession risk” indicator, which uses government bond yields to assess the threat from a recession, projects that Britain’s recession risk has now reached its highest level since 2007. Britain experiences technical recessions, in which output contracts for two consecutive quarters, roughly once a decade. The ove
Britain faces its highest risk of recession since the crisis, new study warns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: elliot smith
Keywords: news, cnbc, companies, economic, global, uncertainty, risk, uk, resolution, recession, britain, leave, month, study, warns, crisis, highest, faces


Britain faces its highest risk of recession since the crisis, new study warns

The U.K. is facing the highest risk of recession since the financial crisis due to Brexit uncertainty and a global economic slowdown, a new study has warned.

The ominous assessment of the nation’s economic health, published by think tank the Resolution Foundation, suggested urgent plans are needed in order to mitigate the impact of the next downturn, with many of the Bank of England’s monetary policy cards already played.

The Resolution Foundation’s “recession risk” indicator, which uses government bond yields to assess the threat from a recession, projects that Britain’s recession risk has now reached its highest level since 2007.

Britain experiences technical recessions, in which output contracts for two consecutive quarters, roughly once a decade. However, the combination of global trade and domestic political pressures mean that the avoidance of mass job losses and socio-economic detriment which accompanied the last downturn may not be as attainable.

There is some evidence to suggest that the U.K. economy may already be contracting, as manufacturers in June had their worst month in more than six years and consumer borrowing increased at its slowest pace since 2014. The overall purchasing managers’ index (PMI) for June fell to 14.0, well below the average forecast in a Reuters poll, and its lowest since February 2013.

Last month, the Bank of England cut its forecast for economic growth in the second-quarter to zero.

The U.K. is set to leave the European Union on October 31, but is embroiled in a domestic leadership contest which is compounding uncertainty surrounding the country’s mode of egress.

Boris Johnson, the frontrunner to replace Prime Minister Theresa May, has vowed to leave the EU on Halloween with or without a deal in place, a move widely anticipated to be profoundly damaging for the British economy.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: elliot smith
Keywords: news, cnbc, companies, economic, global, uncertainty, risk, uk, resolution, recession, britain, leave, month, study, warns, crisis, highest, faces


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The next Lagarde? Europe searches for one of its own to take the IMF job

The International Monetary Fund (IMF) will soon start the process of choosing a new managing director, with Christine Lagarde set to leave the organization in a few months’ time. Since the IMF’s formation back in 1945, the managing director has always been from Europe. Lagarde decided to suspend her role as managing director, shortly after the 28 heads of state decided she should replace Mario Draghi as the ECB chief. Before officially taking on her new position, Lagarde has to answer questions


The International Monetary Fund (IMF) will soon start the process of choosing a new managing director, with Christine Lagarde set to leave the organization in a few months’ time. Since the IMF’s formation back in 1945, the managing director has always been from Europe. Lagarde decided to suspend her role as managing director, shortly after the 28 heads of state decided she should replace Mario Draghi as the ECB chief. Before officially taking on her new position, Lagarde has to answer questions
The next Lagarde? Europe searches for one of its own to take the IMF job Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: silvia amaro
Keywords: news, cnbc, companies, european, director, lagarde, europe, replace, official, searches, imf, start, decided, months, managing, job


The next Lagarde? Europe searches for one of its own to take the IMF job

The International Monetary Fund (IMF) will soon start the process of choosing a new managing director, with Christine Lagarde set to leave the organization in a few months’ time.

EU ministers have made it clear they want to see someone from their continent take the job — which will be a five-year term — and continue the tradition of having a European at the helm of the Washington-based institution. Since the IMF’s formation back in 1945, the managing director has always been from Europe.

“What we want in France is first to have a European Union candidate that can succeed Lagarde as the head of the IMF; secondly, we want to be able to take a decision quickly; thirdly, I want it to be a unique candidate, presented by the EU, without useless rivalries,” Bruno Le Maire, the French finance minister, said last week. His Spanish counterpart, Nadia Calvino, also said it was a “priority” for it to be European.

Lagarde decided to suspend her role as managing director, shortly after the 28 heads of state decided she should replace Mario Draghi as the ECB chief. Before officially taking on her new position, Lagarde has to answer questions from European lawmakers in the coming months. Therefore, official discussions on who should replace her at the IMF are unlikely to start until she hands in her official resignation.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: silvia amaro
Keywords: news, cnbc, companies, european, director, lagarde, europe, replace, official, searches, imf, start, decided, months, managing, job


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Investors searching for yield should buy this sector in Singapore, strategists say

Singapore-listed real estate investment trusts may not appreciate much more in price given their roughly 20% rise this year — but strategists said they’re still a buy as interest rates will likely stay low. Real estate investment trusts, or REITs, are companies that manage a portfolio of properties such as shopping malls, hotels and offices. Income generated from those real estate assets, after accounting for operating fees, is distributed as dividends to shareholders. REITs listed on the Singap


Singapore-listed real estate investment trusts may not appreciate much more in price given their roughly 20% rise this year — but strategists said they’re still a buy as interest rates will likely stay low. Real estate investment trusts, or REITs, are companies that manage a portfolio of properties such as shopping malls, hotels and offices. Income generated from those real estate assets, after accounting for operating fees, is distributed as dividends to shareholders. REITs listed on the Singap
Investors searching for yield should buy this sector in Singapore, strategists say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: yen nee lee
Keywords: news, cnbc, companies, sreits, buy, yield, say, real, investment, singapore, trusts, million, investors, estate, reits, strategists, sector, searching, portfolio


Investors searching for yield should buy this sector in Singapore, strategists say

Singapore-listed real estate investment trusts may not appreciate much more in price given their roughly 20% rise this year — but strategists said they’re still a buy as interest rates will likely stay low.

Real estate investment trusts, or REITs, are companies that manage a portfolio of properties such as shopping malls, hotels and offices. Income generated from those real estate assets, after accounting for operating fees, is distributed as dividends to shareholders.

Investors generally find REITs attractive for their dividend payout and the potential for capital appreciation, and as a diversification in a portfolio of stocks, bonds and cash.

REITs listed on the Singapore Exchange — commonly known as S-REITs — have been a favorite among institutional investors. In the first six months of 2019, S-REITs attracted a net inflow of 396.3 million Singapore dollars ($291.85 million) from institutional investors, the exchange said in a report.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: yen nee lee
Keywords: news, cnbc, companies, sreits, buy, yield, say, real, investment, singapore, trusts, million, investors, estate, reits, strategists, sector, searching, portfolio


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A lack of innovation could be why investments in China’s tech firms are plunging

China has spawned some of the world’s largest private technology companies like TikTok parent, Bytedance and Alibaba affiliate, Ant Financial. Foo has invested in large Chinese technology companies such as ride-hailing service DiDi, and electric car start-up Xpeng Motors. The concern over the public market performance of Chinese tech firms has had an effect on early stage venture investors. Some public companies also continue to lose money as they sink money into growing the company. They come o


China has spawned some of the world’s largest private technology companies like TikTok parent, Bytedance and Alibaba affiliate, Ant Financial. Foo has invested in large Chinese technology companies such as ride-hailing service DiDi, and electric car start-up Xpeng Motors. The concern over the public market performance of Chinese tech firms has had an effect on early stage venture investors. Some public companies also continue to lose money as they sink money into growing the company. They come o
A lack of innovation could be why investments in China’s tech firms are plunging Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: arjun kharpal
Keywords: news, cnbc, companies, capital, public, technology, investments, lack, firms, plunging, companies, chinese, investors, market, liu, tech, chinas, innovation, money


A lack of innovation could be why investments in China's tech firms are plunging

An investor observes the stock market at a stock exchange hall on June 29, 2018 in Jinhua, Zhejiang Province of China. VCG | Visual China Group | Getty Images

A lull in innovation is one of the major forces behind a recent plunge in venture capital (VC) investment in Chinese technology companies, according to investors who spoke to CNBC. The value of VC investment in China was $9.7 billion in the second quarter of 2019, according to financial data company Prequin. This was down by nearly 77% from the $41.3 billion invested in the same period last year. China has spawned some of the world’s largest private technology companies like TikTok parent, Bytedance and Alibaba affiliate, Ant Financial. But investors say the country’s tech sector lacks innovation. “If you look at the past decade, there is a lot of low hanging fruit when there is the first mobile boom. And then after mobile, there hasn’t been a new … platform to host and spawn out of the new innovations coming out of the platform,” Yuan Liu, managing director of China-based VC fund Zhenfund, told CNBC in an interview. “So people were thinking whether VR (virtual reality) will be the next big thing, whether crypto will be the next big platform that would … do this. They didn’t turn out to be,” Liu said. “And AI (artificial intelligence), there is a lot of hope for that. And then after AI … investors started to think, is AI a bubble?” For now, he said, “there hasn’t been many innovations in the market so investors haven’t seen anything that excites them.”

That sentiment was echoed by Jixun Foo, managing partner at GGV Capital, a venture capital firm that invests in entrepreneurs in the U.S., Asia and other emerging economies. Foo has invested in large Chinese technology companies such as ride-hailing service DiDi, and electric car start-up Xpeng Motors. During a CNBC-hosted panel at the RISE conference in Hong Kong, Foo said the “innovation wave” has “slowed down.” “Things always goes in cycles,” Foo said. “If you were to project forward where 5G comes up, there will be a new innovation wave. From 3G to 4G we see short form video. What will come with 5G, with AR (augmented reality), with VR, there may be new innovation waves that will propel new investment.”

5G refers to next-generation mobile networks that promise super-fast data speeds with the ability to support new technologies like driverless cars. “There is no lack of capital. It’s just where money is being put, there needs to be innovation that drives this new capital requirement,” Foo added.

Trade war worries

Other investors cited the ongoing U.S.-China trade war as well as poor performance of some Chinese technology companies in the public markets, as factors for the fall in investment. “It has a lot to do with the confidence level with the China-U.S. trade war definitely part of it,” Edith Yeung, managing partner at Proof of Capital, told CNBC. “And then I think also a lot of the IPOs (initial public offering) that happened in 2018 haven’t really performed … so it sends not-so-good of a signal for the early VCs.” Chinese tech companies have been caught in the middle of tensions between the U.S. and China. Huawei, for example, has been put on a U.S. blacklist that restricts American companies from selling to the Chinese firm. Some of those restrictions have since been eased. While Huawei is not publicly listed, negative sentiment toward Chinese technology firms have played out in the public markets, particularly with some of the companies that have listed in the past year. Smartphone maker Xiaomi, which went public in July 2018, is down over 26% this year. Shares of electric carmaker NIO, which is listed in the U.S., are down more than 46% this year. The concern over the public market performance of Chinese tech firms has had an effect on early stage venture investors. “When you see the public markets not performing well, the pre-IPO or the growth equity guys will be more cautious when they look at their valuation metrics and dynamics … which will then trickle down to the series B guys, ” Liu said. Series B refers to a relatively early stage funding round for businesses.

‘Cash burn’ concerns

Many start-ups looking to grow quickly burn through cash to gain market share and scale with the aim of trying to achieve profitability later on. Some public companies also continue to lose money as they sink money into growing the company. Liu of Zhenfund, which is an early stage investor, said companies are now discussing “unit economics” earlier in their fund-raising, something that didn’t happen five years ago. Unit economics refers to the revenue and costs associated with a company’s business model. In the case of many internet companies, a single user is the unit. Working out unit economics can be a way of projecting how profitable a company will be and if their business model is viable. Liu said he is advising companies to act like they won’t be able raise money for the next 6-12 months. Some start-ups are also looking to raise funds so they have some money in case things turn sour. “Some of them raise money, come out to market proactively before they actually need (it), when they have say 12 months’ capital to go. They come out now just so they have more buffer because people are uncertain about the future capital market,” Liu told CNBC.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: arjun kharpal
Keywords: news, cnbc, companies, capital, public, technology, investments, lack, firms, plunging, companies, chinese, investors, market, liu, tech, chinas, innovation, money


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China posts its lowest quarterly growth in 27 years as the trade war drags on

China released second-quarter figures on Monday showing that its economy slowed to 6.2% — the weakest rate in at least 27 years, as the country’s trade war with the U.S. took its toll. From April to June, China’s economy grew 6.2% from a year ago, the country’s statistics bureau said on Monday. The second quarter economic growth was the country’s slowest pace since the first quarter of 1992 — the earliest quarterly data on record, according to Reuters. China’s statistics bureau said the economy


China released second-quarter figures on Monday showing that its economy slowed to 6.2% — the weakest rate in at least 27 years, as the country’s trade war with the U.S. took its toll. From April to June, China’s economy grew 6.2% from a year ago, the country’s statistics bureau said on Monday. The second quarter economic growth was the country’s slowest pace since the first quarter of 1992 — the earliest quarterly data on record, according to Reuters. China’s statistics bureau said the economy
China posts its lowest quarterly growth in 27 years as the trade war drags on Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: huileng tan
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China posts its lowest quarterly growth in 27 years as the trade war drags on

China released second-quarter figures on Monday showing that its economy slowed to 6.2% — the weakest rate in at least 27 years, as the country’s trade war with the U.S. took its toll.

From April to June, China’s economy grew 6.2% from a year ago, the country’s statistics bureau said on Monday. That was in line with the expectations of analysts polled by Reuters, and lower than the 6.4% year-on-year growth in the first quarter of 2019.

The second quarter economic growth was the country’s slowest pace since the first quarter of 1992 — the earliest quarterly data on record, according to Reuters.

China’s statistics bureau said the economy faces a complex situation with increasing external uncertainties, Reuters reported. The world’s second largest economy also faces new downward pressures and will try to ensure steady economic growth, the statistics bureau added.

China’s months-long trade dispute with the U.S. has weighed on its economy.

“Uncertainty caused by the US-China trade war was an important factor and we think this will persist, despite the recent tariff truce, ” said Tom Rafferty, principal economist for China at The Economist Intelligence Unit.

“Businesses remain skeptical that the two countries will reach a broader trade agreement and recognise that trade tensions may escalate again,” wrote Rafferty in a note on Monday.

One analyst said he will be watching China’s employment numbers more closely for a better read of the economy.

“Are factories shedding workers as their order book falls? Because that leads to the overall target of saying ‘we want to grow employment’ — and the social structure of China hinges on that, and I think that’s very important for the authorities,” said Colin Graham, Chief Investment Officer of multi asset solutions at Eastspring Investments.

Graham said there is room for the People’s Bank of China to introduce more fiscal stimulus in the months ahead to steady the economy.

“They have room to make sure the economy doesn’t slow too quickly,” Graham told CNBC’s “Street Signs” on Monday after the GDP numbers were released. He said he expected China’s 2019 full-year GDP growth to be flat at between 6.2% and 6.3% from a year ago.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: huileng tan
Keywords: news, cnbc, companies, countrys, drags, growth, 27, quarter, chinas, quarterly, lowest, economy, trade, war, bureau, statistics, 62, china, posts


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Billionaire investor Peter Thiel reportedly says the FBI and CIA should investigate Google

Billionaire investor Peter Thiel said Sunday that the FBI and the CIA should investigate if Google has been infiltrated by Chinese intelligence, according to a report from Axios. “Number one, how many foreign intelligence agencies have infiltrated your Manhattan Project for AI (artificial intelligence)?” Thiel reportedly asked. “Number two, does Google’s senior management consider itself to have been thoroughly infiltrated by Chinese intelligence?” He said those questions “need to be asked by th


Billionaire investor Peter Thiel said Sunday that the FBI and the CIA should investigate if Google has been infiltrated by Chinese intelligence, according to a report from Axios. “Number one, how many foreign intelligence agencies have infiltrated your Manhattan Project for AI (artificial intelligence)?” Thiel reportedly asked. “Number two, does Google’s senior management consider itself to have been thoroughly infiltrated by Chinese intelligence?” He said those questions “need to be asked by th
Billionaire investor Peter Thiel reportedly says the FBI and CIA should investigate Google Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, reportedly, investigate, google, intelligence, cia, washington, fbi, thoroughly, thiel, peter, chinese, asked, infiltrated, questions, investor, billionaire


Billionaire investor Peter Thiel reportedly says the FBI and CIA should investigate Google

Billionaire investor Peter Thiel said Sunday that the FBI and the CIA should investigate if Google has been infiltrated by Chinese intelligence, according to a report from Axios.

Thiel, a Facebook board member, was speaking at the National Conservatism Conference in Washington, D.C. and his speech focused on three questions that should be presented to the tech giant, Axios said.

“Number one, how many foreign intelligence agencies have infiltrated your Manhattan Project for AI (artificial intelligence)?” Thiel reportedly asked. “Number two, does Google’s senior management consider itself to have been thoroughly infiltrated by Chinese intelligence?”

He said those questions “need to be asked by the FBI, by the CIA.”


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: saheli roy choudhury
Keywords: news, cnbc, companies, reportedly, investigate, google, intelligence, cia, washington, fbi, thoroughly, thiel, peter, chinese, asked, infiltrated, questions, investor, billionaire


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Impossible Foods sets its sights on Asia, which consumes nearly half the world’s meat

Meatless burger-maker Impossible Foods is looking to expand in Asia — a region with a voracious appetite for meat. According to a 2019 report by the Organisation for Economic Co-operation and Development, and the Food and Agriculture Organization of the United Nations, Asia accounts for more than 46% of the world’s meat consumption. Impossible Foods, which primarily makes plant-based protein products, made their first foray into Asia via Hong Kong about 18 months after launching worldwide. Hong


Meatless burger-maker Impossible Foods is looking to expand in Asia — a region with a voracious appetite for meat. According to a 2019 report by the Organisation for Economic Co-operation and Development, and the Food and Agriculture Organization of the United Nations, Asia accounts for more than 46% of the world’s meat consumption. Impossible Foods, which primarily makes plant-based protein products, made their first foray into Asia via Hong Kong about 18 months after launching worldwide. Hong
Impossible Foods sets its sights on Asia, which consumes nearly half the world’s meat Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: stella soon
Keywords: news, cnbc, companies, foods, nearly, meat, sights, sets, half, halla, worlds, asia, plantbased, kong, consumes, market, core, united, impossible, hong


Impossible Foods sets its sights on Asia, which consumes nearly half the world's meat

Meatless burger-maker Impossible Foods is looking to expand in Asia — a region with a voracious appetite for meat.

“Asia is by far the number one focus for us. It is core to our mission; core to our business,” the company’s senior vice president for international, Nick Halla, told CNBC’s “Street Signs ” on Thursday.

According to a 2019 report by the Organisation for Economic Co-operation and Development, and the Food and Agriculture Organization of the United Nations, Asia accounts for more than 46% of the world’s meat consumption.

Impossible Foods, which primarily makes plant-based protein products, made their first foray into Asia via Hong Kong about 18 months after launching worldwide.

Hong Kong has one of the highest meat consumption per capita in the world, according to the University of Hong Kong. Hong Kongers consume a daily average of meat equivalent to about two pieces of 10-oz steak — that’s four times higher than in the United Kingdom, according to the university’s research.

This has meant the California-based company had to adopt a different market strategy for its Hong Kong expansion.

“The first thing we have to do, coming into a new market, is build that credibility that this is not the plant-based product of the past,” Halla said.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: stella soon
Keywords: news, cnbc, companies, foods, nearly, meat, sights, sets, half, halla, worlds, asia, plantbased, kong, consumes, market, core, united, impossible, hong


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