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Breakfast Briefing: British Warships Face the Axe and Facebook for Kids

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UK Assault Ships Face the Axe

The Royal Navy may cut key strategic warships in order to plug a £20bn black hole in funding.

Editor’s Remarks: Gavin Williamson, the UK’s new defence secretary, may have to axe HMS Bulwark and HMS Albion, Britain’s two amphibious assault ships. Presently, the UK and France are the only two nations in Western Europe with the capacity to conduct large-scale amphibious assaults on enemy territory. As such, the possibility of the UK scrapping this capability has prompted worry among its NATO allies. The US has said that the removal of the UK’s amphibious ships would strongly impact America’s strategy in Europe while also strengthening the hand of NATO’s opponents.

CVS to Buy Aetna

America’s biggest drugstore chain will purchase healthcare insurer Aetna for $69bn. 

Editor’s Remarks: CVS Health’s takeover of Aetna will create a new behemoth in the prescription drugs industry – a move that some say is a response to Amazon’s rumoured debut in the pharmacy business. Over the past several months, Amazon has received licenses from various US pharmacy boards, which has fuelled speculation that the e-commerce titan is looking to sell prescription drugs online. Aetna shareholders will receive $207 per share in cash and CVS stock, which is a 30% premium on the company’s share price in October. Ahead of Amazon’s next move, commentators expect to see further consolidation in the pharmacy industry as incumbents prepare to defend their territory.

Facebook Launches Kids’ App

A new version of Facebook Messenger will enable parents to control who their children talk to.

Editor’s Remarks: The new app is aimed at children as young as six and parents who want their kids to access the internet safely. The app has not yet been released and will first go live in the US before spreading across the entire user base. Facebook’s introduction of this new feature coincides with YouTube facing allegations that it has allowed publication of videos of children and sexual comments related to them. Facebook has confirmed that children’s accounts will not automatically convert into full user accounts when kids reach 13, the minimum age limit for full user accounts.

Irish Border Deal Falls Through

Following rumours that consensus had been reached, the DUP’s objection caused it to fall through.

Editor’s Remarks: Yesterday, senior officials said that “regulatory alignment” has been achieved on the issue of the post-Brexit Irish border. However, while this appeased the Ireland, Northern Ireland’s DUP rejected draft proposals – despite Theresa May personally phoning DUP leader Arlene Foster. Given that the Conservatives owe their working parliamentary majority to the co-operation of the DUP, the latter wields significant power in the ongoing Brexit negotiations. The collapse of the deal comes just days before the December EU summit and therefore reduces the time available for the member states to outline their proposals for the union’s future relationship with the UK.

Xiaomi Prepares for 2018 IPO

The Chinese smartphone maker is looking to go public at a valuation of $50bn.

Editor’s Remarks: Xiaomi was the world’s most valuable startup before Uber dethroned the company. Now, it is looking to finally go public sometime in early 2018, according to insiders. Xiaomi is based in Beijing and commentators believe it will most likely list in Hong Kong, rather than New York or London. Over recent months, the company has regained ground it lost to competitors such as Huawei and is currently expanding its retail stores in India, where it has become the premier smartphone maker in less than three years after entering the market in 2014.

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Asia

Japan Is Behind Bitcoin’s Rise

Japan Bitcoin

Deutsche Bank released a research note saying that Japanese investors account for bitcoin’s meteoric rise.

Deutsche Bank analysts have said they believe that individual Japanese foreign-exchange (FX) traders are instead moving towards leveraged cryptocurrency trading in the search for astronomical returns. Already, Japan makes up 50% of the world’s leveraged FX trading and Nikkei recently said that 40% of cryptocurrency trading was denominated in yen throughout October and November. Evidently, the Japanese are growing tired of years of ultra-low interest rates and are turning to the blockchain to boost their savings.

Keep reading |  1 min read

Global Affairs

Breakfast Briefing: Disney Buys 21st Century Fox and Snap’s Studio

Disney Fox

Disney Buys Up Murdoch Assets

Disney has bought assets in Rupert Murdoch’s empire in a deal worth $66bn.

Editor’s Remarks: 86 year-old Rupert Murdoch is set to rapidly downsize his business holdings by selling 21st Century Fox to Disney. Before the sale goes ahead, Murdoch’s Fox News will complete its planned acquisition of the 61% Sky that the company does not already own. Once complete, Sky will join other Murdoch assets such as Hollywood studio 21st Century Fox in Disney’s expanding portfolio. Disney CEO Bob Iger has confirmed he will remain in his position until 2021 and also consider a position for James Murdoch after the acquisition is complete.

Delta Opts for Airbus

Delta Air Lines bought 100 jets from Airbus instead of its rival, Boeing.

Editor’s Remarks: In a deal worth over $12.7bn, the budget North American airline chose to back Airbus by buying a large order of its A321neo jets. The airline will take delivery of the single-aisle planes in 2020 and has retained the option to purchase a further 100 jets. Meanwhile, Boeing will be licking its wounds as it now turns elsewhere to offload its 300 brand new Max 10 737s. The deal follows another large order of Airbus planes by Delta in 2014, when the carrier purchased 50 wide-body aircraft for $14bn. The last time Delta bought a major order of Boeing planes was in 2011, when it purchased 100 737s.

Capita Crashes 14%

The troubled UK outsourcing giant plunged 14% after it announced that 2017 had been subdued.

Editor’s Remarks: Capita has plunged 68% over the last two-and-a-half years as it has suffered setback after setback relating both to the quality of it services and increasing competition for big ticket contracts. The company announced that although 2017 has been in line with expectations, contract wins have come in below expectations. The sharp fall in Capita’s share price reflects how the UK stock market is presently hyper-sensitive to even the faintest whiff of a profit warning. Capita’s collapse is a huge blow to Neil Woodford, the prominent UK fund manager, who has suffered similar falls in a number of his other large holdings since the Brexit vote.

Japan Is Behind Bitcoin’s Rise

Deutsche Bank released a research note saying that Japanese investors account for bitcoin’s meteoric rise.

Editor’s Remarks: Deutsche Bank analysts have said they believe that individual Japanese foreign-exchange (FX) traders are instead moving towards leveraged cryptocurrency trading in the search for astronomical returns. Already, Japan makes up 50% of the world’s leveraged FX trading and Nikkei recently said that 40% of cryptocurrency trading was denominated in yen throughout October and November. Evidently, the Japanese are growing tired of years of ultra-low interest rates and are turning to the blockchain to boost their savings.

Snap Opens Online Studio

The studio will enable brands to build adverts that individuals users can include in their own snaps.

Editor’s Remarks: Snapchat is adding another trick to its repertoire by allowing users to add branded animations to the existing arsenal of augmented reality lenses This is not a wholly new innovation as advertisers can already sponsor lenses, although there is a hefty minimum spend of $300,000 and a current need to work closely with Snap’s design team. However, the new studio will enable advertisers to create their own adverts, which will then need to be accepted by Snap before they are given the green light. The move is part of Snap’s wider efforts to diversify their revenue streams.

 

Keep reading |  3 min read

Asia

Japanese Startup Ispace Raises $90m

Ispace

Ispace Inc raised $90m from Japan’s largest corporates in a bid to reach orbit by 2019. 

Ispace is backed by Japan Airlines, Tokyo Broadcasting System Holdings and also government-backed Innovation Network Corp. of Japan. The company plans to sell advertising space on its spacecraft, which will then feature prominently in distributed images. However, Ispace also envisages the use of rovers that will offer a “projection mapping service”, which will essentially produce a tiny billboard on the surface of the moon. This is the latest announcement in what is rapidly shaping up to be a wider commercialisation of space exploration. Elsewhere, SpaceX and Blue Origin are developing reusable rockets, while Planetary Resources intends to mine asteroids.

Keep reading |  1 min read

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