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Great Wall Wants Fiat Chrysler, Maersk Sells Its Oil and Beware of Killer Robots.

 5 min read / 

Great Wall Motors Wants Fiat Chrysler

The Chinese automaker says that it has “always had the interest and intention to acquire” Fiat Chrysler (FCA).

Editor’s Remarks: FCA is the world’s seventh largest auto maker, targeting sales of 7m vehicles a year, and it has said that it has not been approached by Great Wall Motor (GWM). GWM is one of China’s largest privately owned automakers, selling over 1m Sports Utility Vehicles (SUV) and trucks in China, and a tie-up with FCA would enable it to boost its high-end SUV product range. But a simple takeover could be too big for GWM, whose market cap is $18.1bn compared with FCA’s $20bn, unless it can get significant outside funding. Apart from the Fiat and Chrysler brands, FCA also owns Jeep, Dodge and Maserati and maybe GWM’s real target is Jeep, which sold 1.4m units in 2016, and would fit with the Chinese company’s SUV offering. FCA has previously approached General Motors and Volkswagen about a merger or takeover, and it should be no surprise that GWM has global aspirations after competitor Geely Motor’s success with its 2010 Volvo acquisition.

Hyundai Motor Governance Targeted

The new head of South Korea’s Fair Trade Commission is talking to Hyundai Motor about changing its complex ownership structure.

Editor’s Remarks: President Moon Jae-in has focused on the disproportionate influence of South Korea’s “chaebols” (conglomerates) in the economy since taking power in April, and his anti-trust chief Kim Sang-jo is getting down to work. Hyundai Motor’s founding Chung family only own a 7.5% direct stake in the auto manufacturer but control it through a complex web of cross-holdings. Kim has labelled this a “big governance risk” and suggested that the Chung family “shouldn’t waste more time before dissolving cross-shareholdings.” This move comes hot on the heels of the sentencing of Samsung Group heir and vice-chair Lee-Jae Yong to 12 years in jail for his role in bribing ex-President Park. Both the public and the stock market seem in favour of chaebol reform – shares in Hyundai Motor and other Hyundai group companies rose after Kim’s comments.

Maersk Sells Oil Unit to Total

The $7.5bn deal will allow Maersk to concentrate on its core container shipping, ports and logistics businesses.

Editor’s Remarks: Maersk Oil’s assets are mainly concentrated in the North Sea, with reserves of around 1bn barrels of oil, and the share deal, which includes $2.5bn of existing debt, will give Maersk Group a 3.75% stake in the French oil company. Maersk has said that it will return to investors a “material portion” of the Total shares it receives through a dividend, share buyback or distribution of the shares themselves. Maersk is the world’s largest container shipper and has been restructuring to take advantage of a sector that is consolidating quickly and where freight rates and profitability are showing improvements. And there could be more divestments to come – Maersk also owns oil drilling, tanker and supply services businesses and sales of these could net a similar amount to shareholders.

China Outbound Investment Crack-Down

The State Council has issued new regulations on overseas deals by Chinese companies that aim to restrict “irrational investment.”

Editor’s Remarks: The new guidelines will target outbound investment in property, hotels, entertainment and sports clubs in a move that underlines the central government’s efforts to reign in highly leveraged overseas acquisitions by private companies. However, at the same time, the State Council is encouraging investment in infrastructure projects linked to President Xi Jinping’s “One Belt, One Road” initiative and will also support investments in the high-tech, energy and agricultural sectors. After a splurge of deals in 2015 and 2016, government efforts to restrict “irrational” acquisitions have already impacted outbound investment, which totalled $57bn in the year to July, compared with $103bn during the same period in 2016. President Xi is upping his control of the economy in the lead into the upcoming 19th Communist Party Congress.

Beware of Killer Robots say Tech Experts

A group of 116 bosses of robotics companies have written an open letter to the UN warning of the dangers of lethal autonomous weapons.

Editor’s Remarks: The UN was due to begin discussions on formulating an outright ban on the development of autonomous weapons as part of its Convention on Conventional Weapons (CCW), but these talks have now been postponed until November. Signatories to the open letter, including Elon Musk and Mustafa Suleyman, head of AI at Google’s Deepmind, have warned that “once this Pandora’s box is opened, it will be hard to close” and urged the UN to act on a possible “third revolution in warfare.” In December 2016, the UN voted to begin formal talks on autonomous arms but so far only 19 out of 123 member states have called for an outright ban, and the open letter marks the first time that the world’s leading experts and developers of robotics and AI have come together to highlight the issue.

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Financing for Green Sustainable Development

 3 min read / 

Green Sustainable Development

Green sustainable development has been on multiple discussions channels. Talks, seminars, workshops, you name it. However, financing it has not been thoroughly discussed. How do we finance sustainable green development? Is it profitable for companies who do so? Is the rate of return high enough to cover the cost of investing in green technologies?

No doubt, green sustainable technology is an expensive technology with no clear ROI. Venturing into green technologies may be a blind-man guided only by a voice in his head. Yes, green sustainable technology yields a significant Marginal Social Benefit (MSB). But often, MSB is non-quantifiable.

Leading this social-technology movement, Jeffrey Sachs, with the support of foundations such as the Jeffrey Cheah Institute, established the Sustainable Development Goals (SDG) centre in the backdrop of academics – Sunway University.

The aim is to directly address the issues for SDGs and to ensure the goal set in the Paris Climate Agreement is able to be achieved successfully.

Now, as mentioned, private firms are both afraid and pessimistic about green sustainable development. Many do not see the outcome of this initiative and are not concerned about the environment. The technology is costly, and some firms are even struggling to break-even at their current costs. Lack of momentum from firms involved in similar industries and lack of financial support has made venturing into green technology unattractive.

On 14th of January 2018, pioneers and advocates from across the globe were invited to join a workshop at Sunway University. The idea was to bring together a group of academics, from the Asian Development Bank Institute to representatives from New Zealand and Austria, to discuss how to finance green sustainable developments. It attracted a number of firms involved or who wanted to be involved in this movement.

Financing models such as the SIB model and the Yozma model were introduced by Dr Hee Jin Noh. Papers on the theoretical relationships between a firm, a bank, and households were presented by Dr Maria Teresa Punzi. And the outcome of these series of workshops will be a book, which aims to provide a better insight and guideline for green financing, written by Dr Hee.

Also presented was a case study, comparing different countries. Associate Professor Ivan Diaz-Rainey had made comparisons on some successful countries, looking at European countries versus New Zealand and Australia. In the case study, countries were compared, and recommendations were made on how to make green financing successful. Though the definition and KPIs of a successful green development country are still vague, countries from Europe are exemplary on the ‘theory to practice’ phase.

While there is a significant increase in awareness and wanting to be involved by private firms, it needs to be supported by the government more. Regulators need to provide sufficient information to assist private firms venturing into green technology or green development. A healthy government support will increase the chance of a firm venturing into green development being successful. And these are the baby steps needed in order for transformation at city-scale or nationwide-scale.

Keep reading |  3 min read

Global Affairs

Smart Cities Take Off

Smart cities

Big tech deals took off in 2017 as big tech firms strived to make smart cities a reality. 

Editor’s Remarks: In 2017, 35 agreements were reached between various cities around the world and big tech companies – a huge increase from the eight that were agreed in 2016. Alphabet has launched a project to develop a miniature smart city in 12 acres of land it purchased in Toronto. Meanwhile, Alibaba is leveraging digital infrastructure in Macau, where its smart transport systems will hopefully improve efficiency for the municipal government. Saudi Arabia has also announced a plan to build a new city, to be named NEOM, which will rely fully on renewable energy as well as self-driving vehicles and drones.

Read more on Big Tech:

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Bayeux Tapestry on Loan

Bayeux Tapestry UK

Emmanuel Macron has offered to loan the famous tapestry to the UK in an effort to improve relations.

Editor’s Remarks: The offer is expected to be announced this Thursday, when Macron will meet UK officials at the Anglo-French summit at Sandhurst. The Bayeux Tapestry was commission by William the Conquerer’s brother to celebrate his 1066 conquest of England and depicts the Norman king defeating the Anglo-Saxon ruler King Harold. Although it was made in England, the piece – which measures about 35 square metres – has remained in France for the past 940 years. At the upcoming summit, Macron is also expected to petition the UK to join his combined European military initiative – a move many expect Britain’s new defence secretary Gavin Williamson to push back on.

Read more on Europe:

Keep reading |  1 min read


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