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Infographic: Grading 15 tech companies that declined big takeover offers
Venture Capital
<p>If you were to ask legendary investor Peter Thiel about the most important moment in Facebook history, he would point to an exchange in July 2006.</p> <p>Yahoo had made the lucrative offer of $1 billion for Facebook, and Peter Thiel as well as board member Jim Breyer got called into a meeting about the deal with Mark Zuckerberg.</p> <p>Courtesy of: Visual Capitalist<br /> This article was published by ValueWalk. <br /> Photo: Jason McELweenie </p>
Corruption kills entrepreneurship
Venture Capital
<p>On Tuesday night, Nobel Laureate Professor Dan Shechtman spoke at the Hong Kong University of Science and Technology about “How Technological Entrepreneurship Can Be Nurtured”. </p> <p>The distinguished chemist sees five important factors that are keys to promoting get-up-and-go risk-taking:</p> <p>“We need good basic education for everyone. And then we need a good engineering and science education, government policy and support for entrepreneurship, a free market economy, and, most important of all, no corruption, for corruption kills entrepreneurship.”</p> <p>Schechtman’s delivered his lecture at the UC RUSAL President’s Forum and HKUST 25th Anniversary Distinguished Speakers Series. UC Rusal is the world’s second biggest aluminium producer and is controlled by Oleg Deripaska, one of Russia's richest and best-connected oligarchs.<br /> Photo: Fred S.<br /> &nbsp;</p>
Innovative trade financing
Capital Markets
<p>Companies still find it tough to access trade finance. Bank-led funding has plummeted by a half from a peak of $14 trillion before the global financial crisis in 2008 to about $7 trillion, according to a report in September by law firm Clyde &amp; Co.</p> <p>More intense regulatory scrutiny and tougher lending rules have curbed both the capacity and appetite of banks to open up the credit valve. </p> <p>That’s forcing producers, suppliers and purchasers to rely on a patchwork of financing to meet their needs, turning to private equity, trade-finance funds or credit provided by major commodity-trading houses.</p> <p>But some banks have found ways to overcome the hurdles by forging agreements with third parties.</p> <p>Today, Citi and the IFC, a member of the World Bank Group, announced the signing of a $1.2 billion risk-sharing facility to help stimulate the growth of trade in emerging markets.</p> <p>It marks the extension of two existing facilities that have financed a total volume of $20 billion for 3,368 trade transaction through 163 Emerging Market issuing banks in 40 countries, of which 23 are low and lower middle-income countries, according to a Citi statement on October 28.</p> <p>“As the availability of global trade finance continues to decline, IFC is committed to working with Citi to find innovative ways to help expand trade finance flows in the developing world,” said Marcos Brujis, IFC director of financial institutions group.</p> <p>Citi says it will use the funding “to originate and fund trade finance transactions in Africa, Asia, Central and Eastern Europe, Latin America, and the Middle East, enabling its bank clients to extend financing to local importers and exporters. The funding is expected to support emerging market trade flows of more than $6 billion through 2019”.<br /> Photo: Andrew Priest<br /> &nbsp;</p>
Asia's growing HNWI populace needs fintech solutions — Fintech O-2-O Meetup
<p>As Asia's population of high-net-worth individuals (HNWIs) explodes, so is the growing demand for fintech solutions to serve them, wealth management professionals told an audience at yesterday's Cyberport NexChange Fintech O-2-O Meetup.</p> <p>The event, held in Hong Kong's Cyberport Tuesday, opened with a keynote speech by Mads Faurholt-Jorgensen, founder of fintech-focused investment firm Nova Founders, which was followed by two panels.</p> <p>The first panel included Joanne Murphy, CAIA Association's Asia Pacific managing director, and Peter McMillan, head of wealth management Asia at Thomson Reuters, and featured a discussion on the growing demands of an increasingly sophisticated HNWI client base.</p> <p>"Investors are smarter," said Murphy,"and they have a need for greater accessbility."</p> <p>She added that clients want more transparancy and information regarding their investments, but pulling out the relevant information for each client can be expensive and time consuming. This is just one area where fintech innovation is needed, the panelists said.</p> <p>The second panel included Dr. Cedric Jeannot from APrivacy, and Phillip Yoon of Phinary Advisors, both managers of their respective wealth management-focused fintech startups. Both expressed similar sentiments to the first panel.</p> <p>Dr. Jeannot observed that small family offices and asset managers were also more nimble when it came to adopting fintech solutions. Yoon meanwhile added that it was important that wealth managers did not focus on innovation for innovation's sake, saying:<br /> "Innovation brings assurance. Regardless of what tools you bring, clients want assurance."<br /> &nbsp;</p>
Japan Post's mega IPO: A saving grace for Abenomics?
Capital Markets
<p>Japan Post's complex three-piece stock market debut is now coming to frutition with Japan Post Holdings pricing at the top end of  its indicative range at 1,400 yen, raising 693 billion yen ($5.7 billion).</p> <p>The pricing comes a week after Japan Post's banking and insurance units also priced at the top of the range after strong appetite from individual investors. About 11% of the companies will be sold with each listing seprarelty, but simultaneously, on November 4.</p> <p>The IPOs are expected to raise a combined 1.6 trilllion yen. It's the Japan's biggest listing since NTT Docomo in 1998, and its largest privatisation since Nippon Telegraph &amp; Telephone Corp in 1987.</p> <p>Due to the political sensitivity of Japan Post's privatisation it has taken the government about a decade to get to this point. With strong demand coming from retail investors — despite recent volatility in Japanese stock markets — the triple offering is proving to be a massive coup for Abenomics, the name for Prime Minister Shinzo Abe's raft of sweeping economics reforms.</p> <p>Abe has been in for a lot of flak recently thanks to stalled progress on his strucutral reforms, the so-called third arrow of the Abenomics agenda. His government's decision to abandon the country's pacifist constitution has also seen the leader's approval ratings sink like a stone.</p> <p>If all goes well when the bell rings,  Japan Post's successful listing will help validate Abenomics and restore public faith in the government's reforms.<br /> Photo: Konstantin Leonov</p>
How to become а successful negotiator: tips from game-theory consultant and TEDx speaker Peter Nixon
<p>20 years ago, Peter Nixon took the road less travelled – between becoming a partner at one of the largest auditing firms and creating a new startup he had a passion for, he chose the latter. He became an expert in negotiation and strategic dialogue.</p> <p>To date, Nixon has influenced tens of thousands of professionals through training, coaching and consulting in over 50 countries. His clients over the years have included Morgan Stanley, Merrill Lynch, JP MorganChase, Standard Chartered Bank, Swire Coca-Cola, Disney, Nike and senior government officials in several countries.</p> <p>Based in Hong Kong, work ranges from sales and procurement, to change management as well as intra and intergovernmental negotiations. He is best known for his book ‘The Solution is in the Dialogue’, which he gave a Tedx talk on in 2014.</p> <p>Nixon joked that his career choice had to do with his upbringing in Montreal, Canada – the ice hockey capital of the world, “when somebody bothers you in that culture,” he said, mimicking the actions, “you drop your gloves, flick your helmet off and dare him to fight.”</p> <p>After extensively traveling, over time, he became more sensitive to different cultures around the world; he no longer believes in the aggressive black-and-white thinking from the West to be a solution to problems. Instead, “The solution is in the dialogue” has become his newly-adopted mantra. “I want to tell the world that I think there is a problem about the way we are confronting the problems we are dealing with,” Nixon described his calling in promoting dialogue.</p> <p>His model of dialogue is based on Nobel Prize Winner John Nash’s game theory of “Governing Dynamics”, which proved that the desired outcome is always possible. With the optimal outcome in mind, Nixon developed a set of communication techniques that help us to talk to each other in the right way. In order to achieve the best outcome for everyone, he emphasises that, “other than achieving what you want, it is also essential to understand and aim at what is best for the other party.”</p> <p>Drawing on last year’s Occupy Central as an example, Nixon describes that “on the surface, they look like really opposing parties but underneath there is a lot of common ground.” He made an effort to talk to students, government officials, businesses, people taking to the streets, tourists coming to watch and parents looking for their kids, and during this time, he observed a lot of common goals that could be resolved by better-facilitated dialogues. “Everybody wanted to talk about the movement during the period,” Nixon said, “but nobody had a clue how to manage a dialogue, and as a result, they have fallen below getting the best outcome.” It is situations like this that motivates him to educate people on how to negotiate.</p> <p>Like most high-powered executives, Nixon always has a lot on his plate. On top of constantly being on the road to speak and consult internationally, he has recently developed a mobile app as a tool for negotiation, and is planning to publish his third book on the subject. Nevertheless, he comes across as an exceptionally calm and collected person, and Nixon attributes this partly to his lifestyle in Discovery Bay (DB), an upscale residential area of Hong Kong.</p> <p>Before moving to Hong Kong, he had never been to Asia. “I am an adventurer and I came for the adventure.” This adventure took him to DB, where he has now spent over 20 years and raised three kids. Instead of going to the city every day, Nixon has a private office in DB close to his home that he calls his “nest”. “I come in the office, put on some music, maybe burn some incense, though very rarely, and get into the zone that leads to great work.” More importantly, the lifestyle in DB allows him to be close to nature. “Nature is my regular way to reconnect. I would say I wrote my books on hikes across Lantau. You would come back with great ideas, then sit down to write the book.” To him, DB is the place to recharge his batteries and become high-energy again after catching a short ferry rid
Backing startups
<p>Investment banks suffering from falling sales and trading revenues are turning to Silicon Valley to boost income. None more so than Goldman Sachs, reports the Financial Times. (paywall)</p> <p>“The bank has climbed back up the league tables for tech IPOs, according to Dealogic, and was recently appointed lead underwriter on the IPO of Square, the payments company. So far this year Goldman ranks second among tech underwriters behind Morgan Stanley, and is a clear number one in M&amp;A,” writes the FT.</p> <p>But, there are risks. </p> <p>“If one individual does much of the legwork, banks make themselves vulnerable if that person leaves. That was the case at Goldman when Anthony Noto [one of the three leaders of the bank’s tech, media and telecommunications division] left last year and joined Twitter, via a short spell at a hedge fund."</p> <p>In addition, “cosying up to young start-ups with unpaid work and other favours can also create 'awkward situations', notes another rival banker, if there is no obvious reward at the end of it.”<br /> Photo: Patrick Nouhailler<br /> &nbsp;</p>
Boosting ETFs in Hong Kong
Asset Management
<p>The Hong Kong authorities are rightly jealous of the territory’s status as Asia’s leading financial and commercial center. Its preeminent role as a regional stock trading hub is a major reason why Hong Kong can resist Beijing’s more heavy-handed interference in its affairs.</p> <p>So, it’s important that it doesn’t get left behind as rivals compete to create new products and attract investors and issuers. The latest worry is the failure of Exchange Traded Funds (ETFs) to take off in Hong Kong.</p> <p>A paper published yesterday by a government agency called the Financial Services Development Council (FSDC) calls for looser regulation to rectify the problem.</p> <p>Other recommendations include improving ETF education, promoting use of ETFs in the Mandatory Provident Fund and broadening the product range through cross-listings, reports AsianInvestor. (paywall)</p> <p>“Hong Kong’s leadership position within Asia has been overtaken by Tokyo and Shanghai, as they have introduced more innovative products. Actions must be taken to enhance the competitiveness of Hong Kong’s ETF platform,” warned Laura Chan, chairman of the FSDC.<br /> Photo: Steve Webel</p>
Michael Mauboussin: four common investor biases
Asset Management
<p>When it comes to achieving personal financial goals, you are your own worst enemy. Investors are always held back by common investor biases, which influence decisions and long-term goals.</p> <p>Both neuroscientists and psychologists have looked into these biases. Combined the two fields of science have established a field of neuroeconomics to understand better how the human brain decodes economic decisions.</p> <p>One of the goals of neuroeconomics is to understand how certain behaviors are linked to specific brain activity.</p> <p>In a report published at the beginning of this week, Michael Mauboussin and Dan Callahan, CFA, looked at four key investor biases, which cause investors to make poor choices. In each case, Mauboussin and his colleague looked at what caused the brain to make suboptimal investment decisions and how investors can overcome these biases to improve their decision making.</p> <p>Social conformity, herding or crowding is the first investor bias Mauboussin covered.<br /> Investor Biases number one: Social conformity<br /> Social conformity comes from our social nature as human beings. Conforming to other social trends encourages others to like you, and can confer loyalty and safety. However, you’re never going to outperform a peer group if everyone owns the same investments.</p> <p>The science behind social conformity is rather interesting. In the mid-2000s, neuroscientists used functional magnetic resonance imaging (fMRI) technology to pinpoint the mechanisms of social conformity within the brain.</p> <p>A study by Dr. Greg Berns and his colleagues showed that social conformity is consistent with activity in the occipital and parietal lobes, the visual process regions of the brain associated with perception. The research suggested that different social settings alter what the subjects perceive. What’s more, subjects that remained independent throughout the study showed increased activity in the amygdala -- a part of the brain that decodes emotion and is especially attuned to threats. In other words, independence creates an emotional burden and requires overcoming a wave of fear.</p> <p>Additional research supports Dr. Berns’ conclusion: social conformity is associated with activity in the part of the brain that detects errors and interacts with other parts of the brain to correct the error. Your brain notices when you’re going against the group and for many, it’s more rewarding to conform than remain independent.<br /> Investor biases two: Pattern seeking<br /> Mauboussin’s second key investor bias is that of pattern seeking. Humans are natural pattern seekers, but when they try to seek out patterns when none are there, problems arise, what statisticians call Type I error.</p> <p>Technical analysis is a good example of our desire to seek out patterns. We are naturally drawn to imposing order, even in cases where the underlying processes are random. Neuroscientists have looked into this trend and arrived at some interesting conclusions.<br /> "Scientists set up a box with two keys that a pigeon can peck with payoffs that are random. They then make one key much more attractive than the other—for example, the red key provides food with an 80 percent probability and the white key with a 20 percent probability (1 - .80). How will the pigeons choose?</p> <p>Once the pigeons figure out the relative probabilit</p>
Daily Scan: Markets across Asia ex-Japan close down; Hong Kong slips in World Bank rankings
Capital Markets
<p>Updated throughout the day</p> <p>October 28</p> <p>Almost all Asian markets stayed in the red throughout the day and remained that way until the final bell. This is largely thanks to oil prices sliding to two-month lows and investor caution other the course of the U.S. Federal Reserve's two-day meeting which concludes today. The U.S. central bank is widely expected to keep interest rates near zero but investors will be pouring over the post-meeting statement all the same.  As was the case earlier in the day, Japan's Nikkei 225 was the only bourse to see gains, finishing up 0.67%, amid hopes that the Bank of Japan (BoJ) will bring in more easing later in the week.</p> <p>Here is what else you need to know:<br /> Hong Kong slips to 5th in World Bank business rankings. Hong Kong is no longer in the top three best places to do business worldwide, according to a new World Bank report, as Singapore continues to maintain its top spot. In the World Bank’s 2016 Doing Business report, Hong Kong now ranks fifth, as construction permits became harder to maintain and cross border trading more difficult. SCMP (paywall)<br /> South Korea, Japan relations starting to thaw? When Gen Nakatani arrives in Seoul next week he'll be the first Japanese defence minister to visit South Korea in nearly five years, signalling that growing regional security risks are trumping the disputes over territory and history. SCMP (paywall)</p> <p>Better-than-expected revenue gives boost to Alibaba expansion plans. The Chinese ecommerce giant aims to push forward with strategic acquisitions after reporting a 32% increase in revenue for its fiscal second quarter ended September. The New York-listed firm reported revenue of 22.2 billion yuan ($3.4 billion) in the three months to September, up from 16.8 billion yuan in the same period last year. South China Morning Post (paywall)</p> <p>Beijing warns U.S. on warship sailing in South China Sea. China said the USS Lassen was sailing illegally near the Nansha Islands. An official said in a statement: “To this the Chinese side expresses its strong discontentment and resolute opposition.” Wall Street Journal (paywall)</p> <p>Iran invited to Syria talks. For the first time, Iran will likely join the U.S. and Russia in international talks about the Syrian conflict. Iran is Syrian President Bashar al-Assad's closest ally, and the country has spent billions of dollars to support Assad's government. The invitation for Iran is less enthusiasm from Washington, and more tolerance and understanding of Iran's involvement. BBC</p> <p>Twitter shares drop 11% after hours. The social media company beat earnings expectations but disappointed with a lower than expected revenue outlook. The company had a net loss of $132 million, compared with a loss of $175 million a year earlier. Twitter expects fourth quarter revenue to be between $695 million and $710 million, below the expected $741 million. MarketWatch</p> <p>Apple revenue up 22%, beating expectations. IPhone sales pushed the company's quarterly earnings up, with ne</p>