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Video: Gen. Petraeus talks US energy revolution
Capital Markets
<p>The U.S. is leading the energy revolution, says former CIA director Gen. David Petraeus on this week's Wall Street Week. Be bullish on America, because its  innovation is paving the way, he says.</p>
NY Fed president William Dudley said to say that it's too early to raise rates
Capital Markets
<p>From Reuters:<br /> It is too early to consider an interest rate rise in the United States due to concerns about global economic growth, New York Federal Reserve Bank President William Dudley was quoted as saying by an Italian newspaper on Monday.</p> <p>"The situation changed over the last few months," Dudley told CorrierEconomia last Thursday on the sidelines of a conference at the Brookings Institutions in Washington.<br /> Last week, Dudley said in a speech at the Brookings Institute that a rate hike was not off the table for 2015 if the economy continued to expand as expected.<br /> Photo: Michael Dadino</p>
Morgan Stanley slumps after earnings miss
Capital Markets
<p> <br /> Morgan Stanley released its third quarter earnings report before opening bell this morning, posting a wide miss of 34 cents per share in adjusted earnings and adjusted revenue of $7.33 billion. Analysts had been expecting earnings of 63 cents per share and revenue of $8.54 billion. In last year’s third quarter, the firm reported earnings of 64 cents per share.</p> <p>Reported earnings were 48 cents per share, compared to last year’s 83 cents per share. Including accounting adjustments, Morgan Stanley (NYSE:MS)’s revenue was $7.77 billion, compared to last year’s $8.91 billion.</p> <p>The firm’s Institutional Securities business saw net revenues excluding DVA fall from $4.3 billion to $3.5 billion this year. Management said they continued to see strength in Equity sales and trading. Advisory revenues rose from $392 million to $557 million, while Equity sales and trading net revenues were flat at $1.8 billion.</p> <p>The Wealth Management business saw net revenues fall from $3.8 billion to $3.6 billion. Asset management fee revenue ticked upward from $2.1 billion last year to $2.2 billion this year. Transactional revenues fell from $912 million to $652 million.</p> <p>Read more at ValueWalk.<br /> Photo: Insider Monkey</p>
Google stands out amid low earnings expectations
Capital Markets
<p>&nbsp;</p> <p> Overall, Wall Street expectations are muted for this week's earnings reports.</p> <p> Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) will buck that trend with strong results, if forecasts are accurate.<br /> Expectations are also high for earnings from American Airlines Group Inc (NASDAQ:AAL), Eli Lilly and Co (NYSE: LLY), General Motors Company (NYSE: GM) and Verizon Communications Inc. (NYSE: VZ).</p> <p>&nbsp;</p> <p>The heart of the third-quarter earnings reporting season has arrived, and results will come fast and furious this week. But overall, expectations are fairly muted.</p> <p>Consensus forecasts from Wall Street analysts call for declining earnings from many of the most prominent companies reporting this week. However, expectations are high for the results from Alphabet Inc, still more commonly known as Google.</p> <p>Strong earnings growth is also predicted for Eli Lilly and Verizon, accompanied by at least some growth in revenues.</p> <p>Some of the strongest year-over-year growth on the bottom line is anticipated this week from General Motors Company and American Airlines. Yet, in both cases, the top line is expected to have shrunk marginally.</p> <p>Below is a quick look at what is expected from these and a peek at some of the week's other most prominent reports.<br /> Alphabet<br /> The company formerly known as Google will post earnings of $7.34 per share for its third quarter, if Estimize's consensus forecast is accurate. That would be up ...</p> <p>Full story available on<br /> Photo: Carlos Luna </p>
Hong Kong ETFs lack appeal
Asset Management
<p>Exchange-traded funds are struggling to find traction in Hong Kong. Several managers, such as HSBC and Lyxor, have de-listed funds in recent years because of low asset sizes or poor trading volumes.</p> <p>The departure of Mirae Asset Management’s Hong Kong head of ETFs last week highlights the problem. Eight of Mirae AM’s 10 Hong Kong-listed ETFs (under the Horizon brand) are far too small to be profitable, notes AsianInvestor. (paywall)</p> <p>Too much sectoral diversity in Asia is one reason. Different tax regimes and accounting treatments in individual countries means it’s tough to assemble a representative list to fill a regional chemical, energy or financial ETF, for instance.</p> <p>There is another reason too. As this year’s gyrations in local bourses have demonstrated, Asian retail investors like to trade rather than park their cash in a passive fund. They prefer some action.<br /> Photo: Roberto Trombetta<br /> &nbsp;</p> <p>&nbsp;</p>
Standard Chartered rolls out Vietnam fintech platform
<p>Fresh from launching its Hong Kong fintech accelerator, UK bank Standard Chartered's Vietnam unit has teamed up with local investment fund Dragon Capital to form the "Vietnam FinTech Club".</p> <p>Its not an accelerator but a roundtable bringing together startups and investors, including veteran Vietnam VC IDG Ventures. According to a release, the club had its genesis during UK prime minister David Cameron's visit to Vietnam in July.</p> <p>With London quickly emerging as a global fintech hub, the UK government is looking to nurture fintech industry connections in emerging markets such as Vietnam.  This new platform will help give the UK  firms access to Vietnamese regulators, financial service providers, and ICT entrepreneurs. The Fintech Club will also help bolster  Standard Chartered's exisiting  Hong Kong-based fintech program. Nirukt Sapru, CEO of Standard Chartered Vietnam, said:<br /> "By backing the FinTech industry in Vietnam, we echo the bank’s strong commitment in supporting and encouraging innovation which we believe is a key driver of economic growth and prosperity. Standard Chartered Bank just launched a FinTech Accelerator Programme in Hong Kong to help local and international early-stage and more established FinTech companies grow in Asia’s vibrant markets. We hope to see strong participation from Vietnam in this initiative.”<br /> News like this can only serve as a boon for the country's venture capital  community which has been touting Vietnam's young demographics and increasingly tech0-savy population for several years. Only last week Chris Freund, founder of Mekong Capital told NexChange:<br /> “There is a big opportunity for VC and PE firms to invest and help their investee companies to build their management teams and apply international best practices, which often leads to those companies becoming the winners in their sectors.”<br /> Photo: Jerick Parrone</p>
The state-backed VC fund shaping the future of Japanese tech
Venture Capital
<p>If you have never heard of the Innovation Network Corporation of Japan (INCJ) then you really haven't been paying attention to Japan’s tech industry.</p> <p>INCJ made headlines again last week when shares in Sharp Corp. soared on the news that the state-backed fund was mulling a 200 billion yen ($1.7 billion) bailout for the ailing electronics giant. </p> <p>Such deals are par for the course for INCJ which has spent the last six years spearheading the government’s efforts to restore Japan’s status as a leader in technology and innovation. </p> <p>It has mostly made a name for itself through its private equity and venture capital investment activity. Backed by the biggest names in Japanese tech - including Canon, Panasonic, Hitachi, Sony, Sharp, and Toshiba - and with about 2 trillion yen of investable capital, it has some serious firepower. </p> <p>Sharp is the most recent example of INCJ supporting the country’s embattled electronics giants. It is the largest shareholder of Japan Display, a firm it created  out of the LCD divisions of Hitachi, Toshiba, and Sony. The fund also famously gazumped  U.S. private equity major KKR in 2012 through its acquisition of chipmaker Renesas. </p> <p>Unsurprisingly, INCJ has come in for a lot of flak from its critics for propping up, rather than revitalising, its distressed targets. That said, rescuing giants is only part of INCJ’s strategy. The fund is also a major player when it come to early stage investments. Around three-quarters of the 90 investments made by INCJ since its inception have involved early stage companies. </p> <p>This is likely to be the real area of focus for Toshiyuki Shiga, Nissan’s former COO who took over as chair of INCJ in June, as the Japanese government looks to replicate some of Silicon Valley’s success in Japan rather just revive some of Japan's own past glories.<br /> Photo: Curt Smith</p>
Why ‘Abenomics’ keeps missing the mark
Capital Markets
Japan Continues to Struggle under ‘Abenomics’. Standard &amp; Poor’s recently cut its long-term credit rating of Japan one level, down to A+, and markets do not seem to have reacted much, if at all. A key reason is that many Japanese bonds are owned by Japanese banks and other Japanese institutions, “which are not going to sell in large numbers,”
The 'age' age
Capital Markets
<p>As I mentioned in last week’s letter, I traveled to San Francisco last Monday with my friend Patrick Cox, who writes our Transformational Technology Alert newsletter. We had dinner with Dr. Mike West of Biotime and then spent the next morning at the Buck Institute for Research on Aging. Pat and I decided we would jointly report on what we learned. He has already written his part, which was published last week. I am going to reproduce portions of that letter, which highlight the conversation with Brian Kennedy and his team at the Buck Institute, and then add my own thoughts about our conversation with Mike West the previous night.</p> <p>(Note that I am excerpting Patrick’s paid letter, which includes comments on companies in his portfolio, rather than his free weekly Transformational Technologies Tech Digest service. We agreed that it was important to do so in this one case, given the huge significance of the research involved and the Buck Institute’s relationship to it.)</p> <p>Essentially, we looked at two aspects of aging. The Buck Institute is focused on how to slow down the aging process and reduce the symptoms (such as chronic diseases) that come with aging. Dr. Mike West and his colleagues, as well as a few other firms and researchers, are focused on using our own pluripotent stem cells in ways that would allow us to repair organs in our bodies, thus giving us the opportunity to “grow younger” again. (It’s not quite that simple, as I’ll try to explain later.)</p> <p>The very good news is that progress is being made. The bad news is that the regulatory environment is impeding progress, as the regulators don’t quite know what to do about the advances that are coming; but even there things may be changing. I recognize this letter will be a little far afield from my usual scribblings on economics and finance, but aging and health are things that concern us all. And if there are a few things you can do to increase your healthspan (not just your lifespan), then the attention you pay to optimizing your health will make all the work you do on your investments even more important and useful. So let’s turn to Pat’s letter, and because I can’t resist, I will insert personal comments in brackets until we get to the end of his letter.</p> <p>Read more at Advisor Perspectives</p> <p>&nbsp;</p> <p>&nbsp;</p>
Daily Scan: China dips on glum outlook; Europe creeps up
Capital Markets
<p>Updated throughout the day.</p> <p>Good evening. China’s growth data was better than many analysts expected, but the overall picture is still glum with China growing at its slowest pace since the global financial crisis -- the markets have reacted accordingly. The Shanghai composite index closed down 0.14% while Hong Kong’s Hang Seng index showed little change -- up slightly at 0.04%. Elsewhere in Asia markets have seen little change, the most pronounced drop was seen in Japan where the Nikkei 225 was down 0.88%.</p> <p>In Europe, markets opened flat but soon started tracking upwards with the pan-European STOXX 600 up 0.6%. One of the noticeable winners in early trading was Deutsche Bank which saw its stock climb 3.1% after it announced restructuring plans earlier Monday. </p> <p>Here’s what else you need to know:</p> <p>China 3Q GDP 6.9%, a six-year low. The number is slightly better than expected. But underlying data signalled underlying weakness especially industrial production, which expanded 5.7%, below expectations of 6.0%.  Makes ya' wonder what it would have been without all the stimulus the government launched this past year. The Guardian</p> <p>Britain rolls out the red carpet for President Xi and everyone wonders why. Says one advisor:  "(It's) the only place where China is truly influential right now because they are so desperate for Chinese investment." Ouch. Financial Times (payall)</p> <p>Japan Post subsidiaries priced at top of market range. Shares in the banking and insurance units of Japan Post have been priced at the top end of their proposed price ranges ahead of their November IPO. It's the country’s largest privatisation since the 1980s. Financial Times (paywall)</p> <p>Heads roll as Deutsche Bank splits its investment bank. Deutsche Bank’s new head John Cryan has launched a radical overhaul of the bank’s senior management and structure, parting ways with several top executives and splitting its powerful investment banking unit in two. The Financial Times (paywall)</p> <p>UK to treat Islamic extremists ‘like paedophiles’. Hate preachers will be treated like paedophiles and banned from all contact with children, UK PM David Cameron is to announce today as part of the government’s counter-terrorism strategy. The Telegraph. </p> <p>Goldman Sachs chief economist says December rate hike likely. Jan Hatzius says his confidence level is about 60%, twice that of the Street. Calculated Risk</p> <p>Wildfire kill 7 Indonesia hikers. Seven hikers were killed and two others suffered severe burns after a wildfire broke out on a mountain on Indonesia's main island of Java.The group was climbing</p>