ApprovedBusinessBusiness and finance

Grab battles Uber in South-East Asia

Overtaking manoeuvres

SCOOTER-DRIVERS in bright green helmets enliven the dusk of rush hour in Ho Chi Minh City, Vietnam’s commercial centre. This conspicuous fleet is carrying round clients of Grab, a South-East Asian ride-hailing firm. Its operations, connecting travellers with taxis, private cars and motorbike taxis in six countries, straddle a region that is twice as populous as America and swiftly urbanising. Its future seems assured, if it can compete with Uber, a deep-pocketed American competitor.

Grab started life at Harvard Business School, where its 34-year-old boss, Anthony Tan, met his co-founder, Hooi Ling Tan (the pair are unrelated). Its headquarters are in Singapore. Anthony’s father runs Tan Chong Motors, a car assembler and distributor which is among Malaysia’s largest companies, but he does not have funding from the family outfit.

Mr Tan denies that he is building South-East Asia’s answer to Uber, and says he is more inspired by Chinese technology firms such as Tencent, an online-gaming and social-media firm that owns WeChat, a fantastically popular mobile-messaging service, and Alibaba…Continue reading

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ApprovedBusinessBusiness and finance

Snow-making companies in a warming world

Better than mud

THE creamy glide of fresh powder sends skiing enthusiasts into ecstasies. Scraping over brown patches and dodging lumpen rocks inspires far less enthusiasm. Thousands of families will hit Europe’s slopes this month, hoping that snow conditions will be more favourable than at the start of the season in December. A warming world is changing precisely how, when and where snow falls. For the winter-sports industry, such shifts could hit profits harder than a springtime avalanche.

The snowfall season has become shorter in places such as the Alps, says David Robinson of Rutgers University in New Jersey, as snow arrives later and melts earlier than it once did. Resorts at lower altitudes are among the most vulnerable. Since the 1970s the duration of the snow season, averaged over the northern hemisphere, has declined by five days a decade, according to the European Environment Agency. Huge regional variation exists, however, both in Europe and elsewhere. Californian slopes that were unable to open in recent years because of snow shortages had to close at the start of 2017 because too much of the stuff had…Continue reading

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China tightens monetary policy (discreetly)

IF ASKED before the start of 2017 to bet on which important central bank would be the first to raise interest rates this year, the safe choice would have been the Federal Reserve. Some gamblers, relishing the long odds, might have gone for the Bank of England or even taken a flutter on the European Central Bank. All these guesses would have been wrong. The first to budge this year? The People’s Bank of China.

On February 3rd the Chinese central bank raised a series of short-term rates. The decision received scant attention. The increases were, after all, small: one-tenth of a percentage point for the main rates. It also seemed quite technical, primarily affecting liquidity tools that lenders can tap if short of cash. And there was no fanfare: the central bank did not publish an explanation.

But China’s move is important for two reasons. First, it highlights the government’s dilemma in managing the economy. Growth is expected to slow from last year’s pace of 6.7%, and recent surveys suggest that momentum is already ebbing. Sentiment is fragile: investment by private companies last year increased at its slowest pace in more than a…Continue reading

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Explaining euro-zone market jitters

IT was not an ideal way to mark a silver jubilee. The 25th anniversary of the signing of the Maastricht treaty, which gave life to the idea of a single European currency, fell on February 7th, the same day that the IMF published its annual health-check on the Greek economy. It said most (but not all) of its board favoured more debt relief to get Greece’s public finances in order—an idea quickly trashed by euro-zone officials.

A day earlier the spread between ten-year government bonds in France and Germany had reached its widest level in four years. The proximate cause seemed to be a growing concern about political risks to the euro. François Fillon, once the front-runner in the race for the French presidency, is embroiled in a scandal and losing ground. A fear is that his fall from grace might boost support for Marine Le Pen, leader of the National Front, who wants France to leave the euro and the EU.

Shorter odds on a Le Pen victory would certainly justify a higher risk premium on French bonds. Yet there is more to the latest bout of euro-area bond jitters than a sharper focus on politics. After all, bond markets…Continue reading

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Remaking American financial regulation

AT FIRST blush, there is little to be excited about. The eighth executive order of Donald Trump’s infant presidency, signed on February 3rd, lists seven “core principles” for regulating America’s financial system. These include the prevention of bail-outs by taxpayers; advancing the American interest in international negotiations; and tidying the unruly thatch of federal regulation. The treasury secretary and regulators must report by early June on how well existing laws fit the bill. “There is little in the actual executive order that the Obama administration would have disagreed with,” says Doug Elliott of Oliver Wyman, a consulting firm. 

And yet. Although the edict does not mention the Dodd-Frank act of 2010, which redefined financial regulation after the crisis of 2008, it is chiefly aimed at that law. (Another presidential memorandum paves the way to aborting a rule tightening financial advisers’ obligations to Americans saving for retirement.) Many banks, especially smaller ones, loathe the 848-page act and its reams of ensuing rules. According to Davis Polk, a law firm, 111 of its 390 “rule-making requirements” have not yet…Continue reading

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