MEF BUSINESS NEWS 22 APRIL 2024 Robust earnings from Corporate America are expected to boost Wall Street despite concerns about rising bond yields, Bloomberg’s Markets Live Pulse survey suggests. With reporting season kicking into high gear this week featuring results from Big Tech giants such as Microsoft, Meta Platforms and Alphabet, two-thirds of respondents anticipate earnings to uplift the US equity benchmark S&P 500, marking the highest confidence level since October 2022. Despite escalating geopolitical tensions in the Middle East, traders and investors remain relatively unfazed, as historical data indicates stocks typically perform well following such events. —————— The unexpected strength of the US dollar in 2024 has surprised financial markets, as investors initially predicted a decline. Robust US economic performance and persistent inflation have led the Federal Reserve to delay interest rate cuts. With the US economy outperforming its Group-of-Seven peers and amid geopolitical tensions, the concept of “US exceptionalism” has gained traction, and the dollar remains a favored safe haven. The Bloomberg dollar index has surged over 4% this year, appreciating against major developed and emerging-market currencies. Trader sentiment, initially bearish, has turned bullish, reaching its highest level since 2019 according to data from the Commodity Futures Trading Commission. —————— ECB Governing Council member Francois Villeroy de Galhau stated that oil price uncertainty would not prevent the ECB from cutting interest rates in June. Villeroy affirmed that unless there’s a surprise, monetary easing should not be delayed. ECB officials are increasingly aligned on implementing rate cuts during the June 6 decision, with Villeroy advocating for the move while others express varying degrees of conviction. —————————————- Governing Council member Madis Mullerm, for example, said that the European Central Bank mustn’t rush into further interest rate cuts after a likely first step in June. “We should be careful not to move too quickly with the loosening of monetary policy” the Estonian central bank chief said in an interview with Bloomberg. ——————————— TikTok vows to contest a US bill mandating a ban or divestment in court, according to Michael Beckerman, TikTok’s head of public policy for the Americas. The bill, a result of an unprecedented deal between the Republican Speaker and President Biden, threatens TikTok’s vital US market. Despite years of efforts to address national security concerns, the app faces potential divestment from its Chinese parent company, ByteDance. The US House of Representatives fast-tracked legislation linking TikTok’s future to the aid package for Ukraine and Israel. The Senate is expected to vote on the bill soon, with President Joe Biden indicating swift approval. —— —— MEF MOBILE NEWS 22 APRIL 2024 U.S. investment firm KKR’s bid to acquire Telecom Italia’s fixed-line access network is under scrutiny by European Union antitrust regulators, with a decision expected by May 30, as per a filing from the European Commission. Telecom Italia, confirming KKR’s application for EU approval, awaits the Commission’s decision, which may include remedies or trigger a more extensive investigation if antitrust concerns arise. The proposed acquisition, valued at up to 22 billion euros, is part of a government-backed initiative to reduce debt and revitalize Telecom Italia. Delays in approval could complicate the company’s restructuring efforts. —————— BT has brought in a senior partner from McKinsey, Tom Meakin, as interim chief strategy and change officer to assist in shaping its strategy. This follows CEO Allison Kirkby’s creation of a strategy and change unit to drive corporate strategy refresh and business-wide transformation. Meakin, currently leading McKinsey’s consumer technology and media practice, will join BT on an interim basis while the company searches for a permanent candidate. This appointment reflects BT’s commitment to strategic transformation under Kirkby’s leadership. —————- The chip powering the Mate 60 Pro phone of sanctioned Chinese company Huawei is not as advanced as American chips, U.S. Commerce Secretary Gina Raimondo said in an interview with Cbs on Sunday, arguing that it shows U.S. curbs on shipments to the telecoms equipment giant are working. Huawei, which has been on a trade restriction list since 2019, surprised the industry and the U.S. government when it released a new phone powered by such a chip. The Huawei Mate 60 Pro was seen as a symbol of China’s technological resurgence despite Washington’s ongoing efforts to cripple its capacity to produce advanced semiconductors. It was also seen by many as a slight for Raimondo, who was visiting China when it was released. —————- Saudi Arabia’s PIF has agreed to acquire a 51% stake in TAWAL from STC, creating the region’s largest telecom tower company, Reuters reported. The newly-formed entity, merging TAWAL and GLIC, will own around 30,000 mobile tower sites with estimated annual revenues of $1.3 billion. PIF will hold a 54% stake, STC 43.1%, and GLIC minority shareholders will own the remaining share capital. The transactions are expected to finalize in the second half of the year. ———————— T-Mobile US has secured a deal with Delta Air Lines to provide various connectivity services, including the installation of a 5G hybrid network at Delta’s headquarters in Atlanta, Georgia. This network aims to enhance operations across all airport activities, from check-in to baggage handling. T-Mobile’s 5G Advanced Network Solutions portfolio, launched two years ago, offers public and private 5G options. Delta’s flight attendants, customer service agents, and ground crews will utilize the network for various activities, including aircraft servicing and maintenance. Pilots will also gain improved access to digital tools and resources worldwide once the network is operational —— ——— MEF TECH NEWS 22 APRIL 2024 Tesla shareholders anticipate the company’s weakest quarterly performance in seven years due to slowing demand and intense pricing competition. Reports suggest a shift away from the proposed $25,000 electric car, known as the Model 2, towards a focus on self-driving “robotaxis.” Elon Musk denied altering plans for the Model 2 but emphasized the importance of autonomy, announcing the launch of a Tesla robotaxi on August 8. Investors grapple with Tesla’s falling share price, disappointing sales, and a controversial headquarters relocation plan, pondering whether the company will prioritize manufacturing or autonomous technology. ———————- Tencent Holdings shares surged in their largest rally since February following the announcement of an earlier-than-expected launch date for Nexon Dungeon & Fighter Mobile game in China in May. The game is anticipated to rejuvenate Tencent’s gaming portfolio, attract new users, and signal a relaxation in China’s gaming market regulations. As Tencent seeks its next major success amidst regulatory challenges, investors are optimistic about the potential of DnF Mobile despite competition from other titles. ——————- Salesforce discussions regarding a takeover of Informatica have stalled, as both parties have encountered difficulties in reaching agreement on terms, according to a source familiar with the matter. The impasse reportedly revolves around pricing, with neither company able to find common ground. The Wall Street Journal reported on Sunday that negotiations were losing momentum. ——————— South Korean metals refiner Ecopro Innovation has cut lithium hydroxide production by 10% due to declining global electric vehicle demand. CEO Anthony Kim suggested a potential further reduction of up to 20% depending on market conditions. He anticipates the battery metals market won’t rebound until the second quarter of 2025, noting signs of recovery in Chinese futures. Despite rising Chinese lithium hydroxide prices, slow market recovery is attributed to surplus stockpiles and continued production by major producers during the glut. —— ——
MEF BUSINESS NEWS 22 APRIL 2024 Robust earnings from Corporate America are expected to boost Wall Street despite concerns about rising bond yields, Bloomberg’s Markets Live Pulse survey suggests. With reporting season kicking into high gear this week featuring results from Big Tech giants such as Microsoft, Meta Platforms and Alphabet, two-thirds of respondents anticipate earnings to uplift the US equity benchmark S&P 500, marking the highest confidence level since October 2022. Despite escalating geopolitical tensions in the Middle East, traders and investors remain relatively unfazed, as historical data indicates stocks typically perform well following such events. —————— The unexpected strength of the US dollar in 2024 has surprised financial markets, as investors initially predicted a decline. Robust US economic performance and persistent inflation have led the Federal Reserve to delay interest rate cuts. With the US economy outperforming its Group-of-Seven peers and amid geopolitical tensions, the concept of “US exceptionalism” has gained traction, and the dollar remains a favored safe haven. The Bloomberg dollar index has surged over 4% this year, appreciating against major developed and emerging-market currencies. Trader sentiment, initially bearish, has turned bullish, reaching its highest level since 2019 according to data from the Commodity Futures Trading Commission. —————— ECB Governing Council member Francois Villeroy de Galhau stated that oil price uncertainty would not prevent the ECB from cutting interest rates in June. Villeroy affirmed that unless there’s a surprise, monetary easing should not be delayed. ECB officials are increasingly aligned on implementing rate cuts during the June 6 decision, with Villeroy advocating for the move while others express varying degrees of conviction. —————————————- Governing Council member Madis Mullerm, for example, said that the European Central Bank mustn’t rush into further interest rate cuts after a likely first step in June. “We should be careful not to move too quickly with the loosening of monetary policy” the Estonian central bank chief said in an interview with Bloomberg. ——————————— TikTok vows to contest a US bill mandating a ban or divestment in court, according to Michael Beckerman, TikTok’s head of public policy for the Americas. The bill, a result of an unprecedented deal between the Republican Speaker and President Biden, threatens TikTok’s vital US market. Despite years of efforts to address national security concerns, the app faces potential divestment from its Chinese parent company, ByteDance. The US House of Representatives fast-tracked legislation linking TikTok’s future to the aid package for Ukraine and Israel. The Senate is expected to vote on the bill soon, with President Joe Biden indicating swift approval. —— —— MEF MOBILE NEWS 22 APRIL 2024 U.S. investment firm KKR’s bid to acquire Telecom Italia’s fixed-line access network is under scrutiny by European Union antitrust regulators, with a decision expected by May 30, as per a filing from the European Commission. Telecom Italia, confirming KKR’s application for EU approval, awaits the Commission’s decision, which may include remedies or trigger a more extensive investigation if antitrust concerns arise. The proposed acquisition, valued at up to 22 billion euros, is part of a government-backed initiative to reduce debt and revitalize Telecom Italia. Delays in approval could complicate the company’s restructuring efforts. —————— BT has brought in a senior partner from McKinsey, Tom Meakin, as interim chief strategy and change officer to assist in shaping its strategy. This follows CEO Allison Kirkby’s creation of a strategy and change unit to drive corporate strategy refresh and business-wide transformation. Meakin, currently leading McKinsey’s consumer technology and media practice, will join BT on an interim basis while the company searches for a permanent candidate. This appointment reflects BT’s commitment to strategic transformation under Kirkby’s leadership. —————- The chip powering the Mate 60 Pro phone of sanctioned Chinese company Huawei is not as advanced as American chips, U.S. Commerce Secretary Gina Raimondo said in an interview with Cbs on Sunday, arguing that it shows U.S. curbs on shipments to the telecoms equipment giant are working. Huawei, which has been on a trade restriction list since 2019, surprised the industry and the U.S. government when it released a new phone powered by such a chip. The Huawei Mate 60 Pro was seen as a symbol of China’s technological resurgence despite Washington’s ongoing efforts to cripple its capacity to produce advanced semiconductors. It was also seen by many as a slight for Raimondo, who was visiting China when it was released. —————- Saudi Arabia’s PIF has agreed to acquire a 51% stake in TAWAL from STC, creating the region’s largest telecom tower company, Reuters reported. The newly-formed entity, merging TAWAL and GLIC, will own around 30,000 mobile tower sites with estimated annual revenues of $1.3 billion. PIF will hold a 54% stake, STC 43.1%, and GLIC minority shareholders will own the remaining share capital. The transactions are expected to finalize in the second half of the year. ———————— T-Mobile US has secured a deal with Delta Air Lines to provide various connectivity services, including the installation of a 5G hybrid network at Delta’s headquarters in Atlanta, Georgia. This network aims to enhance operations across all airport activities, from check-in to baggage handling. T-Mobile’s 5G Advanced Network Solutions portfolio, launched two years ago, offers public and private 5G options. Delta’s flight attendants, customer service agents, and ground crews will utilize the network for various activities, including aircraft servicing and maintenance. Pilots will also gain improved access to digital tools and resources worldwide once the network is operational —— ——— MEF TECH NEWS 22 APRIL 2024 Tesla shareholders anticipate the company’s weakest quarterly performance in seven years due to slowing demand and intense pricing competition. Reports suggest a shift away from the proposed $25,000 electric car, known as the Model 2, towards a focus on self-driving “robotaxis.” Elon Musk denied altering plans for the Model 2 but emphasized the importance of autonomy, announcing the launch of a Tesla robotaxi on August 8. Investors grapple with Tesla’s falling share price, disappointing sales, and a controversial headquarters relocation plan, pondering whether the company will prioritize manufacturing or autonomous technology. ———————- Tencent Holdings shares surged in their largest rally since February following the announcement of an earlier-than-expected launch date for Nexon Dungeon & Fighter Mobile game in China in May. The game is anticipated to rejuvenate Tencent’s gaming portfolio, attract new users, and signal a relaxation in China’s gaming market regulations. As Tencent seeks its next major success amidst regulatory challenges, investors are optimistic about the potential of DnF Mobile despite competition from other titles. ——————- Salesforce discussions regarding a takeover of Informatica have stalled, as both parties have encountered difficulties in reaching agreement on terms, according to a source familiar with the matter. The impasse reportedly revolves around pricing, with neither company able to find common ground. The Wall Street Journal reported on Sunday that negotiations were losing momentum. ——————— South Korean metals refiner Ecopro Innovation has cut lithium hydroxide production by 10% due to declining global electric vehicle demand. CEO Anthony Kim suggested a potential further reduction of up to 20% depending on market conditions. He anticipates the battery metals market won’t rebound until the second quarter of 2025, noting signs of recovery in Chinese futures. Despite rising Chinese lithium hydroxide prices, slow market recovery is attributed to surplus stockpiles and continued production by major producers during the glut. —— ——