MEF BUSINESS NEWS 19 APRIL 2024 Oil jumped after Israel struck targets in Iran. There are concerns over the potential for a wider regional conflict that could endanger crude supplies. Global benchmark Brent surged — topping $90 a barrel at one point, before paring gains — after reports of explosions in Iran, Syria and Iraq. Traders have been girding for an Israeli response to the Islamic Republic’s unprecedented missile and drone attack last weekend, with the rhetoric between the two escalating as Tehran warned against striking its nuclear facilities. The Middle East accounts for about a third of global crude supplies. Haven assets also rose. Gold spiked toward a record, before giving back some of its gains, while the US dollar climbed to a multi-month high. Crude has rallied this year, with gains driven by the worsening hostilities in the Middle East, as well as OPEC+ supply cuts that have tightened the market. Higher energy prices, if sustained, would boosts risks for the global economy and pose a challenge for central bankers as they seek to tame inflation. —————- A mere mention of a potential interest rate increase by a Federal Reserve official halted the US bond market’s recovery. New York Fed President John Williams stated during a conference that while another rate hike isn’t his base case, they would consider it if data suggests higher rates are needed. This caused Treasury yields to rise further, with the two-year yield reaching nearly 4.99%, close to its recent peak. ————— Meanwhile in the corporate world: Netflix had its strongest start to a year since 2020, surpassing analysts’ expectations by adding 9.33 million new customers in the first quarter of 2024. The surge was fueled by a compelling lineup of original content and efforts to combat password sharing. The company saw notable growth in the US and Canada, exceeding forecasts for both sales and earnings. ———— Sony is in discussions with Apollo Global Management regarding a potential joint bid for Paramount Global, leading to a surge in the film and TV giant’s shares, the New York Times reported. No official proposal has been submitted yet. The move could complicate Paramount’s existing negotiations with Skydance Media, led by technology mogul David Ellison, as they explore the possibility of taking the company private through a cash-for-shares transaction. ———— LVMH holds a larger share of French exports than French famed agricultural sector. According to a study by Asterès for LVMH, the luxury conglomerate’s global sales of handbags and perfumes accounted for 4% of France’s total exports last year, surpassing the 3.2% contribution of all Camembert, wine and other agricultural exports combined. With exports valued at €23.5 billion, LVMH’s role in France’s trade balance is significant. —— —— MEF MOBILE NEWS 19 APRIL 2024 Nokia CEO Pekka Lundmark cited low spending levels in North America and India as contributing to a slump in Q1 sales for its mobile networks division. Despite this, Lundmark expects market conditions to improve progressively throughout 2024. The company recorded a 39% decline in net sales for Mobile Networks and an operating loss of €42 million, compared to an operating profit of €137 million in Q1 2023. However, Nokia anticipates improved order intake and a stronger second half overall. Positive developments were also highlighted in patent deals within its IP division and a favorable outlook for its fixed-focused Network Infrastructure unit. ————— Kepler Cheuvreux analysts retain its hold rating on Nokia shares: as sales and margins should be slightly squeezed in coming quarters, there is increased risk of disruption from the gradual introduction of Open RAN that allows operators to build networks using equipment from several different suppliers — according to Kepler Cheuvreux analysis. ————- Telecom Italia has initiated an offer to transfer some of its euro and dollar-denominated bonds to the unit slated to acquire the company’s network. The Italian carrier is inviting holders of €5 billion worth of notes to exchange them for new securities under the control of KKR, according to a statement on Thursday. The notes will be mandatorily exchanged if the grid sale is completed by Oct. 15. Telecom Italia’s euro-denominated bonds due 2028 saw a rise in value after the announcement. However, there are concerns regarding the lack of forward-looking financial information for the new company, particularly regarding leverage policies, covenant protection, and potential restructuring costs. ———— The B2B telecommunications industry will increase at a compound annual growth rate of 15.4%, according to Straits Research. The surge — the research firm said — is bolstered by the increased use of IoT and the growing need for B2B telecommunications among enterprises and government organizations. Furthermore, increased industrialization and urbanization in numerous countries have a beneficial impact on market expansion. However, expensive B2B telecommunication installation costs and privacy and security issues hinder the market’s expansion. ———— In India, the Department of Telecommunications is confident in the country’s telecom market structure, citing plans by Vodafone Idea and state-run Bharat Sanchar Nigam to expand their 4G and 5G networks. In an interview with Moneycontrol, the Department’s Secretary Neeraj Mittal mentioned the potential for India to lead in 6G deployment, building on its ongoing 5G rollout. Mittal emphasized the role of market forces in determining telecom tariffs, currently under forbearance. ————————— Nigeria plans to criminalize the destruction of broadband fiber cables, responding to complaints from MTN and other telecom companies about significant financial losses, Bloomberg reports. The government is finalizing regulations for this purpose. Although laws against vandalism already exist, the new order aims to tighten regulation on construction firms. Penalties for offenders will be severe. —— —— MEF TECH NEWS 19 APRIL 2024 China has instructed Apple to remove several popular chat messaging apps from its app store in the country, marking another instance of censorship demands in Apple’s second-largest market. Meta’s WhatsApp and Threads, along with messaging platforms Signal, Telegram, and Line, were removed from the Chinese App Store today. Despite the ban, these messaging apps, boasting over three billion global users combined, remain accessible in China through virtual private networks that bypass the country’s Great Firewall. ——— Meanwhile, Meta is set to introduce Llama 3, the latest edition of the company’s publicly available large language model, as the AI battle in Silicon Valley continues to escalate. Llama 3 will compete directly with Open AI Chat GPT The updated versions of Meta’s AI-powered smart assistant software will be operational across its apps, including WhatsApp, Instagram, Messenger, and Facebook, starting Today. The rollout will cover more than a dozen countries, including Australia, Canada, Singapore, and the United States. The enhanced AI software, dubbed Meta AI, will be integrated into various aspects of the apps, such as the news feed, search bars, and chat functions. Users will be able to utilize the assistant to seek help in completing tasks and obtaining information, such as finding concerts or locating restaurants anywhere. ——— Google’s attempt to create less intrusive online advertising faces hurdles as the U.K. privacy regulator criticizes its proposed replacements for cookies, the Wall Street Journal reports. The Information Commissioner’s Office (ICO) has raised concerns that Google’s Privacy Sandbox technology doesn’t adequately protect consumer privacy and could still allow user tracking. The ICO plans to release its final report by the end of April and has shared its worries with the Competition and Markets Authority (CMA), which oversees Google’s efforts to eliminate cookies in its Chrome browser. The CMA will consider the ICO’s recommendations as it evaluates Google’s plans.
MEF BUSINESS NEWS 19 APRIL 2024 Oil jumped after Israel struck targets in Iran. There are concerns over the potential for a wider regional conflict that could endanger crude supplies. Global benchmark Brent surged — topping $90 a barrel at one point, before paring gains — after reports of explosions in Iran, Syria and Iraq. Traders have been girding for an Israeli response to the Islamic Republic’s unprecedented missile and drone attack last weekend, with the rhetoric between the two escalating as Tehran warned against striking its nuclear facilities. The Middle East accounts for about a third of global crude supplies. Haven assets also rose. Gold spiked toward a record, before giving back some of its gains, while the US dollar climbed to a multi-month high. Crude has rallied this year, with gains driven by the worsening hostilities in the Middle East, as well as OPEC+ supply cuts that have tightened the market. Higher energy prices, if sustained, would boosts risks for the global economy and pose a challenge for central bankers as they seek to tame inflation. —————- A mere mention of a potential interest rate increase by a Federal Reserve official halted the US bond market’s recovery. New York Fed President John Williams stated during a conference that while another rate hike isn’t his base case, they would consider it if data suggests higher rates are needed. This caused Treasury yields to rise further, with the two-year yield reaching nearly 4.99%, close to its recent peak. ————— Meanwhile in the corporate world: Netflix had its strongest start to a year since 2020, surpassing analysts’ expectations by adding 9.33 million new customers in the first quarter of 2024. The surge was fueled by a compelling lineup of original content and efforts to combat password sharing. The company saw notable growth in the US and Canada, exceeding forecasts for both sales and earnings. ———— Sony is in discussions with Apollo Global Management regarding a potential joint bid for Paramount Global, leading to a surge in the film and TV giant’s shares, the New York Times reported. No official proposal has been submitted yet. The move could complicate Paramount’s existing negotiations with Skydance Media, led by technology mogul David Ellison, as they explore the possibility of taking the company private through a cash-for-shares transaction. ———— LVMH holds a larger share of French exports than French famed agricultural sector. According to a study by Asterès for LVMH, the luxury conglomerate’s global sales of handbags and perfumes accounted for 4% of France’s total exports last year, surpassing the 3.2% contribution of all Camembert, wine and other agricultural exports combined. With exports valued at €23.5 billion, LVMH’s role in France’s trade balance is significant. —— —— MEF MOBILE NEWS 19 APRIL 2024 Nokia CEO Pekka Lundmark cited low spending levels in North America and India as contributing to a slump in Q1 sales for its mobile networks division. Despite this, Lundmark expects market conditions to improve progressively throughout 2024. The company recorded a 39% decline in net sales for Mobile Networks and an operating loss of €42 million, compared to an operating profit of €137 million in Q1 2023. However, Nokia anticipates improved order intake and a stronger second half overall. Positive developments were also highlighted in patent deals within its IP division and a favorable outlook for its fixed-focused Network Infrastructure unit. ————— Kepler Cheuvreux analysts retain its hold rating on Nokia shares: as sales and margins should be slightly squeezed in coming quarters, there is increased risk of disruption from the gradual introduction of Open RAN that allows operators to build networks using equipment from several different suppliers — according to Kepler Cheuvreux analysis. ————- Telecom Italia has initiated an offer to transfer some of its euro and dollar-denominated bonds to the unit slated to acquire the company’s network. The Italian carrier is inviting holders of €5 billion worth of notes to exchange them for new securities under the control of KKR, according to a statement on Thursday. The notes will be mandatorily exchanged if the grid sale is completed by Oct. 15. Telecom Italia’s euro-denominated bonds due 2028 saw a rise in value after the announcement. However, there are concerns regarding the lack of forward-looking financial information for the new company, particularly regarding leverage policies, covenant protection, and potential restructuring costs. ———— The B2B telecommunications industry will increase at a compound annual growth rate of 15.4%, according to Straits Research. The surge — the research firm said — is bolstered by the increased use of IoT and the growing need for B2B telecommunications among enterprises and government organizations. Furthermore, increased industrialization and urbanization in numerous countries have a beneficial impact on market expansion. However, expensive B2B telecommunication installation costs and privacy and security issues hinder the market’s expansion. ———— In India, the Department of Telecommunications is confident in the country’s telecom market structure, citing plans by Vodafone Idea and state-run Bharat Sanchar Nigam to expand their 4G and 5G networks. In an interview with Moneycontrol, the Department’s Secretary Neeraj Mittal mentioned the potential for India to lead in 6G deployment, building on its ongoing 5G rollout. Mittal emphasized the role of market forces in determining telecom tariffs, currently under forbearance. ————————— Nigeria plans to criminalize the destruction of broadband fiber cables, responding to complaints from MTN and other telecom companies about significant financial losses, Bloomberg reports. The government is finalizing regulations for this purpose. Although laws against vandalism already exist, the new order aims to tighten regulation on construction firms. Penalties for offenders will be severe. —— —— MEF TECH NEWS 19 APRIL 2024 China has instructed Apple to remove several popular chat messaging apps from its app store in the country, marking another instance of censorship demands in Apple’s second-largest market. Meta’s WhatsApp and Threads, along with messaging platforms Signal, Telegram, and Line, were removed from the Chinese App Store today. Despite the ban, these messaging apps, boasting over three billion global users combined, remain accessible in China through virtual private networks that bypass the country’s Great Firewall. ——— Meanwhile, Meta is set to introduce Llama 3, the latest edition of the company’s publicly available large language model, as the AI battle in Silicon Valley continues to escalate. Llama 3 will compete directly with Open AI Chat GPT The updated versions of Meta’s AI-powered smart assistant software will be operational across its apps, including WhatsApp, Instagram, Messenger, and Facebook, starting Today. The rollout will cover more than a dozen countries, including Australia, Canada, Singapore, and the United States. The enhanced AI software, dubbed Meta AI, will be integrated into various aspects of the apps, such as the news feed, search bars, and chat functions. Users will be able to utilize the assistant to seek help in completing tasks and obtaining information, such as finding concerts or locating restaurants anywhere. ——— Google’s attempt to create less intrusive online advertising faces hurdles as the U.K. privacy regulator criticizes its proposed replacements for cookies, the Wall Street Journal reports. The Information Commissioner’s Office (ICO) has raised concerns that Google’s Privacy Sandbox technology doesn’t adequately protect consumer privacy and could still allow user tracking. The ICO plans to release its final report by the end of April and has shared its worries with the Competition and Markets Authority (CMA), which oversees Google’s efforts to eliminate cookies in its Chrome browser. The CMA will consider the ICO’s recommendations as it evaluates Google’s plans.