Briefs

London Stock Exchange has agreed to buy Refinitiv in a US$27 billion ($37 billion) bet that the future of the financial services industry is one dominated by data. The transaction is expected to be completed in 2H2020. Shareholders of Refinitiv, including Singapore’s sovereign wealth fund GIC, will receive a stake of about 37% in the enlarged firm.

“With the acquisition of Refinitiv, we will transform our position as a leading global financial markets infrastructure group,” said LSE CEO David Schwimmer on Aug 1. “Refinitiv brings highly complementary capabilities in data and capital markets.”

Refinitiv serves over 40,000 institutions in 190 countries. Its products include the Eikon terminal and the Redi trading execution system.

Just last year, a consortium led by Blackstone Group, Canada Pension Plan Investment Board and GIC bought 55% of Refinitiv in a deal valued at US$20 billion.

Indonesia to loosen ownership rules of banks

Indonesia plans to make it easier for foreign banks to invest in local banks, says Heru Kristiyana, commissioner for banking supervision at the country’s Financial Services Authority, in a recent interview with Bloomberg. The revised rule, which will make no distinction between foreign and local lenders, will relax the long-standing requirement that the acquiring banks have to merge all their local operations into one entity.

“The single-presence policy will be flexible so that there’s consolidation and our banks become more efficient,” Kristiyana says. “Foreign banks are still interested in coming to Indonesia because the net interest margin is still high at around 5%.”

In 2012, Indonesia capped foreign holdings in local lenders to 40%, prompting DBS Group Holdings to abandon an attempt to take over Bank Danamon Indonesia. Since then, Indonesia has relaxed the 40% rule, clearing the way for Japan’s Mitsubishi UFJ Financial Group to take control of Danamon earlier this year, and for Sumitomo Mitsui Financial Group to buy Bank Tabungan Pensiunan Nasional.

Separately, the International Monetary Fund expects Indonesia’s economy to grow 5.2% this year and 5.3% in 2020, led by healthy, strong domestic demand.

Huawei sales up 23%; under probe in Singapore

Huawei Technologies increased sales by 23% y-o-y in 1H2019 to RMB401.3 billion ($80 billion), even after it was blocked from buying components from US suppliers.

From 2014 to 2018, Huawei grew its sales at 26% a year on average. Between January and June 2019, the company sold 118 million units. It had earlier set a target of 250 million to 260 million units for the whole of 2019. The bulk of the growth in smartphones sales are from its domestic market.

Huawei attracted controversy in Singapore recently when it offered to sell a low-end Y6 model for just $54 — a significant discount on the usual price of $198. The offer, valid only for customers 50 years old and above, attracted big crowds, who became agitated when stock ran out way before they could buy one. Submachine-gun-wielding police were called in to maintain order. On July 30, Huawei offered a $100 voucher as an appeasement to those who registered and failed to obtain the specially priced handsets.

Meanwhile, several consumer rights and advertising bodies have launched probes into Huawei for the ruckus it triggered.

India’s ‘coffee king’ dead in apparent suicide

V G Siddhartha, founder of India’s largest coffee retail chain, Café Coffee Day, was found dead on July 31. His body was recovered from a river in the southern state of Karnataka. He left his chauffered car on July 29 and did not return.

Siddhartha and his wife together held 53% of Bombay Stock Exchange-listed Coffee Day Enterprises. In a letter to the company, which it posted to the stock exchange, the 60-year-old said he had “failed to create the right profitable business model despite my best efforts. I would like to say I gave it my all. I fought for a long time, but today I gave up as I could not take any more pressure”.

Since its founding in 1996, Coffee Day has become one of India’s most ubiquitous homegrown consumer brands. It runs more than 1,600 cafés, 500 express stores and 54,000 coffee-vending machines. The company was listed in 2015. Private equity firm KKR owns a 6% stake. Its other significant investor is Indian venture capitalist Parag Saxena’s Asia-based private equity fund New Silk Route.

Siddhartha wrote in the letter that Coffee Day Enterprises faced a “serious liquidity crunch”, though “our assets outweigh our liabilities and can help repay everybody”. He said there was heavy pressure from “one of the private equity partners, who was forcing me to buy back shares” and “harassment from income tax authorities”, adding that “tremendous pressure from other lenders lead me to succumbing to the situation”. Siddhartha, dubbed the “coffee king of India”, said he never intended to cheat or mislead anybody. “I have failed as an entrepreneur,” he wrote.

Scoot to get Airbus A321neos

Singapore Airlines subsidiary Scoot, which has thus far operated an all-Boeing fleet, has placed an order with European manufacturer Airbus for 16 A321neo aircraft. The first plane will be delivered in 4Q2020 and will be used on routes of within six hours.

Scoot is betting that the new fleet will enable it to meet its double-digit growth plan by the end of FY2020/21. Of the 16 aircraft, six are an upgrade from Scoot’s current A320neo order from Airbus, while 10 will be leased. The single-aisle plane will be fitted with 236 seats, which puts it in between the seating capacity of the Boeing 737-800 and Boeing 787 planes in Scoot’s fleet.

“The A321neos will inject growth possibilities to our network plans for 2020 and beyond, and it is indeed apt that we have named the first aircraft Wings of Change,” says Scoot CEO Lee Lik Hsin.

Uber axes 400 jobs, cites ‘mediocre’ results

Ride-hailing company Uber Technologies is cutting 400 staff, or a third of its marketing department globally, as CEO Dara Khosrowshahi seeks to address concerns that the business is slowing down.

“Today, there’s a general sense that while we’ve grown fast, we’ve slowed down,” Khosrowshahi wrote in a July 29 email to staff. “This happens naturally as companies get bigger, but it is something we need to address, and quickly... Many of our teams are too big, which creates overlapping work, makes for unclear decision owners, and can lead to mediocre results. I’m here to win a race that really, really matters.”

San Francisco-based Uber went public in May and currently trades at just below the IPO price. Lyft, Uber’s rival, is under pressure from investors over heavy losses. Jon McNeill, Lyft’s chief operating officer, is leaving the company after less than two years on the job.