Highlights of a decade

Distributed Ledger Technology, the most famous of which is blockchain. DLT/Blockchain is a method for recording and therefore transferring assets or …

The break-neck pace of the 2010s was largely driven by technological and unexpected political shifts. We’ve consolidated a list of the highlights of the last decade which we believe had a real impact.

The mobile payments revolution

The smartphone is inextricably linked to most of the leaps forward in consumer payments, not least NFC technology that facilitated the huge growth enjoyed by Apple Pay, Samsung Pay and Android Pay. However, it was the humble QR code – a square barcode-like system that failed to catch on in the West – that revolutionised the Chinese payments landscape in the last decade thanks to mobile wallets such as Alipay. It signalled a new frontier of payment tech in China upon its launch in 2009 when it spun out of Taobao, the Alibaba P2P eCommerce site, to the point that it now owns over half of the Chinese domestic payments market and the former enjoys over 700m monthly active users. This ubiquity eventually resulted in Alipay becoming one of only a few so-called ‘Super Apps’, surpassing 230 million daily active users with 120,00 lite apps by Spring of 2019, hosting a range of other ‘mini-programs’ within its ecosystem covering ordering a taxi to wealth management, lots of which support Alipay payments in-app.

The evolution of payment of digital money

Distributed Ledger Technology, the most famous of which is blockchain. DLT/Blockchain is a method for recording and therefore transferring assets or contracts within the digital age. It facilitates the instant transfer of assets around the world and has been deployed by various financial houses and exchanges. The speculative bubble that surrounded Bitcoin largely put paid to it as a means of payment, meaning Ripple has probably become the most successful application f the technology within the payments space. To put the potential benefits of DLT in perspective, even the archaic institution that is SWIFT knows it is the future and is slowly adopting the technology.

Unbundling and ‘re-bundling’ Financial Services

Whilst integrating one API might seem pedestrian or the bare minimum in 2020, the rise of tech within finance upstarts heralded the start of a promise that will likely only be made good on over the next decade. At the start of the 2010s, we began to see the unbundling of financial services and banking into API-driven narrower ‘vertical slices’ such as PayTech, WealthTech, LendTech and InsureTech, for example. Towards the end of the ’10s, we saw a dramatic re-convergence of those narrow slices into ‘re-bundling’ of financial services, as each provider began to partner with other FinTech’s to incorporate supplementary services alongside their core offerings or offered an open ‘ecosystem’ for users and consumers to select a ‘pick n mix’ of their providers.

UK Bank of England in flux

Mark Carney was appointed the Governor of the Bank of England in 2011, amid the downturn following the banking crisis. Under Mervyn Kin’s tenure, Carney’s predecessor Mervyn had allowed inflation to spike to circa 5% which, at the time, was viewed as transitory. Against a backdrop of challenges with inflation, historic low-interest rates and a program of asset purchases already underway, Carney did not have many tools left at his disposal to effect change. Part of what Carney did was to introduce the concept of forward guidance to the market, giving clear indications on future policy directions to give the markets reassurance. The UK economy re-emerged as one of the fastest-growing countries in Europe and made a robust recovery from the financial crisis until the Brexit uncertainty hit.

Eurozone challenges

Mario Draghi (head of the European Central Bank) promises to do “whatever it take” to support the Euro. In the contagion that followed the 2007/2008 financial crisis, the sovereign debt crisis engulfed the Eurozone as a group of countries were bailed out to avoid a default on their debts – Portugal, Ireland, Greece and Spain were all forced to take funds from the ECB and to adopt austerity measures, causing deep political unrest and resentment of the Eurozone within these countries. The subsequent populist movement has pushed against the very notion of the EU and the political ramifications are still being felt today. EBPEUR finished the 2010’s at pretty much the same level it started at, which is remarkable given the events that unfolded and the periods of intense volatility along the way.

The US economy on the edge

The Federal Reserve Board (FED) continues Quantitative Easing (QE) with QE2 and QE3. Having deployed “extraordinary measures” in the wake of the 2007/2008 financial crisis, the FED decided to double down on this strategy in November 2010 by announcing a fresh US$600bn in purchases. In 2012, they announced QE3, an open-ended US$40bn per month of purchases. These purchases sparked the bull run in equities that drove the index to record highs. The FED tried to wean the US economy off stimulus by tapering the purchases of assets and raised interest rates briefly. Trump has introduced fiscal policies to support the economy and, in a largely unprecedented move in recent times, applied overt political pressure to the FED to reverse its rate hike.

Changing financial regulations

Over the last decade, we have seen increasing consumer protection via regulation in the shape of:

  • The Payment Services Directive (PSD2)
  • General Data Protection Regulation (GDPR)
  • Markets in Financial Instruments Directive 2 (MIFID2)
  • The 4th EU AML Directive

All of these have required Payment Institutions (PIs) to adopt new measures and controls to keep our clients, their funds and the financial system itself safe.

Rise of the FinTech

In 2010, the Foreign Exchange (FX) market was still dominated by the banks and a few telephone-based brokers. Online dealing platforms were beginning to be launched by the early adopters, but most transactions were completed over the phone. After which, there was a steady increase of disruptive FX companies and wider payment solution-based start-ups reshaping the business landscape – ensuring the growth of FinTech companies.

What about pricing?

Aside from the advances in products and ecosystems we’ve covered above, the last ten years also marked a change in the wind when it came to pricing transparency and simplicity, of which FinTechs have been at the vanguard. In a bid to shake up the status quo of large, slow, opaque players charging unclear fees and trading on the promise of ‘service’, these nimble tech-first businesses ostensibly had either lower overheads by offering an intuitive simple product or proposition, or were content in loss-leading for the first few years to gain a foothold in the market. Thankfully, in some cases, it’s not a choice between a company with an innovative product or competitive pricing.

For example, at WorldFirst we launched a straightforward and transparent pricing structure last year, allowing businesses to access FX costs from as low as 0.15%.

Now that 2020 has begun, we’re keeping an eye on the following:

  • Digital technologies such as cloud computing
  • Machine learning and blockchain are set to have the biggest impact on regulation and competition trends
  • The same can be said for AI, particularly AI personalisation. This will allow industries to use real-time data to make dedicated customer recommendations backed by insights
  • Mobile P2P payments and digital remittance services will continue to drive the growth in smartphone payments which will be driven by customer buying behaviour and their consumption. The key term for 2020 is ‘customer-centricity’.

If you plan on trading in 2020, contact us today to find out how WorldFirst could help you. For up-to-date market news, you can subscribe to our economic updates written by our team of forex correspondents.

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SoftBank Group’s quarterly profit wiped out by Vision Fund losses

Japan’s SoftBank Group Corp said on Wednesday its third-quarter operating profit fell 99%, well short of analyst estimates, pulled down by a second …

Quarterly profit at SoftBank Group Corp was almost wiped out as the Japanese technology giant was hit for a second straight quarter by losses at its $100 billion Vision Fund.

Wednesday’s dismal results could further dampen investor enthusiasm for founder Masayoshi Son’s big bets on untested start-ups. While Son told a news conference SoftBank had turned a corner, he also said he has been forced to scale back a second Vision Fund while investing with only SoftBank’s own capital.

That marks a major climbdown from July, when SoftBank said it had attracted $108 billion in pledges for a second mega-fund.

More pointedly, it shows how the bailout of start-up WeWork last year and other missteps have put a chill on the tech investing scene and given SoftBank shareholder Elliott ammunition to lobby for change.

“We have caused a lot of concern,” Son said in Tokyo following the results, adding he needs to “give everyone piece of mind” to secure outside funds for Vision Fund 2.

Group profit was 2.6 billion yen ($24 million) in the October-December quarter versus 438 billion yen a year before. The Vision Fund posted an operating loss of 225 billion yen ($2.05 billion) for the quarter compared with a 176 billion yen profit in the same period a year earlier.

But Son, known for an ebullience and charisma that is still rare in corporate Japan, said the company’s performance was already improving.

“The tide is turning,” he said.

Big stake

“Softbank should focus on one thing, shareholder value creation,” said Jeffries analyst Atul Goyal in a note to clients ahead of the earnings.

Son pointed to a rally in prices at the Vision Fund’s handful of listed investments and news overnight that a U.S. federal judge had rejected an antitrust challenge to the proposed merger of SoftBank’s Sprint Corp and T-Mobile US Inc.

Shares of SoftBank finished up 12% in Tokyo before the results and after the U.S. court decision.

Son has long argued SoftBank’s shares are undervalued, a position shared by U.S. hedge fund Elliott Management, which has recently emerged as a prominent shareholder. Elliott, one of the world’s best known activist investors, is pushing for changes including $20 billion in stock buybacks, sources said last week.

SoftBank has held discussions with Elliott and is aligned on improving shareholder value, Son said, adding that while open to potentially buying back shares, he was in “no hurry” to sell part of a 26% shareholding in Alibaba to fund buybacks.

The Vision Fund, which is backed by Saudi Arabia and has single-handedly changed the face of tech investing, said it had invested $74.6 billion in 88 companies as at the end of December, when those investments were worth $79.8 billion.

Analysts have said it is difficult to evaluate SoftBank’s performance due to a lack of disclosure around Vision Fund’s internal valuations.

Son’s investing credentials took a hit in the August-September quarter when the Vision Fund recorded an $8.9 billion operating loss.

Since then, a slew of portfolio companies – from hotel-booking platform Oyo to cloud robotics firm CloudMinds – have cut jobs and come under pressure to demonstrate the long-term viability of their business models.

The fund itself has also lost key employees.

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SoftBank’s profit drop amid WeWork worries, Sprint approval

TOKYO – Japanese technology conglomerate SoftBank Group Corp. said its profit for last quarter dropped amid worries about the perceived risk of its …

TOKYO – Japanese technology conglomerate SoftBank Group Corp. said its profit for the last quarter dropped amid worries about the perceived risk of its investments into companies like WeWork.

Tokyo-based SoftBank said Wednesday its profit for the October-December quarter stood at 55 billion yen ($500 million), down to less than a tenth of the 698 billion it earned over the three months in 2018.

In a bit of good news, a U.S. judge in New York on Tuesday rejected a challenge by a group of states to T-Mobile’s $26.5 billion takeover of Sprint. SoftBank owns Sprint.

The deal has been two years in the making, and the latest development appears to clear nearly all the hurdles. The agreement already has U.S. regulatory approval and the go-ahead from public utility commissions. T-Mobile now expects to close the deal as early as April 1.

The good news sent SoftBank shares soaring in Tokyo trading.

SoftBank, which includes in its group a successful Japanese mobile carrier, reported quarterly sales edged down 3% to 2.44 trillion yen ($22 billion).

Losses at SoftBank’s investment fund called the Vision Fund also hurt results , although such losses have been decreasing.

The reputation of the Vision Fund, which was started mostly with Saudi money, suffered in 2018, after the killing of Saudi journalist Jamal Khashoggi. The fund has been investing in various companies, solar projects and artificial intelligence.

Adding to the company’s challenges has been SoftBank’s bailout of WeWork last year. That invited scrutiny after WeWork, which bills itself as both a technology and real-estate company, canceled an initial public offering.

SoftBank brought in new leadership at WeWork to try to engineer a turnaround. The company says it’s banking on the huge potential of workspace sharing around the world, and has secured enough cash to move forward.

SoftBank has powerful companies under its wing, including Alibaba, a Chinese e-commerce, retail and net conglomerate, Yahoo! Japan and the British IOT company Arm.

SoftBank’s founder and Chief Executive Masayoshi Son has managed to score success by jumping from what he sees as one lucrative venture to another, a business style that’s common in the West but relatively rare in conservative Japan Inc.

“I see comments out there that SoftBank even might go bankrupt. But we are in the black. It is a far cry from bankruptcy,” he told reporters and analysts at a Tokyo hotel, noting shareholders’ value had increased by 5 trillion yen ($45 billion) in the past four months.

Son showed a trompe-l’œil image that looks like a duck from the right but a rabbit when looked at from the left, while acknowledging he was making “a pretty outlandish argument” to have people focus on shareholders’ value, not profits.

Among SoftBank’s sprawling businesses are ride-sharing Uber and the talking Pepper humanoid.

___

Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

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SoftBank Group quarterly profit wiped out by Vision Fund losses

TOKYO (Reuters) – Japan’s SoftBank Group Corp said on Wednesday its third-quarter operating profit fell 99%, well short of analyst estimates, pulled …

TOKYO (Reuters) – Quarterly profit at SoftBank Group Corp (9983.T) was almost wiped out as the Japanese technology giant was hit for a second straight quarter by losses at its $100 billion Vision Fund.

Wednesday’s dismal results could further dampen investor enthusiasm for founder Masayoshi Son’s big bets on untested start-ups. While Son told a news conference SoftBank had turned a corner, he also said he has been forced to scale back a second Vision Fund while investing with only SoftBank’s own capital.

That marks a major climbdown from July, when SoftBank said it had attracted $108 billion in pledges for a second mega-fund.

More pointedly, it shows how the bailout of start-up WeWork last year and other missteps have put a chill on the tech investing scene and given SoftBank shareholder Elliott ammunition to lobby for change.

“We have caused a lot of concern,” Son said in Tokyo following the results, adding he needs to “give everyone piece of mind” to secure outside funds for Vision Fund 2.

Group profit was 2.6 billion yen ($24 million) in the October-December quarter versus 438 billion yen a year before. The Vision Fund posted an operating loss of 225 billion yen ($2.05 billion) for the quarter compared with a 176 billion yen profit in the same period a year earlier.

But Son, known for an ebullience and charisma that is still rare in corporate Japan, said the company’s performance was already improving.

“The tide is turning,” he said.

BIG STAKE

“Softbank should focus on one thing, shareholder value creation,” said Jeffries analyst Atul Goyal in a note to clients ahead of the earnings.

Son pointed to a rally in prices at the Vision Fund’s handful of listed investments and news overnight that a U.S. federal judge had rejected an antitrust challenge to the proposed merger of SoftBank’s Sprint Corp (S.N) and T-Mobile US Inc (TMUS.O).

Shares of SoftBank finished up 12% in Tokyo before the results and after the U.S. court decision.

Son has long argued SoftBank’s shares are undervalued, a position shared by U.S. hedge fund Elliott Management, which has recently emerged as a prominent shareholder. Elliott, one of the world’s best known activist investors, is pushing for changes including $20 billion in stock buybacks, sources said last week.

SoftBank has held discussions with Elliott and is aligned on improving shareholder value, Son said, adding that while open to potentially buying back shares, he was in “no hurry” to sell part of a 26% shareholding in Alibaba (BABA.N) to fund buybacks.

The Vision Fund, which is backed by Saudi Arabia and has single-handedly changed the face of tech investing, said it had invested $74.6 billion in 88 companies as at the end of December, when those investments were worth $79.8 billion.

Analysts have said it is difficult to evaluate SoftBank’s performance due to a lack of disclosure around Vision Fund’s internal valuations.

Son’s investing credentials took a hit in the August-September quarter when the Vision Fund recorded an $8.9 billion operating loss.

Since then, a slew of portfolio companies – from hotel-booking platform Oyo to cloud robotics firm CloudMinds – have cut jobs and come under pressure to demonstrate the long-term viability of their business models.

FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato/File Photo

The fund itself has also lost key employees.

($1 = 109.9900 yen)

Reporting by Sam Nussey; Editing by Christopher Cushing, David Dolan and Mark Potter

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Keywise Capital Management LTD Maintains Stake in Taiwan Semiconductor Mfg LTD (TSM …

Some Historical TSM News: 24/05/2018 – TAIWAN’S TSMC 2330.TW TSM.N SAYS IT ORDERS MACHINERY EQUIPMENT WORTH T$306 MLN; …

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) Logo

Keywise Capital Management Ltd increased its stake in Taiwan Semiconductor Mfg Ltd (TSM) by 112.49% based on its latest 2019Q2 regulatory filing with the SEC. Keywise Capital Management Ltd bought 510,500 shares as the company’s stock declined 2.72% . The hedge fund held 964,300 shares of the semiconductors company at the end of 2019Q2, valued at $37.77 million, up from 453,800 at the end of the previous reported quarter. Keywise Capital Management Ltd who had been investing in Taiwan Semiconductor Mfg Ltd for a number of months, seems to be bullish on the $222.45 billion market cap company. The stock increased 1.52% or $0.67 during the last trading session, reaching $44.74. About 6.14M shares traded. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has risen 3.75% since September 14, 2018 and is uptrending. It has outperformed by 3.75% the S&P500. Some Historical TSM News: 24/05/2018 – TAIWAN’S TSMC 2330.TW TSM.N SAYS IT ORDERS MACHINERY EQUIPMENT WORTH T$306 MLN; 09/04/2018 – TAIWAN’S TSMC 2330.TW TSM.N SAYS ORDERS MACHINERY EQUIPMENT WORTH T$1.06 BLN; 26/04/2018 – TSMC 2330.TW SAYS IT ORDERS EQUIPMENT FOR T$856 MLN; 18/04/2018 – InspectorGeneral: Occupational Therapist Owner of TSM Sentenced for Making False and Fraudulent Statements Related to Health; 26/04/2018 – TAIWAN’S TSMC 2330.TW TSM.N SAYS ORDERS MACHINERY EQUIPMENT WORTH T$1.925 BLN; 15/05/2018 – SAMSUNG ELEC 005930.KS IN TALKS WITH ZTE 0763.HK , OTHER SMARTPHONE MAKERS TO SUPPLY EXYNOS CHIPS – EXEC; 19/04/2018 – TSMC 2330.TW TSM.N SAYS EXPECTS HPC SEGMENT TO GROW BY CLOSE TO 40 PCT IN NEXT 5 YRS VS LAST YEAR’S FORECAST OF 25 PCT; 26/03/2018 – TSMC to make automotive chips for Renesas; 19/04/2018 – TSMC 2330.TW TSM.N SAYS IT SEES FOUNDRY MARKET GROWTH AT 8 PCT; 19/04/2018 – TSMC 2330.TW SAYS IT ORDERS EQUIPMENT FOR T$650 MLN

Myriad Asset Management Ltd increased its stake in Alibaba Group Hldg Ltd (BABA) by 7.62% based on its latest 2019Q2 regulatory filing with the SEC. Myriad Asset Management Ltd bought 59,873 shares as the company’s stock declined 8.56% . The institutional investor held 845,425 shares of the business services company at the end of 2019Q2, valued at $143.26M, up from 785,552 at the end of the previous reported quarter. Myriad Asset Management Ltd who had been investing in Alibaba Group Hldg Ltd for a number of months, seems to be bullish on the $466.48 billion market cap company. The stock increased 0.52% or $0.93 during the last trading session, reaching $179.17. About 9.22 million shares traded. Alibaba Group Holding Limited (NYSE:BABA) has declined 6.34% since September 14, 2018 and is downtrending. It has underperformed by 6.34% the S&P500. Some Historical BABA News: 13/03/2018 – Chinese bike-sharing firm Ofo has raised $866 million in new funding led by Alibaba; 29/05/2018 – The investment would be Alibaba’s third in a Chinese courier after buying a minority stakes in YTO Express and Best Inc; 20/03/2018 – Altaba Grapples With Its Huge Alibaba Stake — Barrons.com; 04/04/2018 – Tencent vs. Alibaba: Battle extends to bikes and food delivery; 29/05/2018 – IKANG HEALTHCARE – BOYU CAPITAL FUND lll TO JOIN AFFILIATES OF YUNFENG CAPITAL, ALIBABA GROUP HOLDING AS SPONSOR, PROVIDE EQUITY FINANCING FOR DEALS; 26/03/2018 – Brightwire: Alibaba to release unlimited data package for own apps with China Unicom; 16/03/2018 – Alibaba-backed Cambricon starts financing round at CNY 12 billion valuation, sources say; 15/05/2018 – RONGYU GROUP, ALIBABA SIGN COOPERATION AGREEMENT; 24/04/2018 – XIAOZHU.COM SAYS ANNOUNCED STRATEGIC PARTNERSHIP WITH FLIGGY, THE TRAVEL BRAND UNDER ALIBABA GROUP ON APRIL 24; 10/04/2018 – CHINA’S ANT FINANCIAL IN TALKS WITH INVESTORS TO BOOST FUNDRAISING TARGET TO AT LEAST $8 BILLION

More notable recent Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) news were published by: Finance.Yahoo.com which released: “4 5-Star Companies to Consider as Dow Eclipses 27,000 – Yahoo Finance” on September 12, 2019, also Finance.Yahoo.com with their article: “Sarah Ketterer’s Favorite Tech Stocks – Yahoo Finance” published on September 13, 2019, Seekingalpha.com published: “Wall Street Brunch – Seeking Alpha” on August 18, 2019. More interesting news about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) were released by: Finance.Yahoo.com and their article: “Is Taiwan Semiconductor Mfg. Co. Ltd. (TSM) A Good Stock To Buy? – Yahoo Finance” published on June 07, 2019 as well as Finance.Yahoo.com‘s news article titled: “Jim Cramer Shares His Thoughts On Viacom, Yeti And More – Yahoo Finance” with publication date: August 16, 2019.

Keywise Capital Management Ltd, which manages about $1.77 billion and $242.96M US Long portfolio, decreased its stake in Alibaba Group Hldg Ltd (NYSE:BABA) by 384,100 shares to 190,964 shares, valued at $32.36M in 2019Q2, according to the filing.

Myriad Asset Management Ltd, which manages about $929.23M US Long portfolio, decreased its stake in Graf Indl Corp by 50,000 shares to 150,000 shares, valued at $1.54 million in 2019Q2, according to the filing. It also reduced its holding in Paypal Hldgs Inc by 250,000 shares in the quarter, leaving it with 100,000 shares, and cut its stake in Chegg Inc (NYSE:CHGG).

More notable recent Alibaba Group Holding Limited (NYSE:BABA) news were published by: Seekingalpha.com which released: “Alibaba: It Is A Generational Buy – Seeking Alpha” on August 18, 2019, also Fool.com with their article: “Better Buy: Alibaba vs. JD.com – Motley Fool” published on August 20, 2019, Seekingalpha.com published: “Alibaba postpones Hong Kong listing – Reuters – Seeking Alpha” on August 21, 2019. More interesting news about Alibaba Group Holding Limited (NYSE:BABA) were released by: Seekingalpha.com and their article: “Forget The Trade War – Buy Alibaba – Seeking Alpha” published on August 23, 2019 as well as Finance.Yahoo.com‘s news article titled: “What Do Investors Need To Know About The Future Of Alibaba Group Holding Limited’s (NYSE:BABA)? – Yahoo Finance” with publication date: August 05, 2019.

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