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Apple iPhone Assembler Joins Wave of Tech Investment in India – BNN

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(Bloomberg) — Apple Inc. assembly partner Pegatron Corp. is making preparations for its first plant in India, adding to a large influx of foreign tech investments in the country this year.

In June, the Indian government set out a $6.6 billion plan to woo the world’s top smartphone manufacturers, offering financial incentives and ready-to-use manufacturing clusters. Pegatron is now setting up a local subsidiary and joining fellow Taiwanese electronics assemblers Foxconn Technology Group and Wistron Corp., who have already been making some iPhone handsets in southern India.

With a number of factories in China, Pegatron is the second-largest iPhone assembler and depends on Apple for more than half of its business. Like its peers, it will set up in the south of India, according to a person familiar with its plans who asked not to be named. Foxconn, also known as Hon Hai, and Wistron are looking to expand their operations in the country, and Pegatron’s entry can be seen as a defensive move to protect its share of budget iPhone manufacturing, according to Matthew Kanterman of Bloomberg Intelligence.

What Bloomberg Intelligence says

Pegatron could uphold its iPhone SE assembly market share, which may have grown from a 50-50 split with Hon Hai.

– Matthew Kanterman, analyst

Click here for the research.

India has seen a surge of inward investment in recent weeks, with Google, Facebook Inc. and others pouring close to $20 billion into Jio Platforms Ltd., billionaire Mukesh Ambani’s mobile internet venture. Google has committed to spending $10 billion over the next five to seven years to hasten India’s digital transition and Amazon.com Inc. has said it intends to export $10 billion of made-in-India goods by 2025. When Jeff Bezos visited the country in January, he said “The 21st century is going to be the Indian century.”

Read more: Google, Jio to Build Cheap Phones in $4.5 Billion India Alliance

The country offers a vast pool of skilled labor as well as a domestic market of a billion mobile connections. Only about half of those are smartphones, however, leaving untapped potential that is attractive to growth-hungry global brands like Apple, Samsung Electronics Co., Xiaomi Corp. and Oppo. For assemblers like Pegatron, exports would also be an enticing opportunity, especially at a time of worsening trade relations between Washington and Beijing making it imperative to have a diverse geographic base.

Smartphones are a focal point for Prime Minister Narendra Modi’s much-touted Make in India program. Ravi Shankar Prasad, India’s minister for information technology and electronics, has said the goal is for brands and manufacturers to transport the entire supply chain to the country, not just the end-stage assembly. Quoted by local media, Prasad said India wants not only the “bridegroom” but also the “wedding procession.”

Read more: Trump Tumult Has Gadget Giants Splitting Along U.S.-China Lines

India will become a global manufacturing hub for both components and the complete assembly of smartphones and other devices, said Pankaj Mohindroo, chairman of the Indian Cellular & Electronics Association. The group’s three dozen members include Apple, Foxconn, Google, Wistron, Oppo and others.

“The focus is shifting from making for India to exports and the $400 billion electronics manufacturing that India is targeting by 2025 will be dominated by exports,” Mohindroo said via phone from New Delhi.

©2020 Bloomberg L.P.

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More China coal investments overseas cancelled than commissioned since 2017

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More China-invested overseas coal-fired power capacity was cancelled than commissioned since 2017, research showed on Wednesday, highlighting the obstacles facing the industry as countries work to reduce carbon emissions.

The Centre for Research on Energy and Clean Air (CREA) said that the amount of capacity shelved or cancelled since 2017 was 4.5 times higher than the amount that went into construction over the period.

Coal-fired power is one of the biggest sources of climate-warming carbon dioxide emissions, and the wave of cancellations also reflects rising concerns about the sector’s long-term economic competitiveness.

Since 2016, the top 10 banks involved in global coal financing were all Chinese, and around 12% of all coal plants operating outside of China can be linked to Chinese banks, utilities, equipment manufacturers and construction firms, CREA said.

But although 80 gigawatts of China-backed capacity is still in the pipeline, many of the projects could face further setbacks as public opposition rises and financing becomes more difficult, it added.

China is currently drawing up policies that it says will allow it to bring greenhouse gas emissions to a peak by 2030 and to become carbon-neutral by 2060.

But it was responsible for more than half the world’s coal-fired power generation last year, and it will not start to cut coal consumption until 2026, President Xi Jinping said in April.

Environmental groups have called on China to stop financing coal-fired power entirely and to use the funds to invest in cleaner forms of energy, and there are already signs that it is cutting back on coal investments both at home and abroad.

Following rule changes implemented by the central bank earlier this year, “clean coal” is no longer eligible for green financing.

Industrial and Commercial Bank of China, the world’s biggest bank by assets and a major source of global coal financing, is also drawing up a “road map” to pull out of the sector, its chief economist Zhou Yueqiu said at the end of May.

 

(Reporting by David Stanway; Editing by Kenneth Maxwell)

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Bank of Montreal CEO sees growth in U.S. share of earnings

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Bank of Montreal expects its earnings contribution from the U.S. to keep growing, even without any mergers and acquisitions, driven by a much smaller market share than at home and nearly C$1 trillion ($823.38 billion) of assets, Chief Executive Officer Darryl White said on Monday.

“We do think we have plenty of scale,” and the ability to compete with both banks of similar as well as smaller size, White said at a Morgan Stanley conference, adding that the bank’s U.S. market share is between 1% and 5% based on the business line, versus 10% to 35% in Canada. “And we do it off the scale of our global balance sheet of C$950 billion.”

($1 = 1.2145 Canadian dollars)

 

(Reporting by Nichola Saminather; Editing by Leslie Adler)

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GameStop falls 27% on potential share sale

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Shares of GameStop Corp lost more than a quarter of their value on Thursday and other so-called meme stocks also declined in a sell-off that hit a broad range of names favored by retail investors.

The video game retailer’s shares closed down 27.16% at $220.39, their biggest one-day percentage loss in 11 weeks. The drop came a day after GameStop said in a quarterly report that it may sell up to 5 million new shares, sparking concerns of potential dilution for existing shareholders.

“The threat of dilution from the five million-share sale is the dagger in the hearts of GameStop shareholders,” said Jake Dollarhide, chief executive officer of Longbow Asset Management. “The meme trade is not working today, so logic for at least one day has returned.”

Soaring rallies in the shares of GameStop and AMC Entertainment Holdings over the past month have helped reinvigorate the meme stock frenzy that began earlier this year and fueled big moves in a fresh crop of names popular with investors on forums such as Reddit’s WallStreetBets.

Many of those names traded lower on Thursday, with shares of Clover Health Investments Corp down 15.2%, burger chain Wendy’s falling 3.1% and prison operator Geo Group Inc, one of the more recently minted meme stocks, down nearly 20% after surging more than 38% on Wednesday. AMC shares were off more than 13%.

Worries that other companies could leverage recent stock price gains by announcing share sales may be rippling out to the broader meme stock universe, said Jack Ablin, chief investment officer at Cresset Capital.

AMC last week took advantage of a 400% surge in its share price since mid-May to announce a pair of stock offerings.

“It appears that other companies, like GameStop, are hoping to follow AMC’s lead by issuing shares and otherwise profit from the meme stocks run-up,” Ablin said. “Investors are taking a dim view of that strategy.”

Wedbush Securities on Thursday raised its price target on GameStop to $50, from $39. GameStop will likely sell all 5 million new shares but that amount only represents a “modest” dilution of 7%, Wedbush analysts wrote.

GameStop on Wednesday reported stronger-than-expected earnings, and named the former head of Amazon.com Inc’s Australian business as its chief executive officer.

GameStop’s shares rallied more than 1,600% in January when a surge of buying forced bearish investors to unwind their bets in a phenomenon known as a short squeeze.

The company on Wednesday said the U.S. Securities and Exchange Commission had requested documents and information related to an investigation into that trading.

In the past two weeks, the so-called “meme stocks” have received $1.27 billion of retail inflows, Vanda Research said on Wednesday, matching their January peak.

 

(Reporting by Aaron Saldanha and Sagarika Jaisinghani in Bengaluru and Sinead Carew in New York; Additional reporting by Ira Iosebashvili; Editing by Sriraj Kalluvila, Shounak Dasgupta, Jonathan Oatis and Nick Zieminski)

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