by | September 22, 2014 · 2:25 pm

Australia is expected to be the world`s biggest

China has a serious problem, and that is the pollution. You have probably been there, or seen some pictures from a very cloudy China? Some days in China is described as life threatening. People walk around in the city with masks and look like zombies from another planet.

LNG 3

The Chinese government need to do something very fast, and one thing they have decided to do is to slow down the crude oil consumption. Therefore, China`s demand for natural gas will increase and they need to pay a heavy price, simply because of the supply and demand in the market right now.

They need to buy more than they can produce, and that is a recipe for energy disaster for them, because they must import more natural gas, which gives the rest of the world an energy boom, and that is a game changer for the natural gas industry.

The Chinese government must act fast, because of the rising costs from pollution related illnesses. Their natural gas reserves aren`t the biggest problem for them, but their pipline infrastructure is weak, in addition to the location of the reserves and the inadequate technology to extract these reserves.

Exxon Mobile says in a study that China`s natural gas consumption will almost triple this decade to 14 Tcf (trillion cubic feet). China produced only 3,3 Tcf last year, while their consumption of natural gas was 5 Tcf, and the gap between supply and demand is growing fast.

It`s estimated that natural gas will provide 10% of all the energy used in China by 2020. Some of that will be made in China, but most of it will have to come from imports. If you think that this is a great opportunity, you have to think again, because who will profit from this boom? Putin`s Russia and Australia will!

Gazprom signed a 30-year deal to supply China with 1,3 Tcf of natural gas per year, starting in 2019, and that contract is worth $400 billion. The gas will come from Gazprom`s prolific fields in Siberia.

The Australian Woodside Petroleum will also profit from it, because they are close to China`s LNG operations that is already up and running. They have piplines on Australia`s West Coast, and they have invested over $200 billion in LNG operations. Australia is expected to unseat the current LNG leader, Qatar in the next few years.

Qatar is the world`s biggest supplier of LNG, and by 2020, the U.S will account for about 11% of the total LNG exports. Australia has a massive potential to become a big exporter of LNG, as they are Asia`s closest source of LNG. We are talking about South Korea, China and Japan, and that`s the main reason why Australia will become the world`s biggest supplier of LNG in a few years.

LNG exports will displace iron ore as the biggest source of Australia`s export growth in the next years. It`s expected that Australia will export 80 million tons of LNG by 2018. According to Australia`s Bureau of Resources and Energy Economics, earnings from LNG projects are forecast to increase five times. More than $49 billion through June 2018.

Australian gas output will rise to 100 million metric tons by 2018. It`s gas exports are expected to increase to 81% of production by 2018 (53% in 2012), they has more new LNG plants under construction than any other country, including the United States. The new projects will add 61,4 million tons of LNG capacity by June 2018, and they will have 85,8 million tons of capacity by that date. There are only 17,8 million tons of LNG capacity under construction in the U.S.
Another country`s that can become massive LNG exporters in the future is Canada and Africa. The problem in both country`s right now is their infrastructure. I will write about that later in a new article from shiny bull.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | September 19, 2014 · 2:02 pm

All eyes on Alibaba Group today

If you buy Alibaba shares today, you will buy a piece of North American Island country, and not a piece of the Chinese online retail giant. You will simply buy and own a stake in a variable interest entity registered in the Cayman Island, because Chinese law forbids foreign ownership of strategic assets in China. So, if you buy Alibaba shares today, you would have no influence on management.

alibaba logo

Shares worth about $8 billion is not locked, which means you can sell them right away today. The rest of the IPO`s have a lockup period, which means you have to wait several months before you can sell them.

In addition; if you buy shares in Alibaba today, won`t be able to hedge. Options will listed on September 29. Alibaba Group will be assigned a «China domicile», and therefore shares can`t be included in the S&P 500 Index, which requires a U.S domicile.

As you probably know, Facebook, Twitter and Google are all banned in China, and it was not easy for eBay either. Jack Ma said eBay couldn`t deliver as fast as they could. But what about Alibaba in the west?

Is it gonna be easy for them to build a great express logistic system to deliver fast in the west, where domestic companies are favored over international companies like Alibaba? That`s gonna be interesting in the future, because Alibaba is trying to be a global leader.

In my opinion; Amazon is very expensive, and Alibaba is very cheap. All eyes on Alibaba (BABA) shares today!

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | September 18, 2014 · 12:43 pm

Sony`s losses could triple

I remember the first time I bought my first Walkman. A Sony walkman. What a product. A cassette with my favorite music on, right in my Walkman, driven by batteries. It was launched for the first time in 1979. The worlds first portable music player with a compact cassette format.

sony-walkman

Sony has historically been notable for creating its own in-house standards for new recording and storage technologies, instead of adopting those of other manufacturer’s and standard bodies. They introduced the MiniDisc format in 1992. Sony`s Network Walkman line of digital portable music players did not support the MP3 de facto standard natively. Among many other big things, they bought CBS and have released lots of music, but now things have changed.

Sony (SNE) traded down -6,77% yesterday, and this is probably the beginning. First of all; Sony have decided not to pay a dividend for the first time since listing in 1958. They have no announcement regarding restructuring announcement either.

Investors can expect more bad news in the future. Sony cut its FY3 guidance factoring in the 180b impairment in goodwill associated with Sony Mobile. Sony`s lack of additional clarity on the ongoing strategy and the restructuring of the smart phone business is a big surprise.

But the biggest surprice is their cut in the dividende to zero for the first time since 1958. That`s what drove the shares down yesterday -6,77%. Investors are disappointed at the lack of dividend, but on the other hand; Sony could save about 25b Yen per year and that could be used to restructuring and investments.

It`s early to forecast Xperia Z3`s success and Sony need to rely on Sprint that is disrupting the U.S wireless market via aggressive data pricing. Consumers need to find value at a package that includes Sprint`s low-cost shared data plan.

Sony has managed to sell 3,5 million of the PlayStation 3 and 4 consoles, and if they do it all right with both, to the game and subscription business, they earn about $1 billion for the 2016 fiscal year.

Yesterday, Sony warned that they will report a much larger than expected loss of some 230 billion yen ($2,14 billion), and that`s nearly three times the loss to last year`s 50 billion yen. Sony is blaming ailing smart phone business for the revised guidance.

Last year, Sony`s mobile division was its most profitable, but sales have fallen as Sony`s competitors Huawei and Ziaomi have become dominant in the worlds largest smart phone market, China. In addition, they also compete with big brands like Apple and Samsung.

Sony`s president and chief executive Kazuo Hirai, said they will cut their work force by 15 percent, or about 1,000 workers. He also said that mobile business is one of their core business, and that they will continue to do business in this big market.

Net income has declined from $1,044 billion to -$1,340 billion and that is a dramatic 228% drop.

Sony`s movie division is not a big success either. Sequels of Robocop, 21 Jump Street, Think like a Man 2 and Spiderman underperformed. I would rather go for Walt Disney`s (DIS) Ice princesses and Guardians of the Galaxy.

Sony is now trading at $18,88, and it`s tumble isn`t done yet. Bad news like we saw yesterday will continue to bring down the stock and Sony demonstrated the ability to peel away -30% or more when the bearish mood really sets in.

I`m bearish on Sony and bullish on Walt Disney and Apple.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | September 17, 2014 · 1:51 pm

The Digital Wallet Evolution

Digital wallets is not something new. It has already been on the market for a while, but only a small portion of customers use them. McDonald`s, PayPal, Google, Starbucks and Square to name a few of them offer their own services with contactless payments.

Apple pay

(Picture: Apple Pay)

Security is the key and this is Apple`s challenge right now. They must convince the customers that the transactions are safe. It also creates a tough challenges for governments around the world.

A digital wallet can be a simple phone app, just like the cash in your pocket. It doesn`t require accounts with any intermediary. It can be written by anyone, downloaded by anyone and secured and maintained by everyone.

What about the tax implications. If you get caught cheating on your taxes and flee the country, the government could compel your bank to freeze your assets and cough up the money, but what if there is no bank?

Apple Pay with its presence on millions of iPhones and its advanced security features could be the service that leads to widespread adoption of the digital wallet. The total sum of mobile payments could skyrocket and grow from $1 billion last year to about $60 billion by 2017.

About 220,000 stores are set up to accept Apple Pay. That is only 5,5% of the 3,6 million retail locations in the U.S. Wal-Mart and Best Buy are not participating in Apple Pay so far, and the main reason is cost.

Let`s take a look at some of the company`s in this digital wallet universe so far.

Square Inc
is a financial services merchant services aggregator and mobile payments company based in San Francisco, California. The company was founded in 2009 by Jack Dorsey and Jim McKelvey. They launched its first app and service one year later in 2010. They have 600 employees.

Square Wallet, before it was removed from the Apple App Store and Google Play Store earlier this year, allowed customers to set up a tap and pay for their order by providing their name (or barcode) using a stored credit, debit or gift card.

Starbucks announced in August 2012 that it would use Square to process transactions with customers who pay via debit or credit card. In February earlier this year, Whole Foods Market announced it would use Square Register in select stores sandwich counters, pizzerias and coffee, juice, wine and beer bars.

In March this year, Square announced it will start allowing sellers to accept bitcoin on their own storefronts through Square Market. The seller will take no risk on Bitcoin value fluctuations.

The Square Reader was the first product release by Square, and is used to accept credit card payments by connecting to a mobile device`s audio jack. Square`s original reader consisted of a simple read head directly wired to a 3,5mm audio jack, through which unencrypted, analogue card information was fed to smartphones for amplification and digitization. Square`s technology is PCI compliant and Verisign certified.

Square`s rival VeriFone claimed that the Square system was insecure in April this year. They claimed that a «reasonably-skilled» programmer could write a replacement app which could conceivable use the Square device to skim a credit card and return its details.

Square uses strong encryption on its devices, including SSL and PGP. Its cryptographic keys are at least 2048 bits in length. Card numbers, magnetic stripe data, or security codes are not stored on Square client devices. Square follows the guidelines issued by OWASP.

Earlier this year, Square launched Square Order, which allows users to make purchases in advance and pick them up at a predetermined time. The app replaced Square Wallet. The transaction fee for orders placed in the app is 8%, whereas Square`s normal transaction fee is 2,75%. It replaced Square Wallet, which Square discontinued, removing it from the App Store and Google Play in favor of Order, on 12 May 2014.

VeriFone
Is an American multinational corporation headquartered in San Jose, California. The company is founded by William «Bill» Melton in Hawaii, USA in 1981. VeriFone is a global provider of technology for electronic payment transactions and value-added services at the point-of-sale.

VeriFone sells merchant-operated, consumer-facing and self-service payment systems to the financial, retail, hospitality, petroleum, government and healthcare industries.

The company`s system solutions consist of POS electronic payment devices that run its operation systems, security and encryption software, and certified payment software, and that are designed to suit its customers needs in both consumer-facing and unattended environments.

Its system solutions ould process a range of payment types, including signature and personal identification number (PIN)-based debit cards, credit cards, contractless/radio frequency identification cards, smart cards, pre-paid gift and other stored-value cards, electronic bill payment, check authorization and conversion, signature capture and Electronic Benefit Transfer (EBT).

The company`s PAYware Mobile solutions offer payment capabilities for all segments of the mobile POS environment, from retailers to small merchants.

Dwolla
is a U.S-only e-commerce company that provides an online payment system and mobile payments network. The company is founded by Ben Milne (CEO) and Shane Neuerburg (CTO), in Des Moines, Iowa.

Dwolla was founded in 2008 with services based only in Iowa. After raising $1,31 million in funding, they launched in the U.S on December 1, 2009. Dwolla is notable for its interest among users of Bitcoin.

PayPal
is an international e-commerce business allowing payments and money transfers to be made through the internett. Online money transfers serve as electronic alternatives to paying with traditional paper methods such as cheques and money orders.

The company is founded in Palo Alto, California, U.S. Founders are Ken Howery, Max Levchin, Elon Musk, Luke Nosek and Peter Thiel.

PayPal is an acquirer, performing payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. On October 3, 2002, PayPal became a wholly owned subsidiary of eBay. Its corporate headquarters are in San Jose, California, United States at eBay`s North First Street satellite office campus.

Since July 2007, PayPal has operated across the European Union as a Luxembourg-based bank.

PayPal developed after internet financial services company X.com acquired Confinity in March 2000. Confinity was founded in December 1998 by Max Levchin, Peter Thiel, Luke Nosek and Ken Howery and in 1999 launched a money transfer service called PayPal.

The PayPal money-transfer system was only months old at the time X.com acquired Confinity, but X.com founder Elon Musk was optimistic about its future success. Musk and Bill Harris disagreed on this point and Harris left the company in May 2000.

Musk made the decision that X.com would terminate its other internet banking operations and focus on the PayPal money service. The X.com company was then renamed PayPal and expanded rapidly in 2001 primarily as a result of its use on eBay.

As of 2014, PayPal operates in 203 markets and has 148 million active users.

Google Wallet
is a mobile payment system developed by Google that allows its users to store debit cards, credit cards, loyalty cards and gift cards among other things, as well as redeeming sales promotions on their mobile phone.

Google Wallet can use near field communication (NFC) to make secure payments fast and convenient by simply tapping the phone on any PayPass-enabled terminal at checkout. Google demonstrated the app at a press conference on May 26, 2011.

The app was released in the U.S only on September 19, 2011. On May 15, Google announced the integration of Google Wallet and Gmail, allowing users to send money through Gmail attachments. Like the main service, Google Wallet`s Gmail integration is also currently only available in the U.S, to those 18 or older.

Apple Pay
Apple introduced Apple Pay last friday and US banks are in a marketing race to persuade users to choose their cards as default option under Apple Pay. The product will be launched next month, which allow users to pay for products by tapping it against a terminal or opening an app when shopping online.

You simply use stored credit or debit card information to complete the transaction electronically, without having to type in payment details or shipping addresses.

Apple Inc is threatening the small companies and some smaller competitors fear they may lose out. PayPal is the biggest of them all, but this is so far. I have said it before, and want to say it again; Apple is the right company to make this payment system a success! This is big business.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | September 16, 2014 · 1:56 pm

Will Alibaba raise its IPO price?

The demand for Alibaba IPO shares is going wild! So wild that they have decided to raise its IPO price range from $66 to $68. Alibaba is a step closer to its IPO as much as $21,8 billion. Yahoo! Inc and other backers plan to offer as much as 320,1 million shares.

alibaba logo

Alibaba`s Jack Ma have been on a roadshow, and told the investors that they will not seek too high a valuation, and they are offering the shares at a price-to-earnings multiple that`s below what other public traded Chinese Internet peers fetch.

Alibaba`s market value could be as high as $167,6 billion. China`s biggest search engine trades about 34 times estimates of this year`s earning. Tencent Holdings Ltd trades at 37 times, while Amazon trades to 133 times forecast 2014 earnings.

The average for similar Chinese Internet e-commerce companies trade at 43 times their earnings.

Alibaba will try to be a global company and plans to expand its business in U.S and Europe in addition to Asia. Ma said they will try to avoid a repeat of Alibaba.com`s failure which plummeted below its IPO price right after listing and ended up delisting the company in 2012.

Jack Ma listed the company at the peak of the Hang Seng in 2007 and delisted it at the bottom during the financial crises in 2008. The S&P traded at about 30 times earnings in 2000, but now it is trading at 18. The Alibaba IPO in 2007 was 257 times oversubscribed and we won`t see that kind again.

Jack Ma and Alibaba has been on the road for two weeks trying to meet investors and speak with them. They said they plan to set a final price for the shares on Sept 18. Trading start the day after, on friday 19.

Nasdaq rose to its highest since March 2000 this month. Is this the right timing for Alibaba?

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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