by | March 31, 2014 · 2:09 pm

Low inflation in Euro zone

The yen is weaker today, but Japan`s Nikkei is trading up at its three-week high. A nice day, but it is the worst quarter performance for Nikkei in about two years. It’s also a «window dressing» as the books close for the fiscal year-end today. Nikkei rose to 14,827,83, up 0,9%.

Janet Yellen

The inflation in Europe is at its lowest since November 2009. The question now is what ECB (European Central Bank) will do to stop this threat of deflation in the currency bloc. It`s far from the deflation we saw in Japan in early 90`s, but it is a clear sign of a weak economy.

ECB will probably cut the interest rate on the meeting on Thursday, but because of this year`s late Easter, they will probably wait until the next meeting which is in June this year. It`s still a case for easing.

That`s why we see the European markets trading up today to a three-week high. There are growing speculation that China will start to stimulate its economy too. This is music in investors ears, and not only European shares are up today.

It seems like the U.S markets will open up today too. That`s a nice, green and positive territory. Right before a speech by Federal Reserve Chair Janet Yellen. She is scheduled to speak in Chicago at 09:55 a.m EST.

Investors will listen to what she have to say about interest rates. Last time Yellen spoke about the possibility of an earlier-than-anticipated increase in rates, the equities dropped. This is the last day in march, and the S&P 500 is nearly flat this month. Up 0,5% for the quarter.

Reports today:

09:45 a.m EST  Chicago PMI
09:55 a.m EST  Fed Chair Janet Yellen speaks

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 | March 28, 2014 · 2:08 pm

Y!mobile on the run

 

Yahoo Japan Corp is Japan`s biggest internet portal and SoftBank own a 42,6% stake in Yahoo Japan. Yahoo Japan Corp will try to buy mobile network operator eAccess for 324 billion yen ($3,17 billion). The stock slid -6,38% yesterday.

eaccess and softbanky_mobile

They will try to launch their own mobile internet service and their new Y!mobile service would aim for more than 20 million users. The purchase is scheduled for June 2 and will follow eAccess` planned merger with wireless provider Willcom, which is also a member of SoftBank group.

Combined they have about 10 million users. Yahoo`s President Manabu Miyasaka said they want additional 10 million users, and they do this because they want control over their own sales channel and service, so they launch this as a standard mobile operator with a simple pricing structure.

SoftBank have a 99,68% stake in eAccess but will have only 33,29% voting rights due to regulatory restrictions. SoftBank launched the Apple Inc iPhone in Japan. They aquired the mobile carrier Sprint Corp last year (No 3 in U.S).

The telecom is extremely attractive to companies like this. They will be nothing without this connections. It`s a growing demand for mobile devices, and consumers in Japan will have an average of six mobile devices each, including wearables and mobile devices in cars, Yahoo`s president said.

Yahoo need to slash prices to win market share against their competitors like NTT DoCoMo Inc and KDDI Corp, as well as their own parent SoftBank, because Japan`s telecom market is ultracompetetive.

SoftBank bought eAccess for 180 billion Yen in 2012 to meet the rising demand for bandwidth as smart phone users surf the web, watch videos and play games. They need to be prepared for faster network demand.

Yahoo Japan will start the new service called Y!mobile and share phone networks with SoftBank, once eAccess acquires Willcom in June. Yahoo Japan hope to win more users who will turn more frequently to their marketplace and auction sites and boosting their e-commers and online advertising businesses.

As the Yahoo president say; they are trying to do something wild, and not be in a status quo position. So are SoftBank doing it. They have been pursuing investments in internet firms around the world, and have a stake in Yahoo Japan, and a 36,7% stake in Chinese e-commerce company Alibaba Group.

A listing of Alibaba would be one of the largest IPO`s by an internet company.

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 | March 27, 2014 · 1:42 pm

Gold @ 6-week low

 

Take a look at the gold price today. Down -1,24%, trading at $1,295,20. Silver is now below $20, trading at 19,67. Down -1,55%, followed by copper which is down -0,98%, trading at $298,15. Not good for the commodities at the moment, but that`s why I said I`m not bullish, but less bearish on commodities.

Gold

Gold prices fell to a six week low yesterday. Declining on more technical selling pressure. The Fed of St. Louis president James Bullard said the U.S economy is improving and sees the unemployment below 6% at the end of this year.

European stocks rallied yesterday, as the European Central Bank have an idea to embark on further monetary policy stimulus due to concerns about deflation in the Euro zone. In addition; the Fed issued a report that was deemed as less dovish than investors expected.

Bears next downside breakout price objective is closing prices below a technical support at $1300,00. It is the macro-news that drives the metal prices and the down trend in copper is in a three-month old downtrend in the daily bar chart.

In a new report released yesterday, Barclays have revised their gold price forecast for 2014 from $1205/oz to $1250/oz. Other average price forecast for 2014 from Barclays is silver, $19 an ounce. China has become the world`s largest gold-consuming nation, and Barclays expect the gold consumption will continue to grow.

A key for gold will be whether indian authorities ease restrictions on gold imports meant to control the current-account deficit. “We think a decision likely will not be made until after the end of the fiscal year, and perhaps more likely not until after (spring) elections,” Barclays said. “Such a move would provide the next cushion of support for gold prices, in our view.”

“We think the extent of the decline in copper prices is overdone since micro trends have likely bottomed, though macro concerns and stock overhang take some of the potential upside off our Q2 price forecast,” Barclays said. “China is now the biggest risk — in both directions.

Reports today:

08:30 AM ET Unemployment Claims
08:30 AM ET FOMC Member Pianalto Speaks
08:30 AM ET Final GDP q/q
08:30 AM ET Final GDP Price Index q/q
10:00 AM ET Pending Home Sales
10:30 AM ET Natural Gas Storage

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 | March 26, 2014 · 1:45 pm

Alibaba IPO

 

I wrote about the company last year and now it is time to do it again. Alibaba Group Holding Ltd is a big fish which is preparing to launch perhaps the largest U.S stock listing ever of a Chinese company.

alibaba logo

Personally, I have been dealing with Alibaba for many years now, but most of the people don`t have a clue of what it is. Alibaba is a mix of Amazon, Ebay, Paypal and Google. The difference between Amazon and Alibaba is that Alibaba is connecting buyers and sellers, while Amazon buy from suppliers and sell the products to the customers.

Alibaba is more like Ebay Inc. Their role is more like a middleman role and does not operate like an auction. Taobao is Alibaba`s biggest website. It is a gigantic Chinese bazar with about 760 million product listings from 7 million sellers.

Merchants pay Alibaba for advertising and other services from Alibaba. They do not pay them to sell their own products. The no-fee model is part of Taobao`s appeal in China. Just like Google, the ads from merchants appear with Taobao`s product-search results.

Taobao is designed for small businesses, but Alibaba`s Tmall is another shopping site that is designed for bigger brands like Nike and Apple. Tmall has about 70.000 merchants. They charges each seller a deposit and an annual fee, as well as a commission on each transaction.

Taobao and Tmall accounts for more than half of all parcel deliveries in China. In 2012, the combined transaction volume of Taobao and Tmall topped $163 billion. That is more than Amazon and eBay combined!

Alibaba`s revenue is 1/10 of Amazon`s. The Chinese company doesn`t sell products like Amazon on its site. Alibaba`s revenue rose 51% (third quarter) to $1,78 billion, while Amazon posted revenue of $17,09 billion and a loss of $41 million in the same quarter.

Alibaba`s profit margin is 44,6% and net profit was $792 million. They could raise about $15 billion from their U.S IPO. This can move another stock; Yahoo, which own a stake of 24% in Alibaba.

It can move Yahoo before and after the IPO. Like the Facebook IPO, they may «suck the air» of the markets. Yahoo has a market cap of $36 billion. It`s early in the process, but it is estimated that the IPO range is about $160 billion.

Alibaba remains by far the biggest player in China`s fast growing e-commerce market. Their biggest competitor Tenchent Holdings Ltd is a powerful competitor because of their popular WeChat mobile-messaging application.

Going public will keep Alibaba in the race in the global market. Yahoo is down -2,0% today and -11,2% YTD. This can change because Yahoo is a takeover candidate. This is one of the pioneers of the web.

Yahoo is a great success story of the Net. The stock has returned 21% annually since early trading in 1996. The company have survived two bear markets to date, and was one of the tech companies in the tech bubble in the late 1990`s.

Report today:

08:30 AM ET Core Durable Goods Orders m/m
08:30 AM ET Durable Goods Orders m/m
09:45 AM ET Flash Services PMI
10:30 AM ET Crude Oil Inventories

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 | March 25, 2014 · 1:21 pm

Chat battle

 

China`s largest listed internet company Tencent posted its slowest quarterly profit growth in two years. They have spent a lot of money to promote its mobile messaging app called WeChat and other e-commerce sites in competition with Alibaba Group. Marketing expenses is up 39% from the third quarter.

WeChat

Tencent is a third owned by South African e-commerce and media company Naspers and they plan a 5 for 1 split share on the company. This will take place from May 15. Tencent`s share price has more than doubled in the past years and their market cap is $138,7 billion.

Tencent gave an indication of WeChat revenue figures for the first time as it transforms from a massaging service to fully fledged mobile platform. WeChat is more than a chat platform. It`s everything from social networking and gaming to personal finance and booking taxis.

WeChat Q4 revenues is between 200-300 mln yuan ($32 – 49 million). Tencent`s President Martin Lau said last week that the WeChat and Mobile QQ together generated gaming sales of more than 600 million yuan in three months to Dec 31. The groups revenue is 16,97 billion yuan in total revenue for the quarter.

Line Corp from Japan is another competitor and they announced 2013 revenues of 34,3 billion yen ($338,38 million), making it last year`s top-earning non-gaming smart phone app. WeChat is worth about $64 billion.

The multiple uses of this app called WeChat offer far greater earnings potential than Facebook`s WhatsApp, which is «worth» $19 billion. 70% of the WeChat`s revenue comes from gaming and subscriptions and online ad sales rose 58% to RMB 1,5B. E-commerce transaction revenue nearly doubled to RMB 3,3B.

Tencent is fighting against the e-commerce giant Alibaba in mobile-based retail services and both groups recently announced plans to launch virtual credit cards using QR codes that function in a similar way to bar codes scanned by smartphones to process payments.

Those two groups has attacked China`s traditional banking sector and the central bank is considering regulations to limit the use of third-party payment systems offered by Tencent and Alibaba Group.

Tencent`s mobile massaging platform is dominant in China (totaled 355M, +6% Q/Q and 12% Y/Y. ). globally MAU`s for WeChat rose 5,7% in the fourth quarter to 355 million with a net income of 3,91 billion yuan ($631M) on revenues. Up 40% at 16,97 billion yuan ($2,74B).

WeChat`s MAU is nearly 3 times that of Sina`s Weibo, and 24% smaller than WhatsApp`s 465M (as of February). MAU`s for Qzone social networking platform rose 4% Y/Y to 625M. Instant messaging MAU`s rose only 1% to 808M.

A month after Facebook spent $19B on WhatsApp, Alibaba (ABABA) is investing $215M into messaging/VoIP app Tango at a $1,1B valuation. Tango and BBM are close to each other in scale. WhatsApp claims a market-leading MAU of 465M. Tango claims 70M.

BlackBerry`s John Sims disclosed BBM`s base had grown to 85M MAU`s since the launch last fall. The Tango deal is only one of many investments made by Alibaba which is trying to grow their Web/mobile empire.

To compare: Renren (RENN) is declining and is headed for a fall of 40 – 45% drop. Online game revenue fell 39,6% in Q4 to $15,6M after dropping 17% in Q3. Ad revenue pressured by share losses to social media rivals such as Tencent and Sina, fell 17,9% to $10,2M after falling 11% in Q3. Monthly unique logins fell to 45M in December from 50M in September.

Sina surges on Weibo IPO news and Alibaba is spending $805M to buy a 60% stake in ChinaVision Media. A Hong Kong based producer of films and TV dramas. Youku (YOKU) remains the market`s biggest player on the fragmented online/mobile video market.

Strong competition is provided by Baidu, Sohu and Tencent. Alibaba, Baidu and Tencent have been constantly finding ways to encroach on each others turf. Tencent bought a 15% stake in #2 Chinese e-commerce firm JD.com. What a battle!

Yelp has been a hot stock and some investors say these stocks are «momentum monsters», and now you have the chance to get into a new IPO of the Facebooks game developer called Candy Crush. Wall Street is planning on selling 22 million shares. A valuation of $7,6 billion! Candy Crush made $159 million in 2013! Wow!

Reports today:

09:00 AM ET S&P/CS Composite 20 HPI y/y
10:00 AM ET CB Consumer Confidence
10:00 AM ET New Home Sales
07:00 PM ET FOMC Member Plosser Speaks

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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