MarketLine Blog

Posts written in August 2013

Is Nintendo still a relevant home console hardware player?

MarketLine

Following the recent torrent of launch details for Sony Corporation’s (Sony) PlayStation 4 (PS4) and Microsoft Corporation’s (Microsoft) Xbox One, Nintendo Co., Ltd. (Nintendo) has taken to the Internet to reveal some new details of its own. Notably, the company has slashed the price of its Wii U home console, with the Wii U Deluxe model set to retail for $299 in the US from 20 September, 2013. Whether this will be enough to keep the company afloat over the next generation does, however, remain to be seen. The decision… Read more

Cycling in England: Could new investment power a change in habits?

MarketLine

The UK government has announced a major allocation of investment dedicated to improving England’s cycling infrastructure and thereby encouraging a new wave of commuters and recreational cyclists to get on their bikes. The investment, announced as a £94m ($149.2m) scheme to be split between some chosen cities and national parks, with £77m ($122.2m) shared between the cities and £17m ($26.9m) going to the national parks. The cities have been named as Manchester, Leeds, Birmingham, Newcastle, Bristol, Cambridge, Oxford and Norwich. Of these, the money has been weighted in favour of… Read more

Less scope for free market economics

MarketLine

The Prudential Regulation Authority was created to be an arm of the Bank of England and to promote the safety and the soundness of individual banks, building societies, credit unions, insurers and major investment firms. Ultimately, PRA will keep a very close eye on financial institutions to ensure that the bank bailouts of the last few years won’t happen again. The authority set up a 3% leverage ratio threshold, which forces banks and building societies to have at least £3 of own capital to support £100 of lending. Interestingly, after… Read more

Bundestagswahl 2013: Angela Merkel looks set to retain position as Chancellor

MarketLine

On the 22nd September 2013, Europe’s largest economic power, Germany, goes to the polls to determine the 598 members of the Bundestag, the main federal legislative house of Germany. If early indications are anything to go by, current Bundeskanzlerin (Chancellor) Angela Merkel will remain in place as head of government. Polls from five leading survey companies (Allensbach, Emnid, FG Wahlen, Forsa, and Infratest) place the Christlich Demokratische Union Deutschlands’ (CDU) share of the vote at between 39% and 42%, as compared to 22%-25% for Peer Steinbrück’s Sozialdemokratische Partei Deutschlands (SPD)…. Read more

Glencore Xstrata: Commodity Prices and Merger aftershocks

MarketLine

When Glencore and Xstrata merged, it created the fourth largest mining company globally and an integral part of many commodities’ supply chains. It looks now however that Xstrata was overvalued and the company could be facing an $8bn loss on mining assets due to weaker conditions in the commodity industry. Following the 16-month acquisition saga, in the company’s first set of results saw a 2% dip in revenue for the first of 2013 compared to last year, and a 9% drop in EBITDA. Two significant macroeconomic events have contributed to… Read more

Ukraine reduces reliance on the Russian gas and imports more from Europe

MarketLine

Ukrainian state energy company, Naftogaz, has reduced gas imports from Russia by 30% so far in 2013 and will cut them further in 2014. At the same time imports from Europe will double, according to Ukraine’s Energy Minister Eduard Stavytsky. Imports from Europe are expected to reach 2-2.5 billion cubic meters this year, and no less than 5 billion cubic meters in 2014. The reason behind this move is the high price of Russian gas. While the sample average price of gas supplied from Europe by German firm RWE (RWEG.DE)… Read more

Sony reveals PS4 release date, Microsoft still quiet on Xbox One launch

MarketLine

The gamescom conference in Cologne, Germany has led to the emergence of new key information on Sony Corporation (Sony) and Microsoft Corporation’s (Microsoft) launch plans for the PS4 and Xbox One. Notably, a solid release date was absent from Microsoft’s keynote at the event, but Sony announced that its PS4 would release in North America on 15 November and in Europe on 29 November, 2013. Rather than nailing down a definitive release date for the Xbox One, which currently holds a November 2013 release date, Microsoft took to the stage… Read more

HS2: Both sides of the argument become more entrenched

MarketLine

When potential plans to build a new high speed rail link in the UK were first announced, it immediately produced a huge rift between members of the general public. High speed 2 (HS2) was proposed as a huge new rail network, which would first link Birmingham and London, and then later in stage two link Birmingham to Manchester on one line and Birmingham to Leeds on another. This route essentially forms a Y shape up the spine of the country and spreads into both Greater Manchester and Yorkshire. There have… Read more

Israel heightens defense after rocket attack and amid Egyptian turmoil

MarketLine

Since the interception of a rocket launched allegedly from Sinai, and the growing instability in Egypt, the Israeli Defense Force (IDF) have bolstered their defenses by deploying a sixth Iron Dome battery near Eilat, which was the target of the rocket attack. The Iron Dome missile defense system has proven exceptionally effective in the past. During Operation Pillar of Defense in November 2012, five of the IDF’s Iron Dome batteries intercepted 86% of the 421 rockets aimed at populated Israeli areas. Israeli defense spending had a total budget allocation of… Read more

The internet access market is growing well, but deceleration may be on the cards

MarketLine

Introduction The global internet access market grew at a good rate in 2012, despite some minor deceleration from previous years. Internet access, in general, is becoming more of a necessary lifestyle expenditure in many developed markets, meaning that consumers consider internet access to be something they are unlikely to go without. Even in times where disposable income is fairly low, we see consumers retaining internet access contracts. This is good news for the future of the market as although in coming years some regions will eventually become saturated, they are… Read more

Rebel activity and drug trafficking cause South American government’s military budgets to explode

MarketLine

Introduction Global defense spending continues to grow, despite many developed nations implementing considerable cuts to their defense budgets as part of their austerity measures. Western Europe in particular has suffered, as the impact of the Eurozone crisis has been felt by many EU members. For many countries in Europe defense spending is seen as a politically ‘safe’ area to make cuts, particularly as operations in Afghanistan wind down. At the same time, North America is suffering from the US’ sequestration measures which resulted in a decline in spending in 2012…. Read more

Brazil’s domestic beauty products companies fight back

MarketLine

As Latin America continues to see strong economic growth, so too does Brazil’s personal care market, experiencing growth of 8.2% in 2012. According to industry reports published by the Brazilian Association of the Cosmetic Toiletry and Fragrance industry (ABHIPEC), the country is currently ranked as the third biggest beauty market in the world. Moreover, the rise in disposable income has triggered beauty spending and more women are spending money on their appearance than ever before. Therefore more beauty/cosmetics companies are eager to enter the Brazilian market. In addition to this,… Read more

Blackberry announces formation of Special Committee to explore strategic alternatives

MarketLine

BlackBerry Limited, formerly Research In Motion (RIM) is a global mobile communications company. BlackBerry’s worldwide smartphone market share has been in decline since early 2009 according to research by International Data Corporation (IDC). The company, which was worth around $84bn in 2008, is worth less than $5bn now. The latest figures by IDC, which looked at the shipments of smartphone operating systems (OS) in the second quarter of 2013, found BlackBerry’s sales were still losing ground. Android and Windows Phone OS grew by 73.5% and 77.6%, respectively, compared to the… Read more

Moving people, moving money: Western Union and the remittance market

MarketLine

In July 2013, Barclays, one of the UK’s largest retail banks, announced its decision to close the accounts of money transfer companies, which allow customers in one country to receive funds locally from a sender in a different country. The reason given by Barclays was that some of these companies had insufficient checks in place to prevent the transfer of funds to terrorists and other criminals. However, the resulting outcry revealed just how vital such remittance services are for many people in the developing world. A petition to the UK… Read more

A digital future for The Washington Post?

MarketLine

Jeff Bezos, the founder and CEO of Amazon, has reached an agreement to purchase the Washington Post newspaper, in a personal capacity, for $250 million. The sale is expected to be completed within the next 60 days and will see Mr. Bezos acting as the sole owner of this leading daily American newspaper. Prior to Mr.Bezos’s offer, the newspaper was owned by The Washington Post Company, an educational and media group who also own the test preparation company, Kaplan. The deal, which includes the sale of the paper, washingtonpost.com, and… Read more

BT’s offering unlikely to dethrone Sky from the Sports TV market

MarketLine

BT launched two new channels aimed at carving a lucrative pound of flesh from the incumbent Sky for the sports television market, although it is unlikely to seize the throne under its current plans. BT has invested £736m in 38 Premier League games and exclusive of coverage of the Aviva Premiership rugby season, with over 500,000 customers signed up. Other offerings include UFC, MotoGP, and Women’s Tennis. The company claims that its channels will be free to its broadband customers, although this is a half truth. Tablet, smartphone and computer… Read more

Lloyds Banking Group and Royal Bank of Scotland: The big sell-off?

MarketLine

This week, both Lloyds Banking Group (Lloyds) and Royal Bank of Scotland (RBS) have announced encouraging results for the six months to the end of June. The two banks, which are 39% and 81% government-owned respectively, returned to profit and this has led to speculation that the UK government may look to divest its interests. Lloyds’ results came first on Thursday (August 1st) and showed a £2.13bn (approximately $3.38bn) pre-tax profit. This signals a welcome return to form for one of the country’s so-called ‘Big Four’ banks and represents a… Read more

Does the Wii U spell doom for Nintendo’s console business?

MarketLine

Following Nintendo Co., Ltd’s (Nintendo) latest results announcement, the media has become focused on the sorry state of the company’s latest home console release: the Wii U. Billed as a successor to the stratospherically popular Wii, a console that broke down perceived barriers between experienced and novice gamers, the Wii U released in Q4 2012. Unfortunately for Nintendo, sales figures have been less than promising, and its latest results confirm an operating loss for the last three months. So what went wrong with the Wii U? Despite having a novel… Read more

Serco: A relatively unknown billion pound company

MarketLine

The UK based service company Serco, is a large services business entity that in popular UK media is a relatively low key and unknown business. Despite this the company is one of the key contractors in the UK and is widespread internationally. In 2012 the company turned over £4.9bn (approximately $7.4bn), with net income of £245.3m (approximately $374.2m) which is clear evidence of its scale and scope. Serco has an incredibly diverse business profile, but its key business area is providing governments with private sector contractor options, outsourcing essentially. The… Read more