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FILE PHOTO: People walk past a ZTE logo outside its booth at the Mobile World Congress in Barcelona, Spain, Feb. 25, 2019. REUTERS/Sergio Perez/File Photo
HONG KONG (Reuters) – Chinese telecom equipment maker ZTE Corp’s controlling shareholder plans to reduce its stake by as much as 3 percent after the stock more than doubled in value since surviving a U.S. sanction last year, showed regulatory filings late on Tuesday.
The stock slumped as much as 7.6 percent in Shenzhen on Wednesday following the news. Its Hong Kong-listed shares dropped as much as 5.6 percent.
The Chinese firm was crippled early last year after breaking U.S. sanctions and was only able to resume business in July after paying $ 1.4 billion in penalties to lift a U.S. supplier ban. The stock has since risen around 150 percent in Shenzhen.
ZTE in the filings said state-owned controlling shareholder Zhongxingxin Telecom plans to sell up to 2 percent in ZTE A-shares via block trades within 90 days. Zhongxingxin has also proposed to use not more than 41.9 million ZTE A-shares, or 1 percent of the company’s total share capital, to subscribe for units in the ICBCCS SHSZ 300 exchange-traded fund.
Reporting by Sijia Jiang; Editing by Christopher Cushing
SEOUL (Reuters) – South Korea’s LG Electronics Inc on Friday said second-quarter operating profit likely rose 16.1 percent from the same period a year earlier, falling short of market expectations.
Analysts said higher marketing expenses for new products weighed on profit.
LG, in a regulatory filing, estimated April-June profit at 771 billion won ($ 691.79 million), compared with an 821 billion won average of 10 analyst estimates in a Thomson Reuters survey.
Revenue likely rose 3.2 percent to 15 trillion won from 14.6 trillion won from a year earlier.
The firm did not elaborate on its performance and will disclose detailed earnings in late July.
Reporting by Heekyong YangEditing by Christopher Cushing
TOKYO (Reuters) – Flea market app operator Mercari Inc’s shares surged 100 percent in their Tokyo stock market debut on Tuesday, hitting their daily limit high, underscoring strong investor appetite for a rare Japanese unicorn bent on U.S. expansion.
Shares rose as high as 6,000 yen in early afternoon trade, valuing the company at as much as $ 7.4 billion. That made it the most valuable firm on the Tokyo bourse’s Mothers market for startups, ahead of games and social network company Mixi Inc and robotics firm Cyberdyne Inc.
A popular smartphone app that allows people to trade used items online, Mercari has been downloaded 71 million times in Japan where it has 10.5 million active users. It makes money by charging sellers commission, and expects sales to jump 62 percent to 35.8 billion yen ($ 325.93 million) this financial year.
Mercari shares already look expensive, said Masayuki Otani, chief market analyst at Securities Japan. While the app is well known in Japan and still growing, it is likely to face more competition at home, he said, with companies such as Rakuten Inc and Start Today Co Ltd offering used-goods services.
Mercari shares were trading at 5,350 yen at 13:00 local time (0400 GMT).
Its initial public offering, the biggest in Japan this year, raised $ 1.2 billion through the sale of around a third of Mercari’s shares, with the majority bought by overseas investors.
The company is profitable at home but is losing money in the United States, where its expansion plans are being headed by former Facebook Inc executive John Lagerling.
Its U.S. expansion dragged it to a net loss of 4.2 billion yen in the last financial year through June 2017, with a further loss of 3.4 billion in the nine months to March as the company committed funds to improving its brand recognition through advertising.
“We can’t be successful globally without success in the U.S.,” Chief Executive and founder Shintaro Yamada told Reuters in April.
In a country that has many successful giant corporations but lacks a vibrant startup culture, Mercari gained attention as one of Japan’s two unicorns – startups with valuations above $ 1 billion – according to data provider CB Insights. The other is information technology startup Preferred Networks Inc.
Mercari’s growing popularity as Japanese shoppers shed their inhibitions about buying and selling used goods has seen it join the ranks of companies such as Uniqlo parent Fast Retailing Co Ltd that have grown by appealing to consumers’ economizing instincts.
The app has outperformed rivals with its focus on mobile, its ease of use – with users able to trade goods with just a few taps – and by offering anonymity to its privacy conscious Japanese audience.
Reporting by Sam Nussey; Editing by Edwina Gibbs and Christopher Cushing
MILAN (Reuters) – Italian state lender CDP intends to buy shares in Telecom Italia (TIM) on the market or in block orders, a source told Reuters on Thursday.
CDP, which is controlled by Italy’s Treasury, does not currently hold any shares in TIM, the source, who is close to the matter, added.
The decision on the share acquisition, including its size, will be taken at CDP’s board meeting on Thursday.
Reporting by Stefano Bernabei, writing by Giulia Segreti; Editing by Kim Coghill
BRUSSELS (Reuters) – Large companies with significant digital revenues in the European Union could face a 3 percent tax on their turnover under a draft proposal from the European Commission seen by Reuters.
The proposal, expected to be adopted next week and still subject to changes, has been modified from an earlier draft which put the planned corporate rate between 1 and 5 percent.
The tax, if backed by EU states and lawmakers, would only apply to large firms with annual worldwide revenues above 750 million euros ($ 924 million) and annual “taxable” revenues above 50 million euros in the EU.
The tax is presented in the draft as a temporary measure that would only be implemented if no deal is found on a more comprehensive solution which would tax the digital profits of companies in the countries where they are made, rather than where the firms are headquartered as is the case now.
($ 1 = 0.8117 euros)
Reporting by Francesco Guarascio; editing by Foo Yun Chee
HONG KONG (Reuters) – China’s Leshi Internet said about 5.62 billion yuan ($ 890 million) of its debts would be due by the end of this year, or almost two-thirds of the company’s total loans and liabilities, sending its shares down for a ninth day.
This is the first time the video-streaming firm – which is battling the fallout from a severe cash crunch at its founder Jia Yueting’s embattled technology conglomerate LeEco – has provided an estimate for its debt in 2018.
Earlier, the company had said that a part of its total loans and financial liabilities of 9.29 billion yuan ($ 1.5 billion)would be due this year, without giving any further details.
Leshi shares plunged by the daily limit of 10 percent on Monday. Nine days of declines, since the stock resumed trading in January after a nine-month suspension, have knocked 37.5 billion yuan off the company’s market capitalization, that is currently at 23.7 billion yuan.
At its peak in 2015, Leshi was valued at 153 billion yuan.
Just last week, Leshi flagged that it expected a loss of 11.6 billion yuan for 2017, more than five times its combined profits since listing on the Shenzhen stock exchange in 2010, due to the ongoing crisis at LeEco.
LeEco was once China’s Netflix-to-Tesla contender but ran into a cash crunch since late 2016 after expanding too fast. Leshi used to be the main listed unit of the conglomerate.
But under the control of property developer Sunac China – its second-largest shareholder, Leshi is now trying to distance itself from the LeEco brand.
Leshi says its largest shareholder Jia and related LeEco units owe it 7.5 billion yuan ($ 1.19 billion). LeEco disputes the figure.
Shares of Sunac plunged as much as 6 percent, lagging a nearly 2 percent fall for the benchmark index.
Reporting by Sijia Jiang; Editing by Himani Sarkar
TOKYO/SINGAPORE (Reuters) – Bitcoin extended its sharp tumble of the past 24 hours, skidding more than seven percent on Wednesday in a rapid downturn in fortunes as investors were spooked by fears regulators might clamp down on an asset whose value has skyrocketed in the past year.
The price of the world’s biggest and best-known cryptocurrency fell to as low as $ 10,567 on the Luxembourg-based Bitstamp exchange, not far from its six-week nadir of $ 10,162 touched the previous day. The session’s high was $ 11,794.07.
It led the fall in cryptocurrencies, although others such as Ethereum and Ripple, have also slid sharply this week after reports South Korea and China could ban trading, sparking worries of a wider regulatory crackdown.
“Cryptocurrencies could be capped in the current quarter ahead of G20 meeting in March, where policymakers could discuss tighter regulations,” said Shuhei Fujise, chief analyst at Alt Design.
At its lows on Tuesday, Bitcoin had fallen 25 percent in the session, its biggest daily decline in four months. It was a far cry from its peak close to $ 20,000 in December, when the virtual currency had risen nearly 2000 percent over the year.
Tuesday’s decline followed reports that South Korea’s finance minister had said banning trading in cryptocurrencies was still an option and that the government plans a set of measures to clamp down on the “irrational” cryptocurrency investment craze.
Separately, a senior Chinese central banker said authorities should ban centralised trading of virtual currencies as well as individuals and businesses that provide related services.
“Bitcoin is deciding whether this is the moment to crash and burn,” said Steven Englander, head of strategy at New York-based Rafiki Capital.
“My conjecture is that cryptocurrency holders are trying to decide whether to abandon Bitcoin because its limitations mean it will be superseded by better products or bet that it can thrive despite them.”
Bitcoin futures maturing on Wednesday on the Cboe Global Markets Inc’s Cboe Futures Exchange were at $ 10,740, with 1,586 contracts traded, after having opened at $ 10,850. The open interest was 2,895 contracts. The Cboe 14 March 2018 contract was quoted at $ 11,130.
The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.
The MVIS CryptoCompare Ripple Index, which covers the performance of a digital assets portfolio which invests in Ripple (XRP), a cryptocurrency developed by Ripple Labs, dropped 15 percent to $ 7,298 on Wednesday.
That equity index has seen a 66 percent slide in its value since the start of the year. Ripple itself was quoted at $ 1.15 on website CoinMarketCap, down from a high of $ 3.81 on Jan 4.
“The run-up in Bitcoin created a mystique of one-way trading which is being shaken but the pricing requires faith that there will always be demand,” Englander wrote.
“This is far from guaranteed given the existence of alternatives with better characteristics.”
Reporting by Hideyuki Sano in TOKYO; Writing by Vidya Ranganathan; Editing by Shri Navaratnam
SINGAPORE/TOKYO (Reuters) – Bitcoin extended its recovery in holiday-thinned trading on Tuesday, rising 10 percent to be up more than a third from last week’s lows of below $ 12,000.
Bitcoin, the world’s biggest and best-known cryptocurrency, fell nearly 30 percent at one stage on Friday to $ 11,159.93 and, despite a late recovery, had its worst week since 2013. At 0445 GMT on Tuesday, it was quoted around $ 15,049 on the Luxembourg-based Bitstamp exchange.
The digital currency had risen around twentyfold since the start of the year, climbing from less than $ 1,000 to as high as $ 19,666 on Dec. 17 on Bitstamp and to over $ 20,000 on other exchanges. But it has posted heavy declines since.
While bitcoin investors and analysts believe the decline in its value was a natural correction after a heady run-up in prices, there have been further warnings from market regulators and central banks.
“There is no right current price which would reflect the right current valuation,” said Andrei Popescu, Singapore-based co-founder of COSS, which describes itself as a platform that encompasses all features of a digital economy based on cryptocurrency.
“Taking profit is right, while buying into a long term projection is also right. You don’t have to be right in this market, just less wrong than the rest,” Popescu said.
Shmuel Hauser, the chairman of the Israel Securities Authority, said on Monday he will propose regulation to ban companies based on bitcoin and other digital currencies from trading on the Tel Aviv Stock Exchange.
Singapore’s central bank last week issued a warning against investment in cryptocurrencies, saying it considers the recent surge in their prices to be driven by speculation and that the risk of a sharp fall in prices is high.
Prices of rival cryptocurrencies, which slid along with bitcoin last week, have also recovered, with Ethereum, the second-biggest cryptocurrency by market size, quoted around $ 771, up from Sunday’s low of $ 689 but still far from highs around $ 900 hit last week.
Editing by Sam Holmes
NEW YORK/SYDNEY/LONDON (Reuters) – Bitcoin futures eased back from an initial surge of almost 22 percent to trade up 13 percent on Monday, in an eagerly awaited U.S. market debut that backers hope will confer greater legitimacy on the volatile cryptocurrency and lead to its wider use.
Although bitcoin futures were already offered on some unregulated cryptocurrency exchanges outside the United States, the Chicago-based Cboe Global Markets’ (CBOE.O) launch marked the first time investors could get exposure to the market via a mainstream regulated exchange.
The debut on Sunday night may have caused an early outage of the Cboe website. The exchange said that due to heavy traffic, the site “may be temporarily unavailable”.
The one-month bitcoin contract <0#XBT:> opened trade at 6 pm local time (2300 GMT) at $ 15,460, dipped briefly before rising to a high of $ 18,700 and then slipping again.
As of 1112 GMT the one-month future was up 13 percent from the open at $ 17,450, around $ 1,000 higher than the “spot” bitcoin price – the price at which bitcoin is currently being bought and sold.
The two-month contract was trading at $ 18,880, while the three-month contract was changing hands at $ 19,040.
“The premiums have so far been very high, demonstrating that few want to take the short side of the trade,” said Altana Digital Currency Fund manager Alistair Milne, whose fund has $ 35 million in assets under management.
In just over 12 hours after the launch, 2,780 contracts had been traded, meaning around $ 48.5 million had been notionally invested. That compares with daily trading volumes of more than $ 20 billion across all cryptocurrencies, according to trade website Coinmarketcap.
Just 13 trades of the two-month contracts had been traded.
“It will take time for derivative volumes to build up, but eventually if they prove to be a significant percentage of the global trade, they should in theory help stabilize things,” said Milne.
Most fund managers at mainstream asset management firms and other institutional investors say they will not be lured into the market by the launch of the futures.
“There’s no place for bitcoin in a multi-asset portfolio given the very high volatility,” said Robeco Chief Investment Officer Lukas Daalder.
“We’ve looked at it in the past but if you look at the number of times that you need to trade to keep your exposure at the same level, after one week you need to rebalance the portfolio already,” he added.
On the Luxembourg-based Bitstamp BTC=BTSP exchange, bitcoin prices surged 12.5 percent on the day to $ 16,570, close to an all-time high of $ 16,666.66 hit on Friday.
Bitcoin is up more than 1,500 percent so far in 2017, having started the year at less than $ 1,000, and its gains in the past month have been rapid.
Experts had worried that the risks associated with the currency’s Wild West-like nature could overshadow the futures debut. Bitcoin tumbled 20 percent in 10 hours on Friday.
“Even if there is an institution or institutional-sized trader out there, they are going to want to make sure that the mechanics work first, just for the futures,” said Ophir Gottlieb, chief executive officer of Los Angeles-based Capital Market Laboratories.
“I think the excitement will come when the futures market is established. That can take a few days,” Gottlieb added.
The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by virtual currency entrepreneurs and brothers Cameron and Tyler Winklevoss. Bitcoin was quoted at $ 16,674 on the Gemini exchange.
While bitcoin’s price rise mystifies many, its origins have been the subject of much speculation.
It was set up in 2008 by someone or some group calling themselves Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation difficult if not impossible.
Central bankers and critics of the cryptocurrency have been ringing the alarm bells over the surge in the price and other risks such as whether the opaque market can be used for money laundering.
“It looks remarkably like a bubble forming to me,” the Reserve Bank of New Zealand’s Acting Governor Grant Spencer said on television on Sunday.
“We’ve seen them in the past. Over the centuries we’ve seen bubbles and this appears to be a bit of a classic case.”
Many investors have stood on the sidelines watching its price rocket. However, it is possible to buy bitcoin without having to spend the full price of one coin. Bitcoin’s smallest unit is a Satoshi, named after the elusive creator of the cryptocurrency.
Somebody who invested $ 1,000 in bitcoin at the start of 2013 and had never sold any of it would now be sitting on around $ 1.2 million.
Heightened excitement ahead of the launch of the futures has given an extra kick to the cryptocurrency’s scorching run this year.
The CME Group (CME.O) is expected to launch its futures contract on Dec. 17.
Bitcoin fans appear excited about the prospect of an exchange-listed and regulated product and the ability to bet on its price swings without having to sign up for a digital wallet.
Others, however, caution that risks remain for investors and possibly even the clearing organizations underpinning the trades.
“You are going to open up the market to a whole lot of people who aren’t currently in bitcoin,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
The launch has so far received a mixed reception from big U.S. banks and brokerages, though.
Goldman Sachs Group Inc (GS.N) said on Thursday it was planning to clear such trades for certain clients.
Bitcoin’s manic run-up this year has boosted volatility far in excess of other asset classes. The futures trading may help dampen some of the sharp moves, analysts said.
“Hypothetically, volatility over the long run should drop after institutions get involved,” Gottlieb said. “But there may not be an immediate impact, say in the first month.”
Additional reporting by Chuck Mikolajczak and John McCrank in NEW YORK,; Michelle Chen in HONG KONG and Helen Reid in LONDON; Editing by Lisa Von Ahn, Will Dunham and Gareth Jones
(Reuters) – China’s Tencent Holdings Ltd has bought a 12 percent stake in Snapchat parent Snap Inc, a regulatory filing showed on Wednesday.
Snap said Tencent acquired 145.8 million shares of its non-voting Class A common stock through open market purchases this month. bit.ly/2zqvybE
Snap had about 1.2 billion shares outstanding.
Reporting by Arjun Panchadar in Bengaluru; Editing by Sai Sachin Ravikumar