Connect with us

Prime Minister Theresa May listens in the House of Commons, London.

PA Images | PA Images | Getty Images

Prime Minister Theresa May listens in the House of Commons, London.

British Prime Minister Theresa May told lawmakers that the U.K. Parliament will get another chance to vote on her deal to exit Europe before the end of February.

May said if there is no deal by Tuesday 26 February, the government will make a statement to MPs on that day, and hold a debate on an amendable motion the following day.

In a statement to the House of Commons on Tuesday, May also asked for more time to negotiate with the European Union (EU).

“The talks are at a crucial stage. We now all need to hold our nerve to get the changes this House has required and deliver Brexit on time,” May said.

Following the speech, the main opposition Labour leader Jeremy Corbyn said May was “running down the clock” in a bid to force lawmakers to accept her deal.

May wants European counterparts to adjust the terms of the “backstop” that currently forms part of the Withdrawal Agreement. If that occurs, she could likely secure a majority in Parliament.

The backstop is an arrangement that acts as a means to prevent any hard border being erected on the island of Ireland between the Republic of Ireland which is staying In Europe and Northern Ireland which is part of the United Kingdom and is set to leave the EU.

Prior to the statement, the pound sat at 1.2861 versus the dollar and was largely unmoved as she spoke.

Source link

World

Shares rally nearly 13%, adds $5 billion in value

Published

on

Several boxes of goods, bought from JD.com, are stacked on the floor.

Zhang Peng | LightRocket | Getty Images

JD.com’s shares surged nearly 13% after the company delivered second quarter numbers showing exactly what the market wanted — profitability.

On Tuesday, the Chinese e-commerce giant reported these results for the June quarter:

  • Net revenue of 150.3 billion yuan ($21.9 billion), a 22.9% year-on-year rise
  • Net income attributable to ordinary shareholders of 618.8 million yuan ($90.1 million), compared to a net loss in the same period last year.

Importantly, JD.com’s margin ticked up sharply and management raised adjusted net income guidance to between 8 billion yuan and 9.6 billion yuan for the full year. JD has reported full year losses for the past three years. That improving profitability picture helped propelled shares higher in U.S. trade on Tuesday, with the company adding about $5 billion to its market capitalization.

“The street didn’t expect them to do well on the bottom line … this is not (just) going to be the first time, it’s going to be the beginning of a new trend,” Tian Hou, founder and CEO of T.H. Capital, told CNBC’s “Street Signs” on Wednesday.

Shares of JD are up over 46% year-to-date versus just under 20% for rival Alibaba.

JD’s business model looks a lot more like Amazon than Alibaba, however. It owns more of the inventory it sells in addition to operating a marketplace. Alibaba platforms such as Taobao, meanwhile, are more marketplace models. JD has invested heavily in its logistics business in the past few years, trying to get the edge on competitors through quicker delivery.

That’s weighed on profits, but the company revealed that its logistics business broke even from an operating income perspective.

“In the beginning, the cost of our logistics was relatively high. And through years of investment and increasing our fulfillment and opening strategy, our fulfillment expense costs continue to decline,” Richard Liu, CEO of JD.com, said on an earnings call on Tuesday.

Fulfillment costs, which pertain to the company’s logistics business, did rise, but they fell as a percentage of overall revenues, highlighting improvement in the division.

“Profits in the long-run will continue to grow,” Liu said of the entire JD.com business.

Investment in smaller cities

Liu said the company would look to invest more heavily in growing in smaller Chinese cities. Its growing logistics network could help it serve that market, according to Hou.

“I think the logistics is actually JD’s strength. And logistics of JD can actually reach out to the really lower-tier cities … if you can reach out to the really sixth-tier cities … because of the difficulty of developing, that is your moat, your strength,” she said.

Lower-tier cities have become something of a battleground for Chinese e-commerce players Alibaba and newer rival Pinduoduo (PDD). Such cities often feature less infrastructure and consumers that are more price sensitive. Pinduoduo, through its mobile-focused social shopping product offering heavy discounts, has made some headway there. That’s where JD could face some stiff competition as it looks to expand.

James Lee, U.S. and China internet analyst at Mizuho Americas, has kept a neutral rating on JD’s stock despite raising the price target, saying the company needs to do more to win in lower-tier cities.

“We want to see the company be more aggressive in tier-three and tier-four markets, PDD is super aggressive in those markets, and what we want, would like JD to do is more heavily market in those markets … by giving deeper discount … to attract those consumer in order to win the market share. We haven’t seen that yet,” Lee told CNBC’s “Street Signs.”

Source link

Continue Reading

World

Hong Kong airline Cathay Pacific stock moves after recent tumble

Published

on

A view from a Cathy Pacific Jet which see another Cathay Pacific Jet Park in Hong Kong International Airport in Hong Kong, China. 23 May 2019

NurPhoto | Getty Images

Shares of Hong Kong airline Cathay Pacific rebounded in Wednesday morning trade.

Still, “much uncertainty” remains ahead in the market, according to Luya You, analyst for transportation research at Bocom International.

“We believe … the most prudent way to treat the stock right now is to downgrade to neutral,” You — who disclosed ownership in Cathay Pacific stock — told CNBC’s “Squawk Box” on Wednesday. “It’s very, very hard for us to know what’s going to happen in the next upcoming days or even upcoming weeks simply because right now Cathay Pacific is unfortunately stuck in a very, very, very tough place.”

Shares of Cathay Pacific jumped more than 2.5% in morning trade on Wednesday.

Right now Cathay Pacific is unfortunately stuck in a very, very, very tough place

Luya You

Analyst for transportation research at Bocom International

Cathay in the spotlight amid protests

You’s comments came as Hong Kong continues to be rocked by protests that have lasted for weeks and have seen outbursts of violence. Recent rounds have left operations at the city’s airport disrupted for two days.

For its part, Cathay Pacific has come under increased scrutiny from Beijing, with the Chinese aviation regulatory body issuing a “major aviation safety risk warning” to the airline last week. The Civil Aviation Authority said that “on multiple occasions,” Cathay’s flight personnel have participated in “violent assault,” according to CNBC’s translation.

“The incidents pose a serious threat to aviation safety, causing adverse social impact and as a result is increasing inbound aviation safety threats from Hong Kong to the mainland,” it said.

It also ordered the carrier to provide identification information for its crew on mainland-bound flights, and said that crew members that do not receive the authority’s approval won’t be allowed into its airspace, including on flights bound for other destinations.

Asked if other airlines could benefit from the misfortunes of Cathay Pacific, You said it was possible but “it’s a little bit too early” at the moment, as the Chinese aviation authority was “still waiting” to see the carrier’s response.

“If things do significantly … deteriorate then potentially yes, you know, the other airlines such as Air China, China Southern, even foreign airlines at Hong Kong International Airport could benefit from any displaced demand that goes from Cathay to anywhere else,” she said.

‘Very critical period’

Looking ahead, You said it was “very hard to say” how Cathay Pacific was likely to respond further to the current situation.

“Everybody’s waiting to see their official response,” You said. “They’ve already issued their verbal response, their verbal agreement to China’s new standards but we’ve yet to see really a lot of mass actions.” She added that it is a “very critical period” for Cathay Pacific as investors wait to see if China “agrees” that the firm has taken sufficient measures.

If Beijing disagrees, then there could be more restrictions for Cathay Pacific, she said, adding that it would be “absolutely catastrophic” for the airline if it were to lose certain access or a “very, very large part of their market.”

So far, Cathay Pacific has suspended two pilots, fired two ground staff and issued a warning email to its employees. The airline’s top shareholder and manager, Swire Pacific, has also voiced support for China and vowed to follow China’s aviation regulations.

— Reuters and CNBC’s Grace Shao contributed to this report.

Source link

Continue Reading

World

Chinese state media urge action, voice support for Hong Kong police

Published

on

Protesters occupy the departure hall of the Hong Kong International Airport during a demonstration on August 12 in Hong Kong.

Anthony Kwan | Getty Images

Chinese state media called on Beijing on Wednesday to deal with protests in Hong Kong more decisively after a reporter from one of China’s largest government-backed newspapers was caught up in overnight clashes.

Ten weeks of increasingly violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms, are posing one of the biggest challenges for Chinese President Xi Jinping since he came to power in 2012.

Demonstrators and riot police clashed at Hong Kong’s airport late on Tuesday after flights were cancelled for a second day. Protesters at one point held a man who Chinese media have said was a reporter from China’s Global Times newspaper.

A front-page commentary on the overseas edition of the Communist Party’s official People’s Daily newspaper said on Wednesday Hong Kong had reached a critical juncture.

“Using the sword of the law to stop violence and restore order is overwhelmingly the most important and urgent task for Hong Kong!” it said.

Another commentary by a Shenzhen University researcher, published by the China Daily, said the central government should deal with Hong Kong issues more decisively.

U.S. President Donald Trump said on Twitter overnight the Chinese government was moving troops to the border with Hong Kong and urged calm.

However, Chinese state media has stopped short of calling for military action to deal with the protests.

Demonstrators say they are fighting the erosion of the “one country, two systems” arrangement that enshrined some autonomy for Hong Kong after China took it back from Britain in 1997.

“Extreme political ideas have found frequent expression in Hong Kong, with some even raising ‘Hong Kong independence’ slogans recently. Which means the ‘one country, two systems’ principle faces a new challenge,” Chinese author Li Peiwen said.

Chinese state media has also posted messages of support for the Hong Kong police, describing what was happening in the city as “a shame”. Such posts were the most-discussed topics on China’s social media platforms on Wednesday.

“We support the Hong Kong police too!” said a post on the People’s Daily’s official Twitter-like Weibo account that was reposted more than 500,000 times.

Global Times editor Hu Xijin said one of the newspaper’s reporters was rescued by police after being tied up by demonstrators. The tabloid is published by the People’s Daily.

“GT reporter Fu Guohao has been rescued by police and sent to the hospital. We’re still learning about his injury conditions,” said in a tweet.

Chinese state broadcaster CCTV called Fu “a real man” in a another Weibo post that had more than 140,000 “likes.”

Netizens have been closely watching what Beijing might do next after China this week condemned some protesters for using dangerous tools to attack police and said the clashes showed “sprouts of terrorism.”

The Global Times reported on Monday that China’s People’s Armed Police assembled in the southeastern city of Shenzhen, fueling speculation of a possible intervention in Hong Kong.

Some reactions on China’s social media platforms called for Beijing to intervene while many others urged calm.

Source link

Continue Reading

Trending