Global IPO market looks set for a strong 2017: EY report

After a poor 2016 for initial public offerings, the outlook for 2017 is much more upbeat as economies grow stronger, say experts from EY.

The number of IPOs fell by 16 percent year-over-year in 2016 and the amount of capital raised fell 33 percent to $132.5 billion, according to EY's latest Global IPO Trends report.

Political and economic uncertainty in 2016 knocked the confidence of entrepreneurs and investors, deterring IPOs.

But Martin Steinbach, global IPO leader at EY, said the outlook for 2017 was positive.

"We have a strong momentum from Q4, so the IPO activity rose by 25 percent compared to Q3," he told CNBC's Squawk Box Europe.

"If we go to equity market indices, they are at an all-time high in many markets. Volatility has fallen, so these are good signs for 2017. Pipelines are building."

However, he added that the economy is in a period of transition following political events such as the U.S. election and Brexit will impact economic policy and make 2017 an interesting year with lingering uncertainty.

Technology, industrial and healthcare were the three top sectors this year, Steinbach added.

"We expect some unicorns (start-ups valued over $1 billion) next year in the U.S. and this may drive also some big tech IPOs in other regions."

Geographically, Asia-Pacific was one of the stronger areas of IPO activity in 2016, according to the report. The area accounted for 54 percent of global capital raised and 60 percent of IPO volume.

The Hong Kong market performed robustly in 2016, though 2017 will be very unpredictable with factors like the interest cycle on an upward path, a strengthening U.S. market and new changes in government policies like the Shenzhen-Hong-Kong Connect Program," said Ringo Choi, EY Asia-Pacific IPO leader, in a press release.

Follow CNBC International on Twitter and Facebook.

Let's block ads! (Why?)

Global IPO market looks set for a strong 2017: EY report

GE to sell $3 billion industrial solutions business

General Electric said on Wednesday it would sell its $3 billion industrial solutions business, which makes electrical equipment, as part of a push to focus on its core businesses.

The industrial conglomerate expects to raise about $4 billion from the sale of the unit as well as the previously announced sale of its water business, GE said in an investor presentation.

The industrial solutions business has about 13,000 employees and 30 plants globally.

Let's block ads! (Why?)

GE to sell $3 billion industrial solutions business

Swiss central bank says the situation in Europe remains difficult

The Swiss National Bank's monetary policy framework must remain "expansionary", as concerns and uncertainties still lurk in Europe, its chairman explained to CNBC on Thursday.

"The situation in Europe remains more difficult and that's exactly the reason why monetary policy in Europe remains expansionary and that also means that we have to continue maintaining negative interest rates in Switzerland," Thomas Jordan, chairman of the Swiss National Bank, told CNBC Thursday.

Earlier, the Swiss central bank decided to stand pat on its monetary policy, leaving its interest rates unchanged at record-low levels. The SNB left its deposit rate at a negative 0.75 percent on Thursday, as was widely expected.

In the bank's latest statement, the SNB said it would remain active in the foreign exchange market, and that its current expansionary monetary policy is expected to help prop up economic activity and help keep an eye on the Swiss franc.

"Our monetary policy is expansionary and it has to remain expansionary because we still have a very difficult situation: We have negative inflation, we have a negative output gap and the Swiss franc remains significantly overvalued," he added.

Meanwhile, on Wednesday the U.S. Federal Reserve decided to raise interest rates by 25 basis points - the second time it had done so in a decade. While the market had priced this in, investors weren't expecting three planned hikes for 2017. However, for the SNB's chairman, the Fed's recent moves highlight that the U.S. economy is on track.

"It's very positive that the U.S. economy is on track. The decision by the Fed shows that the situation is improving and this is a very positive sign, not only for Switzerland but for the world economy as a whole."

As 2017 approaches, the Swiss central bank remains "cautiously optimistic" for the coming year, forecasting GDP (gross domestic product) to grow around 1.5 percent; yet it did however trim its inflation expectations for 2017 and 2018.

Let's block ads! (Why?)

Swiss central bank says the situation in Europe remains difficult

Elon Musk is expected to urge Trump not to abandon the Paris climate agreement

Elon Musk is joining President-elect Trump's policy advisory council, despite his comments before the election that Trump "doesn't seem to have the sort of character that reflects well on the United States."

Still, it's probably in Musk's favor to work with the incoming administration, especially as it starts to shape new policies that are dear to Musk's heart, like regulations to bring self-driving cars to U.S. roadways and whether to abide by the 2015 Paris climate agreement or pull out, a threat Trump made on the campaign trail.

That doesn't sit well with Musk, who will likely urge the Trump administration to remain a signatory on the international climate accord. Reps for Musk did not immediately respond to request for comment.

Shortly after Trump won the election, his team began sketching a plan to abandon the the Paris accord, reported Reuters. And Trump's pick to head the EPA, Scott Pruitt, doesn't think climate change science is real.

Musk, on the other hand, has long advocated for the U.S. to institute a gradual carbon tax, which he says is the only viable way to spur a transition from fossil fuels to more sustainable forms of energy.

Trump is unlikely to warm up to the idea of another tax — he's promised to cut taxes across the board.

More from Recode:
Elon Musk and Travis Kalanick are joining Donald Trump's strategic and policy forum
As Trumplethinskin lets down his hair for tech, shame on Silicon Valley for climbing the Tower in silence
I want a smart home. What's the simplest way to start?

Even so, Musk might be able to persuade the president-elect not to renege on the Paris agreement, which already lacks strong mechanisms for enforcement.

Rex Tillerson, Trump's pick for secretary of state and CEO of Exxon Mobil, also supported U.S. participation in the climate talks and endorsed the idea of a national carbon tax. Tillerson may also urge Trump not to leave the Paris deal.

Musk has a financial incentive for wanting the U.S. to start thinking progressively about transitioning from fossil fuel. Musk's company Tesla acquired SolarCity, a leading U.S. firm building solar-powered energy systems, last month.

Trump has previously said that he's convinced climate change is a hoax perpetrated by the Chinese.

Watch Elon Musk's speech at the Sorbonne in 2015, where he urged students to "talk to your politicians, ask them to enact a carbon tax" and to "fight the propaganda from the carbon industry."

Follow CNBC International on Twitter and Facebook.

Let's block ads! (Why?)

Elon Musk is expected to urge Trump not to abandon the Paris climate agreement

Starbucks to double its China stores in 5 years as Chinese middle class adopts coffee culture

Starbucks plans to add over 10,000 new jobs a year in China over the next five years as part of the U.S. coffee giant's big bet on the nation of tea drinkers, where coffee culture is flourishing amid a booming middle class despite an economic slowdown.

Besides aiming to more than double its store count in China to 5,000 by 2021, the world's largest coffee chain is brewing up a 30,000 sq ft premium coffee house in Shanghai, described by its new China head Belinda Wong as "the second Disneyland" in the making.

In an interview with the Post at a "Bing Sutt"-style Starbucks café in Central, which pays homage to the traditional 1950s Hong Kong coffee shop decor, Wong spoke of her vision since stepping into her role as the Seattle-based company's first China operations chief executive late October.

"In China in the coming five years we are definitely adding 10,000 plus new jobs every year. We open 500 stores a year and our goal is by 2021...to have 5,000 stores," said the 44-year-old, who has been named in the top 25 on Fortune China's annual list of the country's most influential businesswomen since 2012.

"This is the early chapter of our China growth right now. We have barely even scratched the surface."

That expansion is poised to make China, where the middle class have awakened to the taste of coffee ever since Starbucks opened its first store in 1999, the largest market outside the U.S. within the next few years.

The mainland China outlets were already the most profitable, said Starbucks chief executive Howard Schultz during a post-earnings call with analysts last week, when he projected that China had the potential to overtake its home market which it has nurtured for 45 years.

While Starbucks coffee can be an everyday indulgence for urbanites in the West, with a price tag of 30 yuan (US$4.43) for a medium latte in Shanghai, it is still a brand with plenty of snob appeal – a status symbol for the emerging Chinese middle class and a "liquid luxury" for an average worker.

More from the South China Morning Post :
Gold seen soaring next year on euro-zone uncertainties
'History in the making' as Shenzhen-Hong Kong share trading link goes live
Be ready for a 'roller coaster' under Trump, warns US trade veteran

The U.S. coffee chain came under attack in 2013 by the state broadcaster for what critics called "inflated prices", but the bad public relations at that time failed to deter its expansion or overhaul its pricing strategy.

Starbucks more than quadrupled its number of mainland stores to more than 2,300 within five years, even as other U.S. fast-food and restaurant chains including Yum! Brands' KFC and PizzaHut outlets reported lackluster business.

The company has proven adept at adding local touches in its Chinese stores, such as moon cakes, dragon dumplings, as well as tea-flavored beverages such as spicy mocha and oolong.

Wong, who was born in Hong Kong, educated in Canada and is now based in Shanghai, said Starbucks might break into 10-15 new urban markets in China every year, while continuing its penetration in megacities where it has taken hold.

"There is plenty of space to infill in first and second tier cities where we have already opened – Beijing, Guangzhou, Shenzhen, Shanghai," said Wong.

Coffee consumption in the world's second biggest economy is still well below that of Europe and the US, and market researcher Euromonitor predicts that retail sales volume of fresh coffee will post a compound annual growth rate of 17 per cent in China.

However, competition in China is also intensifying. While other international coffee chains like Costa Coffee scramble to seize market share, independent coffee shops have also sprung up and are proving to be a magnet for young affluent Chinese seeking to "be different".

Starbucks last month unveiled plans to ramp up its upscale Reserve brand, where baristas prepare coffee using exceptional methods, such as siphon brewing.

"We want to make sure we open stores that are not cookie cutters," Wong said. In her new role Wong is responsible for the planned 2017 opening of the first international Starbucks Roastery and Reserve Tasting Room in Shanghai, which, at 30,000 sq ft, would be twice as large as the original Seattle outlet launched in 2014.

The roastery is a theater-style Starbucks catering to coffee connoisseurs more discerning about the coffee beans and roasting. It will be situated on West Nanjing Road, one of Shanghai's most expensive shopping districts.

"Shanghai Roastery is going to be much better than the Seattle one," said Wong, declining to give further details on what the showpiece would look like – other than to hint at it being like a "second Disneyland in Shanghai". "It's going to attract not only people in Shanghai but attract a lot of tourists in China," she added.

Follow CNBC International on Twitter and Facebook.

Let's block ads! (Why?)

Starbucks to double its China stores in 5 years as Chinese middle class adopts coffee culture

Trump team 'bounced' Twitter from tech summit over 'Crooked Hillary' emoji flap: Report

President-elect Donald Trump declined to invite social network Twitter— a platform Trump himself uses with impunity—to a summit with other major technology players because of the company's refusal to approve a specialized emoji during the campaign, Politico reported on Wednesday, citing an unnamed source.

At the height of the campaign, Trump was attacking Democratic contender Hillary Clinton as "crooked", something he wanted the social network to create a "Crooked Hillary" emoji. The Trump campaign proposed a $5 million deal to do so, the publication stated, but Twitter rejected the idea. The character would have depicted money bags being stolen or given away, according to the report.

Twitter was pointedly left out of the confab at Trump Tower, which included high ranking executive delegations from Apple, Amazon.com and Oracle, just to name a few. A source told Politico that the company was "bounced" from the meeting in retribution over rejecting the emoji.

The unnamed source told Politico that RNC spokesman Sean Spicer, who is an adviser to the Trump transition, made the call to deny an invitation to Twitter CEO Jack Dorsey. The summit was organized by Facebook board member and tech billionaire Peter Thiel, who has been a vocal backer of Trump's.

Twitter declined to comment when reached by CNBC.

The full report can be found on Politico's website.

Let's block ads! (Why?)

Trump team 'bounced' Twitter from tech summit over 'Crooked Hillary' emoji flap: Report

Exxon CEO Tillerson to hand over reins to president after State Department pick

Oil major Exxon Mobil said on Wednesday that President Darren Woods would become chief executive and chairman in January after the retirement of Rex Tillerson, who is U.S. President-elect Donald Trump's pick for secretary of State.

Exxon shares fell to session lows shortly after the announcement around 3 p.m., ET. The stock ended the day 2 percent lower amid similar declines in the broader energy sector, which fell due to lower crude oil prices.

Exxon said Tillerson, 64, will retire at the end of the year and Woods, 51, would take over as chairman and CEO, effective Jan. 1.

Woods joined Exxon in 1992, and in January he was elected to the company's board and appointed president.

Woods has held various senior positions at the company, including overseeing its refining, supply and transportation businesses and managing its specialty-chemical unit.

Tillerson got his start as a production engineer at Exxon in 1975 and has worked there ever since, running business units in Yemen, Thailand and Russia before landing the top job in 2006.

He was expected to retire next year, when he turned 65, the company's mandatory retirement age for its CEO.

The retirement date had been advanced due to "the significant requirements associated with the confirmation process," Exxon said.

With his retirement, Exxon's board will have 12 directors.

The announcement of Exxon's change of leadership comes a day after Trump formally named Tillerson as his nomination to serve as secretary of state, citing his "tenacity, broad experience and deep understanding of geopolitics."

He could face a rocky confirmation process, given concerns among both Democrats and Republicans about his ties to Russia.

If Tillerson can overcome the skepticism of Republicans, he could win confirmation since their party will control a slim majority n the Senate when Trump takes office on Jan. 20.

Tillerson earned about $24.3 million in 2016. He has a net worth of $150 million, plus a $70 million pension plan.

Let's block ads! (Why?)

Exxon CEO Tillerson to hand over reins to president after State Department pick