Industry Update

Bank of America Corp., the biggest underwriter of state and local government debt, isn’t worried that municipal-bond yields will turn negative, even if they do in other parts of the U.S. fixed-income markets. Bond yields have been plunging fast, making it seem possible that American investors could actually wind up paying governments to lend them money -- as is already happening in Japan and much of Europe because of the escalating trade war with China, concerns about slowing global growth and stock market volatility. The yield on 10-year Treasuries has dropped to about 1.55%, with those on tax-free debt about a quarter percentage point less. Source: https://www.bloomberg.com/news/articles/2019-08-16/negative-muni-bond-yields-bank-of-america-says-no-way?srnd=markets-vp

The Turkish Armed Forces Assistance Fund (known as Oyak) says it plans to take over British Steel, which employs 5,000 people, by the end of the year. British Steel owns the Scunthorpe steel works where 3,000 people work and it employs another 800 on Teesside. But the firm was put into compulsory liquidation in May after rescue talks with the government broke down. Another 20,000 jobs in the supply chain were put at risk by the collapse of the talks between the government and British Steel's owner, Greybull, prompting a parliamentary inquiry. Source: https://www.bbc.com/news/business-49368217

Softbank Group Corp. is planning to lend as much as $20 billion to its employees to buy stakes in its second venture capital fund following the success of an earlier $100 billion fund to invest in tech startups, the Wall Street Journal reported. The second Vision Fund aims to raise $108 billion, Softbank said earlier. In addition to its employees, it’s also expected to collect money from Apple Inc., Microsoft Corp., Foxconn Technology Group and the sovereign wealth fund of Kazakhstan. It’s also won support from Japanese financial institutions, with seven identified as signing memorandums of understanding to participate. Source: https://www.bloomberg.com/news/articles/2019-08-17/softbank-to-lend-employees-up-to-20-billion-for-fund-wsj-says?srnd=premium-europe

Dubai welcomed 8.36 million international overnight visitors in the first six months of 2019, up 3 percent compared to the same period last year, according to official figures. According to Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism), India was the largest source market with 997,000 visitors despite severe air traffic and seat capacity challenges due to geopolitical volatilities. The second largest feeder market was Saudi Arabia which delivered 755,000 visitors, followed by the UK which delivered 586,000 travellers despite a devalued British Pound and concerns surrounding Brexit. Source: https://www.arabianbusiness.com/travel-hospitality/425925-dubai-attracts-836m-tourists-in-first-half-of-2019-up-3

Bugatti debuted its most powerful supercar at Pebble Beach on Friday: a $10 million,1,600 horsepower throwback to the ’90s that sprints from 0 to 62 mph in 2.4 seconds. The French carmaker is making a splash at Monterey’s annual auto week. The Centodieci is the company’s latest coach built super car commemorating Bugatti’s 110th anniversary. Unlike Bugatti’s $18.7 million La Voiture Noire, which was built for grand touring, the Centodieci was built for speed. The company is making just 10 of the Centodiecis, which feature Bugatti’s 8.0-liter W16 engine. The company added an extra air inlet to help cool the engine. Source:https://www.cnbc.com/2019/08/16/bugatti-reveals-its-most-powerful-supercar-yet-the-10-million-centodieci.html

Softbank-backed AI and robotics firm Automation Anywhere is in talks with a number of UAE-based airlines and telecom operators to provide software it says can boost productivity by undertaking mundane day-to-day tasks, according to Milan Sheth, the company’s executive vice president for India, the Middle East and Africa. The company which also has Goldman Sachs as an investor produces software powered ‘digital workers’ that it says are three times as productive as human employees, helping release them to focus on high-level business value initiatives. Last week, the company announced that it had opened a regional headquarters in Dubai as it focuses on expansion in the region.

Source: https://www.arabianbusiness.com/technology/424197-softbank-backed-automation-anywhere-eyes-opportunities-in-uae-airline-sector

UK television network ITV has teamed up with the BBC on a streaming product that gives British audiences a new alternative to Netflix. BritBox will debut in the final three months of this year, the networks announced Friday. For £5.99 ($7.50) per month, users will get access to older shows and new HD programming across multiple screens. The back catalog will include popular series like Victoria and Love Island. Price could be a major selling point. BritBox will cost the same as a basic Netflix (NFLX) subscription but it's £3 ($3.75) cheaper than the American company's HD offering.

Source: https://edition.cnn.com/2019/07/19/media/bbc-itv-britbox-netflix/index.html

Britain's largest supermarket, Tesco, has increased the price of more than 1,000 products in the past two weeks. The firm raised prices on products including cheese, chocolate and bananas by an average of 11%, according to the Press Association. Tesco says it held off raising prices for as long as it could, and insists it is still competitive when compared to Asda, Sainsbury's and Morrisons. It comes as rivals Aldi and Lidl put pressure on the big four supermarkets. All shops are having to deal with increases in the cost of the goods they sell. The prices of milk powder, potatoes and pork have all risen much faster than the official inflation figure of 2%.

Source: https://www.bbc.com/news/business-49048822

Mumbai-based L&T Hydrocarbon Engineering Limited (LTHE), a subsidiary of Larsen & Toubro (L&T), has won a $1.01 billion contract from Saudi Aramco for its key oil field development project in Marjan. The project scope for oil facilities for the Marjan Incremental Development Project consists of four tie-in platforms, one tie platform module, nine production deck modules (wellhead decks), 217 kilometers of subsea pipelines across 25 segments, and 145 kilometers of subsea cables across 16 segments. It also includes the replacement of existing control gears at eight SA offshore platforms and tie-in to existing systems.

Source: https://www.arabianbusiness.com/energy/424210-lt-consortium-signs-1bn-saudi-aramco-contract

Footfall will continue to be a challenge for retail malls in Dubai and the greater UAE in the face of coming oversupply and the rapidly increasing adoption of e-commerce, according to real estate consultancy JLL. According to a recent JLL report on the real estate sector in Q2, market rents in Dubai primary malls have declined by approximately 14 percent, compared to 24 percent for secondary malls when compared to the same time period last year. Additionally, market rise vacancies are estimated to have risen from 14 percent in Q2 2018 to 18 percent in Q2 2019. Total mall-based reply supply stood at around 3.8 million sq.  at the end of the quarter, with the expansion of Dragon Mall being the only project completed during the quarter.

Source: https://www.arabianbusiness.com/retail/424185-dubai-malls-turn-to-tech-in-face-of-retail-sector-oversupply