Android Founder to Launch Smartphone, China’s GDP Picks Up, but Snap Shares Are Going Down

China's GDP Numbers Pick Up

Q2 GDP came in at 6.9% due to strength in the property market and foreign trade.

Editor's Remarks: Last year's GDP growth rate was 6.7% and, if the first half's 6.9% rate continues into the second half, this will be the first year since 2010 that China has seen its growth accelerate over the previous year. Growth rates were boosted by an 8.5% increase in property investment, despite government efforts to cool down the property market by limiting home purchases and mortgage lending, and strong export growth of 8.5%. While June figures released the same day also showed a continuation of strong fixed asset investment, the government must navigate a tight balancing act in the second half. Over the weekend, President Xi Jinping warned that "deleveraging at SOEs is of the utmost importance" and worries over the credit environment are leading to increased measures to limit debt which could impact growth in the second half of the year.

Android Founder's New Phone to be Launched

The new phone targeted at "trend setters and technology seekers" is to be launched in Western Europe and Japan before the end of the year.

Editor's Remarks: The sleek, high-end Essential Phone PH-1 has an edge-to-edge display, comes with no preloaded apps and will use modular attachments, such as a 360-degree camera, to introduce innovative functionalities. Essential was developed by Andy Rubin, the founder of Google's Android platform, after he left the tech-giant in 2014, and has raised $300m to develop a handset which he hopes will challenge Apple and Samsung's market dominance. The company has held talks with network operators in the UK, Europe and Japan to distribute the new handset and already has a US deal in place with Sprint, although the handset, priced at $699, has not yet been launched there. Rubin is a big figure in the industry and has secured funding from iPhone assembler Foxconn, China tech-giant Tencent as well as his own technology fund Playground, which is backed by Google and HP.

Hermes to Pay For Research Costs Itself

The UK Fund manager will stop charging its clients for research costs in anticipation of the introduction of MiFID II next year.

Editor's Remarks: MiFID II will be introduced in January 2018 and will force fund managers to either be fully transparent about their investment research budgets or pay for the research themselves. Several UK fund managers, including Jupiter, M&G and Woodford Investment Management have already said that it is much easier to pay for it themselves and Hermes Investment Management has followed suit. The fund manager has over £30bn of assets under management and its head of investments, Eion Murphy, said "it is the right thing to do" for its fund clients and that compared with the alternative of passing research costs onto these clients, "the difference in costs was not huge." Fund managers all need to make the decision of whether to pay for research themselves or pass on costs to their clients, but whichever way they go, research budgets are only heading one way.

North-South Korea Talks?

South Korea's President Moon has proposed talks in an attempt to de-escalate tensions.

Editor's Remarks: Tensions have been high on the Korean peninsula in recent months with the North's ongoing missile tests, but new South Korean President Moon has long been in favour of a resumption of the "sunshine policy" of North-South dialogue. He has now proposed the first military talks for three years, starting Friday in the demilitarised zone, as well as the resumption of Red Cross talks to reunite families split by the border since the 1950s Korean War. In a speech in Berlin last week, Moon signalled his accommodative stance, saying: "We do not want North Korea's collapse, nor will we seek any form of unification by absorption," both of which tally with China's aims in the region. However, the US may not be so happy. The Trump administration is increasingly tired of accommodating the North as it develops missile technology.

Toshiba Bailout Runs into US Trouble

A US court is standing in the way of the Japanese government's attempts to cobble together a consortium to buy Toshiba's chip making business.

Editor's Remarks: Toshiba is close to collapse and badly in need of funds to fill a hole left by the bankruptcy of Westinghouse electric, its US nuclear unit. The troubled electronics company has been trying to engineer a sale of its $18bn NAND flash memory chip-making business to a domestic consortium, to keep its sensitive technology within Japan. But the unit is run in a joint venture with the US owner of Sandisk, Western Digital, who is trying to block the sale. A US court has delayed a decision on a ruling that requires Toshiba give notice to Western Digital in the event of a sale, effectively blocking any move by Toshiba and giving Western Digital leeway to muscle its way back into negotiations. Toshiba is in a hurry to sell to shore up its balance sheet, but the chip market is tight and Western Digital does not want to lose chip making capacity in a fire sale.

Source: Android Founder to Launch Smartphone, China's GDP Picks Up, but Snap Shares Are Going Down