Trade tensions, jibes at U.S. overshadow Chinese cyber conference - Reuters

WUZHEN, China (Reuters) - At one of the world’s showpiece tech conferences in China, jibes at the United States for its ‘bully behavior’ lent a Cold War tone to proceedings as trade tension once again reared its ugly head in an event that drew a dearth of top U.S. executives.

FILE PHOTO: Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019. REUTERS/Aly Song

The state-run World Internet Conference, one of the country’s most prominent tech events, took place this year against a backdrop of rising Sino-U.S. frictions and has been especially overshadowed by Washington’s moves against Chinese tech companies.

The United States earlier this month placed several Chinese AI companies on a supplier blacklist and trade talks between both countries show little sign of any quick resolution.

Attendees in previous years included the heads of Google and Apple Inc. In 2017, Apple CEO Tim Cook told the conference that the company shared China’s vision for developing a digital economy for openness.

But this year’s three-day event, which ended on Tuesday, drew few American luminaries and did not feature a U.S.-China panel like last year, reflecting the heightened tensions between the United States and China.

In his opening remarks, China’s propaganda chief Huang Kunming set the overall tone with the criticism that the cyberspace industry was being hindered by a “Cold War” mentality and “bully behavior,” a barely veiled jibe at the United States.

“No sanctions or restrictions can hinder China’s development or the development of Chinese enterprises,” Yang Shuzhen, the head of the Chinese Academy of Cyberspace Studies, a government-backed think tank, told reporters at the conference.

“No country’s enterprise can cover all the world’s technical patents, components and equipment. The irreversible trend is that all countries rely on the support of the global market.”

SPYING AND AI

In May, Washington ramped up pressure on China by placing Huawei Technologies Co Ltd [HWT.UL], the world’s largest telecoms equipment provider, on a U.S. blacklist over national security concerns, banning it from buying American-made parts without a special license.

The U.S. government, fearing Huawei equipment could be used to spy on customers, has led a campaign to convince allies to bar it from their 5G networks. Huawei has repeatedly denied the claims.

Some attendees told Reuters that they were seeing efforts by the Chinese government to allocate more resources toward the tech sector to compete with the United States.

“The trade tensions have indeed impacted on our local traditional businesses, including the apparel industry and fiberglass manufacturers, said a local government official who declined to be named as he was not authorized to speak to the press.

“But we are trying our best to encourage high-tech businesses to set up operations here, such as renewable energy-driven vehicles and self-driving cars,” the official added.

Still, many speakers including Alibaba chairman Daniel Zhang and Microsoft’s Artificial Intelligence & Research executive vice-president Harry Shum, avoided discussing the ‘entity list’ or other thorny topics publicly.

Huawei and Megvii were also among 15 companies awarded prizes by the conference organizers for new product innovations, but no mention was made of the troubles they may face from being put on Washington’s trade blacklist.

“The problem is that everyone’s avoiding the problems,” said one U.S. attendee.

“There is not a candid discussion of the problems foreign companies face in China, or some of the larger problems having to do with internet governance in China. Rather, there’s technological boosterism,” he said.

Others also tip-toed around the issue of the months-long protests in Hong Kong, even as a seminar was organized to discuss internet innovation in the city and Macau.

Baidu CEO Robin Li was one of the few speakers to make a passing reference to the protests. In a speech talking about artificial intelligence, he predicted that people could one day use the technology to store their thoughts and have conversations with people from the past.

Former Chinese paramount leader Deng Xiaoping could be among them, he said. Deng in 1984 and 1987 said if “turmoil” occurs in Hong Kong, “the central government must intervene”.

“We can also ask Mr. Deng Xiaoping what he thinks of the situation in Hong Kong today,” Li said.

(This story changes “tensions” to “tension” in first paragraph)

Reporting by Yingzhi Yang and Josh Horwitz in Wuzhen; Editing by Brenda Goh & Shri Navaratnam

Our Standards:The Thomson Reuters Trust Principles.

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2019-10-22 09:29:00Z
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Revolut strikes deal with Mastercard to accelerate expansion into the US - CNBC

Revolut's logo is displayed on a smartphone next to a Mastercard-branded debit card issued by the U.K. fintech firm.

Revolut

British fintech firm Revolut has partnered up with Mastercard to help it expand into the U.S. by the end of the year.

The deal means all of Revolut's first debit cards in the U.S. will be issued with Mastercard, while a minimum of half its European cards will carry the payments giant's branding.

Revolut CEO Nik Storonsky said the firm would also use some of Mastercard's new technology, including a platform that enables payments to be sent directly from one card to another.

"When we were trying to launch in the U.S. two years ago, Mastercard became our first offer for it," Storonsky told CNBC in a phone interview, adding he thought the company had "great tech and great infrastructure."

The deal arrives on the heels of a separate partnership Revolut struck with Mastercard's largest rival, Visa, a few weeks ago, which it said would help the firm hire an additional 3,500 people by the summer of 2020 to support its global expansion.

But this new tie-up means that Mastercard will get first dibs when it comes to Revolut cards issued in the U.S. Visa will still be the card network behind 75% of Revolut's cards beyond Europe though, and has said it still plans to support the firm's U.S. launch at some point in the future.

"What we've been working really hard on is accelerating Revolut's launch in the U.S.," Sue Kelsey, Mastercard's executive vice president of global prepaid and financial inclusion, told CNBC. "This will allow us 100% issuance of Revolut accounts on Mastercard" to begin with, she added.

Revolut is one of the many digital challenger banks which have gained a foothold in Europe by offering consumers colorful cards and slick mobile apps. Despite having no branches, the likes of Revolut, Monzo and N26 have gained millions of users between them.

London-based Revolut has already hired 30 employees in the U.S. and says it plans to triple its headcount there over the next six months. Rival fintech firms Monzo and N26 started rolling out in the U.S. earlier this year.

Revolut started out in 2015 with a prepaid debit card and foreign exchange service that let people spend abroad without paying high fees. It has since expanded its suite of products to add support for business accounts and trading in cryptocurrencies and, more recently, shares.

But like many of its peers in the fintech space, Revolut has yet to generate an annual profit. The company's most recent accounts showed losses more than doubled in 2018 to £32.8 million ($42.6 million) from £14.8 million a year earlier. TransferWise is one notable exception in the industry, having been profitable for three straight years.

Still, Revolut has been growing at a rapid pace, and is currently signing up between 800,000 and 900,000 new users a month.

Banking challengers have not been without their teething issues. U.S. start-up Chime recently suffered a widespread outage that left millions of customers without access to their accounts. According to fintech consultancy 11:FS, many upstarts in the U.K. faced similar problems in the early days of operating as they relied on third parties for certain processes.

And Revolut hasn't been immune to controversy, having been hit by a series of negative headlines towards the start of the year. Several reports highlighted a toxic work culture at the firm and alleged issues with compliance. The company denies it ever failed to meet any regulatory requirements, but admitted mistakes were made with regard to culture.

Challenger banks have proved to be a hot investment target for venture capitalists looking to tap into their wild growth. According to data firm CB Insights, the space saw $649 million in venture funding across 17 deals in the second quarter of the year.

Revolut is currently in talks with investors for a new round of funding that could close later this year. A recent Sky News report said the company is aiming to raise $1.5 billion, in a funding deal comprised of $500 million in equity and $1 billion in convertible notes. Storonsky declined to comment on that report.

WATCH: What is fintech?

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2019-10-22 07:03:18Z
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Revolut will partner with Mastercard for US launch - Quartz

Mastercard and Visa have been battling each other for market share for decades. These days, their competition is increasingly taking place via fintech startups.

An example is Revolut, which will use Mastercard when it launches in the US this year, according to a statement. The London-based financial app and debit-card operator will also partner with Mastercard for at least 50% of existing and future cards issued in Europe (Visa will have the other half). Revolut has an EU banking license from Lithuania’s central bank and will partner with a US-licensed bank when its rolls out in America.

In an effort to strike back, Visa recently said it will partner with Revolut as the startup expands in 24 new markets, for a total of 56 around the world. And while Revolut will start out issuing Mastercard in the US, Visa says it will get a chunk of that business from Revolut over time. Revolut says 75% of its cards outside of Europe will eventually be Visa branded.

As more transactions flow through digital startups instead of traditional banks, fintech firms represent increasingly important partnerships for the card networks. These startups could also prove vital for the card networks’ continued grip on payments, as physical cards become less important and transactions become more virtual. Four-year-old Revolut offers foreign exchange and stock and crypto brokerage as well as peer-to-peer payments. It says it has 8 million customers, and more than 1 million of them use its services every day.

Visa executives have confessed that they were slow to chase the fintech craze but say they are catching up. Mastercard claims it is the clear leader in the fintech game: The card network says it is the “partner of choice” for 60 digital banks and financial startups, which is twice as many as two years ago.

“We are very confident,” said Sue Kelsey, executive vice president and global head of prepaid cards at Mastercard. “I don’t think this is a draw by any stretch.”

Card transactions and online commerce are soaring, making payment companies some of the most valuable financial companies in the world. Mastercard and Visa’s stocks have each returned more than 30% this year, and together they have a market capitalization of more than half a trillion dollars. These payment giants take a tiny toll of a few basis points on card transactions: They processed more than $5 trillion during the most recent quarter, a 5% increase from a year earlier, amounting to nearly $10 billion in revenue.

Revolut, meanwhile, is part of a wave of digital upstarts that offer banking services through slick app interfaces instead of costly bank branches. As it expands globally, Revolut is looking to raise $1.5 billion, according to Sky News, in a deal that would value the company somewhere between $5 billion and $10 billion. Some $1 billion of that funding will reportedly be in the form of a convertible loan that converts to stock if Revolut obtains a US banking license.

While European companies like Revolut, N26, and Monzo have proven that they can quickly acquire legions of customers, questions remain as to whether they will prove better than tech unicorns like Uber at converting those users into profitable, sustainable businesses. All three fintech firms are seeking to make inroads in the US.

Some investors are wary of heady fintech valuations. “I have a Revolut card, sure,” said Mark Tluszcz, chief executive of Mangrove Capital Partners, a self-described contrarian investment firm. “But is that a long-term business? I don’t know.”

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2019-10-22 07:01:00Z
52780416234427

Revolut strikes deal with Mastercard to accelerate expansion into the US - CNBC

Revolut's logo is displayed on a smartphone next to a Mastercard-branded debit card issued by the U.K. fintech firm.

Revolut

British fintech firm Revolut has partnered up with Mastercard to help it expand into the U.S. by the end of the year.

The deal means all of Revolut's first debit cards in the U.S. will be issued with Mastercard, while a minimum of half its European cards will carry the payments giant's branding.

Revolut CEO Nik Storonsky said the firm would also use some of Mastercard's new technology, including a platform that enables payments to be sent directly from one card to another.

"When we were trying to launch in the U.S. two years ago, Mastercard became our first offer for it," Storonsky told CNBC in a phone interview, adding he thought the company had "great tech and great infrastructure."

The deal arrives on the heels of a separate partnership Revolut struck with Mastercard's largest rival, Visa, a few weeks ago, which it said would help the firm hire an additional 3,500 people by the summer of 2020 to support its global expansion.

But this new tie-up means that Mastercard will get first dibs when it comes to Revolut cards issued in the U.S. Visa will still be the card network behind 75% of Revolut's cards beyond Europe though, and has said it still plans to support the firm's U.S. launch at some point in the future.

"What we've been working really hard on is accelerating Revolut's launch in the U.S.," Sue Kelsey, Mastercard's executive vice president of global prepaid and financial inclusion, told CNBC. "This will allow us 100% issuance of Revolut accounts on Mastercard" to begin with, she added.

Revolut is one of the many digital challenger banks which have gained a foothold in Europe by offering consumers colorful cards and slick mobile apps. Despite having no branches, the likes of Revolut, Monzo and N26 have gained millions of users between them.

London-based Revolut has already hired 30 employees in the U.S. and says it plans to triple its headcount there over the next six months. Rival fintech firms Monzo and N26 started rolling out in the U.S. earlier this year.

Revolut started out in 2015 with a prepaid debit card and foreign exchange service that let people spend abroad without paying high fees. It has since expanded its suite of products to add support for business accounts and trading in cryptocurrencies and, more recently, shares.

But like many of its peers in the fintech space, Revolut has yet to generate an annual profit. The company's most recent accounts showed losses more than doubled in 2018 to £32.8 million ($42.6 million) from £14.8 million a year earlier. TransferWise is one notable exception in the industry, having been profitable for three straight years.

Still, Revolut has been growing at a rapid pace, and is currently signing up between 800,000 and 900,000 new users a month.

Banking challengers have not been without their teething issues. U.S. start-up Chime recently suffered a widespread outage that left millions of customers without access to their accounts. According to fintech consultancy 11:FS, many upstarts in the U.K. faced similar problems in the early days of operating as they relied on third parties for certain processes.

And Revolut hasn't been immune to controversy, having been hit by a series of negative headlines towards the start of the year. Several reports highlighted a toxic work culture at the firm and alleged issues with compliance. The company denies it ever failed to meet any regulatory requirements, but admitted mistakes were made with regard to culture.

Challenger banks have proved to be a hot investment target for venture capitalists looking to tap into their wild growth. According to data firm CB Insights, the space saw $649 million in venture funding across 17 deals in the second quarter of the year.

Revolut is currently in talks with investors for a new round of funding that could close later this year. A recent Sky News report said the company is aiming to raise $1.5 billion, in a funding deal comprised of $500 million in equity and $1 billion in convertible notes. Storonsky declined to comment on that report.

WATCH: What is fintech?

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https://www.cnbc.com/2019/10/22/revolut-partners-with-mastercard-to-accelerate-us-expansion.html

2019-10-22 06:33:17Z
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Why the stock market has a ‘great distance to rise’ in the coming years - MarketWatch

There’s a lot to be glum about in the stock market — and the world, really — at the moment, but in our call of the day Michael Kramer, founder of Mott Capital Management, is confident there’s some serious upside potential in the coming years.

It all starts with valuations.

Kramer points out that the earnings multiple of the S&P 500 index SPX, -0.39% on a trailing 12-month basis sits around 19.7, the lowest level since June 2016 — a time when “the world literally felt as if it was on the verge of a meltdown”. (That multiple is a key method of measuring the value of a stock relative to earnings.)

But, in the reality that perhaps matters most to markets, we were in the midst of an earnings recession that would soon come to an end.

The bull market had life and, three years later, it still does, he says.

Read: How big will this year-end rally turn out to be?

For some context, Kramer used earnings data going back to 1988 and projections through to 2020, then overlaid that with a chart of the S&P for what he says is a self-explanatory reflection of where we stand.

And, more importantly, where we’re headed.

Kramer explained that the numbers show attractive equity valuations and, if corporate earnings continue to increase as expected, the market “has a great distance to rise” in the coming years.

Stocks are rising this morning, though not by “a great distance” yet.

The market

Futures on the Dow YM00, +0.13%, S&P ES00, +0.27% and Nasdaq NQ00, +0.33% are all in the green ahead of the opening bell. The pound GBPUSD, +0.1773%  is fairly volatile as investors wait for more Brexit updates after Prime Minister Boris Johnson’s deal vote was a non-starter on Saturday. Europe SXXP, +0.45%  stocks are up.

The chart

Yes, it’s a bit hairy out there.

This one is really stunning: A separate index that only focuses on uncertainty in global trade policy has surged to around 100 this year. From 1996 through 2018, its average level was about 2. “I think political uncertainty is clearly far higher than it has been for a long time.” pic.twitter.com/hgdAAT4Vvi

— Steven Russolillo (@srussolillo) October 20, 2019

The buzz

We’ve got a big week of earnings coming up, with bellwethers like Microsoft MSFT, -1.63%, Amazon AMZN, -1.68%, Procter & Gamble PG, +0.72% and Boeing BA, -6.79% among notables on the docket.

Voters won’t have to wait much longer to hear how Democratic presidential candidate Elizabeth Warren plans to pay for the “Medicare for All” future she envisions. The Massachusetts senator, who says she’ll give the details of her plan soon, came under heavy fire from her opponents during last week’s debate for refusing to say whether her plan would raise taxes on the middle class.

The strike at General Motors GM, -0.06% is spilling over into a second month, and the impact is intensifying across the Midwest in the U.S.he United Auto Workers union banged out a tentative labour deal with GM last week, but union leaders opted to continue picketing until workers approve the agreement.

The quote

“Market stability should not be the subject of a tweet here or a tweet there. It requires consideration, thinking, quiet and measured and rational decisions.” — Christine Lagarde, soon-to-be president of the European Central Bank, in an interview that aired on Sunday night on CBS’s “60 Minutes”.

The economy

New and existing home sales figures for September are probably the economic highlight of the week, but we won’t get a look at those until Thursday and Tuesday, respectively. There’s nothing of note on the docket today. University of Michigan rounds out the week on Friday morning with the consumer sentiment index.

Read: Latest data does nothing for investors ‘animal spirits’

The tweet

Hillary & her gang of rich, powerful elite are going after me to send a msg to YOU: “Shut up, toe the line, or be destroyed.” But we, the people, will NOT be silenced. Join me in taking our Democratic Party back & leading a govt of, by & for the people! https://t.co/TOcAOPrxye pic.twitter.com/TahfE2XOek

— Tulsi Gabbard (@TulsiGabbard) October 20, 2019

Random reads

Influencers can buy 1,000 fake followers on Facebook FB, -2.38% for $34. Advertisers pay billions for them to pitch products to real people.

There’s a bear market in religion.

This sure looks like Republican senator Mitt Romney’s secret Twitter TWTR, -1.57% account.

A man stabbed his brother to death; now he earns six figures in Silicon Valley.

The grim reality of what climate change could do to three major US cities.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter, Instagram, Facebook.

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https://www.marketwatch.com/story/why-the-stock-market-has-a-great-distance-to-rise-in-the-coming-years-2019-10-21

2019-10-21 11:11:00Z
CAIiELA61TY5cOE1OflXUHTaligqGAgEKg8IACoHCAowjujJATDXzBUwiJS0AQ

Facebook says Libra could use a series of cryptocurrencies pegged to different currencies - CNBC

A "Zuck Buck" is displayed on a monitor as David Marcus, the executive leading Facebook's blockchain initiative, is questioned by U.S. lawmakers in Washington, D.C., on July 17, 2019.

Andrew Harrer | Bloomberg | Getty Images

Facebook has suggested its Libra project could use multiple cryptocurrencies backed by different existing currencies like the dollar, rather than having one single digital token tied to a basket of currencies.

The tech giant had initially proposed one synthetic unit of value that would be tied to a basket of currencies and government debt. But according to Reuters, David Marcus, the executive leading Facebook's blockchain initiative, told a banking seminar that he was open to looking at alternative approaches.

"We could do it differently," he said, according to the news agency. "Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stablecoin, etc."

Stablecoins are cryptocurrencies that are usually pegged to government-backed currencies like the dollar. Tether is the world's best-known stablecoin, backed by the dollar, though it has garnered some controversy over whether it has a sufficient amount of dollars in reserve, as well as the suggestion that it could have been used for market manipulation.

Such currencies aim to reduce the volatility seen in virtual currencies like bitcoin and ether. In libra's case, the objective is to create a more efficient cross-border payments system.

But the Switzerland-based Libra Association, which oversees the proposed cryptocurrency, has faced numerous setbacks since the start of the month, with various original member companies including payments giants Mastercard and Visa backing out.

And as payments companies withdraw from Libra, there are no immediate signs that banks could be willing to join. J.P. Morgan CEO Jamie Dimon on Friday called the group's currency "a neat idea that'll never happen."

Libra has also been met with fierce regulatory pushback, with authorities around the world worried the currency could heavily disrupt the financial system and potentially be used for money laundering or terrorist financing.

Last week, the Group of Seven (G-7) said in a report that no stablecoin project — Libra included — should be allowed to go ahead until the attached legal risks are addressed.

Meanwhile the Financial Action Task Force, a global watchdog on illicit financing, said that such digital currencies could inhibit efforts to clamp down on money laundering and terrorist financing.

Facebook could find some solace in the fact that the chief of Germany's financial regulator doesn't think libra will go away anytime soon. BaFin President Felix Hufeld told CNBC over the weekend that he doesn't think the social media firm's digital token is "dead in the water." Meanwhile, fellow tech giant IBM has said it's open to working with Libra.

WATCH: Don't think Facebook's libra is dead in the water, BaFin president says

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2019-10-21 07:04:28Z
52780413829659

Facebook says Libra could use a series of cryptocurrencies pegged to different currencies - CNBC

A "Zuck Buck" is displayed on a monitor as David Marcus, the executive leading Facebook's blockchain initiative, is questioned by U.S. lawmakers in Washington, D.C., on July 17, 2019.

Andrew Harrer | Bloomberg | Getty Images

Facebook has suggested its Libra project could use multiple cryptocurrencies backed by different existing currencies like the dollar, rather than having one single digital token tied to a basket of currencies.

The tech giant had initially proposed one synthetic unit of value that would be tied to a basket of currencies and government debt. But according to Reuters, David Marcus, the executive leading Facebook's blockchain initiative, told a banking seminar that he was open to looking at alternative approaches.

"We could do it differently," he said, according to the news agency. "Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stablecoin, etc."

Stablecoins are cryptocurrencies that are usually pegged to government-backed currencies like the dollar. Tether is the world's best-known stablecoin, backed by the dollar, though it has garnered some controversy over whether it has a sufficient amount of dollars in reserve, as well as the suggestion that it could have been used for market manipulation.

Such currencies aim to reduce the volatility seen in virtual currencies like bitcoin and ether. In libra's case, the objective is to create a more efficient cross-border payments system.

But the Switzerland-based Libra Association, which oversees the proposed cryptocurrency, has faced numerous setbacks since the start of the month, with various original member companies including payments giants Mastercard and Visa backing out.

And as payments companies withdraw from Libra, there are no immediate signs that banks could be willing to join. J.P. Morgan CEO Jamie Dimon on Friday called the group's currency "a neat idea that'll never happen."

Libra has also been met with fierce regulatory pushback, with authorities around the world worried the currency could heavily disrupt the financial system and potentially be used for money laundering or terrorist financing.

Last week, the Group of Seven (G-7) said in a report that no stablecoin project — Libra included — should be allowed to go ahead until the attached legal risks are addressed.

Meanwhile the Financial Action Task Force, a global watchdog on illicit financing, said that such digital currencies could inhibit efforts to clamp down on money laundering and terrorist financing.

Facebook could find some solace in the fact that the chief of Germany's financial regulator doesn't think libra will go away anytime soon. BaFin President Felix Hufeld told CNBC over the weekend that he doesn't think the social media firm's digital token is "dead in the water." Meanwhile, fellow tech giant IBM has said it's open to working with Libra.

WATCH: Don't think Facebook's libra is dead in the water, BaFin president says

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https://www.cnbc.com/2019/10/21/facebooks-david-marcus-libra-could-use-currency-pegged-stablecoins.html

2019-10-21 06:34:21Z
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