|Bid||107.40 x 44200|
|Ask||107.42 x 100000|
|Day's range||106.92 - 108.64|
|52-week range||58.77 - 119.90|
|Beta (5Y monthly)||1.23|
|PE ratio (TTM)||21.60|
|Earnings date||06 Aug 2020|
|Forward dividend & yield||3.90 (3.61%)|
|Ex-dividend date||06 Feb 2020|
|1y target est||N/A|
German engineering company Siemens saw the volume of business contract by as much as 20% in the three months to June and activity in 2021 would stay below 2019 levels, the chief financial officer told Boersenzeitung (BoeZ). Ralf Thomas told Saturday's edition of the newspaper that the company's financial third quarter, which runs April to June, "will be a big challenge for us, as for most other market participants as well" due to the coronavirus crisis. "However, it will not be a bottomless fall," he said, adding that the business volume of short-cycle activities had likely contracted by between 10% and 20% in the period.
(Bloomberg Opinion) -- One more item for Germany’s to-do list following the Wirecard scandal: Reassess the country’s two-tier board system.German companies are run by executives on a management board. Above them sits a supervisory board of non-executives, whose explicit duties are appointing, supervising and advising the managers. A longstanding question is whether these supervisory boards properly protect investors’ interests.Wirecard, now accused by auditor Ernst & Young of “an elaborate and sophisticated fraud,” should rekindle the debate.For starters, the composition of Wirecard AG’s supervisory board didn’t keep up with the increasing complexity of the company. It had only three members until June 2016, when it grew to five. Being so small, the board chose not to create dedicated committees for audit or risk and compliance until early 2019. When they were created, it was amid mounting pressure on the company following the Financial Times’s dogged investigation into its suspect accounting.Now consider how the supervisory board described its duties. The language of the board’s most recent yearly summary (for 2018) was more about observing than taking action. The directors kept themselves “intensively informed” about the “development, position and perspectives” of the group. Their function was to “monitor.” The board performed the “tasks incumbent on it pursuant to the law,” implying a box-ticking mindset.It took yet more pressure from the FT before Wirecard engaged KPMG for an independent audit last October.Of course, KPMG’s review wasn’t completed due to obstruction by Wirecard and partner companies. For hedge fund TCI Fund Management Ltd, that failure also raised questions about the supervisory board’s ability to be more than a passive observer. TCI wrote publicly to supervisory board chairman Thomas Eichelmann, asking why he hadn’t intervened when it was clear KPMG couldn’t finish its job.As TCI pointed out, the German Stock Corporation Act says supervisory board members have a duty of care to the company, and are liable for damages if they breach that duty. But there is a question here about whether the "supervisory" nature of the role is too weakly defined in the Act and the German corporate code. Wirecard is sadly not the only corporate disgrace in Germany in recent history. It follows the Dieselgate emissions-rigging debacle and the Siemens AG bribery scandal from almost 15 years ago.For example, the German corporate governance code says supervisory board members can serve for 12 years before their length of service prevents them being deemed independent. Wulf Matthias was in the role at Wirecard for more than 11 years before stepping down in January. True, some chairmen of DAX index constituents have served longer, for example at Deutsche Telekom AG and some family-controlled companies. But it is generally accepted that boards benefit from fresh leadership at least every decade. The equivalent limit in the U.K. corporate governance code is nine years.To be sure, there’s no reason why a two-tier board system can’t be effective. But it requires supervisory boards to have a clear remit, to be properly accountable and to attract the best talent with an interventionist mindset. Germany needs to ask whether its current regime really fosters that.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Italian tax police arrested 13 people, including executives of the Italian units of Germany's Siemens and France's Alstom, in an investigation into alleged bribery relating to Milan subway contracts, prosecutors said on Tuesday. Among those arrested were officials at ATM, the Milan municipal transport company, and executives at Italian IT service provider Engineering Informatica and three other contracting companies, Milan prosecutors said in a statement.
Siemens and U.S. software developer Salesforce will work together on products to help companies' employees get back to work while following rules to prevent the spread of the new coronavirus, the firms said on Tuesday. The project will link Salesforce's Work.com platform with products from Siemens Comfy and Enlighted, part of the German company's Smart Infrastructure businesses, to give employees data on their mobile phones when they return. Employee check-in and contact tracing will be also be available for companies if an emergency response is needed to limit the spread of COVID-19.
(Bloomberg Opinion) -- The European Union prides itself on its tough antitrust regime. It is one of the pillars of the single market. But a recent court ruling, which overturned a Brussels decision to block a British telecoms merger, has put this at risk.At the same time, some of the EU’s most powerful states are pushing to create “European champions” in certain industries by combining companies to better compete with global rivals such as the Chinese. Meanwhile, the Covid-19 pandemic is encouraging a more relaxed attitude toward industrial consolidation because of the fear of companies going bust. Taken together, this confluence of events means Europe’s commitment to protecting competition is wavering. Unfortunately, there’s precious little evidence that mergers will boost efficiency, as their champions claim. Indeed, they may hurt consumers by raising prices and limiting choice.Back in May, the EU’s second-highest court overturned the European Commission’s 2016 decision to block the takeover of O2, a British mobile operator owned by Spain’s Telefonica SA, by its rival domestic rival Three, which is owned by Hong Kong’s CK Hutchison Holdings Ltd. The General Court said Brussels hadn’t proven that the merger would damage competition and lead to an increase in prices.The Commission is appealing to the European Court of Justice, but the ruling has prompted companies to dust off plans for mergers in telecoms and beyond. Were the ECJ to uphold the General Court’s judgement, it would be much harder for Brussels to make a case against many so-called horizontal mergers (where two companies offering similar services combine).The ruling comes at a bad moment for EU antitrust policy. The French and the German governments were already leaning on the Commission to water down its standards after Brussels blocked a combination between the rail businesses of France’s Alstom SA and Germany’s Siemens AG last year. They’ve since been joined by Poland and Italy. The EU has promised a review of its competition regime, but this won’t happen until 2021.The coronavirus pandemic will add to calls for a softer approach on mergers, as a deep recession will put many companies under severe financial strain. EU governments have sought to cushion the Covid blow through furlough schemes and loan guarantees. However, these steps won’t be enough, especially in sectors already facing more profound challenges, such as retail and travel. Governments might then see mergers as a palatable alternative to job-destroying bankruptcies.There’s a danger here. As Thomas Philippon documented in his book, “The Great Reversal,” the EU has become more competitive than the US. Its antitrust regime isn’t perfect: For example, it has cleared too many horizontal mergers. However, the increase in markups (as measured by higher profit margins) after these deals has been generally less steep than in the U.S. because the market has remained more open.A new wave of consolidation could reverse these gains. While supporters of European champions often claim that they’ll be better at dealing with foreign competition, notably from China, there’s no evidence to support this. A bigger company can enjoy economies of scale, but the lack of intra-European competition might also allow it to be less efficient and less innovative.Letting a company rescue a failing rival isn’t always the best course of action. In a recent paper, Massimo Motta, a professor of economics at Pompeu Fabra University in Barcelona, and two co-authors looked at the so-called “failing firm defense” in the context of the Covid-19 epidemic. They noted that there were often good reasons to be strict about mergers in declining industries.In such sectors, one can’t count on new rivals emerging to counter the merged firm’s market power. And it might be better to let a failing company restructure and downsize, in the hope that it will become competitive again. Finally, from the point of view of consumers and taxpayers, an orderly market exit may be better than a rescue. Technology will make certain companies obsolete. That has always been the case.Of course, politicians must help the workers of a failing firm, including short-term income-support schemes and retraining. Some countries, especially in southern Europe, have poor labor-market policies, preferring to keep zombie companies on life support to the detriment of long-term efficiency.A lively antitrust regime is the best antidote against the European economy turning into a petrified forest. The EU should celebrate rather than suppress this success.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ferdinando Giugliano writes columns and editorials on European economics for Bloomberg View. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Wirecard AG has temporarily suspended its outgoing chief operating officer after revealing that auditors couldn’t find about 1.9 billion euros ($2.1 billion) in cash, spooking investors and casting doubt on the company’s leadership and survival.Jan Marsalek has been suspended on a revocable basis until June 30, the company said in a statement on Thursday. James Freis, who had already been tapped to lead the company’s new “integrity, legal and compliance” department starting next month, will begin in his role immediately. Marsalek was due to step down from the COO role to a new position in charge of business development, Wirecard said in May.The company suffered one of the worst stock slumps in the history of Germany’s benchmark index on Thursday after revealing that auditors had been unable to find billions of cash that was supposed to be held in Asian banks. The company warned loans of as much as 2 billion euros could be terminated if its audited annual report, delayed for the fourth time, was not published by Friday.Marsalek had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, but wasn’t successful, according to a person familiar with the matter. It’s unclear if the funds can be recovered, the person added. Marsalek couldn’t immediately be reached for comment.Ernst & Young was unable to confirm the location of the cash in certain trust accounts, and there was evidence that “spurious balance confirmations” had been provided, Wirecard said in a statement on Thursday. That’s about a quarter of the consolidated balance sheet total, the company said.“We are stunned,” said Ingo Speich, a fund manager at Deka Investments, a top 10 shareholder at the firm. “A new start in terms of personnel is more urgent than ever.”The escalating crisis also calls into doubt the future of Chief Executive Officer Markus Braun. The executive, also the company’s biggest shareholder, has been at the helm since 2002, building the company from a startup into a payment provider whose technology facilitates transactions around the world.Braun painted the company as a potential victim in a separate statement. The CEO has been resisting calls to resign and aggressively defending the company against accusations of accounting fraud, led by a series of articles in the Financial Times.“It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred,” said Braun, adding that the company will file a complaint against unnamed persons.In another statement published overnight, Braun said the trustee involved is in “constant contact” with EY and Wirecard and has promised to clear up the issue quickly with the two banks.“It cannot be ruled out that Wirecard has been the victim in a substantial case of fraud,” Braun said.The stock dropped as much as 71% to 29.90 euros in Frankfurt on Thursday, one of the biggest falls on record and the largest for a member of Germany’s prestigious 30-company DAX stock index. It later recovered somewhat to 39.90 euros, a decline of 62%. Wirecard’s bonds suffered a record plunge.Loan IssueWirecard warned loans up to 2 billion euros could be terminated if its audited annual report was not published by June 19. Analysts at Morgan Stanley estimated that Wirecard has available cash of around 220 million euros, if it cannot locate the missing $2.1 billion.“While we would expect Wirecard to seek covenant waivers, if the banks call 2 billion-euros of debt and that is mostly drawn, then we expect investor focus to turn to the balance sheet and liquidity,” said analysts at Morgan Stanley in a note on Thursday.Wolfgang Donie, analyst at NordLB, warned that the “overall situation at Wirecard can only be described as insupportable and the scandal is now becoming a crisis that is threatening the existence of the company.”German financial markets regulator BaFin said it is examining Wirecard’s disclosure on Thursday as part of its investigation into whether the company violated rules against market manipulation, according to a spokeswoman.In September 2018, Wirecard reached a market valuation of 24.6 billion euros, replacing Commerzbank AG in the DAX alongside titans such as Volkswagen AG, Siemens AG, and Deutsche Bank AG. Following Thursday’s collapse, the company is valued at around 6.7 billion euros.“Wirecard’s retreat could be terminal,” said Neil Campling, an analyst at Mirabaud Securities.EY told Wirecard that their results will require additional audits after two unnamed Asian banks that have been managing the company’s escrow were unable to find accounts with about 1.9 billion euros in funds, Wirecard said in an additional statement. Those funds had been set aside for risk management, the company said.Headquarters SearchedWirecard said last month that the latest delay in publishing results was due to EY needing more time to finish its review, and that the auditor hadn’t found anything material within the scope of its work. Wirecard had previously postponed the results while it was working with KPMG on a probe into allegations about accounting irregularities.Braun has aggressively fought against allegations that the company’s financials have been mismanaged. Braun has also resisted calls from activist investors TCI Fund Management Ltd. to step down, promising to regain investor confidence and improve compliance and control.Wirecard headquarters were searched in May by German prosecutors as part of a probe involving the company’s senior management.Wirecard said in February that full-year revenue rose about 38% to 2.8 billion euros while earnings before interest, taxes, depreciation and amortization jumped 40% to 785 million euros.(Updates with Braun statement from 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The European Union’s chief antitrust official, Margrethe Vestager, has made her name tackling big corporate fish in pretty unconventional ways. A ruling on Alphabet Inc.’s Google, which came with a seven-figure fine, argued free services weren’t always good for the consumer, while those on Apple Inc. and Starbucks Corp. deemed that low taxes were illegal state aid (though some judges begged to differ).True to form, Vestager — in partnership with Internal Market Commissioner Thierry Breton — is now aiming at a new antitrust target: unfair government subsidies from outside the EU. (They’re illegal inside the bloc, although the rules have been temporarily relaxed because of the pandemic.) Historically the preserve of trade lawyers and diplomats shuttling between foreign capitals and the World Trade Organization in Geneva, these subsidies are now seen as a competition problem that the EU’s executive arm in Brussels must address. And it wants expanded powers to do so.Officially, the idea is to scrutinize government financing from any country outside the EU that would give companies inside the bloc an unfair advantage.But just as Vestager’s focus on technology companies seemed deliberately targeted at the U.S., this proposal looks squarely aimed at China, whose rapid rise has become a global problem.There’s an element of making up for lost time here. Chinese firms have poured an estimated 160 billion euros ($180 billion) of investment into the EU over the past decade, according to research firm Rhodium Group, with state-owned enterprises at one point accounting for the lion’s share (it has since fallen). What was initially cheered as a welcome source of funding after the financial crisis has become a source of anxiety over an increasingly one-sided relationship.German robotics firm Kuka AG is now China-owned; Chinese rail powerhouse CRRC is seen by Alstom SA and Siemens AG as a competitive threat; and telecoms-equipment maker Huawei Technologies Co. has been accused of profiting from as much as $75 billion in Chinese state aid, according to the Wall Street Journal. (The company denies it.) Back in 2013, then-EU Commissioner Karel De Gucht accused firms including Huawei of anti-competitive behavior driven by access to cheap capital, but plans for an investigation were shelved.The case for giving new powers to Vestager’s division in this area, including the ability to issue fines, is that nobody else has been able to do much about it so far. The global trading system has been defenseless in the face of this tide of state support that helps companies undercut local competition. The WTO’s mechanisms are clunky and in need of reform. U.S. President Donald Trump’s barrage of trade tariffs has alienated allies while failing to fix the underlying problem. An encouraging deal on reforming the WTO was signed in January by the EU, U.S. and Japan, but it’s an early step. Paired with the EU’s foreign-investment screening tool, an anti-subsidy push would help Europe exert more political clout against Beijing. Under Xi Jinping, China has been a more assertive geopolitical actor, expanding its influence into Europe with its Silk Road initiative and technology investments. The Covid-19 crisis has exposed the extent of its supply-chain dependence on China and just how ineffective it is diplomatically. There’s now an opportunity to try to rebalance the relationship, which will be one of the priorities when Germany takes over the EU presidency in July, according to Eric-Andre Martin of French think tank IFRI.Still, there are some big unknowns. Hunting down subsidies isn’t straightforward, and the proposed powers would need buy-in from companies and its 27 member states. They might also aggravate trade wars rather than defuse them — the U.S. and the U.K. could technically be subject to these powers, setting up the risk of future clashes that might bury all hopes of reform. This mechanism might be seen by the EU as one way to keep the Brits’ trade practices under scrutiny after Brexit.For now, though, we should take the proposal at its word. The aim isn’t to punish all subsidies but decide on a case-by-case basis whether they distort the market or not. If the EU move leads to tougher oversight of state aid payments globally, that would be a worthwhile result, according to Bloomberg Intelligence analyst Aitor Ortiz.After unity within the EU almost completely broke down early in the Covid-19 crisis, this kind of proposal helps answer a constant existential riddle: Just what is the bloc for? If the 750 billion-euro pandemic recovery plan shows the economic benefits of pooling resources, a creative push to punish trade distortions shows how it can protect its market abroad. If Vestager’s stance is anything to go by, Europe is serious about asserting itself on the world stage. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Siemens <SIEGn.DE> is maintaining its investment in research and development despite the economic slowdown and reduced energy consumption caused by the global coronavirus pandemic, managing board member Cedrik Neike said on Tuesday. "COVID-19 is going to go away at some stage," he added, saying Siemens is one of the world's biggest investors in technology R&D, spending more than 5.4 billion euros (£4.9 billion) per year. Siemens expects global energy consumption to fall by 6% this year -- equivalent to the energy consumption of India -- due to the restrictions announced because of the virus, Neike said.
The Siemens Ag (ETR:SIE) share price has risen by 13.1% over the past month and it’s currently trading at 99.34. For investors considering whether to buy, hold...
Manufacturers are facing new challenges as they look to restart or maintain operations during the ongoing COVID-19 pandemic. As preparations are made for the "next normal", manufacturers must consider additional dimensions of employee safety, including the establishment of production environments and workflows that address physical distancing requirements. Combining proven hardware and software, Siemens has created a new solution that enables companies to quickly and efficiently model how employees interact with each other, the production line and plant design. The new solution also enables organizations to build an end-to-end digital twin, in order to simulate worker safety, iterate on and optimize workspace layouts and validate safety and efficiency measures to help future-proof production lines.
Speakers talked about how we can be more consciously inclusive and why it is critical for us to achieve buy-in from leadership and across all functions of the C-Suite.
Siemens will give 55% of its power business to shareholders when it spins it off in September, the German engineering group said on Tuesday, the latest stage in its shift away from a sprawling conglomerate. The trains to industrial software maker then wants to "significantly" reduce its remaining 45% position within 12 to 18 months after the shares are listed on Sept. 28, Siemens said, detailing the separation it announced a year ago. Siemens gave no indication of the market capitalisation of Siemens Energy, which had sales of 29 billion euros ($31.82 billion) and which JP Morgan analysts valued at around 10 billion euros.
Siemens is planning to keep a 45% stake in its energy business which the German engineering group wants to spin off later this year, two people close to the matter said on Monday. Siemens plans to give its owners one Siemens Energy share for every two shares they hold in Siemens, the sources said. Siemens is planning to hold 35.1% of the Siemens Energy shares directly with a view of reducing that stake within 12-18 months, while 9.9% will be held by Siemens' pension unit, the sources said.
(Bloomberg) -- Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the rollout of everything from wireless networks to artificial intelligence.In the masterplan backed by President Xi Jinping himself, China will invest an estimated $1.4 trillion over six years to 2025, calling on urban governments and private tech giants like Huawei Technologies Co. to lay fifth generation wireless networks, install cameras and sensors, and develop AI software that will underpin autonomous driving to automated factories and mass surveillance.The new infrastructure initiative is expected to drive mainly local giants from Alibaba and Huawei to SenseTime Group Ltd. at the expense of U.S. companies. As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the Made in China 2025 program. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.“Nothing like this has happened before, this is China’s gambit to win the global tech race,” said Digital China Holdings Chief Operating Officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors. “Starting this year, we are really beginning to see the money flow through.”The tech investment push is part of a fiscal package waiting to be signed off by China’s legislature, which convenes this week. The government is expected to announce infrastructure funding of as much as $563 billion this year, against the backdrop of the country’s worst economic performance since the Mao era.The nation’s biggest purveyors of cloud computing and data analysis Alibaba Group Holding Ltd. and Tencent Holdings Ltd. will be linchpins of the upcoming endeavor. China has already entrusted Huawei to galvanize 5G. Tech leaders including Pony Ma and Jack Ma are espousing the program.Maria Kwok’s company is a government-backed systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.China is no stranger to far-reaching plans with massive price tags that appear to achieve little. There’s no guarantee this program will deliver the economic rejuvenation its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure will help national champions develop cutting-edge technologies.What BloombergNEF SaysChina’s new stimulus plan will likely lead to a consolidation of industrial internet providers, and could lead to the emergence of some larger companies able to compete with global leaders such as GE and Siemens. One bet is on industrial internet-of-things platforms as China aims to cultivate three world leading companies in this area by 2025.Nannan Kou, head of researchClick here for researchChina isn’t alone in pumping money into the tech sector as a way to get out of the post-virus economic slump. Earlier this month, South Korea said AI and wireless communications would be at the core of it its “New Deal” to create jobs and boost growth.According to the government-backed China Center for Information Industry Development, the 10 trillion yuan ($1.4 trillion) that China is estimated to spend from now until 2025 encompasses areas typically considered leading edge such as AI and IoT as well as items such as ultra-high voltage lines and high-speed rail. More than 20 of mainland China’s 31 provinces and regions have announced projects totaling over 1 trillion yuan with active participation from private capital, a state-backed newspaper reported Wednesday.Separate estimates by Morgan Stanley put new infrastructure at around $180 billion each year for the next 11 years -- or $1.98 trillion in total. Those calculations also include power and rail lines. That annual figure would be almost double the past three-year average, the investment bank said in a March report that listed key stock beneficiaries including companies such as China Tower Corp., Alibaba, GDS Holdings, Quanta Computer Inc. and Advantech Co.Beijing’s half-formed vision is already stirring a plethora of stocks, a big reason why five of China’s 10 best-performing stocks this year are tech plays like networking gear maker Dawning Information Industry Co. and Apple supplier GoerTek Inc. The bare outlines of the masterplan were enough to drive pundits toward everything from satellite operators to broadband providers.It’s unlikely that U.S companies will benefit much from the tech-led stimulus and in some cases they stand to lose existing business. Earlier this year when the country’s largest telecom carrier China Mobile awarded contracts for 37 billion yuan in 5G base stations, the lion’s share went to Huawei and other Chinese companies. Sweden’s Ericsson got only a little over 10% of the business in the first four months. In one of its projects, Digital China will help the northeastern city of Changchun swap out American cloud computing staples IBM, Oracle and EMC with home-grown technology.It’s in data centers that a considerable chunk of the new infrastructure development will take place. Over 20 provinces have launched policies to support enterprises utilizing cloud computing services, according to a March note from UBS Group AG. Tony Yu, chief executive officer of Chinese server maker H3C, that his company was seeing a significant increase in demand for data center services from some of the country’s top internet companies. “Rapid growth in up-and-coming sectors will bring a new force to China’s economy after the pandemic passes,” he told Bloomberg News.From there, more investment should flow. Bain Capital-backed data center operator Chindata Group estimated that for every one dollar spent on data centers another $5 to $10 in investment in related sectors would take place, including in networking, power grid and advanced equipment manufacturing. “A whole host of supply-chain companies will benefit,” the company said in a statement.There’s concern about whether this long-term strategy provides much in the way of stimulus now, and where the money will come from. “It’s impossible to prop up China’s economy with new infrastructure alone,” said Zhu Tian, professor of economics at China Europe International Business School in Shanghai. “If you are worried about the government’s added debt levels and their debt servicing abilities right now, of course you wouldn’t do it. But it’s a necessary thing to do at a time of crisis.”Digital China is confident that follow-up projects from its housing initiative in Guangzhou could generate 30 million yuan in revenue for the company. It’s also hoping to replicate those efforts with local governments in the northeastern province of Jilin, where it has 3.3 billion yuan worth of projects approved. These include building a so-called city brain that will for the first time connect databases including traffic, schools and civil matters such as marriage registry. “The concept of smart cities has been touted for years but now we are finally seeing the investment,” said Kwok.(Updates with more details on projects from around China in tenth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The analysts covering Siemens Aktiengesellschaft (ETR:SIE) delivered a dose of negativity to shareholders today, by...
(Bloomberg Opinion) -- With first-quarter earnings mostly in the books, investors have now gotten their first detailed glimpse of how the coronavirus pandemic has affected profits in corporate America. To no one’s surprise, the results as a whole weren’t good: Earnings fell about 14% from a year earlier for members of the S&P 500 Index, according to DataTrek Research. Wall Street analysts expect things to get worse before they get better, with earnings forecast to plunge about 41% in the second quarter, decline 24% in the third quarter and drop 11% in the final three months of the year. Add them up and Wall Street forecasts a 20% tumble for the year to $127 a share. Coming into 2020, the consensus was that members of the S&P 500 would produce earnings of about $175 a share. But that’s the mile-high view. For a real sense of the challenges facing the economy, it helps to get as granular as possible. To that end, we’ve asked those Bloomberg Opinion columnists that focus on business and finance to provide their thoughts on the quarter that snapped the longest U.S. economic expansion in history, revealing the winners and losers, highlighting interesting tidbits and musing about what may lie ahead.Bankers are the good guys? The message from the largest U.S. banks as they released their earnings in mid-April, just as the pandemic was escalating across America? We are well-capitalized, made a lot of money from trading in extremely volatile markets, and have the capacity to help our clients get through the crisis. Unlike the financial crisis just over a decade ago, big banks have a chance to be the good guys now, processing U.S. Small Business Administration loans and allowing individuals and families to delay payments on credit cards, auto loans and mortgages in certain cases. Yet banks have been among the biggest laggards across U.S. stock markets. The KBW Bank Index has fallen about 42% this year, compared with just 12% for the S&P 500, suggesting the economic recovery might be slower and more punishing than the broader markets for equities may be signaling. —Brian ChappattaCable conundrums, streaming dreams. The absence of lucrative sports programming and muted advertiser demand has forced traditional cable-network operators to make an even bigger push into the rocky terrain of streaming, where revenue is entirely dependent on must-see content continuously propelling subscriptions. AT&T Inc. said total ad sales fell 13%, while Walt Disney Co. said ESPN alone suffered an 8% drop. Meanwhile, almost 16 million people signed up for Netflix and about 2 million canceled cable TV. —Tara LachapelleGorging on comfort food. As panic-ridden consumers stock up on essentials, Big Food brands of yesteryear, from Kellogg’s Frosted Flakes to Kraft macaroni and cheese, that had been struggling to find their place in a new health-conscious society suddenly had a moment. This explains the resurgence of companies such as General Mills Inc., whose brands include Betty Crocker, Pillsbury and Totino’s pizza rolls. Its U.S. retail sales surged 45% in March and 32% in April. The question: Is this only a moment? We’re also noticing some quirky consumer habits. Unilever NV said we are using less deodorant, skin care and shampoo, as much of this use is associated with work and socializing. Henkel AG enjoyed strong demand for home hair coloring. If the recession is a long one, expect these habits to continue. —Tara Lachapelle and Andrea FelstedAmazon isn’t alone. E-commerce giant Amazon.com Inc.’s sales increased 26% in the quarter, and the company forecast up to 28% growth for its April-through-June quarter as nationwide lockdowns sparked a surge in online shopping. But overwhelming demand and shortages are giving its rivals opportunities as consumers increasingly shop elsewhere. It's showing up in the latest metrics from Shopify Inc.'s merchants, as well as Wayfair Inc., Best Buy Co., Target Corp. and Costco Wholesale Corp. — all pointing to much faster online sales growth rates than the tech giant. —Tae KimBig Tech divergence. Shares of Facebook Inc. and Google parent Alphabet Inc. rose post-earnings following better-than-feared commentary on April digital ad market trends. Even so, Facebook cautioned the future economic recovery may be worse than expected. And Google said not to extrapolate the stabilization that seemed to occur in April. Both internet ad giants may face business pressures going forward if companies cut their marketing budgets in coming quarters. In contrast, Amazon and Netflix are thriving as consumers increasingly shift spending to e-commerce and watch more streaming video content. Finally, Apple Inc. uncharacteristically failed to give sales guidance for its current quarter for the first time since 2003, signaling the lack of visibility it has for iPhone demand. —Tae KimCovid-time tech winners. Best-of-breed cloud software makers are surging as companies accelerate the spending shift away from traditional on-premise equipment to the cloud's more scalable and cost-efficient offerings. Some of the biggest earnings winners included Datadog Inc., Okta Inc. and Twilio Inc. Video-game stocks are one of the hottest-performing subsectors this year as it has become a key in-home entertainment choice under shelter-in-place orders. Both Activision Blizzard Inc. and Electronic Arts Inc. posted strong results and confirmed accelerating sales for its offerings in April. Investors also bid up Zoom Video Communications and Slack shares as the two companies benefited from the workforce-collaboration software trend and revealed strong accelerating business metrics. —Tae KimPharma unfazed, for now. As a wide variety of industries panicked and cut profit targets, large drugmakers broadly reaffirmed guidance in the first quarter. Merck & Co., which makes many hospital- and physician-administered treatments, was the only big firm to slash its drug sales forecast seriously. Making medicine is a durable business, even in a pandemic. However, if a strong second-half economic recovery doesn't materialize, more companies may follow Merck as patients make the tough decision to stay home instead of venturing out and seeking treatments. —Max NisenCover me. Large health insurers were also relatively sanguine, despite a pandemic that would seemingly spark increased claims. They believe that the dive in expensive elective surgeries will balance out adverse effects. That doesn't mean there won't be change. UnitedHealth Group Inc. announced this month that it plans to re-enter Obamacare's insurance markets after mostly exiting four years ago. A 14% unemployment rate will do that. Watch for imitators. —Max NisenCashing in on Covid cures? During Gilead Sciences Inc.’s first-quarter earnings call, an analyst asked CEO Daniel O'Day if investors should expect the sort of attractive returns from newly confirmed Covid treatment remdesivir that the company produces for other drugs. O'Day responded that "there's been no other time like this in the history of the planet" and that "we understand our responsibility." In other words, probably not. Gilead announced on Tuesday a temporary royalty-free license that will allow five generic drugmakers to make a presumably cheaper version for more than 100 low-income nations. Other companies will face pressure to follow its example and price moderately in developed countries, which calls into question the soaring valuations for pandemic-focused drugmakers. —Max NisenGoing local. Still spending. Coronavirus shutdowns have snarled industrial-supply chains already facing strain from the U.S.-China trade war. While no one envisions an abandonment of China as a manufacturing hub, there are early signs of work being brought back to the U.S. Unfortunately, this is unlikely to mean much in terms of jobs, at least not for humans. Rockwell Automation Inc. said it's seen an uptick in interest from companies that might have previously manufactured products out of Asia to take advantage of low wages but are now rethinking that economic calculus. When it comes to investment, discretionary spending on things like travel has been cut across the board at many manufacturers. Most CEOs and top executives have taken pay cuts. Buybacks are off the table but for a few brave souls, including Eaton Corp. But many manufacturers are continuing to fund projects they view as essential to their future growth. For United Parcel Service Inc., that means investments in automation that can help make e-commerce deliveries more profitable. For Caterpillar Inc., that's services work and expanding its product lineup. "I'm not planning on sacrificing the future just to cut back on capex," Honeywell International Inc. CEO Darius Adamczyk said on a recent earnings call. —Brooke SutherlandPink slips or paychecks? While aerospace manufacturers such as Boeing Co. and General Electric Co. have moved swiftly to announce large layoffs amid a collapse in the industry, other industrial companies have been more surgical, at least for now. Caterpillar CEO Jim Umpleby has said his company's efforts to hold headcount relatively flat even as revenue climbed the past few years means there's less slack in the system and the company doesn't have to be as ruthless on job cuts during the pandemic. Others, such as railroad Union Pacific Corp., are worried about having enough labor at the ready whenever a recovery does occur so prefer furloughs when possible. "We don't want to cut the talent so deep that when the recovery happens, we don't have the right people," said Greg Hayes, CEO of Raytheon Technologies Corp., whose robust balance sheet and defense business give it more flexibility to weather the commercial aerospace downturn. Companies can still save costs without cutting employees: Trash-hauler Waste Management Inc. is guaranteeing 40 hours a week of pay for full-time employees through the pandemic, but the redistribution of its workers has helped it reduce more costly overtime hours by half. —Brooke SutherlandStaying safe. Most manufacturers have kept their doors open through the pandemic because their work is considered essential. That has come at a cost: Trash-hauler Republic Services Inc. spent $3 million in the first quarter on actions to keep its employees safe, including providing them with protective gear and doing enhanced cleaning. To keep Emerson Electric Co.'s factories humming, Chief Operating Officer Steve Pelch had to rent aircraft to bring in crucial supplies and double the number of buses used to transport workers in Mexico so they can safely spread out, according to an interview with Bloomberg News's Thomas Black. Automated doors have been installed, as have hand-washing stations. Plexiglass partitions separate workers on the factory floor. Siemens AG digitally redesigned an Airbus SE factory that's been repurposed for ventilator manufacturing to ensure social distancing, and workers must pass through a sanitization tent to gain access. In what could be a key test for the reopening of other parts of the economy, automakers with large union workforces including General Motors Co. and Ford Motors Co. are bringing their factories back to life this week in preparation for a May 18 official restart. Ford said it will require face masks for anyone entering its facilities, as well as safety glasses with side or face shields for those employees whose jobs don't allow for social distancing. It's spacing out production shifts to allow more time for cleaning and requiring employees to complete daily health and temperature checks. —Brooke SutherlandOil, oil everywhere. At a primeval level, the oil business is all about sinking money into the ground. When the barrel gods are smiling, even more money comes back up. In 2020, it feels like the gods aren’t happy. Hence, earnings season for oil companies was odd. While exploration and production companies are always careful to talk up efficiency, what really gets the juices flowing are spending plans for new wells. Not this time. Parsley Energy Inc., which fracks in America’s oil heartland, the Permian basin, suspended drilling, declaring bluntly (and correctly) that right now, “the world does not need more of our product.” At the other end of the scale, Exxon Mobil Corp. also slashed spending this year to as little as — get ready for it — $23 billion! While Exxon recognizes the immediate impact of Covid-19, it doesn’t think “events like this change basic human nature or people's wants and desires.” The jury remains out on that notion. And in any case, the switch from budget boasting to public prudence offers a glimpse of what peak oil could mean for what’s ahead. Expect dissonance. —Liam DenningThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Beth Williams is a managing editor with Bloomberg Opinion. She has also worked at Bloomberg News as an editor and reporter covering M&A, markets, companies, finance and government.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Siemens Ag (ETR:SIE) share price has risen by 1.64% over the past month and it’s currently trading at 86. For investors considering whether to buy, hold or8230;
The Siemens Ag (ETR:SIE) share price has risen by 1.64% over the past month and it’s currently trading at 86. For investors considering whether to buy, hold or8230;
You can share your thoughts with Thyagaraju Adinarayan (firstname.lastname@example.org), Joice Alves (email@example.com) and Julien Ponthus (firstname.lastname@example.org) in London and Stefano Rebaudo (email@example.com) in Milan. There is a broad consensus that European bourses could be trapped in a wide range in the next few weeks, amid uncertainty about the second phase of the coronavirus crisis. As long as earnings downgrades continue and there is the risk of a second wave of higher infection rates, volatility will remain elevated, Unicredit says in a research note.
You can share your thoughts with Thyagaraju Adinarayan (firstname.lastname@example.org), Joice Alves (email@example.com) and Julien Ponthus (firstname.lastname@example.org) in London and Stefano Rebaudo (email@example.com) in Milan. A ruling seen to curb European Central Bank power to buy government bonds, but the German top court ruling earlier this week might paradoxically create issues for the Bundesbank while the European Central Bank is free to go on with its plans.
You can share your thoughts with Thyagaraju Adinarayan (firstname.lastname@example.org), Joice Alves (email@example.com) and Julien Ponthus (firstname.lastname@example.org) in London and Stefano Rebaudo (email@example.com) in Milan. European bourses are trading in positive territory after U.S. and Chinese trade negotiators agreed to strengthen cooperation, but investors are cautious ahead of U.S. monthly unemployment data.