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BW Businessworld

Globescan: Last Woman Standing

Mercedes-Benz solidified its sales lead over the BMW brand in the first half of the year, moving closer to a goal of unseating its rival for the first time since 2005

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Britain’s new Prime Minister Theresa May has maintained that she intends to lead the country out of the European Union, though she also asked EU leaders for time to prepare that path. “We will rise to the challenge,” May said. “As we leave the European Union we will forge a bold new positive role for ourselves in the world, and we will make Britain a country that works not for a privileged few, but for every one of us.” Brussels welcomes appointment of May as British PM. But, May also told EU leaders that she needed time carry out the British exit, or Brexit. In phone conversations with the leaders of Germany, France and Ireland, who called to wish her well as Britain’s second-ever woman prime minister, May underlined her commitment to a British exit, or Brexit. “The prime minister emphasised her commitment to delivering the will of the British people to leave the EU,” a spokeswoman for May said.

Speed Breaker
Mercedes-Benz solidified its sales lead over the BMW brand in the first half of the year, moving closer to a goal of unseating its rival for the first time since 2005. BMW’s six-month deliveries rose 5.8 per cent from a year earlier to 986,557 autos compared with a 12 per cent gain to just over 1 million cars for Daimler’s Mercedes. That left Munich-based BMW trailing its Stuttgart-based rival by 20,062 vehicles. Mercedes is set to deliver four years early on a target of beating BMW’s annual sales. Volkswagen’s Audi division, which reported a 5.6 per cent first-half delivery increase to 953,200 cars, has also said it wants to become No. 1 in the luxury-auto industry. All three have stressed that growth mustn’t come at the expense of profitability.

Gloomy Outlook?
Japan’s government is expected to cut its consumer inflation forecast for the current fiscal year and produce an estimate for fiscal 2017 that is much lower than the central bank’s 2 per cent target, government sources said. The gloomy government assessment may add to market doubts over the Bank of Japan’s optimistic price forecasts and step up pressure on the central bank to expand stimulus this month as it struggles to fend off deflationary risks. In draft forecasts to be finalised at a cabinet meeting, the government projects consumer inflation of 0.4 per cent for the current fiscal year ending in March 2017, down from 1.2 per cent projected in January, the sources said.

Buying Out

China Vanke said it and partners are in talks to acquire some commercial property firms from Blackstone Group and other third parties for $1.9 billion. The disclosure is a more detailed response by Vanke to enquiries from the Shenzhen bourse after criticism by its second-biggest shareholder that the board’s approval of a white knight deal was not valid as one director had abstained from voting. Fearing a hostile takeover bid by its biggest shareholder, financial conglomerate Baoneng, Vanke’s management announced a $6.9-billion deal with Shenzhen Metro Group, which would dilute the holdings of Baoneng and China Resources.

Game On
Pokemon GO, a mobile game that has rocketed to the top of Apple and Android app stores in record time, looks set to challenge young internet companies which specialise in increasing foot traffic for small businesses and may end up playing a role in major brands’ marketing, according to industry experts. The augmented reality game from Japan’s Nintendo, where players walk around real-life neighborhoods to hunt down virtual cartoon characters on their smartphone screens, has more than 65 million users in the US just seven days after launch. That is more users than Twitter, and it is helping local restaurants and small retailers to attract new customers.

Rate Hike
The Federal Reserve could hike interest rates up to two times before year end, a top US central banker said, slightly downgrading his expectations for monetary tightening even though he said the economy is on “fairly firm footing.” Philadelphia Fed president Patrick Harker predicted two to three rate increases this year. Since then US jobs growth plunged one month and then shot back up the next, while Britons voted to leave the EU. Harker, who has been at the Fed for a year, downplayed any effects of the so-called Brexit referendum.

Money Matters
The US federal government posted a budget surplus of $6 billion in June, compared with a surplus of $50 billion in the same month a year earlier, the Treasury Department said. The current fiscal year-to-date deficit stood at $401 billion, according to the Treasury’s monthly budget statement. Receipts last month totaled $330 billion, while outlays were at $323 billion. Accounting for calendar adjustments, June would have shown a surplus of $10 billion compared to an adjusted surplus of $50 billion for June 2015.

Big Step
The top US securities regulator took another step toward tightening its oversight of security-based swaps by proposing new reporting requirements for transactions, nearly six years after Congress directed it to build a regulatory regime for the derivatives. “These provisions will result in increased transparency which should allow for a more efficient market, better price discovery, and increased competition,” said Democratic Commissioner Kara Stein at a Securities and Exchange Commission (SEC) meeting, saying the proposal will cast “light on this previously opaque market”. But Stein also noted that the requirements were mandated by the Dodd-Frank Wall Street reform law, enacted in 2010.

Safety Measures
Concerns raised by the first reported fatality in a semi-automated car were expected to speed adoption of more sensitive technology to help vehicles see and drive themselves safely, increasing demand on the emerging autonomous vehicle technology industry, investors and analysts said. Goldman Sachs forecasts the market for advanced driver assistance systems and autonomous vehicles will grow from about $3 billion last year to $96 billion in 2025 and $290 billion in 2035. More than half of that revenue in 20 years, Goldman estimates, will come from radar, cameras and lidar, a sensor that uses laser — all tools considered essential to building vehicles that can pilot themselves.