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Davos: Companies should have Climate Change strategy

According to the Global Risk Report by the World Economic Forum, Climate Change, Natural Resources and Biodiversity are among the the top global risk areas for this year. 

– Rising geopolitical and geo-economic tensions are the most urgent risk areas in 2019, with 90% of experts saying they expect further economic confrontation between major powers in 2019, the World Economic Forum Report states.

– Environmental degradation is the long-term risk. Rapidly evolving cyber and technological threats are the most significant potential blind spots; we still do not fully appreciate the vulnerability of networked societies, the report says.

– 2018 was sadly a year of historic wildfires, continued heavy flooding and increasing greenhouse gas emissions. It is no surprise that in 2019, environmental risks once again dominate the list of major concerns. So, too, does the growing likelihood of environmental policy failure or a lack of timely policy implementation. To effectively respond to climate change requires a significant increase in infrastructure to adapt to this new environment and transition to a low-carbon economy. By 2040, the investment gap in global infrastructure is forecast to reach $18 trillion against a projected requirement of $97 trillion. Against this backdrop, we strongly recommend that businesses develop a climate resilience adaptation strategy and act on it now, says Alison Martin, Group Chief Risk Officer in the  Zurich Insurance Group.

The Wef Davos meeting will be held next week in Davos, in Switzerland. Around 3000 quests are expected to come to Davos, including Japan PM Shinzo Abe, German Angela Merkel and Prince William, the Duke of Cambridge.

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Business Lifestyle
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Stocks gained after the UK confidence vote

Wall Steet ended up lifted by the better trade outlook and the UK confidence vote. UK Prime Minister Theresa May won the vote of the confidence of the Conservative Party in London on Wednesday.

According to PM May, the focus is now delivering the Brexit deal in order to build the better future for Britain and brining the country together. She mentioned also that she will have negotiations with the EU members on Thursday regarding the legal and political assuarances of the Brexit deal.

Dow Jones ended up 0,64 % to 24 527 points, S&P 500 -index  ended up 0,54 % to 2651 points and technology-index Nasdaq closed up 0,95 % to 7098 points. In Europe the FTSE 100 -index closed up 1,08 % to 6880 points and German DAX-index + 1,38 % to 10929 points and in France the CAC 40 -index closed up 2,15 % to 4909 points.

In Asia the stocks were also on the upward trend and in Hong Kong the Hang Seng -index closed up 1,61 % to 26 186 points and in Japan the Nikkei 225 -index ended up 2,15 % to 21 602 points.

The euro was trading at 1,137 dollars, up 0,04 % and UK sterling rose 0,06 % to 1,263 US-dollars.

The Brexit-process will continue as planned and after the EU-meetings on Thursday and Friday, it is expected that the UK Parliament would have the Brexit vote before the 21st January 2019. According to the timetable, the Brexit breakup will be on the 29th March 2019.

For the UK Conservative Party, it means that the Party will have to renew their position for the next elections, while it might be that the PM May is not the Party leader then.

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Autodesk to buy PlanGrid for 875 million dollars

Autodesk (ADSK), a Californian software company in the construction industry, is buying PlanGrid -company for 875 million dollars. According to Autodesk this transaction enables the company to offer more comprehensive, cloud-based construction platform for its customers.

Autodesk is one of the softwares that can be used in the so called BIM-projects (Building Information Modeling), for example in the Green Buildings projects.

– This means that our customers can have real-time collaboration regarding project plans, punch lists, project tasks, progress photos and for example daily field reports, Autodesk says.

PlanGrid´s projects have included for example Hudson Yards in New York, Comcast Innovation Tower in Philadelphia and NVIDIA headquarters in California.

The transaction is expected to close during the fourth quarter of fiscal 2019, ending January 31, 2019.

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Stock markets steady in spite of trade wars

Financial markets stayed steady during the Monday morning  trading in the European Stock Exchanges. For example the London FTSE 100 – was down about 0,09 percent, DAX in Frankfurt was up 0,07 percent and Paris CAC 40- index was up 0,01 percent.

The markets in Japan were closed on Monday, but Hang Seng was up 0,05 percent in HongKong and Shanghai A-index was down 0,61 percent.

The dollar was trading 1,17 against euro, up 0,07 percent.

The trade tensions between the US, China, Russia and EU are tiggering and the companies are facing growing unease with the situation. This will have its own impact in investment decisions, timings, places and financing. For example this will have big impact in tech companies and their locations in the future.

The markets will be expecting more information from the world leaders, the US president Donald Trump and Russian president Vladimir Putin in Helsinki today. The leaders are having their press conference during the late afternoon EET.

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US tech sales to new record this year – 351 billion dollars

The US tech sales will make a new record this year. According to CTA, the Consumer Technology Association, the revenue will grow to 351 billion dollars. This is 3,9 % increase from year earlier.

According to the study, the growth will come from Smart Home, Smart Speakers and Virtual Reality products & services. Although the growth is strongest in the emerging technologies,  the volume sales come from the “old products” like smartphones, + 3% increase to 62,9 billion dollars or automotive electronics +5,1 % to 15,9 billion dollars.

Amazon Echo and Google Home -type smart speakers will get 3,8 billion dollars revenue, increase with 93 %. Smart Home sales will increase by 34 % to 4,5 billion dollars and virtual reality services + 18 % to 1,2 billion dollars.

Wearables, like smartwatches and health & fitness & sports products, will get 1 % increase to 6,4 billion dollars.

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What are the main topics in CES 2015 in Las Vegas?

The growing demand of consumer electronics is a economic factor. If you think about the world largest consumer electronics exhibition (CES) in Las Vegas this year, the city is full of everything: press releases, events, 20 000 new prodcut launches, business peopleWhat´s new in the CES this year?, journalists and investors. Now also a dedicated stage for startups. So, it is hard to pick the best of the huge event, but here is a short list of what is going on in Vegas:

Cars: If you think about the car industry, there are two big trends that are driving the industry at the moment. First, electric cars and cars with renewable energy. For example Tesla Motor has a unique business strategy with their own software and batteries compared to other automakers.

The second trend is the self-driving cars: for example Volvo, Mercedes and Audi have followed the road of Google cars. Volvo is experimenting a new model of self-driving cars so that there are several cars in the chain and the leading car will take care of the speed of others. During the fairs BMW also launched their new model of a car, which can park itself. In-vehile technologies have grown so much that this industry sector is now one of the biggest in the fairs.

This rapid growth is also raising the question of car security and safety. Which operating system is taking care of the information & entertaining panels ?

Wearables: I have written about wearables and the need for more classy-style and finally we have seen – The Swarovski Shine. This crystal maker and wearable company Misfit have combined forces and the outcome is marvellous. This is a collaboration of a fitness and sleep tracker…this beautiful wearable will be in the shops in China, HongKong and the US by the end of March.

This is also a good example of product differentation. All the others from Apple, LG, Microsoft, Motorola to Sony, show pretty much the same design models in their wearables. Blackberry announced that they will support the Android operating system wearable in their own products.

Home: Home security continues to be one of the topics as well. Kitchen appliances and different new gadgets will be part of the internet of things (ioT) in all the home electronics. According to Google, it is estimated that in 2020 there will be 50 billion devices connected to the internet.

For example Samsung estimated that 90 procent of its products will be ioT devices by 2017 and all the devices by 2020.

As Intel´s CEO Brian Krzanich said in his presentation:” We are going to experience Computing Unleashed, where computing gains a new dimension. From that two dimensional world, to a three dimensional world. Computers are gaining senses. They are going to be able to see, and hear. And that will result in their ability to understand. They are becoming wirefree, giving new meaning to portable and mobile,” he said.

Consumer electronics are expanding rapidly and the Las Vegas CES is now International. The first Asian fairs will be running this spring in Shanghai.

 

Photo: Ville Koski, 2014

Design Tech
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Changing IPO markets

Reading Alibaba´s IPO makes me think of the changes in the financial markets. This huge 21 billion dollars IPO will be making history in the markets for many ways. It will lead this Chinese e-commerce giant to the history books of NYSE (www.nyse.com) and give for example funds new investment case with 163 billion dollars market value.

Alibaba “BABA” as its ticker will be when the trading starts next week the 19th September, has priced its shares around 68 dollars and they expect the demand to be enough to sell the stocks at the high end of the offering range. The final offers will be placed in the early next week. Alibaba has had its global roadshow in the US last week and next week they will be in London.

The company is a good example of what internet has enabled to Chinese business people and the huge growth potential in the Asian markets. The IPO growth story is good and backed with figures. International media companies have analysed Alibaba many times. One of the topic questions has been, if this Chinese company is to rival Amazon altought the business strategy is different.

The roadshow is also branded by the company founder Jack Ma and his story, as was the story of Facebook in 2012 when the company listed. And lessons learned from that, Alibaba do not want to push the price too high. Facebook´s IPO faced many obstacles in the beginning of the trading: one of them the high pricing. And NYSE is already testing the trading system with brokers.

On the other hand, financial markets focus now more on governance issues. Some institutional investors are not easy for example with the board nomination in Alibaba due to the governance structure of the company. And questions have been raised about the payment subsidiary Alipay, which is not included in the IPO.

Investors with long-term focus have to think about the ESG disclosures and reporting nowadays more than ever. And this will have its effects on the company storytelling and branding. Companies with focus on long-term value creating and reporting will be the winners in the financial markets, whether they are huge giants or growth companies.

 

 

Finance