Items filtered by date: Monday, 29 October 2018
China is minting a billionaire every three days as tech boom unlocks ‘stealth wealth’
Posted on October 29, 2018 by Admin
The total number of billionaires reached 2,158 last year, up 9% from 2016, according to a new report from UBS and PwC.
 
The growth was fastest in Asia, with China minting roughly one new billionaire every three days.
Asian billionaires will be wealthier than their American peers in less than three years.
The rich are getting richer and more numerous.
 
The world added 332 billionaires last year, with their cumulative wealth increasing 19% to a record $8.9 trillion, according to an annual survey from UBS and PwC.
 
What’s behind this phenomenon? Explosive wealth creation in China.
 
“China is where we’re seeing unbelievable and unprecedented growth,” said John Mathews, head of ultra high net worth Americas for UBS Global Wealth Management. For the first time ever, billionaire growth in Asia Pacific outpaced that of the US last year.
 
In 2006, there were just 16 Chinese billionaires. But in 2017, the tally hit 373 – a fifth of the global total. The US still leads regionally, with 585 billionaires, but wealth creation in the region is slowing. The US created 53 billionaires in 2017, compared with 87 in 2012.
 
In China, 106 people became billionaires in 2017 (although a number dropped off the list from 2016). That comes out to roughly one new billionaire every three days.
 
If current trends hold, Asian billionaires’ wealth will surpass that of their American counterparts in three years.
 
That growth has been driven by self-made entrepreneurs in China, particularly in the technology industry.
 
More than 300 Chinese companies went public last year, unlocking what UBS deems “stealth wealth,” the difficult-to-measure wealth of individuals in private markets with little transparency.
 
About 97 percent of Chinese billionaires are self-made, and, at 56 years old on average, they’re about a decade younger than their North American counterparts.
 
US entrepreneurs could play catch-up next year, though. Mathews said major anticipated initial public offerings in 2019, including Uber, could reveal more stealth wealth, potentially adding more billionaires to the US’s count. Of the 53 new billionaires in the US last year, 30 were self-made.
 
 
Source: Business Insider
Published in World

Ghana has a serious flood problem. Over about 50 years, 4 million people have been affected by floods, resulting in economic damage exceeding USD$780 million. At least one major flood disaster has occurred every year over the past 10 years.

Floods are not uncommon in West Africa. Rainfall variability and land use changes have made them increasingly common throughout the region.

In Ghana’s urban areas, like Accra and Kumasi, floods are mostly triggered by seasonal rainfall combined with poor drainage, the dumping of waste into waterways and the low elevation of settlements. In northern Ghana, some floods are caused by spillage from a dam in Burkina Faso.

The floods expose communities to health risks, food shortages and mental stress.

The problem is Ghana’s government currently reacts to the floods using coping strategies. These don’t deal with the underlying risks, are expensive and don’t consider that floods will get worse. The government must take steps towards more proactive flood risk management.

Reactive strategies

After every flood, the country’s national disaster management organisation – along with the military, police, and other emergency personnel – is deployed for rescue and emergency relief.

The government then repairs damaged infrastructure, clears waterways and demolishes properties built close to drainage channels.

The problem is this doesn’t deal with the underlying causes of the floods, or prepare people for them. Money that could go towards future prevention is instead spent on perpetual cycles of recovery.

These coping strategies will get more costly because the flood risk is set to get worse. The amount of rainfall classified as “heavy” is projected to increase between 2010 and 2050, with the wet seasons projected to get wetter and the dry seasons drier.

This will be felt intensely in the urban areas as populations continue to grow. Already, about 40% of Accra is classified as “highly prone” to flooding. This will increase as, due to more building, less water will drain into the soil.

The case for flood risk adaptation

The government needs to make the country more resilient and able to withstand the challenges posed by intense and frequent floods.

Ghana participates in a variety of adaptation programmes. Like the resilient cities network and the Africa Adaptation Program. But this hasn’t translated into action.

The government has also taken on projects to protect against floods, but these are focused on the coastal areas. For example the Keta sea defence project.

The current greater Accra Metropolitan Area sanitation and water project is constructing drains and culverts in Accra. But this isn’t a major part of the project.

Much more needs to be done. Ghana must fully transition from coping strategies, to proactive, long-term measures. These include:

  • Structural flood protection measures – like storm drains or levees. These need to be constructed to protect all at risk areas, and not just the coastal areas

  • Improve early warning systems to ensure timely flood risk alerts. This should include; a 24 hour monitoring and warning service during peak rain seasons and an education program to help communities understand the risk, respect the warnings and know how to respond

  • Social protection – like affordable social housing – which will move more people out of informal settlements built in flood prone zones

  • Strategies aimed at improving the natural environment – for example, creating riparian buffer zones that protect and expand wetlands so that vegetation slows and absorbs flood waters

  • Encourage households to adapt and advise on actions they can take, like using more water resistant building materials

  • Restore lagoons and rivers

  • Proper waste management. Ghana has a huge solid waste problem. Poor disposal of solid waste often leads to the blocking of drains and drainage systems, preventing flood waters from flowing through

  • Moving homes and businesses out of flood prone locations. They can choose to do this, or the government can facilitate it by buying out at-risk properties

  • Build new homes on elevated ground or foundations

  • Strict planning to avoid construction in flood-prone areas

  • Deal with spillage from dams by building canals that channel the water. These can be dammed and the water used for irrigation.

The initial cost of adaptation measures will be expensive, but it will pay off. Research shows that for every US$1 spent on flood risk reduction, it saves at least US$4 to US$9 otherwise spent in an emergency response when disaster occurs. The Netherlands is a classic example of a country that has taken flood risk adaptation seriously. A quarter of the country is below sea level and 60% of its people in flood-risk areas but the measures it has taken have reduced the likelihood of major flooding.

Ghana can take advantage of predictions and past experiences of floods to aggressively pursue flood risk adaptation. Failure to do this will increase flood disasters, and social and economic disruptions.The Conversation

 

Jerry Chati Tasantab, PhD Candidate, School of Architecture and Built Environment, University of Newcastle; Jason von Meding, Senior Lecturer in Disaster Risk Reduction, University of Newcastle; Kim Maund, Head of Discipline-Construction Management, University of Newcastle, and Thayaparan Gajendran, Associate professor, University of Newcastle

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis

MTN Group, Africa’s biggest mobile operator, reported a 1.1 percent rise in quarterly user base on Monday, helped partly by strong performances in Nigeria, its largest but increasingly problematic market.

The company said its user base increased by 2.5 million subscribers to 225.4 million users in the quarter ended September, and mobile money customers grew by 1.7 million to 25.8 million users.

Mobile money customers charge their phones with cash, and send it to friends or family via the short message service. These counterparties can then make similar transfers or cash in their credits with pre-approved agents, such as merchants or banks.

MTN is embroiled in a $10.1 billion dispute with the west African country of Nigeria, which has accused the company of illegally sending money abroad.

The telecom firm, which makes about a third of its annual core profit in Nigeria, said the allegations are without merit.

Nigeria’s central bank on Aug. 29 ordered the South African firm and its lenders to bring $8.1 billion back into Nigeria that it alleges the company sent abroad in breach of foreign exchange regulations. MTN also faces a $2 billion tax demand from the country’s attorney general.

“We continue to engage with relevant authorities on these matters. We remain resolute that MTN Nigeria has not committed any offences and will continue to defend this position vigorously,” MTN said while posting the quarterly results.

Reporting by Tiisetso Motsoeneng, Editing by Sherry Jacob-Phillips (Reuters)

Published in Telecoms
Nigeria Tier-2 financial institution, Diamond Bank Plc. has denied media reports that it was in talks with new investors to raise fresh capital for the company.
 
It was reported that the funds, which were to be injected by foreign intersperse, were part of the measures to recapitalise the bank as its asset value had been eroded by increased non-performing loans and high operational cost.
 
Recall that the mid-tier bank had on Thursday said the Chairman of its board, Oluseyi Bickerseth, and three other directors resigned “with immediate effect for varied personal reasons.”
 
Although, the lender did not clearly state why they resigned, but it was gathered the four key members of its board were asked to step down to make room for new management for easy capital raising.
 
The management of the bank made this known on Friday in a notice sent to the Nigerian Stock Exchange (NSE).
 
“Diamond Bank is not in talks with any party, global or otherwise, for any capital injection.
 
“While previous communication from the bank has highlighted a need to shore up the bank’s capital adequacy ratio (CAR), the preferred option is an internal capital management programme,” the bank said in a statement on Friday.
 
Meanwhile, the announcement appeared not to have gone down well with its shareholders as the bank’s shares closed at N1.44 per share on Friday after it fell by 3.36 percent, the biggest drop in over six weeks.
 
Ripples Nigeria reports that the stock had been on bullish trend since last Monday to reach N1.49 per share on Thursday, their highest level in four (4) months.
 
Besides, Diamond Bank’s earnings results for nine months ended September 30, 2018 showed a worsening financial state of the company, just as its gross earnings for the review period dropped to N142.5 billion from N143.7 billion a year earlier.
 
A further analysis revealed that the company’s profit before tax fell from N4.8 billion to N3.1 billion, while the post-tax profit declined from N3.9 billion to N1.7 billion in the period under review when compared to the same period in 2017.
 
Owing to this terrible performance, the Diamond Bank’s Earnings Per Share (EPS) dropped by 59 percent to 7 kobo.
 
 
Source: The Ripples
Published in Bank & Finance
IBM Corp said on Sunday it had agreed to acquire U.S. software company Red Hat Inc for $34 billion, including debt, as it seeks to diversify its technology hardware and consulting business into higher-margin products and services.
 
The transaction is by far IBM’s biggest acquisition. It underscores IBM chief executive Ginni Rometty’s efforts to expand the company’s subscription-based software offerings, as it faces slowing software sales and waning demand for mainframe servers.
 
“The acquisition of Red Hat is a game-changer … IBM will become the world’s No. 1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses,” Rometty said.
 
IBM, which has a market capitalisation of $114 billion, will pay $190 per share in cash for Red Hat, a 62 percent premium to Friday’s closing share price.
 
Founded in 1993, Red Hat specialises in Linux operating systems, the most popular type of open-source software, which was developed as an alternative to proprietary software made by Microsoft Corp.
 
Headquartered in Raleigh, North Carolina, Red Hat charges fees to its corporate customers for custom features, maintenance and technical support, offering IBM a lucrative source of subscription revenue.
 
The acquisition illustrates how older technology companies are turning to dealmaking to gain scale and fend off competition, especially in cloud computing, where customers using enterprise software are seeking to save money by consolidating their vendor relationships.
 
IBM is hoping the deal will help it catch up with Amazon.com Inc, Alphabet Inc and Microsoft in the rapidly growing cloud business. IBM shares have lost almost a third of their value in the last five years, while Red Hat shares are up 170 percent over the same period.
 
IBM was founded in 1911 and is known in the technology industry as Big Blue, a reference to its once ubiquitous blue computers.
 
It has faced years of revenue declines, as it transitions its legacy computer maker business into new technology products and services. Its recent initiatives have included artificial intelligence and business lines around Watson, named after the supercomputer it developed.
 
To be sure, IBM is no stranger to acquisitions. It acquired cloud infrastructure provider Softlayer in 2013 for $2 billion, and the Weather Channel’s data assets for more than $2 billion in 2015. It also acquired Canadian business software maker Cognos in 2008 for $5 billion.
 
Other big technology companies have also recently sought to reinvent themselves through acquisitions. Microsoft Corp this year acquired open source software platform Github for $7.5 billion; chip maker Broadcom Inc agreed to acquire software maker CA Inc for nearly $19 billion; and Adobe Inc agreed to acquire marketing software maker Marketo for $5 billion.
 
One of IBM’s main competitors, Dell Technologies Inc, made a big bet on software and cloud computing two years ago, when it acquired data storage company EMC for $67 billion. As part of that deal, Dell inherited an 82 percent stake in virtualization software company VMware Inc.
 
The deal between IBM and Red Hat is expected to close in the second half of 2019. IBM said it planned to suspend its share repurchase program in 2020 and 2021 to help pay for the deal.
 
IBM said Red Hat will continue to be led by Red Hat CEO Jim Whitehurst and Red Hat’s current management team. It intends to maintain Red Hat’s headquarters, facilities, brands and practices.
 
Goldman Sachs Group Inc and JPMorgan Chase & Co advised IBM and provided financing for the deal. Guggenheim Partners LLC advised Red Hat. “Knowing first-hand how important open, hybrid cloud technologies are to helping businesses unlock value, we see the power of bringing these two companies together, and are honored to advise IBM and commit financing for this transaction,” JPMorgan CEO Jamie Dimon said in a statement.
 
 
 
 Source: PmNews
Published in Business
JOHANNESBURG - President Cyril Ramaphosa says the money pledged at the Investment Conference will translate directly to more jobs in the sectors that contributed.
 
President Cyril Ramaphosa declared the conference an overwhelming success that will yield thousands of jobs for the people of South Africa.
 
At the end of the conference on Friday, Ramaphosa announced a combined amount of R290 billion in investments In South Africa.
 
Over 1,000 local and international investors attended the conference at the Sandton Convention Centre.
 
Anglo American, the Brics Development Bank and automotive traders were the big contributors, investing R71 billion, R29 billion and R40 billion, respectively. Vodacom announced R50 billion in investment.
 
President Ramaphosa says prominent among these announcements are the themes of beneficiation, innovation and entrepreneurship.
 
“The number of new jobs and people who will be employed is going to be phenomenal and unprecedented in the history of our country.”
 
He says the country has battled with bringing in investment to generate growth.
 
 
Source: News24
Published in Business
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