Feb 8

1. (economics) China implementing its trade deal agreements (Finimize)

What’s up?

China has just announced it will halve tariffs on $75B worth of American goods. 

What does this mean?

China is trying to curry favor with the US, as it looks to avoid even more hardship from a trade war that’s dragged on for almost two years. Also, to curb the economic damage from the recent epidemic, the central bank injected ~$200B into the economy & slash interest rates to make borrowing cheaper, encourage spending and promote growth. This news came as welcome relief to investors, then not only the country’s stock rises, but also European and US stocks hit a record. 

2. (pharmaceutical) How does Merck splitting off part of its business save the company $1.5B in the long run? (follow-up the news in Feb 6)

Let me flashback

Merck’s planning to split its women’s health, biosimilars, and legacy drugs segments into a new standalone company 

Why should I care?

While Merck’s share will plunge in the first place, it reckons that loss will be offset by future saving costs in the remaining business (more towards R&D)

• The business of R&D is pretty standardized, then Merck can cut duplicate costs
• Merck can reduce manufacturing and distribution costs, since it will not have to make and sell as many drugs.

3. (e commerce) Tiki and Sendo has held exploratory talk to merge with each other to be the second unicorn in Vietnam (Cafef)

What’s up?

The market is going more fiercely with these two local companies. They are raising money slower than Shopee and Lazada as these two are backed by tech colossuses SEA and Alibaba. Therefore, a merge deal is reasonable at this time.

Zooming out

Let’s take a quick look at major players in the market (2018)

• Lazada: 1,773B VND profit and 7.111B VND cumulative loss. Backed by Alibaba, who has bought more than 50% of the e-wallet e-monkey. Then Alipay is coming? After years struggling with the license of State Bank of Vietnam 
• Shopee: 1,901B VND profit and 2,708B cumulative loss. Backed by Shopee, who owns “an ecosystem”: Shopee-ecommerce, GHTK-deliver and Airpay- payment.
• Tiki: 756B VND profit and 1,395B VND cumulative loss, two major shareholders are VNG and Tencent. 
• Sendo: 701B VND profit and 1,253B VND cumulative loss. Major shareholders are FPT and SBI. This company has raise $61M USD in 2019 (series C)