Comment, analysis and other offerings from Friday’s FT, William Wallis: Why Africa is leaving Europe behindAfricans are relishing something of a reversal in roles, writes William Wallis, the FT’s Africa editor. The former colonial powers in Europe are wrestling with debt crises, austerity budgets, rising unemployment and social turmoil. By contrast much of sub-Saharan Africa can point to robust growth, better balanced books and rising capital inflows. There is an opportunity in this novel scenario: for Africa to assert itself on the global stage, and for European countries to take advantage of their historic footprint in Africa by stimulating commercial expansion to their south. But it is far from clear either side will grasp it.
Yesterday the Merkozy plan for a Financial Transaction Tax caused some hefty damage for London-listed exchanges and brokers. Not a surprise really. The analysts at Adam Smith Institute were hopping mad on Thursday:
Vice-President Joe Biden is in China to get the measure of the country’s likely next leader, Xi Jinpingr, says Bloomberg. The US is keen to push for economic cooperation, although foreign journalists were bundled out of the room by Chinese security when Biden mentioned the economy in a speech, says FT beyondbrics. Biden is expected to spend most of his time over the next five days with vice president Xi Jinping, providing officials rare access to the inner circles of Chinese government, says the WSJ.
The White House will lay out detailed plans on deficit reduction and job creation next month, pressing Republicans in Congress to accept fresh support for the sluggish US economy, reports the FT. President Barack Obama is seeking to revive plans that would combine long-term deficit reduction with immediate steps to boost job growth, says Bloomberg. The measures will include the extension of a two per cent cut in the payroll tax for workers that is due to expire at the end of 2011. White House officials are keen to point out that the policies would be revenue neutra, Politico adds.
Dell has cut its revenue forecast for the rest of the year, sending its shares tumbling nearly 8 per cent in after-market trading, says the FT. The company blamed economic uncertainty including a slowing outlook for government and corporate spending as it cut the forecast for revenue growth to between 1 and 5 per cent, instead of 5 and 9 per cent, the WSJ says. Nevertheless, Dell executives claimed the company is now less dependent on its traditional PC business and said it was in a stronger position to withstand an economic downturn than it had been in 2008.
Barclays star banker Todd Edgar and his team of nearly a dozen fellow commodities traders are set to leave the bank amid a push to cut costs, reports the FT. The move is part of a strategy to shed overheads and put the UK bank on target to hit profit targets but comes only two years after Edgar was poached from JPMorgan’s proprietary trading team to join Barclays Capital. The £30m deal stoked a political storm at the time, sparking a semi-public row which ended in the US bank filing a complaint with the UK’s Financial Services Authority.
Speaking of a patent war in the smartphone industry… Compared to the massive Google-Motorola deal, Samsung’s ongoing battle with Apple is more like a skirmish, but it probably shows just how disruptive Google’s strategy could be, if they can pull it off.
Interpublic has sold half its stake in Facebook to an undisclosed buyer, valuing the social network at $66.5bn, the FT reports. The advertising group owned slightly less than half of 1 per cent of the social networking giant. Facebook’s valuation has increased more than fivefold in less than two years, driven largely by companies like Interpublic that make small investments in the hope of forging strategic partnerships. Interpublic said that the share sale would bring in approximately $130m, says the NYT.
German economic growth slowed to a near standstill in the second quarter of this year, dealing a further, unexpected blow to eurozone prospects, the FT reports. GDP rose o.1 per cent compared to 1.3 per cent the first quarter, Germany’s statistics office said. The euro fell more than 1 per cent against the Swiss franc on the darkening growth outlook for the eurozone, reports Reuters. French growth stalled in the same period, suggesting the business cycle decisively shifted during the second quarter, Bloomberg says. The French and German leaders also meet on Tuesday to discuss the bloc’s debt crisis as a threat to growth, Reuters adds.
Breaking Google news on Monday lunchtime: RTRS-GOOGLE TO ACQUIRE MOTOROLA MOBILITYRTRS-GOOGLE INC – DEAL FOR $40.00 PER SHARE IN CASHRTRS-GOOGLE INC – DEAL FOR ABOUT $12.5 BLNRTRS-GOOGLE INC – SAYS MOTOROLA MOBILITY WILL REMAIN A LICENSEE OF ANDROID AND ANDROID WILL REMAIN OPENRTRS-GOOGLE INC – SAYS GOOGLE WILL RUN MOTOROLA MOBILITY AS A SEPARATE BUSINESS.RTRS-GOOGLE INC – SAYS “VISION FOR ANDROID IS UNCHANGED AND GOOGLE REMAINS FIRMLY COMMITTED TO ANDROID AS AN OPEN PLATFORM”