Apple to Open iPhone NFC Chip to Competitors for Contactless Payments
Competitors of Apple will soon be able to use the technology in iPhones for contactless payments. The European Commission has made legally binding agreements with the tech company to facilitate this change. Previously, Apple Pay was the only ‘mobile wallet’ allowed to use the NFC chip in iPhones. This NFC technology enables contactless payments in stores via smartphones. Apple had not granted access to this NFC chip to other developers. According to the European Commission, Apple abused its dominant position by restricting access. This will now change, according to European Commissioner for Competition Margrethe Vestager. Within two weeks, Apple must ensure that other payment services can also utilize the NFC chip in iPhones. “From now on, competitors can effectively compete with Apple Pay for mobile payments using the iPhone in stores,” Vestager said. “Consumers will have a broader selection of safe and innovative mobile wallets.” These agreements will be in place for ten years. If Apple does not comply with the rules, the European Commission can impose a fine of up to 10 percent of Apple’s total annual revenue.
Severe Rainfall in France Causes Major Wheat Harvest Decline
The heavy rainfall in France is causing significant issues for the wheat harvest. As Europe’s largest agricultural producer, France is expected to see its soft wheat harvest drop to its lowest level in four years. The relentless rainfall has left French farmers in distress. The adverse weather conditions have increased the risk of diseases, leading to crop rot. The saturated fields make it difficult for machinery to operate, delaying the harvest and potentially reducing the quality of the yield. According to data from the French Ministry of Agriculture, wheat production is expected to decrease by 15.4 percent this year, totaling 29.7 million tons. This is over 14 percent less than the average production of the past five years. “In the past twenty years, only two other harvests have failed to exceed 30 million tons, those in 2016 and 2020,” stated the ministry. France predominantly produces soft wheat, which is used for making biscuits, breakfast cereals, and animal feed. In contrast, hard wheat is used for products like pasta, bread, bulgur, and couscous. The drop in wheat production has significant implications for the global wheat market. France is one of the world’s top wheat exporters, and a reduced harvest could lead to increased wheat prices worldwide. Importers who rely on French wheat might need to look for alternative suppliers, potentially causing a shift in trading dynamics. Countries in North Africa and the Middle East, major importers of French wheat, may face supply shortages and increased costs, which could impact food prices and inflation in these regions. Furthermore, the reduced supply could put upward pressure on the prices of products that use soft wheat, such as baked goods and cereals. This scenario could have a ripple effect, increasing the cost of living for consumers and affecting food manufacturers’ profit margins.
BYD to Open Major Electric Vehicle Factory in Turkey, Evading EU Tariffs
Chinese electric vehicle manufacturer BYD has announced plans to open a significant production facility in Turkey, a strategic move aimed at circumventing the recently heightened import tariffs imposed by the European Union on Chinese electric cars. The establishment of this plant marks a major investment of $1 billion (approximately €920 million). The formal agreement for the new factory was signed in a ceremony held in Istanbul, attended by prominent figures including BYD Chairman Wang Chuanfu and Turkish Minister of Industry and Technology Fatih Kacir. Turkish President Recep Tayyip Erdogan was also present, highlighting the importance of this development for both the Turkish economy and BYD’s expansion strategy. The upcoming facility is designed to produce 150,000 vehicles annually, significantly boosting BYD’s production capabilities. In addition to the manufacturing plant, an advanced research and development center will be established on-site, underscoring BYD’s commitment to innovation and technological advancement in the electric vehicle sector. The project is also set to create approximately 5,000 jobs, providing a substantial economic boost to the local community. This strategic move by BYD comes in response to the European Union’s recent decision to increase import tariffs on Chinese electric vehicles, a measure aimed at protecting the EU’s domestic automotive industry. For BYD, the new tariff rate has been set at 17.4 percent, a significant hurdle for the company’s European market aspirations. By setting up production in Turkey, BYD can take advantage of Turkey’s customs union agreement with the EU, thereby facilitating smoother and more cost-effective access to the European market. The decision to invest in Turkey highlights BYD’s strategic adaptability and its commitment to expanding its global footprint despite regulatory challenges. This move is expected to strengthen economic ties between China and Turkey while providing BYD with a crucial gateway to the lucrative European market.
Porsche’s Global Sales Decline in First Half of 2024, Driven by Weak Performance in China
In the first half of 2024, Porsche faced a notable decline in global sales, significantly impacted by a substantial drop in the Chinese market. The prestigious German automaker saw its vehicle sales in China fall by nearly one-third, as the country grapples with persistent weak economic conditions. These economic challenges have prompted Chinese consumers to be more cautious about purchasing luxury vehicles, affecting Porsche’s performance in one of its key markets. The downturn in sales was not confined to China alone. North America also experienced a reduction, with Porsche exporting approximately 6 percent fewer vehicles compared to the first half of 2023. This decline highlights the broader challenges facing the luxury car market in the region. Furthermore, other markets such as Africa, Latin America, Australia, Japan, and Korea saw a decrease in sales by about 2 percent. These regions, while smaller in terms of overall volume, contribute to the global picture of Porsche’s performance and reflect the varied economic conditions and consumer behaviors across the globe. However, not all regions reported declines. Europe, in particular, showed resilience and growth. In Porsche’s home market of Germany, the number of vehicles delivered surged by 22 percent, underscoring strong domestic demand. The rest of Europe also performed well, with sales increasing by around 6 percent. This growth in Europe contrasts with the declines seen in other regions, indicating a more favorable economic environment and consumer confidence in the European market. Despite these pockets of growth, the overall global performance of Porsche was impacted. From January to June, the Stuttgart-based automaker delivered a total of 155,945 vehicles worldwide. This figure represents a 6.8 percent decline from the same period last year, underscoring the challenges faced by the company in navigating varied economic landscapes and consumer behaviors across different regions. In summary, while Porsche continues to see robust demand in certain markets, the significant drop in sales in China and the reduction in North America have contributed to an overall decrease in global sales for the first half of 2024. The company’s performance in Europe provides a silver lining, but the broader challenges highlight the complex and dynamic nature of the global automotive market. Porsche’s strategic responses to these challenges will be critical in shaping its performance in the latter half of the year.
Decline in Oil Tankers Bound for China Signals Weaker Demand
The number of large oil tankers heading to China has dropped to its lowest in nearly two years, indicating weaker demand for oil in the world’s second-largest economy. According to Bloomberg, only 86 supertankers are currently en route to China over the next three months, a decrease of five from last week. This is the lowest weekly figure since August 2022, based on data compiled by Bloomberg. The forecast for Chinese oil demand in the second half of this year has been weak for some time. China’s industrial sector has recently shown renewed signs of contraction, continuing to struggle. This raises uncertainty about whether China can meet its economic growth targets for the year. The situation may exert downward pressure on global oil prices, although the extent of this impact is difficult to predict at present. Additionally, Bloomberg notes that fourteen tankers are heading to Angola, the highest number since the end of April. Angola has been ramping up its oil exports since the African nation exited the OPEC oil cartel earlier this year. Overall, nearly 550 supertankers worldwide have their destinations known for the coming months, though their schedules may still change. Bloomberg also identified 37 tankers whose destinations remain unclear.
Nordea Bank Accused of Laundering €3.5 Billion for Russian Clients by Danish Authorities
Nordea Bank, one of Scandinavia’s largest financial institutions with its headquarters in Helsinki, Finland, has been accused by Danish police of laundering approximately 3.5 billion euros for Russian clients. This case is considered one of the largest money laundering investigations in Denmark’s history. According to the Danish authorities, Nordea Bank allegedly ignored multiple warnings about suspicious transactions involving Russian customers between 2012 and 2015. The bank is accused of failing to act on these alerts, thereby facilitating large-scale money laundering activities. Despite these allegations, Nordea has strongly contested the charges. The bank itself publicly disclosed the accusations, reflecting its stance of transparency and commitment to addressing the issue. In 2019, Nordea proactively set aside a provision of 95 million euros to cover any potential fines that might arise from the investigation. This financial buffer indicates that the bank had anticipated possible repercussions from the ongoing scrutiny of its past operations. The scandal involving Nordea is not an isolated incident within the Scandinavian banking sector. In 2018, Danske Bank, another major financial institution in the region, was embroiled in a significant money laundering controversy. It was discovered that Danske Bank’s Estonian subsidiary had allowed suspicious money flows from foreign criminals to pass through its accounts for several years without proper oversight. This lapse led to Danske Bank being fined a staggering 2 billion dollars. These consecutive scandals highlight the challenges and risks faced by banks in maintaining rigorous anti-money laundering controls, especially when dealing with high-risk clients from regions known for financial irregularities. Both Nordea and Danske Bank’s cases underscore the importance of stringent regulatory compliance and the need for robust internal controls to prevent such occurrences in the future. As the investigation into Nordea continues, the bank remains under significant scrutiny from regulatory bodies and the public. The outcome of this case could have substantial implications for the bank’s operations and reputation, as well as for the broader financial industry in Scandinavia.
Shell Faces Setback of at Least €554 Million for Halting Biofuel Plant Construction in Rotterdam
Shell is facing a setback of at least €554 million due to the halt in the construction of a biofuel plant in the port of Rotterdam. The costs could potentially escalate to nearly €1 billion. Earlier this week, the oil and gas company announced that the plant, initially slated to be operational this year, is now expected to be completed by 2030. In September 2021, Shell made a grand announcement regarding the construction of a large biofuel plant in Pernis. The plant was primarily intended to produce fuel for blending with aviation fuel, with the first batch expected this year. However, the company now cites both technical challenges in construction and unfavorable market conditions as reasons for the delay. Shell intends to wait until airlines are mandated to increase their use of biofuels, as the current requirements are already being met by the available Sustainable Aviation Fuel (SAF) on the market. SAF is significantly more expensive than kerosene, leading airlines to avoid using it voluntarily due to competitive pressures. The promotional campaign highlighting Shell’s commitment to building the sustainable fuel plant has concluded, according to a spokesperson. “I can’t imagine it will be used again anytime soon,” the spokesperson added. The construction of the plant is being phased out, and the hundreds of workers involved will need to seek other assignments.
Approval of Lufthansa’s Investment in ITA Airways with Conditions
German airline Lufthansa has been granted permission by the European Commission to acquire a significant stake in Italy’s ITA Airways. However, in exchange, Lufthansa must create room for competition on flight routes between Italy and Central Europe. Lufthansa announced its investment in ITA in spring 2023, initially paying €325 million for a 41% stake in the company. Lufthansa has also expressed intentions to fully acquire ITA after 2025, subject to discussed takeover conditions that would allow them to expand their share in ITA at that time. The Italians have been facing financial difficulties for some time and could benefit greatly from this investment. In March, the European Commission initially withheld approval for the deal, expressing concerns that Lufthansa could become too dominant with a large stake in ITA Airways, potentially limiting passenger choice on certain routes and at airports. To secure approval for the acquisition, Lufthansa has agreed to open up more space for other airlines on routes between Italy and Central Europe. This move aims to encourage other airlines to offer flights on these routes, providing consumers with more options beyond just Lufthansa or ITA. Additionally, Lufthansa will be relinquishing some of its landing and take-off slots at Milan Linate Airport as part of the conditions set by the European Commission.
Nike Sales Decline Over the Past Three Months, Warns of Further Setbacks
Nike has reported a decline in sales over the past three months and is warning of more setbacks to come. Sales of lifestyle items and classic sneakers such as the Air Force 1 have decreased more than anticipated. Additionally, sales in China have significantly dropped. The global revenue for the past three months amounted to over $12.6 billion, compared to $12.8 billion the previous year. Disappointing sales were seen particularly in lifestyle clothing and classic sneaker models. Nike’s subsidiary brand Converse also saw a decline, with sales dropping by 18%. Despite positive sales in basketball apparel and running shoes, the overall picture remained bleak. Sales fell short of expectations in almost every region, especially in North America and China, where the quarter performed much worse than anticipated. Analysts attribute Nike’s challenges to a lack of innovation in its designs, allowing other brands to gain market share. The company is hoping that athletes wearing its shoes at the Olympic Games will boost sales. The outlook for the current quarter is also less optimistic, with sales expected to drop by another 10%, partly due to challenging conditions in China.
Exor Increases Stake in Philips to 17.5%, Signaling Strong Confidence in MedTech Sector
In recent weeks, Exor, the Amsterdam-based investment company of the Italian Agnelli family, has significantly increased its stake in Philips. Exor now holds 17.5% of the shares, making it by far the largest shareholder in the medical technology company. A spokesperson for Exor confirmed the move, describing it as a sign of confidence in Philips’ management and the long-term prospects of the sector in which the Dutch company operates. This sector has quickly become a key division in Exor’s investment portfolio, alongside the automotive industry (Stellantis, Ferrari). Exor also holds interests in the French medical research center Institut Merieux and the Italian healthcare management company Lifenet. The investment firm believes that the growing demand for healthcare, combined with advancements in data analysis, makes the medical technology sector highly attractive. Exor’s total investment in Philips now stands at €3.3 billion. The latest increase in its stake cost John Elkann’s company €481 million. Philips, which was not informed in advance of the stake increase, views it as a sign of the major shareholder’s confidence in the company’s strategic direction.