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Stock market’s wild mood swings can be explained by Mr. Spock

By Barry Ritholtz

CLIENTS, colleagues and even family members keep asking the same question: “Why have stocks decoupled from the economy?” These are not people who obsess over the Federal Reserve’s balance sheet or spend time with the Bureau of Labor Statistic’s birth-death model. They just want to know what’s going on in the stock market.

Recently, the gulf between peoples’ daily experiences and the market has never been greater. It is a huge source of confusion. Traders are alternately exuberant and panicked, swinging markets up or down 10% in a day. In March, indexes fell 34% from record highs just a month earlier; despite horrific news about the economic blow from the coronavirus shutdowns, stocks then jumped 44% from those lows. My Bloomberg Opinion colleague John Authers describes it as the “insanity trade.”

No wonder the public thinks Mr. Market is bipolar. The average person doesn’t want to hear abstract academic arguments that markets are probabilistic mechanisms, collectively allocating capital by incorporating imperfect information about an inherently unknowable future. These explanations are clearly unsatisfying.

But maybe there is a simple explanation. In short, one shouldn’t think about the “stock market.” Instead, think of it as the “Spock market.” *

A short explanation for those who are not familiar with the Star Trek TV and film franchise: Mr. Spock is the science officer and second in command aboard the starship USS Enterprise; his mother was human while his father was a Vulcan, a race that only managed to save itself from violence and war by turning to hyper-rationalism. Spock’s human half, of course, is emotional and irrational and his logical side struggles to keep it under control.

Once you think of Mr. Market as Mr. Spock, the raging disconnect between the economy and equity prices becomes easier to grasp. Consider the following points:

Investors are rational: Much of the time, markets are understandable and make intuitive sense to investors. When the economy is expanding and profits are rising, so do stocks. If the economy tanks, shares plunge. There are long periods when stocks meander higher, reflecting positive developments in technology, taxes and inflation. This is the Vulcan logic of equities, reflecting investors’ rational, quantitative calculations of value.

Investors are irrational: Sometimes, markets seem to bounce from giddiness to panic almost overnight. It is especially obvious at turning points: Recall the March 2000 dot-com highs, when new companies were trading at 100 times earnings. Or the March 2009 financial-crisis lows, when prices were cut in half and selling was indiscriminate. The points where groupthink takes over the crowd, where emotions run rampant and greed and fear can overwhelm investors — that’s the human half at work. The Nobel prize committee recognized these two opposite forces in 2013.**

Most recently, we’ve seen this with day traders buying bankrupt companies because their prices are rising while others sell quality holdings at very low prices because others have also done so. Irrational investors create opportunities for those few who recognize this.

Markets are efficient: The volume of information is so enormous, it can never be fully grasped by one person. Yet prices reflect all of what is known, which gets communicated to all participants through the impact of buying and selling.

Price, in other words, is the most efficient collective probability bet about the future. Very rational, indeed.

Markets are very inefficient: Efficient, yes, except when those efficient expressions turn out to be wildly wrong. Note this is not when a trade turns out to be a money-loser. Rather, it’s when the analytical framework underlying the trade turns out to be completely unfounded.

This is where our emotional half sends the rational half off the rails. Rather than describing markets as efficient, it is more accurate to describe markets as efficient except when they’re not.

Most investors do not know they don’t know: Most explanations of recent market behavior reflect hindsight bias detailing what everyone now knows. It is rare to hear someone asked a question about a market move and not give a detailed after-the-fact explanation. Few are willing to admit that they really don’t know or that many market moves are simply random.

Here, Mr. Spock is quite different. He often notes his lack of understanding with a simple response of “fascinating.” His logic and ego control allow the admission of not knowing. He is subject to the Dunning-Kruger effect much less than most. Investors often get into trouble when they imagine they have an understanding about things they don’t.

Spock’s mixed human-Vulcan heritage was a great plot device that allowed Star Trek to subtly comment on the human condition, exploring the tension between logic and emotion, between our intellectual capacities and our baser drives.

Investors who recognize and take account of the Spock market will better understand what is going on, and — one can hope — use it to guide their actions for better results.

BLOOMBERG OPINION

*Not to be confused with the trading game of the same name — Spock Market — which was similar to fantasy football, only with Star Trek characters during reruns and a sort of drunken bingo: “The Spock Market is actually kind of fun. You set up an account and are given 15,000 Federation Credits or FDR. You can then buy and sell different “stocks” based on characters and items from the show. For instance, my portfolio is composed of Scotty (SCT), Chekov (CKV), Communicator and Communications, Inc. (COM), Federation Costume and Uniform (FCU), Dilithium Mining and Mineral (DMI) and Red Shirt (RDS). The object is to be one of the top 6 Traders.”

**By awarding the Nobel Prize to both Eugene Fama and Robert Shiller, the committee acknowledged this schism. Fama’s thesis was that the pricing mechanism of markets were so efficient that they were difficult (if not impossible) to beat; Shiller’s data overwhelmingly showed that markets could be as irrational as the humans who traded in them. Bubbles form, prices detach from reality, then crash.

Djokovic’s charity event exposes risks faced by pro athletes

MUMBAI/BELGRADE — Novak Djokovic aimed to help people affected by the COVID-19 pandemic with his charity tournament but with a number of players testing positive for the virus after attending the event, it could imperil the resumption of professional tennis.

The men’s world number one was the fourth player to contract the virus after Bulgarian Grigor Dimitrov, Croatia’s Borna Coric and Viktor Troicki previously tested positive after playing in the Adria Tour event in the Balkan region.

The tournament was among many events that have recently been held while professional tennis remains suspended due to the pandemic.

But there was one key difference about Djokovic’s event.

While the other tournaments were contested without any fans in attendance and those present adhered to social distancing rules, Djokovic’s Adria Tour attracted a capacity crowd in the Serbian capital, where players interacted, embraced and partied like they did in pre-COVID-19 days.

“Djokovic shot himself in the foot by organizing the Adria Tour,” Radmilo Armenulic, a former Yugoslavia Davis Cup coach, told Reuters by phone.

“The organization of the Belgrade leg was catastrophic, the stands were so full that fans were virtually sitting on top of each other. He staged this event with the best of intentions but it turns out it was a big mistake.”

While the players hugged at the net, played basketball, posed for pictures and attended news conferences together, Djokovic also organized nights out in Belgrade and pictures and videos of him dancing with the players made it to social media.

The players, however, did not break any government protocols in Serbia or Croatia with both countries easing lockdown measures weeks before the event.

But it highlighted the risks of athletes from different countries being in close proximity to one another, which could be a concern for the men’s ATP and women’s WTA Tour when they resume the professional circuit in August after five months.

The United States Tennis Association (USTA) has also announced plans for the US Open Grand Slam to be held as scheduled from Aug. 31 in New York and governing bodies are expected to have strict protocols in place.

“We have to be careful because we also have to be conscious that even with extreme measures, you could actually end up having some players testing positive,” ATP chairman Andrea Gaudenzi told the New York Times.

BUBBLE
During the US Open, players and guests must wear masks when onsite unless practising or competing and testing will be conducted before traveling to the United States and at least once per week along with daily temperature checks.

Top players, including Djokovic, have in recent times expressed their displeasure at the stringent measures, something that the ATP and the WTA are also expected to incorporate at their tournaments.

Gaudenzi said he hoped players will be more receptive to restrictions following the Adria Tour fiasco.

Stacey Allaster, the new US Open tournament director, said organizers had to take a “leap of faith” regarding players’ willingness to follow the protocols.

“If you think about it, we really designed this tournament around a bubble,” said Brian Hainline, the chief medical officer for the National Collegiate Athletic Association.

“If someone becomes infected, that’s a possibility, if they go out and they put themselves at a behavior where their behavior is risky, they’re really taking on a responsibility of saying what I’m doing is not that important to my fellow players.”

Armenulic, however, believes it will take the sport at least a year to go back to where it was before the pandemic and professional circuit should not resume before next year’s Australian Open.

“Unfortunately, this virus is still present, and it is a new reality that we are still learning to cope and live with,” Djokovic, a 17-time Grand Slam singles champion, said.

“I am hoping things will ease with time so we can all resume lives the way they were.

“I am so deeply sorry our tournament has caused harm. We were wrong and it was too soon.” — Reuters

Ateneo’s Thirdy Ravena heads to Japan to play in B. League

COLLEGIATE standout Thirdy Ravena of the Ateneo Blue Eagles is heading to Japan to play for San-en NeoPhoenix in the B. League, the team announced on Wednesday.

Mr. Ravena, who helped the Blue Eagles to their third straight University Athletic Association of the Philippines last season, is set to make history as the first player to be signed in the B. League under the “Asian Player Quotas” system to be implemented by the league in the 2020–21 season.

The Asian Player Quotas system is designed to “enhance competitive abilities by matching with various Asian players” as well as stretching the reach of the B. League to other countries.

Apart from playing for Ateneo, Mr. Ravena, 23, has been a steady fixture for the Philippine national basketball team in the past few years.

The B. League plans to open the new season in October but is still dependent on the coronavirus disease 2019 (COVID-19) pandemic situation by that time.

San-en NeoPhoenix, which finished last season with a 5-36 record, plays its home games at the Toyohashi City General Gymnasium.

“We would like to thank Ravena for his enthusiasm,” said the team in a statement on the Filipino star’s decision to join it in the B. League. — Michael Angelo S. Murillo

Ancajas ready anytime boxing resumes, open to different possibilities

SIDELINED for months now because of the coronavirus disease 2019 (COVID-19) pandemic, Filipino world boxing champion Jerwin “Pretty Boy” Ancajas said he is not letting the “forced” break go to waste as he continues to train in preparation for boxing’s eventual resumption just as he said he is open to different possibilities as far as future opponents is concerned, including against compatriot Donnie “Ahas” Nietes.

One of the guests in the recent episode of Tiebreaker Vods’ The Hit List, along with his coach Joven Jimenez, Mr. Ancajas (32-1-2) said training never really stopped for him amid COVID-19, mindful not to lose his step as he waits for the go-ahead for them to resume activities.

“With the help of Coach Joven and the rest of the team I continue to train because you’ll never know when we will be called back to fight. It’s better to be ready anytime,” said International Boxing Federation super-flyweight champion Ancajas, 28, in Filipino from their home base of Survival Camp in Cavite.

Recognizing the severity of the COVID-19 situation in the country, the Ancajas team said it is making sure that the needed health and safety protocols are being observed, including physical distancing and proper hygiene, so as not to compromise the wellbeing of every member of the group.

Mr. Ancajas went on to say that despite the prodding of some people to go up in weight, he is sticking to the 115-lb division for now as they feel there is still unfinished business to deal with.

“For me I want to still stay at 115 until I have faced the other champions in the division, the big-name fighters at 115,” said Mr. Ancajas, who won the IBF title in 2016 over Puerto Rican McJoe Arroyo and has had eight successful title defenses to date.

A possible opponent being floated is Mr. Nietes, who won the World Boxing Organization super-flyweight title in 2018 but vacated it months later.

In the event Mr. Nietes asks them for a shot at the IBF title, Mr. Ancajas said it is something they are open to considering.

“Sure. Whatever the plans of Sir Sean [Gibbons] (president of MP Promotions which Mr. Ancajas is part of) and Coach Joven I’m ready. Presented with such an opportunity (Nietes fight), it’s worth grabbing,” he said.

Still another fight they see worth considering is a rematch against Alejandro Santiago Barrios of Mexico, whom the Filipino champion split drew with in September 2018.

With the way the fight ended the Ancajas team said it given the chance it wants a rematch to settle with finality the issues surrounding it.

“We are open to it. We want to fight him (Barrios) again because many said Jerwin lost that fight. We want to fight him to settle things once and for all,” Mr. Jimenez said.

Mr. Ancajas last fought in December last year, beating Chilean fighter Miguel Gonzalez by way of technical knockout in the sixth round to retain his title.

He was scheduled to fight in April in the United States against Mexican Jonathan Javier Rodriguez but it was called off because of COVID-19. — Michael Angelo S. Murillo

Jokic, six other NBA players reported COVID-19 positive

DENVER Nuggets All-Star Nikola Jokic of Serbia (Denver Nuggets Facebook page)

SEVEN National Basketball Association players, including Denver Nuggets All-Star center Nikola Jokic, have tested positive for the coronavirus recently, according to various media reports Tuesday.

The only one of the group who was specifically identified was Jokic, who reportedly is under quarantine in his native Serbia, per multiple media outlets.

Two unnamed members of the Phoenix Suns have the virus, according to the Arizona Republic. And ESPN’s Adrian Wojnarowski tweeted that an unnamed Western Conference playoff team had four players test positive in the past week.

The NBA is due to restart late next month with 22 of the 30 teams competing at the Walt Disney World Resort near Orlando, Florida. Training camps at Disney are due to open July 11.

Jokic was scheduled to return to Denver this week. According to ESPN, Jokic has been asymptomatic since testing positive last week. Per the report, he is expected to be cleared to travel to Denver within a week.

Players who left their home team market were scheduled to return to their pro team market on June 15 for testing. Jokic was granted an exception by the NBA to stay in Sombor, Serbia.

All other players are due to report Tuesday, per the terms of the NBA and National Basketball Players Association agreement, as the league begins advanced preparation for the resumption of the 2019–2020 season.

Jokic, 25, was in Belgrade for an exhibition game on June 15.

The Suns have been holding voluntary team workouts in Phoenix, and the Republic reported that Mikal Bridges, Elie Okobo, Frank Kaminsky III, Dario Saric, Jevon Carter, Aron Baynes, Jalen Lecque and Cheick Diallo have attended. — Reuters

Austria to host FIBA 3×3 Olympic qualifiers in May 2021

By Michael Angelo S. Murillo, Senior Reporter

FROM Bengaluru, India, 3-on-3 basketball teams, including one from the Philippines, vying for a spot in the Olympic Games will trek to Graz, Austria, instead for qualifiers slated for May 2021.

In an announcement made by world basketball governing body FIBA on Tuesday, the 3×3 Olympic Qualifying Tournament will now take place from May 26–30 next year in what organizers said will be built around “modernity and sustainability.”

The qualifiers were originally set for March in Bengaluru this year until the coronavirus disease 2019 (COVID-19) pandemic rendered it an impossibility to be staged.

Also affected by the pandemic was the Olympic Games in Tokyo which was pushed back to next year.

Three-on-three basketball is set to make its debut in the Olympics.

In being chosen as the new host of the qualifiers, Austria said it welcomes the opportunity as it is a chance for it to showcase its newly crafted thrust as far as sports is concerned.

“The focus of our government in sports is the promotion of trending and green sporting events. The FIBA 3×3 Olympic Qualifying Tournament combines modernity and sustainability in a unique way,” said Austria Vice-Chancellor and Sports Minister Werner Kogler.

He went on to say that their sustainability concept was developed based on waste management, energy and water use, mobility and climate protection, regional products and social responsibility.

For FIBA, to have Austria come on board 3×3 basketball’s Olympic journey is a great addition considering what it has to offer.

“FIBA is delighted that the road to the Olympics will stop in Graz’s iconic Hauptplatz and that the Austrian authorities have vowed to make it the greenest, most sustainable event to date, which is entirely in line with our concept of reduced ecological footprint of 3×3,” said FIBA Executive Director for Europe Kamil Novak.

In the Graz qualifiers, 40 teams (20 in each gender) coming from 36 different countries will compete for the six tickets (three per gender) to Tokyo.

Among those squads is Team Philippines, led by the country’s top two 3×3 players Joshua Munzon and Alvin Pasaol. They are joined by Southeast Asian Games gold medallists CJ Perez and Mo Tautuaa from the Philippine Basketball Association.

“We will be ready come 2021,” said executive Ronald Mascariñas of Chooks-to-Go, whose group is a huge supporter of the Philippine 3×3 team and one of the prime movers of the sport here in the country.

As per the draw, the Philippines will open its OQT bid in Group C along with Slovenia, France, Qatar and the Dominican Republic.

The local organizers of the Graz qualifiers said they will build a temporary outdoor venue of a 2,000-seat capacity for the occasion and are already looking forward to the event.

“Fast, exciting, diverse, entertaining, inspiring: this is 3×3 basketball. The FIBA 3×3 Olympic Qualifier will be the highlight of the Graz sports year in 2021,” said Graz Mayor Siegfried Nagl.

For more information about 3×3 at the Tokyo Olympics, go to http://fiba3x3.basketball/olympics.

Barca lacking spark since season resumed, says coach

BARCELONA — Barcelona coach Quique Setien admitted his side has struggled to get going since the season returned following the three-month hiatus due to the COVID-19 pandemic, after a scrappy 1-0 win at home against Athletic Bilbao on Tuesday.

Barca needed a late goal from substitute Ivan Rakitic to see off a determined Athletic side and although it picked up a third win in four matches since the season restarted, it again failed to sparkle.

“When teams offer you little space you have to be very precise and agile and we have been lacking that since we returned,” Setien told a virtual news conference.

“It’s not been easy and we are missing something overall, a bit of spark. Our opponents have a lot to do with this because they are sticking together and leaving hardly any space and we’re finding it hard to open them up.

“But I think we’ll start to find it easier the more the season goes on.”

Barca thrashed Real Mallorca, 4-0, on its return after the long break but looked rusty in last week’s 2-0 victory over struggling Leganes and on Friday was held, 0-0, at Sevilla, allowing Real Madrid to go on top of the league on Sunday.

The win over Athletic took Barca three points ahead of Madrid but Zinedine Zidane’s side will go back to the top of the table with victory over Real Mallorca on Wednesday.

Setien was not pleased with how his side started against Athletic but praised youngsters Riqui Puig and Ansu Fati for helping to open their opponents up when they came off the bench.

“We were more relaxed in the second half and played much better. Ansu and Riqui gave us dynamism and allowed us to have longer periods of possession,” Setien said. — Reuters

When the virus hit, Japan already had an army of contact tracers

Kawasaki’s seven public health centers are part of a web of over 450 such institutions across Japan which played a crucial role in limiting the nation’s outbreak. Experts contend that the existence of these centers, which implement and execute central public health policy from giving elderly diet advice to investigating child abuse, are one of the key reasons Japan was able to avoid an explosion in coronavirus cases. — Asian Scientist Magazine

The virus might have been new, but for Yuko Koizumi the work was still the same.

In Kawasaki, a city just south of Tokyo, nearly 300 people had tested positive for the coronavirus by early June. But Koizumi was unperturbed. As head of infectious disease response for the city’s network of seven public health centers, she was able to draw on a familiar strategy used in past pandemics and seasonal outbreaks: trace infection routes via close contacts, check on recuperating patients, and arrange treatment where needed.

It’s a playbook that may have made all the difference in Japan’s unorthodox, though largely successful, virus response.

Kawasaki’s seven public health centers are part of a web of over 450 such institutions across Japan which played a crucial role in limiting the nation’s outbreak. The centers meant Japan already had an army of trained contact tracers when the virus struck, and may provide a model for other countries as they look to build systems that will future-proof them for the next pandemic.

Experts contend that the existence of these centers, which implement and execute central public health policy from giving elderly diet advice to investigating child abuse, are one of the key reasons Japan was able to avoid an explosion in coronavirus cases.

“I don’t think I would have been able to do it if it wasn’t something I already knew how to handle,” Koizumi said. “We also already had a team of people that could communicate and work together.”

Center staff played a crucial role in quick contact tracing, serving as early gatekeepers when the first cases of the disease in Japan were identified in January. They asked people infected with the virus to detail their movements, share personal information, and disclose the details of people they had met to trace who needed to be tested and isolated.

While largely unknown outside of the medical community prior to the COVID-19 pandemic, trained contact tracers are now recognized to be the cornerstone of a successful virus response, used effectively in nations from South Korea to Germany.

A cluster of eight cases had appeared in a local hospital in Kawasaki when Bloomberg News spoke with Koizumi earlier this month.

“It’s already under control,” she said, four days after the cluster was reported. “The day after cases emerged, the local center sent staff to the hospital to figure out close contacts and advise on how to disinfect the necessary areas.”

COMMUNAL GLUE
Unlike in some Asian cities such as Hong Kong, where authorities have published detailed accounts of the workplaces, residences and restaurants and bars visited by infected people to get others to come forward for testing, officials in Japan have studiously avoided publicly identifying businesses or even regions hit.

With privacy paramount, public health center workers have been able to conduct tracing while maintaining the anonymity of their patients.

“People trust the public health center and will share any kind of information with them,” said Haruka Sakamoto, a public health researcher at the University of Tokyo. “They understand the characteristics of the community.”

The public health centers perform a myriad of functions in local neighborhoods, serving as a communal glue of sorts. In addition to infectious disease response, they oversee a wide range of health concerns, from advising the elderly on diet and exercise and conducting health checkups on newborns, to issuing licenses for bars and restaurants and investigating cases of child abuse or food poisoning.

That in-built connection to the community helped with the initial coronavirus response, which involved tracking the disease and informing citizens of the right precautions to take. Even now, the work of contact tracing, arranging tests, and identifying clusters is still being done across the centers as the country continues to re-open.

At the Chitose public health center in Hokkaido, workers are now fielding around 30 to 40 calls a day, down from more than 100 at the peak in early May, said Reiko Kano, a public health nurse at the center with over two decades of experience.

“Trust is very important, especially if you’re suddenly just getting a call from someone,” said Kano. “You have to think about your final goal, and be very careful about protecting privacy and personal information while also realizing there are certain things you have to ask. There’s a balance you need to strike.”

TUBERCULOSIS STRATEGY
Japan’s public health centers trace their roots back to a program in the 1930s to fight tuberculosis, a disease that, like COVID-19, requires a trace-and-track response, said Toshio Takatorige, a public health professor at Kansai University in Osaka. In contrast, public health systems in western nations stem from an earlier fight against cholera in the 19th century, he said — a very different type of pandemic that can be solved by improving water and sewage systems.

“The tuberculosis problem was more serious than coronavirus is now,” Takatorige said. It was also a serious issue for the Imperial Army, ensuring a well-funded response. To this day, containing TB remains one of the public health centers’ core functions, with Japan having one of the higher rates among OECD nations.

Similarly, experience with past epidemics — Hong Kong’s bruising encounter with SARS in 2003, South Korea’s 2015 struggle with MERS — has helped other Asian countries also weather the pandemic better than western nations.

“For tuberculosis, you need to follow up for two years — the coronavirus tracing time period isn’t as long,” Takatorige said. “The public health centers carry out the tuberculosis strategy on a daily basis, so comparatively the coronavirus response is easy.”

Public health centers have also provided data that was integral to Japan’s understanding of the virus, Hitoshi Oshitani, a professor of infectious diseases at Tohoku University and member of a panel of experts advising the Japanese government on its virus response, said at a press conference on June 1.

DECLINING FUNDING
The centers themselves are far from flashy or high-tech. Contact tracing breaks down when there are too many cases at once, as happened in Japan in April. The centers lack a centralized system to share information and use faxes to report individual infections, slowing the transmission of vital information and adding to an already heavy workload.

Funding for the public health center system has also dwindled in recent years, causing the number of centers to fall by nearly half in the last 30 years, according to a professional group for public health center directors in Japan. This has overloaded denser cities in particular, which have also been worst hit by the coronavirus.

But the centers may now be cherished anew, as other nations struggle to assemble contract-tracing operations amid the pandemic.

“Things like how to ask questions, it’s all on-the-job training,” said Nobuhiko Okabe, the director general of Kawasaki City’s Institute for Public Health who is also a member of the government’s expert panel. “You need people who are used to it. It’s not something you can do just by increasing the number of people.”

A 41-year-old man who contracted the coronavirus in Tokyo in April told Bloomberg News that staff from the local public health center called him without fail every day while self-isolating at home — asking him to describe his conditions, and providing advice on when was appropriate for him to leave the house after his symptoms subsided. The man, who declined to be identified for privacy reasons, was also asked to log his temperature and condition on a website daily, as well as questioned over who he may have been in close contact with.

“Everyone is captivated by potential treatments and vaccines, because if they’re successful there will be money for pharmaceutical companies,” said Takatorige, the public health professor in Osaka. “No one thinks about the system that’s already a part of daily life.” — Bloomberg

Para Sa Bagong Bukas: Globe myBusiness strengthens support for local SMEs to adapt to new normal

While the term micro, small, and medium enterprises (MSMEs) may suggest that the industry is little in size, they play an important role in the Philippine economy. In 2019, the Department of Trade and Industry (DTI) noted that it accounted for 99.56% of total businesses in the country and was able to generate 4.9 million new jobs.

“It’s undeniable that MSMEs play a crucial part in today’s society. It allows entrepreneurs to become financially independent and in turn create livelihood to millions of Filipinos across the country. Globe myBusiness is tapping on the power of technology to make sure local MSMEs are digitally equipped and connected amid the new normal brought on by the COVID-19 pandemic,” shares Celeste Porto, Globe myBusiness Marketing Head.

In accordance with the telco’s overall mission of making families’ dreams come true, businesses flourish, and the nation admired, Globe myBusiness is giving recognition to local MSMEs – the modern-day heroes who play a critical role in the country’s economy this month. The Saludo SMEs campaign aims to honor and pay tribute to these businesses: their passion and successes, contribution to the nation, and now, very timely, their resilience and recovery from the COVID-19 crisis.

Online Business Consultation Caravan

Globe myBusiness has hosted a series of learning sessions through Globe myBusiness Academy. On June 25, there will be a special edition of the virtual Business Consultation Caravan via Zoom to help MSMEs adjust and navigate through new ways to do business in the new normal. This exclusive caravan will also include one-on-one consultations with industry experts on how to continue their businesses despite the economic downturns brought by COVID 19.

Exclusive product offers for local SMEs

Globe myBusiness will be offering exclusive plans to help SMEs get reconnected and back to business:

  1. The Saludo SMEs Postpaid Broadband Plans allow customers to enjoy higher speeds for the same price.  For as low as  Php1899 per month, business owners get a speed of up to 50 Mbps vs current speed of 20 Mbps. These plans also come with unlimited data allocations and includes a complimentary modem and a landline with free calls to Globe and TM.
  2. Premium Plans start at P2,999 with speed of 15 Mbps vs current speed of 10 Mbps, with a daily data allocation of 50GB. An additional benefit of Premium Plans is access to a myBusiness Expert, a dedicated support in handling account, network, billing and service queries.
  3. True Unli Mobile Plans that start at ThePLAN Plus 999 give clients unlimited calls and texts to all networks, unlimited landline, and 8GB of mobile data, to ensure that SMEs remain connected to their suppliers and clients.  Moreover, all new mobile plans will have Facebook Ad Creator Credits worth Php1000 which SMEs can use to promote their business on Facebook.

These exclusive Saludo SMEs offers are available until July 31, 2020.

Through these efforts, Globe myBusiness hopes to honor and support MSMEs, including their passions and successes, contribution to the nation, and most importantly, their resilience and recovery to cope with and excel in the new normal.

Stay tuned to the official Facebook page of Globe myBusiness for updates and other activities for Saludo SME.

 

Stimulus addiction grows as risk in emerging markets

Emerging-market (EM) inflation is dormant even as governments and policy makers hurl money into the economy. Investors shouldn’t count on it staying that way.

Once the coronavirus pandemic is over, governments are going to struggle to wean themselves off the loose fiscal and monetary policies that have averted economic collapse, said David Hauner, a London-based strategist at Bank of America Corp. That risks reviving inflation, weakening currencies, and undermining bonds.

“Many EM governments will confront even greater social problems post-COVID-19 than they were facing before,” Mr. Hauner said. “A permanent increase in government spending appears likely.”

For now, the coronavirus pandemic has slashed consumer demand and investment and pushed inflation to a record low in Brazil and a six-year low in Colombia. Across emerging markets inflation is moribund, allowing governments to ramp up spending and central banks to provide the liquidity markets need. The longer it goes on though, the harder it will be for policy makers to turn off the tap.

Still, the gap between breakevens, a measurement of inflation expectations, in riskier, high-beta markets and more stable low-beta peers is widening as traders begin to worry about inflation risks in countries with greater political and fiscal threats, according to Bank of America.

In the next six to 12 months, South Africa’s rand may be among the most at risk given lower policy rates, underlying vulnerabilities, and the central bank’s quantitative-easing program, said Brendan McKenna, a foreign-exchange strategist at Wells Fargo Securities in New York. Brazil’s currency may also come under pressure as policy makers become increasingly likely to embark on a bond-buying program, he said.

While Chile’s central bank forecasts subdued inflation for the rest of the year, the amount of stimulus rolled out has also put the South American nation’s peso on Mr. McKenna’s radar, he said.

The risks are highest for nations that have tapped foreign-currency markets and could run into trouble if their currencies decline sharply, said Damian Sassower, chief emerging-market credit strategist at Bloomberg Intelligence in New York, citing Turkey, South Africa, and Colombia.

Prolonged monetary stimulus measures would be an even deeper issue for nations with less-credible central banks, according to Michael Bolliger, head of emerging-market asset allocation at UBS Switzerland AG in Zurich.

“It’s hard to break bad habits,” Mr. Bolliger wrote earlier this months. “There is a fine line between providing temporary support to local economies and the risk of higher inflation and ultimately debt monetization.” — Bloomberg

SGV announces new leaders

In line with its purpose to nurture leaders and enable businesses for a better Philippines, SGV announces its new leadership appointments effective July 1.

The new leaders will continue to serve as responsive stewards who will help SGV drive long-term value for its stakeholders.

SGV is organized by Market Groups, which are aligned to specific sectors to better develop sector-specific competence, experience and deep industry knowledge among its professionals.

Vivian C. Ruiz has been appointed Vice Chair and Deputy Managing Partner. She was SGV’s Assurance Service Line Leader and had served as the leader for SGV’s Market Group that focuses on clients from media, entertainment and gaming.
  Martin C. Guantes assumes the role of Assurance Service Line Leader. Prior to this, he was a Market Group Leader for accounts in the consumer products, airline, technology and services sectors.
Noel P. Rabaja is the Strategy and Transactions Service Line Leader and concurrent Market Group Leader for media, entertainment and gaming. He has served as Country Leader for Tax Accounting and Risk Advisory Services and Global Compliance and Reporting.
Marydith C. Miguel takes on the role of Market Group Leader for clients in the business process outsourcing, telecommunications, and retail sectors.
Henry M. Tan is the Market Group Leader for clients in the consumer products, airline, technology and services sectors. He is the concurrent Country Leader for Global Compliance and Reporting, Partner for SGV’s Tax Basics Seminars and Program Director of the EOY Entrepreneur Of The Year Philippines.
Aris C. Malantic has been appointed Market Group Leader supporting clients in resources (mining, oil & gas) and logistics.He is also the EY ASEAN Financial Accounting Advisory Services leader.
Christian G. Lauron has been named Sector and Account Representative. He heads the Financial Services Risk Management Group and serves as SGV’s Government and Public Sector Leader.

 

SGV takes this moment to celebrate a generation of new leaders who are passionately committed to working for a better Philippines.

Apple will remove thousands of unlicensed iPhone games in China

Apple Inc. will start removing thousands of mobile games lacking government approval from its App Store in China next month, closing a loophole that the likes of Rockstar Games have relied on for years.

Developers and publishers in China have been told that their iOS games will need licenses to continue operating from July, according to people familiar with the matter. The decision ends the unofficial practice of allowing games to be published while awaiting authorization from the country’s slow-moving regulators.

This has until now allowed games such as Grand Theft Auto, whose gory depictions of violence are unlikely to ever pass muster with Chinese censors, to be available within the country’s borders. China’s regulators require all games that are either paid or offer in-app purchases to submit for review and obtain a license before publication, and major Android app stores have enforced such rules since 2016. But unapproved games have flourished on Apple’s iPhone platform.

It’s unclear why Apple — a target of numerous regulatory clampdowns in the past — hasn’t moved as swiftly as other app stores in China, which are owned and operated by local mobile giants like Alibaba Group Holding Ltd. and Xiaomi Corp.

The latest approvals process took effect in 2019 amid confusion among industry players about the speed with which Beijing, known for months-long content reviews that may or may not lead to a monetization license, would process requests. For its part, Apple has begun ramping up oversight of its Chinese app store, removing two podcast apps earlier this month at China’s request.

Back in February, Apple reminded iOS developers in the country to obtain licenses for their titles by June 30. But it was only after prolonged uncertainty about enforcement that the iPhone maker explicitly told publishers that any unlicensed games after the deadline will be banned and removed from the local App Store, according to the people, who asked not to be identified because the matter is not public.

There’s no telling how long it will take to remove all unlicensed games once the change comes into effect. Chinese gaming blog Gamelook earlier reported Apple’s upcoming enforcement.

An Apple representative declined to comment.

China accounted for about a fifth of the $61 billion in digital goods and services sold via Apple’s App Store in 2019, making it the largest market after the US, the Analysis Group estimates. Apple takes a 30% cut from the majority of such transactions.

There are roughly 60,000 games on China’s iOS App Store that are either paid or contain in-app purchases, and at least a third of them don’t have a license, according to an estimate by AppInChina, which helps companies localize and publish their apps in the country.

“These companies will suddenly lose all revenue from what is typically their second-largest market after the US,” said AppInChina Chief Executive Officer Rich Bishop. His firm received three times its usual volume of inquiries about game licenses over the past week, he added.

Apple’s new effort highlights the Chinese government’s tightening grip on gaming. Citing concerns about the proliferation of addiction among minors and the dissemination of offensive content, regulators now adopt a much stricter and slower review process than before they temporarily halted all approvals in 2018.

While big local players like Tencent Holdings Ltd. and NetEase Inc. have adapted their existing cash cows and can respond to censors’ demands in the development of new games, smaller developers and publishers lack the same resources. Many of them have started attaching a single license to multiple games with similar gameplay, logos or heroes, though the government is aware of the practice and cracking down on it as well.

Imported games are under particularly tight scrutiny, and the App Store loophole served as a last resort for getting some of them distributed in China. Plague Inc., which mimics the spread of an epidemic, had topped the download charts on China’s App Store for weeks during the country’s COVID-19 lockdown. But the unlicensed title was pulled in March after Chinese regulators deemed it to have “illegal” content, according to its developers.

Neither of the remaining options for small game developers appears particularly enticing. They could switch their revenue model to in-app advertising, which is not covered by the same approval process. Or they can team up with big publishers like Tencent to obtain licenses, though that would involve giving up some measure of autonomy, while Tencent itself is more interested in well-known franchises. — Bloomberg