Author: Christina Comben

China Growth Slows Down in Q3 to Hit a 10-Year Low

It’s not good news for the Asian tiger this morning as China growth reaches its slowest quarterly growth since the economic crisis. With the most disappointing growth figures in a decade, the numbers will increase the pressure on Chinese President Xi Jinping as the US trade war blazes on in the background.

China reported its slowest quarterly growth at 6.5% YOY in Q3, although the Chinese government says that they are still on track to exceed the yearly target of 6.5%. GDP was also lower than analysts expected.

Source FT

NBS (National Bureau of Statistics for China) spokesperson Mao Shengyong said that China was facing:

“extremely complex environment abroad and the daunting task of reform and development at home.”

Slower China Growth the Way of the Future?

The NBS reported that it was likely to see a slower growth and “greater downward pressure” in the future. However, China’s economy is resilient and so far, its investment trends remain stable. Moreover, the trade sector is still reporting figures better than expected.

The Chinese stock markets have also taken large tumbles this year, and the CSI 300 that tracks the largest companies in Shenzhen and Shanghai declined by a massive 25.5%. The Chinese government appears to remain unfazed by this decline and will take the necessary moves to restore investor confidence and hand out merger approvals quicker.

In a report by the Chinese Academy of Social Sciences earlier this week, analysts reported that the Chinese economy would grow by 6.6% in Q3, missing their target slightly.

The slowdown in China growth appears to have been provoked by rising US interest rates along with the US/China trade war that’s leaving many Chinese companies out of pocket.

However, an official campaign against financial risk has also served to bring property and infrastructure to a halt, with some major projects like the subway lines in northern cities outright canceled.

Other Figures Not So Bad

Industrial production and retail sales both increases by 5.8% and 9.2% respectively compared to 6.6% and 10.3% this time last year. Moreover, trading activity despite the trade war has been reasonably strong. The tariffs imposed by Trump did not come into effect until late September, which means Q4 could see even more disappointing results.

Featured image from Shutterstock.

October 19, 2018
How Chinese Authorities Caused Tencent $200 Billion Stock Wipeout

The Chinese company Tencent expects a 20% drop in revenue for Q3 of 2018, as China’s repression on computer games licenses could last until next year. The news comes after the company has already lost 40% of its market value, crashing from $578 billion in January to $380 billion now.

The huge decline drove Tencent out of the top 10 largest companies. Before the Chinese government stopped approving licenses, Tencent was the fifth largest company in the world, ranking higher than Facebook and JPMorgan Chase. Now, it has slipped to position 11.

Ceased Sales for Monster Hunter in August

Problems started in August when the Chinese authorities canceled the operating license for Tencent’s Monster Hunter: World. The company had to cease sales a day after the launch of the new video game and offer refunds for over 1 million pre-orders.

It wasn’t the first time the rigid Chinese regulations put the breaks on Tencent’s revenue and valuation. In 2017, the company had to limit the time children were spending playing Honor of Kings, which cost Tencent a $15 billion loss in market value.

Less than 2,000 Games Approved in China in 2018

The government crackdown on online gaming was expected to last a month, but it may take a lot longer before companies have permission to launch new games for monetization. A director of the games unit of one of China’s biggest tech companies stated for the Financial Times that:

“there won’t be approvals this year.”

Beijing is trying to temper online gaming in China, which is by far the largest market in the world. Authorities are worried about children being “addicted” to video-games and want to limit the effects of gaming on children’s vision, according to officials.

This year, the Chinese government approved 1,931 video games, compared to 9,000 games last year.

Tencent Growth Prospects

Analysts believe that Tencent has “strong long-term growth prospects” thanks to its ability to make money despite the game licensing freeze. Karen Chan, equity analyst at Jefferies Hong Kong, for China Daily said:

“We believe Tencent remains the most resilient online game player with huge monetization potential in advertising and content. Although the game approval resumption timeline remains uncertain, Tencent’s 15 mobile games in the pipeline with secured monetization licenses should provide some buffer.”

The Chinese tech giant makes more than 40% of its revenue from video games, being the most important player in the Chinese gaming market. However, the company doesn’t rely entirely on gaming, as one of the most valuable tech companies in China.

Tencent also owns the WeChat messaging app (which has around 1 billion users), the WeChat Pay payment services (800 million users), and Tencent Music, which is China’s largest streaming service with 800 million users.

Featured image Tencent.

October 19, 2018
Journalists Uncover the Biggest Tax Fraud in Europe’s History

European media is flooded this morning with accounts of what looks to be the biggest tax fraud in Europe’s history. According to several European media outlets including Germany’s Die Zeit and Norway’s E24, banks and investors avoided paying taxes on hundreds of billions of European treasury bills and dividends.

And the scandal isn’t restricted to one, or even two European countries. Denmark, Belgium, and Germany are thought to be the hardest hit. But the tax fraud extends all the way to Norway, Switzerland, the Netherlands, Spain, Italy, and France.

Moreover, the tax avoidance scheme has been building up for a number of years, in what the media is dubbing, the “coup of the century.”

Quoted in Die Zeit, Christoph Spengel, a tax law professional who had access to the incriminating evidence, said:

“It’s about the biggest tax fraud in Europe’s history.”

The tax scam is thought to have cost Denmark, Germany, France, Belgium, and Italy a total of $63 billion. For Denmark alone, that sum equals some 12.7 billion Danish kroner (around $2 billion) writes Politiken.

Norway suffered losses of some 600,000 Norwegian kroner (around $73,000) however, according to Swedish news agency Di, after being warned by Danish authorities, was able to prevent 10 further fraud attempts totaling 380 million kroner ($46 million).

It’s not yet certain how much money has disappeared from European treasury bills or the magnitude of the tax fraud that looks the be the century’s worst.

Tax Fraud and a Corrupt Network of Global Banks

SVT reported that many of the world’s largest banks are up to their necks in the largest tax scam of modern times. Deutsche Bank (which will surprise no one after their former traders were convicted of Libor rigging just yesterday) is among the names incriminated.

UBS, BNP Paribas, Barclays, JPMorgan, Meryll Lynch, Banco Santander, and Morgan Stanley are all also said to be implicated. And Swedish bank SEB is on the hot list as well.

SEB is accused of receiving some 70 million Swedish kroner ($7.8 million) for helping to conceal 1 billion Swedish kroner from the German treasury. According to Spengel:

“If you realize you’re part of a criminal gang – and that’s the case here with SEB – it’s breaking the law.”

The bank denies any criminal offenses, with German chief executive of SEB writing an email to SVT assuring them that the bank always operates in accordance with applicable laws and regulations.

The CumEx Files

A year in the making, the CumEx files are the culmination of a massive covert operation of 19 different media and journalists from 12 countries. More than 180,000 secret documents from financial institutions, banks, law firms, and German police investigation material were revised.

“Cum-Ex” is Latin for “with” and “without,” which is meant to highlight the complicated short-term trading of stocks that sellers and buyers do not physically own. Because of its complex nature, ownership is very hard to pinpoint. Tax offenders in some cases declared that they had paid taxes abroad and even received tax refunds in their home countries.

Initially, the idea behind the scam was to receive a double tax refund, however, in the most severe of cases, the same payment was made several times. Since regulations vary from country to country, the scheme was allowed to run unnoticed for several years.

As a German senior advocate told Politiken:

“It’s the perfect crime as this money machine has picked up huge cash sums. It’s as if you had looted Fort Knox, just better, because the source of the money was the treasury, and it’s outcast.”

Featured image from Flickr.

October 18, 2018
Rogue Traders – Ex Deutsche Bank Traders Face up to 30 Years in Jail

You win some you lose some, right? The world of trading is a high risk, high reward one. But when traders get rogue and start dabbling in illegal matters, the wins quickly turn into losses. American Matthew Connolly and Britain’s Gavin Black, both former Deutsche Bank traders, were found guilty yesterday for their roles in manipulating the Libor rate. They now face up to 30 years in the slammer and $1 million fine.

What Happened?

When anything in the trading world is manipulated for personal gain, (think insider trading, rate manipulation) you’re skating on fairly thin ice. Connolly headed up Deutsche Bank’s New York pool trading desk, while Black was a derivatives trader in London. The pair conspired to manipulate Libor on a wire transaction and were found guilty by a jury in New York.

While the news is a further stain on Deutsche Bank’s reputation, a financial institution with a less-than-clean slate, Connolly and Black stand to lose the most. Although it’s unlikely they’ll carry out the entirety of their sentences, staring at a 30-year stretch is not an enviable position to be in.

It is, however, a victory for the US Department of Justice, that has charged many banks for manipulating Libor but prosecuted relatively few individuals with success.

Connolly was convicted of conspiracy on two counts of wire fraud but cleared of a third charge against him. Black was found guilty of both charges against him–of conspiracy and wire fraud.

What Is Libor Anyway?

LIBOR stands for the London Interbank Offered Rate. This is the interest rate that banks charge for borrowing a large amount of money and essentially, a global interest rate benchmark.

16 banks are polled every day on what their rate will be. The top four and bottom four are removed and the Libor rate for the day is calculated from the average of the middle. Check out this handy explainer video if you want to know more:

Deutsche Bank Traders Setting an Example

According to the chief of the DoJ’s criminal division, Brian Benczkowski, quoted in Bloomberg:

“Matthew Connolly and Gavin Black undermined the integrity of our financial markets by manipulating Libor… The justice department and its law enforcement partners will aggressively investigate and prosecute individuals and financial institutions who engage in this sort of misconduct.”

The two former traders were indicted in 2016 after the Deutsche Bank’s $775m Libor settlement the year before.

Both Connolly and Black’s attorneys insisted that the men were innocent. They said that the fight was far from over and that they would be appealing the verdict, making post-trial motions and continue to seek justice.

Featured image from Bloomberg.

October 18, 2018
General Electric Beats Siemens to Land Iraq Power Contract

Yes, it does all sound slightly sordid. The Americans and the Germans battling over their interests in Iraq. Only this time, over who lands the Iraq power generation contract worth an estimated $15 billion. General Electric appears to have pipped Siemens to the post with a little help from president Trump and his administration, who reportedly pressured Baghdad into rejecting the German bid.

Non-Binding Memorandum of Understanding

Call it bribery, call it cronyism, or call it a non-binding memorandum of understanding. It basically amounts to the same thing. The US and Iraqi governments have long discussed how they will co-operate on the issue of power generation, and oil and gas production. The US has oil interests in Iraq? Who knew?

Unfortunately for the German energy giant, their hopes were dashed before leaving the paddock and their winning bid crumbled under the weight of the US government.

General Electric and Siemens had been battling out the deal for several months and it almost looked as if the Munich-based company was close to securing a deal. But as the competition began stepping up a gear, and General Electric started losing ground, the Trump administration issued a friendly reminder about the memorandum. And about the 7,000 Americans that had died since the 2003 invasion to remove Saddam Hussein.

OK, so not so friendly after all.

Welcome News for General Electric

General Electric hasn’t had the best run lately. With dwindling profits and expectations for a dismal third-quarter earnings report, the Iraq power generation contract will be welcome news for its troubled energy division.

Thanks to this new deal, shareholders can look forward to positive news in the Q3 report set for delivery on October 30.

It would have been nice if someone had let the German giant know, though, that their chances of sealing the deal were next to zero.

The company had worked for months on its roadmap for developing infrastructure in Iraq and ramifications of losing the deal will ring throughout the company.

Siemens was so close, in fact, that the chief executive traveled to the Iraqi capital to meet with prime minister Haider Al-Abadi.

But two weeks ago, advisors to Al-Abadi let the company know that they should give up on the deal since their insistence was piling pressure on the Iraqi government. The advisor reportedly said:

“The US government is holding a gun to our head.”

A Tight Spot

The Memorandum of Understanding (MoU) is said to offer both insurance and financing for US companies working in the Iraqi power sector. While that will certainly push GE past the German company on this occasion, Siemen’s power and gas unit is actually headquartered in Houston, which means they could stand to benefit from the agreement at a later date.

Right now Iraq is in a tighter spot than usual. The middle eastern country is relying on US government support over the country’s gas imports from Iran.

Some 35-40% of Iraq’s electricity comes from Iranian gas (are you getting the other irony here?) and with US sanctions on Iran imminent from November 5, those purchases could lead to fines for Iraq, and a wave of blackouts across the country.

The sanctions are a delicate situation not only for Iraq, however, but for the United States as well. If General Electric begins to sell power plants to Iraq using Iranian gas, the metaphorical sh** could really hit the fan, ruffling more than a few feathers in Germany since the country has been instructed to stop doing deals with Iran.

The next few weeks will be interesting to say the least, as we watch how Iraq manages a workaround its Iranian imports. And how the US will avoid falling on the sword of their own sanctions.

Featured image from Shutterstock.

October 17, 2018
Beauty and Brains – Meet the Top 10 Richest Supermodels

Did you think Gigi Hadid, Kendall Jenner, and Chrissy Teigen were rich? Not really. In fact, they barely even break into the first class lounge. The top richest supermodels are dominated by the women who changed the fashion industry forever during the 80s and 90s.

The supermodels, the runway models that became household names, then left the fashion industry and turned themselves into money-making machines in other areas.

Together, the top 10 richest supermodels have an estimated net worth of over $2.6 billion. And who said models were dumb?

1. Slavica Ecclestone

Slavica Ecclestone is a former Croatian supermodel with a net worth over $1.2 billion. She walked for reputed designers and modeled for all the big brands, including Gucci and Armani.

The lion’s share of her wealth doesn’t come from her career as an international fashion model, though, but from a secret divorce settlement. She cashed in pretty big after a 25-year marriage to Formula One boss Bernie Ecclestone.

When the billionaire had to face charges for paying a German banker a £27.5 million bribe, some additional details came to light. And the wife and two daughters took most of the family’s £2.4 billion trust fund ($3.2 billion). In fact, the former supermodel pays her husband £60 million a year ($79 million).

2. Kathy Ireland

Kathy Ireland is a self-made millionaire, with a net worth estimated between $420 million and $500 million. After 13 years appearing in the Sports Illustrated’s Swimsuit Issue, she became an entrepreneur and amassed a fortune thanks to her licensing company, Kathy Ireland Worldwide.

One of the richest supermodels in the world, Ireland promotes over 17,000 products in sectors like furniture, nutrition, weddings, fitness, gardening, and fashion. Her company has an estimated annual revenue of $2.5 billion.

3. Gisele Bundchen

The Brazilian Gisele Bundchen was the highest-paid supermodel for 15 years, from 2002 to 2017. Thanks to her contracts with important brands in the fashion industry, the supermodel’s wealth is estimated at around $400 million.

Gisele started her career in the late 90s. She worked as a Victoria’s Secret Angel and also did campaigns for Givenchy, Ralph Lauren, Versace, Dolce & Gabbana, Ferragamo and more. In 2014, she was the spokeswoman for Chanel No. 5.

Even if she isn’t the highest-earning model anymore, in 2017, she still made a cool $17.5 million (43% less than her 2016 income of $30.5 million).

4. Iman

Iman was one of the first supermodels in the fashion industry. Today, she’s also known for her long marriage to the late David Bowie, as well as for her philanthropic work. Back in the 80s, she was “The African Queen,” and Yves Saint Laurent dedicated an entire collection to her.

Iman was discovered when she was 18, by world-renowned photographer Peter Beard and few people know that to leave Africa and move to New York, she had to divorce her first husband.

Iman made her $100-million-fortune from modeling, and also from her business in the cosmetic industry. She was one of the first to introduce makeup for dark skin tones.

5. Cindy Crawford

What would be a list of the richest supermodels without everybody’s favorite Cindy Crawford? A fashion icon and of the most famous supermodels of the 90s, Crawford appeared on cover magazines, campaigns for well-known brands, and had a long presence on the runway. She was contracted by just about everyone from Chanel to Dolce Gabbana.

Crawford also earned good money from global endorsement contracts with famous brands like Pepsi, Revlon, and Omega. However, most of her wealth now comes from her lines of furniture and beauty products, racking in over $100 million.

6. Heidi Klum

Heidi Klum went from supermodel to TV star to business mogul. Her salary is estimated at $19 million a year from fashion lines, endorsement contracts, and TV appearances. Since 2018, her net worth is estimated to be as high as $90 million.

Heidi Klum became famous as one of Victoria’s Secret’s models at the end of the 90s. Now she’s the executive producer and host of the reality TV design competition Project Runway. And also a judge on the shamefully bingeful show America’s Got Talent.

7. Tyra Banks

Tyra Banks is another of the richest supermodels who turned to the television to increase her net worth. Like Heidi Klum, Banks is now worth $90 million. After a successful modeling career, the former model came back into the spotlight with a reality TV show America’s Next Top Model.

Most of Bank’s fortune, however, is the result of smart investments over the years. Despite her mega riches, the TV star is known for her money-saving habits. She also joins Klum on America’s Got Talent as the show’s presenter. Maybe it should be called “America’s Got Supermodels,” instead.

8. Adriana Lima

Another Brazilian on the richest supermodels list is Adriana Lima, the supermodel with the longest career as Victoria’s Secret Angel. For a couple of years, she was the second-highest-paid model in the industry, after Gisele Bundchen and today, her wealth is estimated at $75 million.

At 37, Adriana Lima is still one of the most celebrated models in the industry. Besides her collaboration with the big fashion brands, this wealthy supermodel has signed a series of highly-paid endorsement deals with companies that include Vogue Eyewear, Maybelline, and IWC Watches.

Adriana Lima is also one of the most famous Insta models, with almost 12 million followers on the social media platform.

9. Kate Moss

Kate Moss was one of the highest-paid supermodels for years, helping her reach her $70 million net worth. Once a wild supermodel with a weakness for random sexual dates and cocaine, Moss finally grew up, turning to business and founding the modeling companies Tilly Church Ltd and Skate LLP.

The supermodel is still a rebel though, according to HMRC (Her Majesty’s Revenue and Customs), which has her modeling company embroiled in a dispute with Tilly Church for £2.6million ($3.4 million). Nice to know she hasn’t lost touch with her wild roots.

10. Alessandra Ambrosio

Alessandra Ambrosio is a supermodel and actress, who along with Heidi, Adriana, and Gisele, became known as one of Victoria’s Secret Angels. Her net worth is estimated at $60 million.

Besides strutting out on the runway as an Angel, Ambrosio modeled for famous houses in the industry, including Armani Exchange, Chanel, Givenchy, Prada, Dior, and Ralph Lauren.

As an actress, she’s appeared in high-profile movies like Casino Royale and New Girl. Together with Adriana Lima, Ambrosio also had a guest appearance in hit show How I Met Your Mother.

The supermodel was also a judge in the reality shows Project Runway and Australia’s Next Top Model. Talk about keeping it in the gang.

The Richest Supermodels

With most of the richest supermodels now in their 40s and 50s, these power women have shown they’re more than just pretty faces. Since most of their businesses were built on personal brands, the now-successful entrepreneurs pay more attention to their image than they did as supermodels, leaving the hot bathing suits (and dollar bills filled with coke) behind and focusing on classy and elegant looks instead.

Featured image from Shutterstock.

October 17, 2018
Getting High Is Now Legal in Canada

As of midnight last night in Newfoundland (Canada’s most eastern province) recreational marijuana become legal. At the time of writing, marijuana in Canada is now legal across all provinces. “I feel great,” said Ian Power, one of the first people to purchase the drug over the counter. Is that great about making history, or great because he’d already taken a few tokes?

Recreational Marijuana in Canada Ends “Prohibition”

An active cannabis advocate for most of his life, Power went on to say, “the prohibition has ended right now,” and “the stigma ends tonight.” As of 12.01 a.m this Wednesday morning, adults in Canda are legally allowed to purchase, carry, and even share up to 30 grams of legal marijuana in public, the amount deemed suitable for recreation use. That is, enough to get high on but not enough to start your own drug cartel.

Cheers from the jubilant public about Canada making history showed how high emotions were at the scene. They also weren’t exactly accurate since Canada is not the first country to legalize recreational marijuana. In fact, their South American neighbors Uruguay legalized the production, sale, and consumption of the plant back in 2013. Although, Canada is the first G7 nation to do so.

Canadians will also be allowed to home-grow up to four plants, as well as make edible products for personal use–bring on the hash brownies! Interestingly, consumers of recreational marijuana will need to be 18 years old or more, compared to alcohol which is still illegal before 19 years of age in some provinces.

Marijuana in Canada will not be sold in the same places as cigarettes or beer. Consumers will have to go to designated sellers that are regulated and licensed.

What’s in Store for Pot Stocks Now?

Ever since the Senate passed the bill in June of this year, investors have been clamoring to join in the green rush, throwing money at cannabis producers such as Tilray (NASDAQ:TLRY) and Canopy Growth (NYSE:CGC).

Tilray Stock yesterday

Tilray Stock 5 days

One might have thought that stock would rally upon the legalization taking effect. However, there has already been a decent amount of hype surrounding pot stocks over recent months and Tilray actually saw its stock drop slightly yesterday compared to last week. Although, it’s definitely worth keeping an eye on it as Wednesday unfolds.

It seems that pot stocks have become so inflated it’s inevitable the bubble will burst once the actual demand is established. Many analysts predict that demand will outstrip supply in the beginning, forcing “sold out” signs to go up in many points of sale. This would serve to confirm investors’ belief of massive demand and hence, massive opportunity for cannabis producers.

However, this situation is unlikely to hold. According to Motley Fool, as supply eventually catches up with and outstrips demand, pot stocks will crash down from the epic high they’ve been on.

Featured image from Shutterstock.

October 17, 2018
Mud in the Eye of Naysayers as Netflix Stock Skyrockets

Whoever said that Tuesday was going to be a rough one for Netlifx investors (no finger pointing here), ended the day with mud in their eye as Netflix stock (NASDAQ: NFLX) soared by a massive 15% (trading at 11% up after the bell rang) after the company announced its third-quarter earnings report.

Netflix Smashes Its Q3 Records

After missing its quarter two targets by 1 million subscribers stock went into a tailspin, leaving investors blindsided. But it looks as if the online streaming service provider has been working hard since then, smashing its target of 5 million new subscribers and racking up an impressive 6.96 million. 1.09 million of these are US-based with a further onboarding of 5.87 million overseas.

Netflix Stock Wednesday

Earnings per share (EPS) was adjusted to 89 cents versus the 68 cents estimated and revenue was impressive as well, at $4 billion. Although international revenue declines by some $90 million due to YOY impact from currency, this figure was still higher than it was during Q3 of 2017.

As per the Sensor Tower estimates, it looks like Netflix is back to the high-speed growth that Wall Street had become accustomed to, having increased revenue by 36% in Q3. CEO Reed Hastings said after the report:

“We’re getting a little better on the forecasting.”

The Outlook for Netflix

Tuesday’s rally is certainly good news for the live streaming company and its investors but that doesn’t put it in the clear. There’s still the matter of the Goldman Sachs Monday warning about the price increase of producing content and competing against new players in the field. Moreover, Netflix will need to continue wooing new subscribers from abroad.

Break-neck speed is hard to maintain before someone ends up tumbling over. Whether or not Netflix stock will bound back and stay high remains to be seen, although yesterday’s shareholder party could get cut short at any time.

October 17, 2018
Meet the Top 10 Richest People in the Netherlands

Dutch billionaires run businesses with operations around the globe, from Europe to Australia and North America. Many of them have inherited their wealth from their forefathers, but there’s a handful of self-made billionaires on this list. And a few sordid details as well. Check out the top 10 richest people in the Netherlands. How many have you heard of before?

1. Charlene de Carvalho-Heineken

Bucking the overwhelming trend of men at the top, the first place on the richest people in the Netherlands list goes to a woman. Charlene de Carvalho-Heineken has a net worth estimated at $13.6 billion, placing her among the wealthiest women worldwide.

Charlene’s fortune comes from the family business. Her late father, Freddy Heineken, left her a 25% stake in Heineken International, allowing her pretty much full control. She’s also an executive director.

Charlene had little interest in the family business, though, as she told Fortune, in 2014. After her father’s kidnapping in 1983, she decided to keep a low profile and stay away from the media.

Before his death, she didn’t own anything of note but a single $32 share in Heineken, living on her husband’s salary, in London. Now she controls the second largest brewer in the world–Heineken’s portfolio includes about 170 beer brands.

2. Frits Goldschmeding

You may not know a lot about Frits Goldschmeding, but you almost certainly know about Randstad Holding, the world’s second largest staffing agency, with branches in 39 countries and over 30,000 employees.

Frits Goldschmeding is the founder of the company and owns a 35% stake. His net worth is estimated at $4.2 billion, despite his company losing some $2.7 billion in market value after the Brexit vote.

Randstad Holding has made some bold movements to reach its current status. The company took over competitor Vedior for $5.1 billion in 2007 and also bought out the US job site Monster for $429 million in 2016.

The 85-year old billionaire retired from the company’s board in 2011, but he’s still the second richest Dutch citizen today.

3. Hans Melchers

Hans Melchers made most of his $2.7 billion fortune from HAL Trust, an international investment company based in Monaco. The 80-year old Dutch billionaire is not as clean as he would like people to see him. In fact, of the richest people in the Netherlands, he’s also one of the dirtiest.

Back in the ‘80s, he was the owner of Melchemie Holland BV, a chemical manufacturing company, which supplied chemicals to Iraq. There were plenty of accusations that Melchers was, in fact, a chemical weapons supplier after being fined for a shipment of banned chemicals.

He brushed the incident off as a “one-time mistake,” but people continue to doubt the ethics behind one of the wealthiest Dutch citizens.

4. Ralph Sonnenberg

Ralph Sonnenberg is the Executive Chairman of Hunter Douglas Group, a company that makes window coverings and architectural products. His net worth is estimated at $2.5 billion.

Sonnenberg inherited the business from his father, who started the company in 1919. Now, he owns 90% of the Hunter Douglas Group’s stock. When it comes to skeletons in the closet?

His name appeared in the Swiss leaks investigation in which journalists from 45 countries revealed the secret bank accounts of celebrities, entrepreneurs, and politicians.

5. John de Mol

Unlike many of the richest people in the Netherlands, John de Mol made his name in reality TV, being the creator of some of the world’s favorite formats, such as Big Brother, Deal or No Deal, The Voice, and Fear Factor.

John de Mol sold his first media company, Endemol, in 2000, to Telefonica of Spain for $5.3 billion. He then continued to produce popular TV shows through his second media company, Talpa Media. In 2016, the billionaire sold this company to the British company ITV for £355 million ($440 million).

Being the fifth richest man in the Netherlands isn’t as simple as it looks, though. The Independent revealed that de Mol’s decision of selling his company came after a long series of life threats and extortion attempts. e Mol’s fortune is estimated at $1.9 billion.

6. Kommer Damen

Kommer Damen is the owner of Damen Shipyards, the Netherlands’ biggest shipbuilder and one of the largest in Europe. The family-owned company generated sales of $2.5 billion in 2017, making Kommer Damen one of the richest people in the Netherlands, with a net worth of $1.8 billion.

The wealth wasn’t just handed to him, though. Damen bough the shipyard from his father and uncle in 1969, and turned the small company into a global player by using the modular shipbuilding concept to bring construction of small boats up to date.

Kimmer Damen’s reputation is far from spotless. His company was embroiled in several financial and legal issues and, in 2016, the World Bank debarred the shipbuilder for 18 months due to fraudulent practices. Moreover, in January 2017, Damen Shipyards was also involved in a criminal investigation for bribing government officials.

7. Lesley Bamberger

Lesley Bamberger has a net worth of $1.7 billion and is the owner and managing director of Kroonenberg Groep, a Dutch privately-held real estate company he inherited from his grandfather.

The Kroonenberg Groep has a diversified property portfolio that includes residential, industrial, and commercial buildings in the Netherlands, Canada, and the US. Most of the company’s properties are office buildings in Amsterdam and shopping centers in the Netherlands.

8. Robert Defares

Robert Defares is the co-founder and CEO of the tech-trading firm IMC, a company with offices in Amsterdam, Zug (Switzerland), New York, Chicago, Hong Kong, Shanghai, and Sydney. He owns a 62.35% stake in IMC, and his wealth is estimated at $1.5 billion.

This Dutch company has a reputation for being a bad employer. Former employees describe IMC as a low trust environment, where they had to deal with a backstabbing culture, awful management, and dirty politics.

Back in the Netherlands, the billionaire likes to stay in the shadows and is almost never mentioned in the media except for the occasional accusation of trying to look poor to avoid taxes.

9. Wim van der Leegte

Wim van der Leegte has a net worth of $1.5 billion. He inherited the family business VDL Groep from his father. The company today is one of the largest family-run European car and bus manufacturers. It has 98 plants in 20 countries and over 17,000 employees.

van der Leegte retired in 2016, after 50 years of working in the company. His three children are all involved in the family business. His son, Willem is the new president, while siblings, Pieter and Jennifer, are members of the executive board.

10. Wijnand Pon

Image by https://www.alux.com/

How did Wijan Pon make almost $1.5 billion? Cars, dairy, and investments. And no, just like most of the richest people in the Netherlands, he didn’t start from scratch either.

Wijnand Pon and his brother Ben inherited the family business from their father. The two brothers founded a chain of car dealerships named Pon’s Automobielhandel and, pretty soon, the company became the leading car importer for famous brands including Porsche and Volkswagen.

In 2016, Pon’s company was part of one of the biggest corruption scandals in the Netherlands, regarding a sale of 3,000 cars to the Dutch Defense Ministry and police force. The prosecutors settled the bribery case for 12 million euros ($13 million).

Besides the auto industry, Wijnand Pon also founded Koepon, a top player in the global dairy industry. The company operates dairy farms in Netherlands, Canada, Germany, Poland, and Scotland.

The Richest People in the Netherlands

The Netherlands ranks fairly low on the global corruption list. But that doesn’t stop its billionaires from getting their names mixed up in fraud scandals and criminal investigations. Unlike the richest people in India and the richest people in Indonesia, it’s refreshing to see both a woman and a brewery on the top of the list.

Featured image from Shutterstock.

October 16, 2018
Netflix Investors Brace Themselves for Q3 Earnings Report

Tuesday is likely to be a difficult day for Netflix investors as they brace themselves for the Q3 earnings report. What was once (albeit briefly) the world’s most valuable media company and purveyor of binge-worthy series seems to be on an inevitable downward trend.

The media giant’s Q2 earnings report left shareholders shaken and stirred as Netflix’s forecasts were off by 1 million subscribers, a discrepancy the company blamed on its own internal forecasting.

Netflix Could Do No Wrong–Until It Started Doing Wrong

The subscriber stagnation revealed in July ran through Netflix stock like an aftershock and ended one of this year’s longest and strongest rallies. Netflix investors had previously seen shares double between January and mid-July. But the recent tech selloffs left and right have done nothing to boost investor confidence and Netflix stock could be set to take another hit.

By Monday of this week, its stock was trading at over 15% less than its $400 level of some months ago, during which time Netflix market cap had overtaken that of Walt Disney. However, despite the unexpected cold shower last quarter, Netflix bulls remain confident the stock will rally.

App analytics provider Sensor Tower pointed to the signs of increased growth that the market has grown accustomed to, with Q3 earnings from in-app subscriptions rising by over 90% YOY thanks to some 50 million new installations.

On top of that, Netflix is experiencing major growth in emerging markets like India and Brazil. And even US growth supposedly remains strong, despite fears of a stagnating market.

Q3 is also thought to have seen more people flock back to the platform thanks to new seasons of its most popular shows. American Vandal, Orange Is the New Black, and Sacred Games are all among subscribers’ favorites.

But the Long-Term Outlook for Netflix Investors Is Not so Bullish

Despite signals from Sensor Tower, Goldman Sachs issued a warning yesterday. Analysts say that even if Netflix does reach its targeted 5 million new subscribers for Q3, Netflix investors can still expect more conservative growth moving forward. Producing world-class content isn’t cheap and Netflix is likely to see a cash burn increase from $2 billion last year to 3.3 billion this year.

Goldman Sachs cut the price target from $470 to $430, pointing to Netflix competitors trading lower price-to-earnings ratios. Netflix is still trading at around 150 times earnings, much higher than the sector as a whole, and Goldman Sachs analysts stated that Wall Street:

“continues to underestimate the size of Netflix’s global addressable market, the impact of incremental content spending, and the growing value of Netflix to both distributors and content creators.”

Netflix is under constant pressure to keep hold of its subscribers and attract new ones by producing quality content and its content budget is estimated to reach an eye-watering $13 billion this year. As more and more rivals enter the video streaming market, including Apple, Disney, and even Snapchat, the pressure will only mount.

Featured image from Shutterstock.

October 16, 2018