Amazon's Jeff Bezos ups his stake in billionaires' space race

Amazon founder Jeff Bezos unveiled plans on Tuesday to build a rocket manufacturing plant and launch site in Florida to better compete with fellow billionaires using their fortunes and tech prowess to open a new frontier in human space travel and exploration. 

PHOTO: AFP

SEP 16, 20157:06 AM

[CAPE CANAVERAL] Amazon founder Jeff Bezos unveiled plans on Tuesday to build a rocket manufacturing plant and launch site in Florida to better compete with fellow billionaires using their fortunes and tech prowess to open a new frontier in human space travel and exploration.

Mr Bezos' space startup, Blue Origin, intends to invest more than US$200 million to build the rocket-making facility adjacent to Nasa's Kennedy Space Center.

The vehicles will blast off from a refurbished launch pad at Cape Canaveral Air Force Station, located just south of Nasa's seaside spaceport. "As a kid, I was inspired by the giant Saturn 5 (Apollo moon) missions that roared to life from these shores. Today, we're thrilled to be coming to the Sunshine State for a new era of exploration," Bezos told an invitation-only crowd gathered at the company's launch site.

Mr Bezos' announcement comes at a pivotal time in the US space industry, which is luring private investment and technological innovation in an attempt to lower the cost of space travel and improve safety.

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Blue Origin is competing against Elon Musk's SpaceX and a handful of other startups backed by billionaire entrepreneurs, including Microsoft co-founder Paul Allen and Virgin Group Chief Executive Richard Branson.

Like Mr Branson's Virgin Galactic, one of Blue Origin's goals is to fly tourists into suborbital, and ultimately orbital, space. "For sure, this is an industry where people are competitive, but I think it's also an industry where there is a lot of heart and people doing this for reasons of passion," Mr Bezos said. "If my only goal were to make money, I'd would just open a new kind of snack food company. It's way more likely to work ... but I don't want to do that," he added.

Blue Origin has been developing and testing a small rocket in West Texas, called New Shepard, that can travel about 62 (100 km) above the planet before returning to Earth. The company's new rockets, which have yet to be named, will be able to reach orbital altitudes, such as the 250- (400 km) mile-high perch of the International Space Station, and beyond.

Blue Origin also will test its new BE-4 engines in Florida. The company is partnering with United Launch Alliance (ULA), a joint-venture of Lockheed Martin and Boeing, on the engine development. Mr Bezos later told reporters he is not sure whether the engine would fly first on ULA's Vulcan rocket, or Blue's booster. "Our approach on this is very simple, which is heads down, focus on the technology," Mr Bezos said.

ULA also is backing an alternative engine under development by Aerojet Rocketdyne Holdings Inc, which last month submitted a US$2 cash billion offer to buy ULA. "Ultimately (ULA) will make the decision about what they want to do, but we're going to work our butts off to give them a great engine," Mr Bezos told Reuters.

Mr Bezos said Blue Origin's new rocket should debut before the end of the decade. He declined to say how much he had invested in Blue Origin to date but said it was "significant with much more to come." "I'm a huge believer that this is a viable and good business," Mr Bezos said. "I'm also kind of well known for being long-term oriented, although I think Blue Origin is going to set a new standard for me in that regard."

REUTERS

    
 

HP says to cut up to 30,000 more jobs in enterprise business

Meg Whitman, chief executive officer of Hewlett-Packard, speaks during an interview in Las Vegas.PHOTO: BLOOMBERG 

PHOTO: BLOOMBERG

SEP 16, 20156:43 AM

[SAN FRANCISCO] Hewlett-Packard Co, which is splitting into two listed companies later this year, said it expects to cut another 25,000 to 30,000 jobs in its enterprise business as part of its efforts to save US$2.7 billion in costs.

The 76-year-old company is separating the faster-growing corporate hardware and services operations, to be called Hewlett Packard Enterprise, from its computer and printer businesses.

The expected job cuts will result in a charge of about US$2.7 billion, beginning in the fourth quarter, HP said in a statement on Tuesday. "We've done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring," Chief Executive Meg Whitman said.

The total job cuts planned by the company as part of Ms Whitman's multi-year restructuring plan was 55,000 as of October last year. HP had more than 300,000 employees as of Oct 31, 2014.

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In the latest third quarter HP's revenue from personal computer and printer businesses, its largest, fell 11.5 per cent. Enterprise services division sales dropped 11 per cent, while revenue at the enterprise group rose 2 per cent.

Hewlett Packard Enterprise is expected to have more than $50 billion in annual revenue and report adjusted profit of US$1.85 to $1.95 per share in 2016, HP said on Tuesday.

The business is expected to report free cash flow of US$2.0 billion to $2.2 billion in 2016, at least half of which is expected to be returned through dividends and share buybacks.

The stock fell 1.4 per cent to US$26.73 in extended trading on Tuesday.

REUTERS

    
 

Asian futures tip stock rebound as bonds track Treasury selloff

PHOTO: AFP

SEP 16, 20157:44 AM

[NEW YORK] Index futures signaled a rebound in Asian stocks as the dollar held gains, while bonds in the region paced a selloff in Treasuries after US retail sales data bolstered the case for higher interest rates as the Federal Reserve prepares to meet.

Futures on equity gauges from Japan to Australia rallied in recent trading, after a second day of losses in Chinese shares sent the Asian stock benchmark to a one-week low. The greenback halted a seven-day decline versus Australia's currency. Ten-year Australian and New Zealand bonds sank following a 10 basis-point surge in similar maturity Treasury yields, while US oil extended its advance into a second day ahead of American stockpiles data.

"Global markets were in a more buoyant mood with core sovereign bond yields and equity markets rising," Con Williams, an agricultural economist in Wellington at ANZ Bank New Zealand Ltd, said in a note to clients. The US retail sales data Tuesday "suggest the consumer is in fine fettle, and hasn't been unsettled by August's equity volatility or slowdown in China," he wrote.

A second month of gains in US retail sales bolstered optimism over American consumption, even as separate data indicated a pullback in industrial output. The numbers came a day before the Fed meets to decide whether the economy can withstand higher borrowing costs, with odds on a rate hike on Thursday holding at 28 per cent, down from more than 50 percent before China roiled global markets by devaluing the yuan. The largest US exchange-traded fund tracking Chinese shares extended losses Tuesday.

Nikkei 225 Stock Average futures jumped 1.2 per cent in recent Osaka trading, while contracts on the Standard & Poor's 500 Index were little changed by 7:58 a.m. Tokyo time following a 1.3 per cent rebound in the gauge. The dollar rose 0.1 per cent versus the Aussie and was at 120.37 yen after gaining 0.2 per cent last session. Ten-year Australian government bond yields climbed 13 basis points to 2.81 per cent as the S&P/NZX 50 Index rallied 0.4 per cent in Wellington. Oil advanced 1 per cent to US$45.02 a barrel.

The debate over whether the Fed will pull the trigger on the first US rate increase since 2006 is entering its final hours, with economists and the market split on what action policy makers will take in Washington later this week. Some analysts are suggesting the Fed consider a 1/8 percentage point increase in the benchmark rate, as opposed to the more typical quarter-point hike. A smaller move would allow the Fed to respond to improvements in the world's largest economy, while minimizing disruption in markets already jittery from China's currency move and gyrations in local equities.

Futures on Australia's S&P/ASX 200 Index were pointing to a 1.1 per cent rebound Wednesday, after banking stocks and mining companies drove the index down 1.5 per cent last session. Contracts on the Kospi index in Seoul climbed 0.7 per cent in recent trading, while those on Hong Kong's Hang Seng Index advanced 1.1 per cent.

Chinese futures trading was mixed, with contracts on the FTSE China A50 Index and the Hang Seng China Enterprises Index - - a gauge of mainland shares listed in Hong Kong - up at least 1.2 per cent, while futures on the Shanghai Shenzhen CSI 300 Index dropped 0.3 per cent in most recent trading. The Deutsche X-trackers Harvest CSI 300 China A-Shares exchange-traded fund fell a second day in New York, losing 1.4 per cent.

Nikkei 225 futures rose to 18,100 by 3 am in Osaka, while yen-denominated contracts on the index traded in Chicago added 0.1 per cent to 18,150 after climbing 1.5 per cent in the previous session. The MSCI Asia Pacific Index slipped 0.6 percent on Tuesday as a 3.5 per cent drop in the Shanghai Composite Index soured sentiment toward equities in the region.

The Bloomberg Dollar Spot Index was little changed at 1,205.58 after gaining 0.3 per cent on Tuesday to snap a three- day decline.

Yields on 10-year Treasury notes rose to 2.29 per cent on Tuesday, the highest closing level since July 22. Rates on two- year notes, regarded as being more policy sensitive, climbed by eight basis points to 0.81 per cent, the highest since April 2011.

"Retail sales is positive - everyone looks at the consumer for guidance in the direction and strength of the economy," said Sean Simko, who manages US$8 billion at SEI Investments Co. in Oaks, Pennsylvania.

Yields on 10-year German bunds jumped nine basis points to 0.74 per cent, while similar-maturity Spanish bond rates were little changed after rising for four days.

West Texas Intermediate crude rose a second day, adding to Tuesday's 1.3 per cent climb with an industry group said to have reported a 3.13 million-barrel drop in US oil inventories for last week. The US Energy Information Administration issues government supplies data Wednesday, with analysts predicting a 1 million-barrel decline in stockpiles at the Cushing, Oklahoma delivery point for WTI.

The spread between WTI and Brent narrowed to the smallest in eight months Tuesday amid rising North Sea deliveries and falling stockpiles at the largest US storage hub. A narrowing spread signals that the global supply glut is growing while there may be relative tightening in parts of the US.

The Bank of Japan publishes its September economic report on Wednesday, while Thailand is projected to keep interest rates on hold in a policy review. Sri Lanka updates on gross domestic product and Malaysian markets are closed for a holiday.

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China's move to more market-determined yuan should be welcomed: RBA

Chinese authorities have moved their exchange rate regime towards a more market-determined rate, a development which should be welcomed, a senior Australian central banker said on Wednesday. 

PHOTO: AFP

SEP 16, 20157:46 AM

[SYDNEY] Chinese authorities have moved their exchange rate regime towards a more market-determined rate, a development which should be welcomed, a senior Australian central banker said on Wednesday.

Reserve Bank of Australia Assistant Governor Guy Debelle noted that while the initial effect of the Aug 11 move was for the yuan to depreciate by around 4.5 per cent, it should be viewed against the fact that the currency had appreciated by more than 15 per cent over the past year in trade-weighted terms. "This is not all that big in the general scheme of exchange rate moves, though it generated a very large amount of commentary," Mr Debelle told an Actuaries Institute Banking Seminar in Sydney. "On that day, the Chinese authorities moved the exchange rate regime further along the path to a more market-determined rate, a development which should be welcomed." Debelle also spoke about the rundown in China's foreign exchange reserves, a decline in global bond market liquidity and low global long-term yields. "All three of these issues are going to be with us for a while to come. So it is important we adjust to the current environment rather than wish it was something else," he said.

REUTERS