October 11, 2016: Euronet Worldwide, Inc. (NASDAQ:EEFT), a leading global electronic payments provider, has completed the acquisition of UK-based ATM operator YourCash Europe Limited. The acquisition includes approximately 5,000 ATMs across the UK, Netherlands, Belgium and Ireland.

With the addition of YourCash, the combined businesses will operate independent ATM networks in 21 European countries. YourCash provides Euronet with additional experience and resources in key Western European markets and a greater access to retailers, particularly in the UK and Netherlands. YourCash will benefit from Euronet’s leading ATM processing capabilities, large-scale operational expertise, additional capital for ATM deployments, as well as a best-in-class technology platform, which will enable more value-added products on their ATMs and diversify the value propositions to their merchant and bank partners.

“YourCash has a management team that shares our vision of bringing financial convenience to customers, and has a proven track record of delivering strong growth in new and existing markets,” said Nikos Fountas, Euronet’s Executive Vice President and Chief Executive Officer – EFT Europe. “This is a great opportunity to leverage the benefits that each organisation brings to the partnership in order to expand Euronet’s ATM coverage across Europe, create additional value for all of our customers, accelerate revenue growth and achieve market synergies across the businesses.”

Jenny Campbell, CEO and principal shareholder of YourCash, said, “We are excited to join the Euronet family. After years of excellent organic growth and expansion into new markets, we are excited to be able to leverage Euronet’s global scale, value added product portfolio, technology, industry expertise and financial strength to further expand our business.”

YourCash generated approximately £29.0 million in 2015 revenues and is expected to be accretive to Euronet’s Adjusted Cash Earnings per Share by approximately $0.07 – $0.08 in the first full year of operations.

Not including the ATMs of YourCash, Euronet operates nearly 26,000 ATMs across 50 countries and provides services to approximately 185,000 ATMs around the world.

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September 16, 2016: Zipcar, the world’s leading car-sharing network, announced the launch of its new free-floating car-sharing service in Brussels, Belgium. This marks the seventh major country launch for the brand in Europe and the introduction of its most flexible car- sharing service to date.

The launch is a pivotal milestone in Zipcar’s international expansion, which already includes a well-established presence in the United Kingdom, Spain, France, Austria, Germany and Turkey.  The launch represents a significant innovation in Zipcar’s offerings, and demonstrates a strategic decision to offer a range of alternative car-sharing models according to a city’s requirements.

The new service gives Zipcar members the freedom to pick up and drop off a Zipcar at any location within a set geographical area – a first for the global car club network. The service complements car-sharing models operated in other cities around the world, including round-trip and flexible one-way rentals, allowing the company to deliver on its commitment to work with city authorities and provide consumers and businesses with a practical alternative to car ownership in urban areas and congested cities.

Zipcar’s free-floating fleet will extend from 100 cars at launch to more than 250 within the first month. The Zipcars – all Peugeot 208s – can be picked up and dropped off in and around the Brussels-Capital Region, within a zone that includes 16 of the city’s 19 communes.  The service will also be readily available to Brussel’s Zipcar members travelling to and from Zaventem Airport, the city’s international airport. Members can easily and spontaneously access a Peugeot 208 via the Zipcar app, giving them access to a versatile car that is well suited to life in the city with easy handling, low emissions and room for up to five people.

The free-floating service extends Zipcar’s international offering, which currently serves the needs of its members across 500 towns and cities globally with access to a wide range of vehicles. The car-sharing network also recently reached a milestone of one million members globally, highlighting the adoption of car-sharing services across the world.

Global membership in car-sharing services is projected to grow from less than 5 million in 2015 to 23.4 million in 2024, according to independent figures from Navigant, as consumers and businesses seek a more sustainable and economic alternative to car ownership, particularly in urban areas to supplement public transport infrastructure.

Zipcar International President Nicholas Cole said, “Today’s launch in Brussels marks a significant milestone for Zipcar. Not only are we extending our operations to another world-class city, but we are also excited to be launching our newest service, free-floating car sharing. Our proven ability in offering convenient access to a car, without the hassle of ownership, meets the need of our members to help them more easily navigate the city.” He added, “This development in our offering means that we are the first global car-sharing network to offer a variety of different car club models around the world, according to different cities’ requirements. We look forward to welcoming Belgian members to our network.”

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May 18, 2016: CENX the global leader of orchestrated service assurance and management solutions for physical and virtualised networks, announced the company has been selected by a Tier-1 global communications service provider, with headquarters in southern Europe, to orchestrate and assure on-demand cloud and data centre services. CENX’s Exanova Service Intelligence software will enable on-demand deployment and real-time assurance of innovative services for the service provider’s international enterprise and wholesale carrier customers. Initial services will include highly reliable connectivity to the public cloud and data centre interconnect (DCI).

“This win represents a significant addition to our European footprint and we look forward to supporting the growth of our customers in the region as they transform their network operations,” said Jay McMullan, Senior Vice President of Sales and Marketing, CENX. “Exanova Service Intelligence enables new, revenue-generating services, in combination with scalability and extensibility, which together provide a future-proof solution for the quick adoption of NFV and SDN infrastructure.”

Exanova Service Intelligence Lifecycle Service Orchestration (LSO) capabilities will provide the cornerstone of corporate customer self-serve offerings for the European service provider. Using a customer portal, subscribers will be able to order, activate, manage and monitor new cloud connectivity and DCI services, on demand. Exanova automates the workflow of the operations tasks required to fulfil customer requests, interfacing with underlying multi-vendor network infrastructure, thus dramatically reducing the time to deploy new services.

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Ousmène Mandeng

February 26, 2016: China’s slowdown has led to a considerable recalibration of market views. It is the third biggest economy after the US and the EU and is set to overtake the EU as the second largest by 2020. Clearly, China matters for the world economy. Its slowdown, therefore, naturally raises concerns. China has become a formidable engine of growth for the world economy. This is unlikely to change any time soon. The biggest challenge over the next few years though will likely be China’s integration into the world financial system.

China’s slowdown is relative only. It has grown on average in real terms 10 percent per year in 2000-10. In 2011-15, its real growth was 8 percent. It is now projected to continue to slow to possible 6-6½ percent in 2016 and 2017. A rebound to reach previous GDP growth rates seems unlikely as China has become significantly richer reducing prospects for sustained high growth rates as key growth success factors such as productivity growth, population growth and capital investments wean off or become negative.

China has increased its share in world GDP from 4 percent in 2000 to 16 percent in 2015. This illustrates its frantic pace of economic integration. It contributed more GDP in cumulative dollar-terms since 2000 than the US or the EU.

The economic weight of China has made it one of the biggest international trading partners. Its share in world merchandise imports increased from 4 percent in 2000 to 11 percent in 2014 and is now second only to the US. Its share in world imports stagnated in 2013 and 2014 indicating some saturation and increasing changes in its composition of GDP towards domestic consumption. The country’s persistent external surpluses have meant that it has subtracted more from GDP from the rest of the world than it added.

The importance of China’s as a leading merchandise importer has naturally made several countries increasingly dependent on their exports to China. In 2014, more than 80 percent of exports from Mongolia and Sierra Leone went to China. For the larger economies, exports to the country in 2014, range from 34 percent for Australia to less than 2 percent for Mexico. The first round effect of a slowdown in China will therefore be felt very differently between countries.

The regions most dependent on exports to China are Asia and Latin America. In 2014, total exports to the country represent on average (weighted) 22 percent of Asia’s exports and 9 percent of Latin America’s exports. Sub-Saharan Africa, the Middle East & Northern Africa (MENA) and Europe are exposed less with total exports averaging 6, 5 and 4 percent, respectively.

China has remained one of the largest creditor countries. The considerable accumulation of external surpluses has allowed the country to conduct large investments abroad. Anecdotal evidence suggests that China has become a major direct investor. However, data on foreign direct investment (FDI) do not seem to support that. As a share of the total stock of outward FDI in 2014, it represents only 3 percent compared with 25 percent for the US. It has invested the bulk of its external surpluses in advanced economies’ government securities, notably US treasury notes.

The increase in China’s current account surplus will likely sustain its outward investments. The country’s current account surplus is estimated to have reached 0.5 percent of world GDP, the highest level since 2008, and is projected to maintain that level in 2016 before declining gradually. The implied transfer of resources abroad will support investments in the rest of the world.

For 2016, China’s output is projected to soften gradually. The basic assumption is an orderly deceleration towards the 6-6½ percent range over the medium-term. However, a more pronounced slowdown is also possible and will largely depend on the implementation of needed reforms, including for the financial system. The adoption of new monetary policy framework under a floating exchange rate regime would also be desirable to mark the macroeconomic policy shift towards domestic rather than external targets. The slowdown will likely expose more vulnerabilities in particular in the financial sector and needed safeguards will have to be adopted. While debt represents a challenge for the corporate sector and regional governments, China’s significant residual fiscal space should allow to adopt sufficient countercyclical measures for a measured soft landing in output.

The estimations of China’s output still rely to a large extent on its ‘old’ industries. Limited data on China’s rapidly growing services industry reduce the explanatory power of current GDP estimates. The country’s output and possibly its rate of growth may be significantly underestimated.

For China and the rest of the world, the biggest challenge for 2016 and onwards will likely be its pace of international financial integration. A first, though mostly a symbolic step, was the inclusion of the renminbi into the IMF SDR basket demonstrating that China wants to lead on international monetary issues. Pending domestic financial sector reforms, China will eventually seek integration into the international financial system. As the country maintains the largest stock of broad money in the world at about 200 percent of China’s GDP or 30 percent of world GDP, the pace of international financial liberalisation will be critical to allow for an orderly absorption of its financial resources. China’s international financial integration will also depend on the pace of substitution of its current foreign assets and the desire to add international diversification to its domestic assets.

The emergence of China as an international economic force has no precedent. The country’s increasing economic role will likely be replicated in other areas, notably in the financial sector. The absorption of China’s merchandise goods will eventually be followed, though not necessarily in a similar scale, by the absorption of its services and financial products.

In the short term, the likelihood of a hard landing for China remains low. Even at about 6 percent GDP growth on average, it will contribute more than double the GDP it contributed during 2000-10 when its growth rate was 10 percent. Other countries may simply need to recalibrate their expectations that output may no longer grow exponentially but merely linearly.

Ousmène Mandeng is Head of Research and Development at New Sparta Asset Management 

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