Alibaba merging China food delivery units to counter Tencent-backed Meituan - sources www.reuters.com

HONG KONG (Reuters) - Alibaba Group (BABA.N) plans to merge its food delivery units and raise funds for the combined business, intensifying a battle with Tencent-backed Meituan Dianping for dominance of China’s booming on-demand services market, four people told Reuters.

The Alibaba units to be merged include food delivery platform Ele.me and food and lifestyle services firm Koubei, the people said. Alibaba is looking to raise between $3 billion and $5 billion for the combined entity, said one of the sources. The entity could be valued at up to $25 billion, said another.

A Hong Kong-based Alibaba task force is working on the merger and fundraising for the combined entity, according to two of the people.

Alibaba’s units and Meituan, backed by social media and gaming giant Tencent Holdings (0700.HK), are fighting for supremacy in China’s buoyant online-to-offline (O2O) market where apps link smartphone users with bricks-and-mortar businesses to provide local food delivery and other offerings.

“Alibaba and Meituan are the two main companies that can offer comprehensive O2O services,” said Mo Jia, a Shanghai-based research analyst with technology consultancy Canalys. “Alibaba’s three units are complementary to each other and it has strategic logic to merge them into one platform to compete with Meituan.”

One of the people said the fundraising was expected to launch later this year. The person said the new unit would also include Alibaba’s Hema Fresh, a chain of cashless supermarkets offering fresh produce and food delivery.

Alibaba, which also handles media queries for Koubei and Hema, declined to comment. A spokesman for Ele.me denied the merger and fundraising plan. All the people declined to be named as the information is confidential.

The value of O2O transactions in China jumped 72 percent last year to $146 billion, according to Chinese research firm Analysys.

According to a June report by Chinese research firm iiMedia Research, Ele.me and Baidu Waimai, which Ele.me acquired a year ago, held a combined 55 percent of China’s food delivery market in the first quarter compared with Meituan’s 41 percent.

China’s biggest ride-hailing firm Didi Chuxing also entered the fray in April launching its own food delivery service.

Meituan Dianping is expected to raise more than $4 billion when it floats in Hong Kong in the coming months. Last year the company was valued at $30 billion in a fundraising round.

In April, Alibaba bought the shares it did not already own in Ele.me in an all-cash deal that valued the startup at $9.5 billion. The e-commerce giant and its financial affiliate Ant Financial Services Group previously owned a 43 stake in the business, whose name roughly translates to “Hungry?”.

Koubei, founded in 2015 as a 50-50 joint venture of Alibaba and Ant Financial, had a valuation of $8 billion at the end of 2017, according to a list of unicorns published by a unit under China’s Ministry of Science & Technology in March. Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital joined as investors in a January 2017 funding round.

Ant Financial declined to comment.

There are no publicly available numbers for Hema, which was founded two years ago as part of Alibaba’s retail push and now operates more than 60 supermarkets in 13 cities in China, according to its website.

Coal miners to see improved finances: BMI www.mining.com

A new report by BMI Research states that despite coal being an increasingly targeted commodity on environmental protection grounds, the demand remains strong due to the economic aspect of the fossil fuel and therefore producers will see improving financials over the coming years.

According to BMI, major coal miners have already displayed positive financial performance in FY2017 and H118, aided by the significant rally in coal prices and better management strategies. In the researcher’s view, this trend is likely to go on.

“For instance, the world’s largest coal miner China Shenhua Energy's net debt to EBITDA decreased from 1.0x in FY2015 to 0.2x in FY2017. US coal miner Peabody Energy Corp’s net debt to EBITDA also decreased substantially from 40.7x in FY2016 to 0.1x in FY2017 after the company filed for chapter 11 bankruptcy in 2016 and streamlined its operations. While not a dedicated coal miner, diversified miner Glencore with significant exposure to coal and a reputation of prioritising coal at a time when others are exiting the industry continues to lower its debt load. The company's net debt reduced to $10.7 billion in FY2017 compared to $15.5 billion in FY2016. The company's debt to EBITDA ratio is at a multi-year low of 2.7x,” the report reads.

BMI suggests that Asian producers will continue to outperform in terms of financial gains due to proximity to demand markets and availability of deposits, while producers in western countries including the United States and Europe will face increasing costs and greater environmental scrutiny.

In its outlook, BMI considers that although times are tempting for miners to resume aggressive acquisitions amid better performance and a pickup in coal prices, it is not expected that they will increase capital expenditures significantly. “This is because as a group, coal miners are still low on free cash flow although firms including China Shenhua, Coal India and Adaro Energy that have substantially better balance sheets distort the total. Compared to a total of $11.8 billion spent on capex in FY2016 by the top 33 coal mining companies on Bloomberg's top coal mining competitive peers Index, spending got reduced to $9.6 billion in FY2017,” the firm’s document states.

In this context, it is expected that capex for most coal miners will mostly be spent on sustaining existing operations, innovation to improve operational efficiency, and expanding growth assets as minimal investment in greenfield projects will continue.

This is particularly the case for US miners, who will see cost inflation become a larger challenge because it will eat into margins. In Q118, the three largest US coal miners, including Cloud Peak Energy and Arch Coal, reported higher y-o-y costs per tonne, citing higher fuel costs, repairs, and lower volumes sold.

According to BMI, Chinese miners will also be at a disadvantage despite the weakening Chinese yuan that will work to offset some losses. “For instance, production costs, including transportation, depreciation and tax, jumped 11% on average to about CNY272/tonne of coal mined in FY2017 at China Shenhua Energy, China Coal and Yanzhou Coal. Costs at midsize Chinese mines rocketed by 17% to about CNY328/tonne of coal mined in FY2017 according to Bloomberg. Additionally, increasing mine-safety and emissions standards as per the country's strict adherence to environmental targets and substantial compensation payments to displaced workers of mine closures will continue to plague the sector,” the forecast concludes.

Russia sets standards for organic food production www.rt.com

President Vladimir Putin has signed a new law regulating production, storing and transportation of organic produce in Russia. The decree bans agrochemicals, pesticides, antibiotics growth stimulators and hormones.
The new law, previously approved by both chambers of the Russian Parliament, will enter force on January 1, 2020. The regulation introduces references to “organic produce,”“manufacturer of organic produce” and “organic agriculture,” as well as sets control over producing, storing, labeling, selling and transporting goods of the kind.

Why a nomadic homestay in Mongolia is the ultimate camping experience www.independent.co.uk

“That’s dinner,” my host told me, gesturing to the lone sheep tethered outside my guest ger that bleated gently as I returned from an invigorating six-mile trek through the pastel green hills to see the ruins of the Erdene Khambiin Khiid monastery.

Within two hours, the animal was slaughtered, shorn, blowtorched and butchered for the pot, leaving nothing to waste. It was a brutal lesson in the realities of nomadic life, which balances freedom, fresh air, and the vast Mongolian countryside with the challenges of self-sufficient and utterly remote living.

I was experiencing a nomadic family homestay in Khogno Tarna national park, attempting to switch off from my overwhelming city life by embracing a simpler way of being. The park offered the ultimate opportunity to get off grid, with grazing animals outnumbering people, vehicles and homes combined, and the evening entertainment consisting of a sky full of stars.

It was also a staging post for reaching Kharkhorim, the long destroyed capital of Ghengis Khan.

I was staying with Khadu, 40, his wife Oyon, 38, and three of their four children, 180 miles from the capital city of Ulaanbaatar. The family had three gers – circular structured tents insulated with wool and pitched around a wood-burning stove. Two of them were kept for guests, usually brought by a small Mongolian agency, Nomad Planet, with whom the family have collaborated for a decade.

Six hard single beds lined my guest ger in a hexagon around a woodburner, the flue poking through the centre of the tent. Unnecessary in the summer, the family explained it was kept burning constantly during winter, including throughout the night.

The modest camp, which also included a 4x4, a motorbike and a couple of rickety animal pens, was set upon a small, sandy knoll in between folds of rocky hills, a small lake and the rolls of the Elsen Tasarkhai sand dunes. Only a handful of other gers were visible for miles.

With no running water, Khadu fetched supplies for cooking and washing daily from the province’s well. The toilet was an open-air pit straddled with two planks and sheltered on three sides by a makeshift cubicle. By the time the sun reached its zenith, it was swarming with flies.

Food was predominantly animal produce: salty milk tea was all the family drank, and it was also used to warm up dried meat.

But what was lacking in amenities was amply compensated by nature. Only the lowing of the cows broke the dawn peace, and with the only electricity provided by a solar panel and a car battery in the main family ger, the pace of life fell into the circadian rhythm of the long summer days.

“I tried living in the city for a month and it felt like 10 years,” said Khadu, explaining that when the seasons were stable, his family might move four times in a year, seeking shelter in the valleys from the unforgiving winter winds and snow. “Here, it’s easy. If you need money, you sell an animal. If you need food, you kill an animal.”

It felt like an oversimplification but the family’s day-to-day life certainly seemed low-stress. There was a steady flow of activities involving the entire family, from milking the cows to keeping watch over the herds, making yoghurt, butter and curd, and maintaining the gers.

Guests were welcome to help; otherwise, we were left to relax, take in the scenery and go exploring on foot, horseback or in an all-terrain vehicle (ATV). From the serene grounds of the Lama Erdene monastery at the foot of Khogno Khan mountain to the sand dunes at sunset, the attractions were all free, deserted and set beautifully in nature.

I helped Oyon and her 14-year-old daughter Nandin make traditional dumplings filled with mutton and chopped vegetables, which they expertly crafted by hand to steam over the woodburner.

One morning, the Buddhist calendar indicated it was a good day for a haircut so Khadu shaved his seven-year-old son Luvsan’s head. Later, he sharpened his scissors to shear the sheep.

In the afternoon, I helped the children herd the goats, bred for their cashmere. It took some time to move them along from a patch of grass, mainly thanks to Luvsan’s pet kid Zuzu, an orphaned black goat that insisted on being carried and was bottle-fed like a baby.

Such tenderness and care for the goats followed by the killing of a sheep for food highlighted the completeness of their relationship with animals. And even the inherently violent act of slaughter was performed with respect: Khadu maintained that the traditional method of stunning the animal, slitting its stomach and pinching its main artery was the most humane way. The sheep was quickly senseless, and dead within two minutes.

Cooked in a pot with water, hot stones, potatoes, onions and carrots, it was enough to feed 15 to 20 people. Everyone ate hunks of flesh, fat and skin using their fingers and a sharp knife, leaving nothing behind except the offal, which would be used later by the family.

On the day I left, Khadu was up early to say goodbye before setting off to hunt wolves in the nearby sand dunes. The family had heard them attacking the sheep overnight and had gathered their neighbours to hunt the animals before they could kill more. The men set off on horseback and motorbikes with old rifles slung across their backs, slipping into the folds of the distant sand dunes without looking back.

63 killed in Mongolia floods www.xinhuanet.com

ULAN BATOR, Aug. 6 (Xinhua) -- Floods in Mongolia have killed 63 people, including 15 children, so far this year, the National Emergency Management Agency (NEMA) said Monday.

BoM President receives IMF Executive Director www.montsame.mn

Ulaanbaatar/MONTSAME/ President of Bank of Mongolia N.Bayartsaikhan met with IMF officials led by newly appointed Executive Director for Mongolia Hohyun Jang.

Shanghai's further opening-up attracts more foreign investors www.xinhuanet.com

SHANGHAI, Aug. 5 (Xinhua) -- At the forefront of China's opening-up drive, Shanghai is attracting more foreign investors with a spate of new measures in multiple sectors.

On July 10, authorities in Shanghai introduced a total of 100 new measures covering five areas, including the banking and securities sectors, in a bid to further expand the city's opening-up.

In less than a month, 74 of the 100 measures have gone into effect. The further opening-up is not only a choice of Shanghai, but also a showcase of China's determination to deepen reforms to embrace the world.

Since the central bank announced further opening up of the country's financial sector, Shanghai has rolled out 32 related measures to benefit many overseas banks, insurers and asset management firms.

ICBC-AXA Life, partly owned by French insurance giant AXA, has won regulatory approval to set up an asset management firm in Shanghai. Willis Insurance Brokers Co. and JLT Insurance Brokers. Co. have became the first two to benefit from business scope expansion.

A survey of Renminbi qualified foreign institutional investors by Standard Chartered Bank showed that investors are thinking when to make investment on the onshore market, rather than whether or not.

Many countries and regions along the Belt and Road are also issuing bonds on China's inter-bank bond market and the Shanghai Stock Exchange.

After increasing investment quotas for the Shanghai-Hong Kong stock connect program, local authorities are making preparations to launch the Shanghai-London stock connect program within the year.

Shanghai's opening-up is also expanding into advanced manufacturing, and shipping and telecommunications sectors.

Also on July 10, U.S. carmaker Tesla Inc. announced that it will set up its first overseas plant in Shanghai, with a planned annual capacity of 500,000 electric cars.

With the largest foreign-invested manufacturing project, Tesla became the first to benefit from a new policy that allows foreign carmakers to set up wholly-owned subsidiaries in China.

Other foreign carmakers are also revving up expansion to get a larger share of the world's largest auto market.

In the aviation sector, Chinese and Russian engineers are working on the development of the CR929 wide-body passenger aircraft, a 280-seat jet with a range of 12,000 kilometers, in Shanghai.

Shanghai is scheduled to host the first China International Import Expo (CIIE), which signals a new round of China's high-level opening-up, from Nov. 5 to 10. Over 130 countries and regions and more than 2,800 companies have confirmed participation in the CIIE.

The country's financial and business center is also improving its business environment, including better protection of intellectual property rights and more efficient government services.

The efforts have yielded results. In the first half of the year, Shanghai's contractual foreign investment hit 21.5 billion U.S. dollars, up 18 percent year on year. Meanwhile, further 17 multinational firms set up regional headquarters in Shanghai, raising the total number to 642.

In addition, foreign-funded businesses in Shanghai saw revenues and profits up 10.3 percent and 17.6 percent, respectively, in the January-May period.

China's Didi to invest $1 billion in its auto services platform www.reuters.com

BEIJING (Reuters) - Didi Chuxing, China’s largest ride-hailing service, said on Monday it will invest $1 billion in its auto services business as part of a wider rebranding of the unit.

Russia Tasks Hollywood Actor Seagal With Improving Russia-U.S. Ties www.themoscowtimes.com

Russia's Foreign Ministry said on Saturday it had made U.S. actor Steven Seagal its special representative for Russian-U.S. humanitarian ties, a role it said was meant to deepen cultural, art and youth ties between the two countries.

Mongolia Balance of Trade 1997-2018 www.tradingeconomics.com

Mongolia's trade surplus narrowed to USD 115.9 million in June of 2018 from USD 173.1 million in the same month of the previous year, as imports jumped 36 percent year-on-year to USD 580.3 million while exports grew at a softer 16.1 percent to USD 696.2 million. Considering the first six months of 2018, the trade surplus decreased 30.4 percent year-on-year to USD 822.2 million from USD 1181.3 million in the previous year. Imports soared 43.4 percent year-on-year to USD 2759.1 million, boosted by machinery & equipment & electrical appliances (44.2%); mineral products (34.9%); vehicles & parts (64.9%) and base metals & articles thereof (92.6%). Meantime, sales rose 15.3 percent to USD 3581.4 million, mostly driven by mineral products (18.5%); textiles & textile articles (16.3%) and live animals & animal’s origin products (94.6%). Balance of Trade in Mongolia averaged -7.81 USD Million from 1997 until 2018, reaching an all time high of 361.60 USD Million in December of 2016 and a record low of -369.80 USD Million in July of 2012