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Global Investment Banking Revenue to Drop 4%, JPMorgan Says

Gianluca Colla/Bloomberg

UBS AG, Switzerland’s biggest bank, remains JPMorgan analysts’ top investment banking pick because of the reorganization at the firm and its strong capital position.

UBS AG, Switzerland’s biggest bank, remains JPMorgan analysts’ top investment banking pick because of the reorganization at the firm and its strong capital position. Photographer: Gianluca Colla/Bloomberg

Feb. 21 (Bloomberg) — Sachin Shah, a special situations and merger arbitrage strategist at Tullett Prebon Plc, talks about the outlook for global merger and acquisition activity.
Shah speaks with Sara Eisen on Bloomberg Television’s “Money Moves.” (Source: Bloomberg)

Investment-banking revenue will drop
about 4 percent this year as commissions earned from advising on
mergers, underwriting securities and trading fall, JPMorgan
Cazenove analysts said.

Revenue will be 13 percent lower in the first quarter
compared with the year-earlier period, analysts led by Kian Abouhossein wrote in a note to clients today.

The analysts upgraded their estimate for fixed-income,
currencies and commodities sales to a 13 percent drop for the
first quarter from a decline of 26 percent after a “material
improvement” at the start of the year. Their estimate for total
sales this year was unchanged at 6 percent lower than 2011.

“We witnessed material improvement in investment banking
overall revenues from the first two weeks of January into
February, leading us to upgrade our year-on-year FICC revenue
estimate,” analysts said in the note.

Income from equities will be down 15 percent in the first
quarter and 5 percent for the full year over the year-earlier
period, the analysts said. Revenues from investment banking,
which includes advising companies on mergers and underwriting
debt and equity sales, will decline 16 percent in the first
quarter compared with the year-earlier period amid a dearth of
rights offerings and initial public offerings.

Goldman Sachs Group Inc. (GS)’s revenue will outperform Morgan
Stanley (MS), the analysts said. UBS AG (UBSN), Switzerland’s biggest bank,
remains their top stock pick in the industry because a drop in
revenue may prompt the Zurich-based firm to scale back in
investment banking, releasing the proceeds to shareholders.

“In short, UBS investment bank should be much smaller than
management’s targets and the release of equity will be highly
accretive to shareholders,” the analysts said.

To contact the reporters on this story:
Elisa Martinuzzi in Milan at
emartinuzzi@bloomberg.net;
Liam Vaughan in London at
lvaughan6@bloomberg.net.

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net

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SAN FRANCISCO, CA, Feb 22, 2012 (MARKETWIRE via COMTEX) –
nScaled, a pioneering provider of cloud-based Recovery-as-a-Service
(RaaS) solutions, today announced that it has completed a Series A
round of financing, securing $7 million in investments from Almaz
Capital and Doughty Hanson Technology Ventures, as well as leading
Silicon Valley angel investors. The investment will be used to fund
nScaled’s growth, including expansion of its global network of data
centers and new software development, as well as sales and marketing
efforts.

Peter Loukianoff, co-founder and managing partner of Almaz Capital,
said, “In nScaled, we found a company that is in prime position to
command a dominant role in the emerging market of cloud-based
disaster recovery. nScaled’s technology platform will enable the
company to broaden its service offerings in the future and allow
customers to take full advantage of the cloud and its enormous
economic and operational benefits. Cloud-computing is forcing
dramatic structural changes in the way software applications are
consumed by companies of all sizes and nScaled is well-positioned to
capitalize on this tectonic market shift.”

“We invested in nScaled because we believe there is a gap in the
market for technology that simplifies and reduces the cost of
providing disaster recovery,” added George Powlick, managing director
at Doughty Hanson Technology Ventures. “nScaled’s early success and
the market’s acceptance of Cloud-based recovery services make us
confident that nScaled will become a leader in the market.”

“2011 was a stellar year for nScaled. We tripled the size of our
business by virtually all measures and we have similarly aggressive
growth plans for 2012,” said Mark Hadfield, CEO of nScaled. “This
funding will help us achieve that growth and position us as one of
the dominant players in Recovery-as-a-Service.”

As part of its growth strategy, nScaled recently announced the
availability of free accounts designed to provide prospective
customers with a fast and easy way to discover Cloud-based disaster
recovery, backup and archiving capabilities for their VMware data
centers.

About Almaz Capital
Almaz Capital is one of the leading venture
capital firms serving entrepreneurs and companies with ties to Russia
and the Commonwealth of Independent States (CIS). Investors and
strategic partners of the firm include industry leaders, such as
Cisco, the European Bank for Reconstruction and Development (the
“EBRD”), and UFG Asset Management. Almaz Capital primarily targets
early and expansion stage investments in high growth sectors,
including Technology, Digital Media, and Communications. In addition
to extensive experience in Russia and the CIS, the firm’s network in
Silicon Valley offers portfolio companies an effective local
investment partner with global reach. For more information please go
to

http://www.almazcapital.com/

About Doughty Hanson Technology Ventures
Doughty Hanson Technology
Ventures invests in exceptional entrepreneurs and management teams
that have the passion, commitment and vision to conceive great ideas
and build global businesses. Their investment strategy targets
companies that develop sophisticated and proprietary technologies and
focuses on three industry sectors: internet software, mobile
communications and clean energy technology. For more information
please go to

http://www.doughtyhanson.com/

About nScaled Inc.
nScaled provides Recovery-as-a-Service (RaaS) to
mid-size companies worldwide. They provide an all-in-one solution for
disaster recovery, business continuity, backup and archiving to
customers with zero tolerance for data loss or downtime. nScaled’s
customers are banks, law firms, hospitals, manufacturers, retailers,
universities — any organization that needs to be ready for the
inevitable problems that lead to data or server loss. All services
are based on a global network of remote cloud data centers plus
on-premises local cloud appliance, all managed as one secure,
seamless infrastructure. The company is headquartered in San
Francisco, with offices in London. For more information, please visit

http://www.nscaled.com or write to info@nscaled.com.

        LEWIS PR for nScaled
        Catherine Koo
        Email Contact
        415-992-4400

SOURCE: nScaled Inc.

http://www2.marketwire.com/mw/emailprcntct?id=06CD3FD2273B54D4

Copyright 2012 Marketwire, Inc., All rights reserved.

Forward-thinking companies with long histories embrace
change to grow their businesses, moving from brick-and-mortar to e-commerce.
Incentives are compelling, but they’re transacting more and more business in an
increasingly dangerous environment in which cyber-criminals use sophisticated
attack tools to circumvent defenses.

Brady Distributing is one of these companies: A family-owned
business since 1944 and the second largest seller in its market, it serves
customers such as homeowners who have arcade-style game rooms, along with
street operators and large family entertainment centers.

We faced a conundrum: how to safely grow our online business
while our users and networks were continuously compromised by malware and
stressed by attacks. Incessant malware infections, botnets and the growing
specter of distributed-denial-of-service (DDoS) attacks threatened our data,
operational efficiency and business continuity.

We concluded that investing in an intrusion prevention
system (IPS) would be critical to protect our business as we continue to grow
our Internet presence. We face a familiar problem: a relatively small company
in terms of employees (about 80), a modest IT staff, and a significant,
expanding online business to maintain and protect.

Our three remote offices in Memphis, Tenn., Orlando, Fla.,
and Miami connect back to our Charlotte, N.C., headquarters through a
Multiprotocol Label Switching (MPLS) network and Citrix gateway. So, we have a
single point of policy enforcement and security control. That’s the good news.

The bad news is that our security investments, once
sufficient, were falling short. The firewall on our MPLS network is severely
limited in its ability to detect attacks that ride into the network with
legitimate traffic on port 80 (HTTP). Our URL content filtering has value for
user productivity and enforcing acceptable use policies, but is limited as a
security tool. It’s a game of whack-a-mole: There are far too many malicious
sites.

We have antivirus protection, but our computers continue to
be infected by malware, particularly in our remote offices, where we have
limited visibility and less control over how our users interact with email,
Websites and social media. Antivirus tools can fail against malware that uses
advanced obfuscation, polymorphic techniques and sheer numbers: 20 million
unique malware samples in 2010. Malware also eats up IT staff time that should
be focused on tasks that enable the business.

We are committed to protecting customer data as a best
practice. The damage to our brand reputation and the cost of a major data
breach (an average of $7 million per breach, according to the Ponemon
Institute) would be enormous.

We knew that an intrusion prevention system on our MPLS
network would provide strong protection against these threats, so we
established evaluation criteria to determine which IPS best met our
requirements for strong, automated security. We eventually chose and deployed
the Corero IPS. Each organization’scriteria may vary based on its IT and
business environment, but these standards should be fundamental for most
companies:

• Effective detection and blocking of malware and botnets:
Malware is our most significant security issue.

• Protection against known vulnerabilities: More than 4,000
new vulnerabilities were assigned to the common vulnerabilities and exposures
(CVE) database in 2010.

• DDoS defense: We’ve mostly seen the traditional Syn
(synchronize) floods (a form of denial-of-service attack), but are also
concerned about the hard-to-detect application-layer attacks. In addition to
criminal extortion, “hacktivists” are using DDoS as a response to whatever
affront they perceive.

• High throughput and low latency: An IPS sits in-line—a
“bump in the wire”—so it must be completely transparent on the network, and
must in no way affect online transactions and traffic to remote offices.

• Reliability: We cannot afford a network security system
that fails—nor the time and staffing to deal with failure.

• Strong support: We require demonstrable expertise, resources
and commitment to the customer in order to respond immediately and effectively
in case of attacks or product issues.

• Easy deployment, minimum management overhead: We have
neither the time nor the IT resources to engage in prolonged installation and “tweaking”
for our environment. The IPS tool should need minimal management time once it
is deployed.

• Visibility: We need the ability to easily monitor attack
activity and verify that it has not spread through the network.

• Audit and reporting: We need reports that enable us to
communicate with management, address operational/security issues, conduct
forensic investigations and meet audit/compliance requirements.

• Our decision to deploy an IPS has resulted in far fewer
infections: On average, we’re down to only one every two months, compared with
four per month in the past. Plus, we invest only one hour a month on the
management effort. We’re now preparing to expand our online presence, with
confidence, knowing that we’re well-positioned to protect our business and our
customers.

Rick Baird is manager of Brady Distributing’s IT department.

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SP 500 Cheapest to Bonds as Zero Fed Rates Boost Spending

Tim Boyle/Bloomberg

In the SP 500 pit on the floor of the CME Group’s Chicago Board of Trade.

In the SP 500 pit on the floor of the CME Group’s Chicago Board of Trade. Photographer: Tim Boyle/Bloomberg

Enlarge image

U.S. Federal Reserve Chairman Ben S. Bernanke

Andrew Harrer/Bloomberg

Ben S. Bernanke, chairman of the U.S. Federal Reserve.

Ben S. Bernanke, chairman of the U.S. Federal Reserve. Photographer: Andrew Harrer/Bloomberg

The Standard Poor’s 500 Index is
approaching the cheapest level ever compared with bonds as
Federal Reserve Chairman Ben S. Bernanke’s zero-percent interest
rates drive investors and companies from cash.

Profits that doubled since 2009 pushed the index’s so-
called earnings yield to 7.1 percent, close to the highest on
record when compared with the 10-year Treasury rate, according
to data compiled by Bloomberg since 1962. American companies
have boosted capital spending 35 percent over six quarters, the
most since 2006.

“Conditions are almost ideal for equity investors relative
to all other investments,” Keith Wirtz, who oversees $14.6
billion as chief investment officer for Fifth Third Asset
Management in Cincinnati, said in a Feb. 14 telephone interview.
“The Fed’s keeping rates low for the foreseeable future to try
to stimulate the environment for employee hiring and business
activity. What does that mean for capital markets? Savers are
not being rewarded.”

The U.S. government and the Fed lent, spent or guaranteed
as much as $12.8 trillion to end the worst recession since the
1930s. That and Bernanke’s three-year effort to drive down
interest rates are paying off with rising consumer confidence
and expanding factory output. The SP 500 (SPX) is off to its best
annual start since 1997 as riskier assets lure money from
savings accounts offering some of the lowest yields on record.

Bailed Out

Individuals are responding with indifference amid the
slowest economic recovery in at least six decades. New York
Stock Exchange volume fell to the lowest level in 13 years last
month. While unemployment slipped to 8.3 percent in January from
9 percent in September, joblessness remains more than two
percentage points above its average level since 1990, according
to data compiled by Bloomberg. Existing home sales reached an
annual rate of 4.6 million in December, 23 percent below the
average between 1999 and 2006.

The SP 500 climbed 1.4 percent to 1,361.23 last week,
within three points of a three-year high. Reports showed housing
starts increased more than forecast and claims for U.S. jobless
benefits slipped to a four-year low. Applied Materials Inc. (AMAT), the
biggest maker of equipment for semiconductor plants, increased
as much as 5.5 percent after saying sales this quarter may be 20
percent above analysts’ estimates.

Futures on the SP 500 rose 0.3 percent to 1,364 at 8:26
a.m. in London today.

Cash Return

Investors who kept money as cash have missed out. A balance
of $10,000 would have earned $184.60 in interest since December
2008, based on the average monthly savings rate compiled by
Bankrate.com. For Treasuries, the return was $1,644. U.S.
equities generated $5,690 including dividends.

Fed policy makers highlighted concern about the rate of
capital spending when they pledged to keep interest rates low
for at least two more years on Jan. 25. “Growth in business
fixed investment has slowed,” they said, altering the last
statement from “business fixed investment appears to be
increasing less rapidly.” Factories in the U.S. boosted
production 0.7 percent in January for the biggest back-to-back
increases in more than two years, the Fed said Feb. 15.

“The real target for the low rates is indeed businesses,”
John Canally, who helps oversee about $330 billion as an
economist and investment strategist at LPL Financial Corp. in
Boston, said in a Feb. 14 phone interview. “They want to push
money out on the risk spectrum. They want that to be put to use
buying a new piece of equipment or expanding a plant or adding a
third assembly line.”

Labor Market

One of the Fed’s two mandates is restoring employment. Of
the 8.8 million jobs lost in the U.S. due to the recession,
about 3.2 million have been recovered, figures from the Labor
Department show. On Feb. 7, Bernanke cited Labor Department data
released Feb. 3 showing the share of working-age people in the
labor force had declined to the lowest level in 29 years.

SP 500 companies increased capital expenditures 35 percent
from June 2010 through the end of 2011, the fastest rate since
June 2006, when stocks were in the middle of a five-year bull
market, data compiled by Bloomberg show.

Earnings in the SP 500 have more than doubled to $96.58
since 2009 and are projected to reach a record $104.28 this
year, more than 11,000 analyst estimates compiled by Bloomberg
show. The earnings yield, or annual profits divided by price,
climbed to 7.1 percent, 5.1 percentage points more than the rate
on 10-year Treasuries. That’s wider than in 97 percent of months
in 50 years of Bloomberg data.

Bullish Precedent

The spread was last this wide in the four months before the
SP 500 reached a 12-year low in March 2009, data compiled by
Bloomberg show. The benchmark gauge for American equities has
increased 101 percent since then, including an 8.2 percent
increase in 2012, the best start to a year since 1997.

Low valuations and signs of recovery have failed to lure
individuals back to equities. Stocks are trading at a 14 percent
discount to their average price-earnings ratio over the past
five decades. The multiple has been stuck below the mean of 16.4
times earnings since May 2010, the longest stretch below the
average since the 13 years beginning in 1973, data compiled by
Bloomberg show.

U.S. gross domestic product expanded an average 2.4 percent
a quarter in the 2 1/2 years since the recession ended in 2009,
data compiled by Bloomberg show. The world’s largest economy
hasn’t had a smaller post-recession recovery rate since at least
the 1940s, the data show. In the 2003 bull market, GDP rose 2.7
percent on average, before the SP 500 surged 102 percent. For
the 1982 rally, the rate was 5.7 percent. Equities more than
tripled in that cycle.

‘Very Sluggish’

“The old story was that the steeper the recession, the
stronger the bounce back,” Nick Sargen, chief investment
officer at Fort Washington Investment Advisors in Cincinnati,
said in a Feb. 16 phone interview. The firm oversees $40
billion. “This is the worst recession since the Great
Depression, and yet despite all that the Fed has done, despite
huge stimulus from the federal government, the economy is just
growing at this very sluggish 2 percent pace.”

Even as the SP 500 doubled, investors pulled money from
mutual funds that buy U.S. stocks for a fifth year in 2011, the
longest streak in data going back to 1984, according to the
Investment Company Institute in Washington. Withdrawals were
$135 billion last year, the second-highest total after 2008. Net
inflows have amounted to almost $1 billion in 2012.

Debt to Equity

Capital investments surged in 2006 as the total debt-to-
assets ratio in the SP 500 was climbing to 38.8 in the third
quarter of 2007, the highest point since at least 1998, data
compiled by Bloomberg show. The ratio is about 32 percent lower
now. Companies spent the past three years paying down debt and
cutting costs, boosting the SP 500 profit margin to 13.8
percent, compared with 8.3 percent in 2009, the data show.

SP 500 companies increased cash and equivalents for 12
straight quarters to $998.6 billion in the third quarter, 60
percent more than in September 2007, just before the index
reached an all-time high of 1,565.15, according to SP. The
total excludes financial, utility and transportation companies.

Applied Materials’ second-quarter profit and sales forecast
topped estimates on Feb. 16, signaling semiconductor makers are
pulling out of a spending slump. Customers such as Samsung
Electronics Co. and Taiwan Semiconductor Manufacturing Co. are
stepping up spending, according to Patrick Ho, an analyst at
Stifel Nicolaus Co. in Dallas.

Disney, Apple

Walt Disney Co. (DIS) boosted capital investments by more than 10
percent each fiscal year since 2009, increasing them by 69
percent last year. The largest U.S. entertainment company by
market value put the first of two new cruise ships into service
last year and is expanding Disneyland Hong Kong, while designing
a theme park in Shanghai.

The company also announced a $16 billion buyback plan in
May. The stock trades at 15.7 times reported earnings, compared
with the average of 26 in the five years before the financial
crisis, Bloomberg data show.

Apple Inc. (AAPL), the world’s largest company by market
capitalization, boosted its capital investments 60 percent each
year, on average, since 2008, helping raise the return to 39
percent last year from 20 percent in 2006, according to data
compiled by Bloomberg. The Cupertino, California-based company’s
earnings are expanding so fast that even with a 24 percent rally
this year, the stock is trading at less than half its average
valuation since 1990, data compiled by Bloomberg show.

“Companies have a lot of cash, and it’s not prudent for
investors to pay up for cash,” LPL’s Canally said. “Doing a
little bit of capital spending has a pretty high multiplier
effect on the economy, where cash on the balance sheet doesn’t
have any. That’s what the Fed’s trying to drive at.”

To contact the reporters on this story:
Whitney Kisling in New York at
wkisling@bloomberg.net;
Katia Porzecanski in New York at
kporzencansk1@bloomberg.net.

To contact the editor responsible for this story:
Nick Baker at nbaker7@bloomberg.net

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irishtimes.com – Last Updated: Tuesday, February 21, 2012, 15:37Taoiseach Enda Kenny and Louise Phelan,PayPal’s vice president of global operations, at the announcement of the creation of 1,000 jobs at the company’s new European operations centre in Dundalk, Co Louth. Photograph: Eric Luke/The Irish Times

Taoiseach Enda Kenny today welcomed PayPal’s plans to create 1,000 new jobs in Dundalk, describing the decision as a vote of confidence in Ireland.

Mr Kenny said the IDA Ireland-backed investment was great news for Ireland and for the north-east.

“This is a great signal of confidence in Ireland and in our talented workforce,” he said.

“It is a clear recognition of the opportunities that Ireland offers global leaders like PayPal. Our Action Plan on Jobs published last week will help to ensure that this is just the first of many similar announcements over the coming year,” he said.

“This is an example of confidence in our country and our young people,” he added.

“Those who have language skills in Spanish, French, German, Russian or Dutch will have opportunities to work in Dundalk. It means they will have the opportunity to live and work and have a career in their own location and own locality.”

Labour TD for Louth and East Meath Gerald Nash said the region had won a battle with other EU countries for the PayPal investment.

“This is the largest job announcement in Ireland in over five years. PayPal chose Louth because it is the best place to do business in Ireland. We’ve got a skilled workforce and an excellent infrastructure,” he said.

“I’ve no doubt that we will continue to attract additional investment to the area. PayPal and its parent, eBay, are flagship companies. The decision to locate here is a huge vote of confidence and will inevitably draw the eyes of the business world to Louth.”

Sinn Féin TD Gerry Adams said the investment is “a much-needed boost for the local economy which has suffered from a series of job losses in recent times and has seen a consistent increase in the number of citizens on the live register.”

Seamus Kirk, local Fianna Fail TD, said the expansion will bring direct benefit to the local economy. “It proves that Ireland remains a very attractive place to do business,” he said.

 Posted 03:43 PM ET

MEXICO CITY (AP) — Mexico’s Economy Department says foreign investment was up 9.7 percent in 2011 compared to the previous year, totaling $19.44 billion.

A press release Monday has the United States as the top foreign investor with 55 percent. It is followed by Spain with 15 percent and the Netherlands with 6.7 percent of foreign direct investment.

Most of the money went into manufacturing, at 44.1 percent. Financial services and insurance received 18 percent of the investment and commerce 9.5.

In 2010, Mexico attracted $17.72 billion in foreign investment. The 2011 figure was larger than surveys had estimated.

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LONDON and NEW YORK, February 20, 2012 /PRNewswire via COMTEX/ –
The SCM Group revealed the results of its investment activities for 2011, consolidated in course of preparations of the Group’s financial and non-financial reports.

In 2011 SCM Group invested $1.9bn (excluding MA) in organic development of its assets (in 2010 – $1.12bn). In particular, Metinvest and DTEK’s investments in business development and modernisation amounted to $1,14bn and $0.56bn, respectively (excluding MA). The SCM Group invested $0.21bn (excluding MA) in the development of non-industrial businesses.

Total investment of the SCM Group in environmental protection, health and safety and development of local communities exceeded $0.63bn, including $0.38bn – in environmental protection and social programmes for development of regions of operation ($0.29bn in 2010), and $0.18bn – in health and safety (almost twice as much compared with $0.1bn in 2010).

“Our investment focus on development of the Group’s businesses and local communities remains unchanged. In 2011 we increased the total investment in modernisation, environmental protection, social programmes for regions of our operation, health and safety by 70%. We hope that in 2012 the market trends will allow for maintaining positive momentum in our investment activities,” noted Oleg Popov, CEO of SCM.

Profile

System Capital Management (SCM) is a professional investor, the managing company of the biggest Ukrainian financial and industrial group focusing on three business areas: mining and metals, power generation and distribution and finance. The company also operates in other sectors including telecommunications, media, real estate, retail, clay production, petroleum products trade, agriculture, pharmaceuticals trade, heavy engineering and transportation.

The SCM Group comprises Metinvest and DTEK, First Ukrainian International Bank and Renaissance Capital Bank, ASKA and ASKA-Life insurance companies, Vega Telecommunications Group, Ukraina Media Group and Segodnya Multimedia publishing holding, ESTA Holding (real estate), Ukrainskiy Retail (retail), UMG (clay production), Parallel (petroleum products operator), HarvEast (agriculture), Ukrainian Pharmacy Holding, Mining Machines heavy engineering holding, Portinvest transportation holding and others.

Chief Executive Officer: Oleg Popov.

SCM is 100% owned by businessman Rinat Akhmetov.

Corporate website:

http://www.scmholding.com

SOURCE System Capital Management

Copyright (C) 2012 PR Newswire. All rights reserved

Discount Investment Corporation (TASE: DISI), a holding company of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH), notified the TASE today that, as part of its financial report for 2011, it was considering a write-down on its holding in Shufersal Ltd. (TASE:SAE), due to the difference between Shufersal’s market cap and the value of the holding in the company’s books.

Discount Investment, which owns 46% of Shufersal, said that there was no certainty that a write-down would be made, and if it was, by how much.

Discount Investment cites a report by Midroog Ltd., which states, “Following the announcement by Discount Investment and Koor Industries Ltd. (TASE:KOR) about measures taken for a merger of Koor with Discount Investment, Midroog is monitoring the proposed structure of the deal and its terms, and it will review the ramifications for the bonds issued by Discount Investment and Koor.”

Discount Investment said that Midroog gives its bonds an A1 rating with a “Negative” outlook, and it gives Koor’s bonds an A2 rating with a “Stable” outlook.

Discount Investment’s share price was flat in morning trading at NIS 23.05, giving a market cap of NIS 1.9 billion, and Shufersal’s share price rose 0.5% to NIS 14.27, giving a market cap of NIS 3.1 billion.

Published by Globes [online], Israel business news – www.globes-online.com – on February 20, 2012

Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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Walmart is announcing this evening that it has upped its investment in Yihaodian, a massive B2C e-commerce company based in China. Walmart, which originally funded the retail giant last year, has made another undisclosed investment in Yihaodian to bring Walmart’s total ownership stake to approximately 51 percent. Closing of the transaction is subject to Chinese government regulatory approval, according to the two companies.

Launched in July 2008, Yihaodian offers more than 180,000 products ranging from clothing to grocery to consumer electronics. Less than 3 years after launch, the company boasts a whopping 5,400 employees and logistics operations in Shanghai, Beijing, Guangzhou, Wuhan and Chengdu, and delivery stations in 34 cities across China.

Neil Ashe, President and CEO of Walmart Global eCommerce, said, “This investment further enables Walmart to deliver a superb customer experience to Chinese consumers that are already connected to the world through smart phones and social media. We are on track to create the next generation of eCommerce, offering the latest in online innovations to give our customers a unique shopping experience.” Ashe explains that the further investment in Yihaodian also shows Walmart’s belief in retail in China as a growth industry.

In July, Bloomberg reported that Yihaodian is looking at a possible IPO. Yihaodian faces competition from China’s 360buy.com, which has raised money from DST and others.

Over the past year, Walmart has acquired social media technology provider Kosmix, Small Society, and OneRiot.

• WALMART
• YIHAODIAN

Wal-Mart’s overall impact on the retail industry and beyond has changed the way business is conducted globally, and increased consumer benefits — regardless of where they shop. From raising tax revenues and lowering overall pricing on goods, to boosting customer traffic at surrounding stores and creating new jobs, Wal-Mart takes every opportunity to be a good neighbor and to provide economic advancements in communities it serves throughout the world.

Learn more

Yihaodian, a massive B2C ecommerce company based in China.

Learn more