TheChek News Flow

Accor currently has 244 hotels in 100 cities, which already makes it Brazil’s largest hotel operator.

Although the country’s longest and deepest recession on record has reduced consumer spending, the weakness of the real against the dollar has encouraged Brazilians to holiday at home, as well as attracting more foreigners.

“We have very good business from Colombia and Argentina, and Brazilians themselves are travelling in Brazil instead of going to Europe and America,” Mr Hick explained.

In the past two years, the real has fallen about 30 per cent against the dollar, to R$3.25, a move that has benefited Brazil’s upmarket shopping centres, as the wealthy cut back on trips to Miami.

Mr Hick said that the Olympic Games, which is due to kick off in Rio de Janeiro this Friday, should also help increase Brazil’s visibility as a tourist destination in spite of the litany of problems affecting the event.

AccorHotels’ ambitious expansion plan comes as many companies are struggling to stay afloat in Brazil.

Latin America’s biggest economy is expected to shrink more than 3 per cent this year after contracting 3.8 per cent last year, while inflation and unemployment are running at about 9 and 11 per cent, respectively.

Brazil’s political crisis has led many foreign companies to put their investment plans on hold as they wait for the outcome of the final vote later this month on President Dilma Rousseff’s impeachment.

While AccorHotels has not been immune to Brazil’s problems — the country was one of worst-performing for the group in the first half, alongside France — Mr Hick says that he sees the crisis as an “opportunity more than a threat”.

Recession has made it easier to take over some of Brazil’s struggling independent hotels, he notes. “Brazil has all the ingredients to recover — it’s just part of the economic cycle,” he argues.

Structurally, the country also represents one of the biggest opportunities for the group worldwide, Mr Hick says.

While about 80 per cent of the group’s business in Asia comes from tourism and only 20 per cent from corporate clients, the inverse is true in Brazil. In São Paulo, as many as 85 per cent of hotel guests are on business.

However, by adding family-friendly facilities to existing hotels and offering package deals, the group plans to increase its leisure business to 40 per cent of its offering in Brazil by 2020.

SHANGHAI—A Chinese consortium led by Shanghai Giant Network Technology Co. and joined by a fleet of financial moguls including a private-equity arm set up by Alibaba founder Jack Ma has agreed to purchase an Israeli games business for $4.4 billion in cash.

The consortium of 11 investors—including Giant Investment Ltd., Yunfeng Capital, a private-equity firm co-founded by Alibaba Group Holding’s Mr. Ma, China Oceanwide Holdings Group Co., China Minsheng Trust Co., CDH China HF Holdings Company and Hony Capital Fund—will purchase a 100% stake in Caesars Interactive Entertainment’s subsidiaries, including mobile-games unit Playtika. A statement announcing the deal was released Sunday by Shenzhen-listed Chongqing New Century Cruise Co., a shell company bought by Giant Interactive Group last year.

The deal, underscoring the Chinese game developer’s ambition to expand overseas, is another big Israel-focused move by a Chinese firm. China National Chemical Corp. paid $1.44 billion for a 40% stake in crop-protection producer Adama Agricultural Solutions in July and last year Shanghai Bright Food took over Tnuva, Israel’s largest food producer, for more than $2 billion.

Possessing advanced research and development, big data and artificial-intelligence analysis capabilities, Playtika has maintained rapid growth over the past five years, the statement said. Its main business is focused on games such as poker, and it has no presence in China yet. The virtual currency used on the Playtika platforms will remain unexchangeable into real currency, the filing said.

The consortium boosted capital in Alpha Frontier Ltd. in its purchase of CIE’s Playtika, said the statement. Playtika will continue to run independently with its headquarters remaining in Herzliya, while its existing management will oversee daily operations, said the companies.

Playtika’s revenue hit $725 million in 2015 and $456 million in the first half of 2016, according to the filing.

In October 2015, the formerly U.S.-listed Giant Interactive, owned by billionaire Shi Yuzhu, returned to the Shenzhen Stock Exchange via a $2.1 billion reverse merger with Chongqing New Century Cruise Co., which is currently valued at $12.6 billion. Trading in the company’s shares was suspended July 13 because of a major asset restructuring.

Martin Skancke, who used to run Norway’s oil fund, the world’s largest sovereign wealth fund, added: “SWFs will not be supporting asset prices to the same degree [in the future, compared with previous years], but I would still expect them to retain their countercyclical nature through rebalancing.”

A state fund specialist at a large asset manager, who did not want to be named, rejected the idea that sovereign funds act as a safety net, pointing out that they are a far smaller investor group in terms of assets than pension funds.

The report, which was produced by the Bocconi University’s Sovereign Investment Lab, a department focused on state-backed vehicles, found that as well as investing less, sovereign funds are investing more in western markets and in so-called safe assets.

More than 57 per cent of state funds’ direct investments went into safe assets such as utilities, hotels and property last year, compared with 15.5 per cent in 2008.

The Bocconi figures include money placed directly into companies, infrastructure projects, property and other investments, rather than money invested via asset managers.

Investments via asset managers have also been falling, according to figures from eVestment, the data provider. It found that sovereign wealth funds pulled at least $46.5bn from investment houses last year.

Prof Bortolotti said state funds are becoming more discerning investors. “Funds will be much more selective [from now on]. It will be more difficult [for companies and projects] to tap sovereign funds for investments. Everything is pointing to better diversification.”

The four largest US wireless carriers are signing up new mobile phone customers at their slowest rate in more than 15 years as consumers put off switching networks and upgrading their smartphones.

Verizon, AT&T, T-Mobile US and Sprint recruited 7.1m of the most lucrative “postpaid” mobile phone customers in the second quarter, according to figures prepared for the Financial Times by BTIG, the stockbroker.

Walt Piecyk, an analyst at BTIG, said postpaid phone additions on a gross measure — which strips out the impact of customer defections — had not been as weak since the broker started tracking them in 2000.

Postpaid phone customers pay for their mobile phone service on a recurring monthly basis, and generate the most profit for the networks.

“Activity in the market looks to be at a record low in terms of upgrades,” added Jonathan Chaplin, analyst at New Street Research. “It’s probably the lowest quarter ever — or at least since we had data.”

Analysts are divided on the reason for the phenomenon, with some blaming pent-up demand for the Apple iPhone 7 and a paucity of new smartphone features.

Others argue that efforts by the networks to stop customers leaving have started to bear fruit, resulting in a smaller pool of switchers for their rivals to pick off.

“There’s a tremendous amount of pent-up activity ahead of the iPhone 7 launch,” said Mr Chaplin. Activity has been so subdued, he said, because the iPhone 6S was not sufficiently different from previous models to convince customers to upgrade.

Customers tend to think about leaving their existing networks and switching to a rival only when they want a better phone, he said.

“A lot of people delayed a decision on upgrading their device,” Mr Chaplin added. “Even though people think the iPhone 7 will be a marginal improvement, they’re nursing beaten-up devices with cracked screens and just can’t wait to upgrade.”

Mike Sievert, chief operating officer at T-Mobile US, also ascribed the quiet quarter to “the absence of a major iconic phone launch”, pointing out that the Samsung Galaxy S7 hit the market in March.

However, Mr Piecyk said the networks were getting better at keeping their existing customers, meaning they do not have to fight so hard to win new ones.

He said the majority of customers were now on family or data-share plans, where the entire family is billed together for several lines.

“If your daughter isn’t coming up for an upgrade for six months, but you’re ready to switch now — well, it’s much harder to switch three or four lines,” he said.

Ironically, the trend could be positive for some carriers, because the process of losing customers and replacing them with new ones, known as “churn” in the industry, is time consuming, costly and damaging to profitability.

Mr Piecyk said it could make it harder for the smaller “challenger” networks — T-Mobile US and Sprint — to win new customers from their larger rivals, however.

Despite talk of pent-up demand for Apple’s iPhone 7, few Wall Street analysts are predicting a blockbuster launch for the handset.

Analysts at RBC Capital Markets said in a recent Apple note that customers are now holding on to their iPhones for several months longer than they used to.

“Replacement cycles have been getting extended rather consistently across the board, which in a flattish smartphone market could create revenue headwinds,” said Amit Daryanani, an RBC analyst.

Like many on Wall Street, Mr Daryanani predicts that the next iPhone will be “more evolutionary rather than revolutionary” compared with its predecessor, giving customers less incentive to upgrade.

Leaks from Apple’s supply chain suggest the handset will have a similar external design to the original iPhone 6, although the camera is expected to be significantly improved.

Uber to pour $500m into global mapping project

Uber is preparing to pour $500m into an ambitious global mapping project as it seeks to wean itself off dependence on Google Maps and pave the way for driverless cars.

The San Francisco-based transportation company has mapping vehicles crisscrossing the US and Mexico to record the surroundings and gather images for maps. Uber says it will start driving mapping vehicles in other countries soon.

Flush with cash after raising billions of dollars from investors, Uber is ramping up investments in new technologies such as mapping and driverless cars.

The company has decided to invest $500m in mapping, according to a person familiar with Uber’s plans, as it doubles down its efforts in this challenging space.

Uber’s initial growth was largely enabled by pre-existing hardware and software such as smartphones and cars, but as the company looks to secure its long-term growth it is spending more on original research.

The disruptive car-hailing company has expanded its business to more than 60 countries and provided passengers with more than 2bn rides, and at times has come under regulatory scrutiny including lawsuits and even criminal charges.

By developing its own maps Uber could eventually reduce its reliance on Google Maps, which currently power the Uber app in most of the world.

Although Google was an earlier investor in Uber, the two companies have avoided working closely together and are now developing rival technologies for driverless cars.

Last year Uber hired one of the world’s leading digital mapping experts, Brian McClendon, who previously ran Google Maps and helped create Google Earth.

“Accurate maps are at the heart of our service and backbone of our business,” Mr McClendon said in a statement. “The ongoing need for maps tailored to the Uber experience is why we’re doubling down on our investment in mapping.”

One advantage of in-house mapping is greater precision, for example an exact location marker for the main door of a large office building rather than a side door.

This precision is particularly needed in developing countries where Google Maps and addresses tend to be less accurate. This is so problematic that in many non-western countries Uber drivers tend to call passengers to ask their location before a pick-up.

Ride-hailing companies automatically generate a vast set of data about traffic patterns and locations using information from drivers’ and riders’ phones, and Uber already incorporates some of its own mapping technologies into its app.

Google has started to increase the fees that it charges for the use of Google Maps, presenting concerns about whether it might raise prices further in future.

As Uber prepares to spend $500m on its mapping ambitions, the programme follows earlier investments in mapping that include the acquisition of an imagery collection team from Microsoft’s Bing last June. Last year Uber also acquired deCarta, a mapping company that developed the turn-by-turn directions behind GM’s OnStar software.

Uber has raised more than $13.5bn from investors including Saudi Arabia’s sovereign wealth fund, private equity group TPG, and China’s Baidu, the search engine. The most recent investors valued Uber at $62.5bn, making it the most highly valued private company in Silicon Valley.

A startup that helps businesses determine when drones are flying unwantedly or otherwise into their airspace, Dedrone, has partnered with the electronics division of civil aircraft manufacturers Airbus to bring drone detection to wide open spaces and remote locations.

Through their partnership, Dedrone will integrate Airbus’s long range radar technology into its systems which are comprised of ground-based sensors and data analytics and reporting software in the cloud.

The radar (and data from it) expands the range of the startup’s drone detection systems to a radius of up to 3 kilometers in open spaces, according to Dedrone CEO Joerg Lamprecht.

Dedrone’s standard hardware is more for distributed use. The sensors are set up all around data centers which are often surrounded by trees, embassies, corporate campuses, or stadiums where a small drone could fly not just overhead but indoors and near windows attempting to capture images or hack into internal systems.

But if a business owns and operates something like an airport, water treatment facility, nuclear power plant, or test tracks where new vehicles are driven and safety-tested, Dedrone hardware with long-range communication capabilities via Airbus radar could allow a more centralized set up.

Lamprecht noted, “We have always integrated the best available technology on the market into our systems. We have had surveillance cameras, mics, frequency scanners and now we have the power of the Airbus radar, which will allow us to reach into new industries.”

Dedrone focuses on drone detection and monitoring, not counter measures to bring unmanned aerial vehicles down, or block them from entering a particular space.

Opening up its systems, and integrating with new hardware and data sources like those from Airbus, allows Dedrone to work increasingly in conjunction with other physical and aerial security systems, for example, jamming units that could force a drone to land before crashing into critical infrastructure.

Investors want simpler, clearer rules and tests

Regulatory authorities have a patchy record when it comes to being in tune with the markets. But the dissonance between those involved in Friday night’s stress tests on the European banking system and investors’ view of the banks is painful.

The London-based European Banking Authority, which is overseeing the tests, has said with admirable British understatement that the recovery of the EU’s banking system from the shock of 2008 has been slower than that of the US. It concedes, too, that the EU’s regulatory authorities have been less effective at recapitalising banks.

It claims, all the same, that progress has been made. EU stress tests, it contends, should no longer be about pushing fresh capital into the system, as they were in 2011, or conducting a root-and-branch assessment of asset quality, as in 2014. Now is more about “steady-state monitoring”.

That characterisation looks dangerously sanguine. European bank share prices have nudged lows last seen in 2011, when the eurozone debt crisis gripped the region. Investors clearly think this is nothing like a steady state.

True, banks’ capital buffers are more ample than they were five years ago. But a panel of respected academics concluded last week that EU banks need €900bn of fresh capital to convince investors they are robust. That dwarfs the €260bn which the EBA says has been pumped in since 2011.

Capital ratios are also about numerators — the quality of loans and other assets — as much as they are about those fattened denominators. As has been well documented, the Italian banking system is awash with non-performing loans — €360bn of them on a gross basis.

Sure enough, Monte dei Paschi di Siena, which on Friday launched an emergency fundraising, came bottom out of 51 banks tested. Other Italian, Irish and German banks were also among the weakest.

The stress tests have provided a welcome snapshot of how exposed banks are to various scenarios, ranging from a 25 per cent fall in equity markets to a 22 per cent decline in property prices. There is also a valid reflection of conduct risk, code for the vast fines that can erode capital buffers.

But this year’s stress tests, like prior exercises, are still flawed. Carried out over recent months, the tests failed to model for some obvious risks, Brexit and the mounting threat of negative interest rates, among them. Nor is there direct reference to the so-called Basel 4 proposals to further toughen capital demands. They have also excluded markets such as Greece and Portugal where banks are weak.

Worst of all is the atmosphere of obscurity. The structure of the tests is labyrinthine — four different, and sometimes bickering, arms of the EU are involved (the ECB, its SSM bank supervisory arm, the EBA and the European Systemic Risk Board).

In addition, the exercise this time carries no threshold for passing and failing. There will be suspicions that political sensitivities have been pandered to. But it may just as much be a result of chaotic policing: bank capital levels have become increasingly bespoke but stubborn delays among national regulators in requiring banks to publish their own individual numbers means there is no transparency about capital baselines. There is also little clarity about how and when undercapitalised banks will be strong-armed into raising fresh equity.

This probably adds up to yet another failed attempt to restore investor faith in Europe’s troubled banks. Without simpler, clearer rules and tests — and clear consequences for failure — there can be little hope of this changing.

The long-awaited sale of the Formula One may finally be nearing the finish line.

A number of bidders including British broadcaster Sky PLC are circling Formula One and a winner of the auction could emerge in the next few weeks, according to people familiar with the matter. A deal could value the racing series at around $8 billion or more.

Other possible buyers participating in the process include a team of Discovery Communications Inc. and John Malone’s Liberty Global PLC, the people said.

Should there be a deal, it isn’t clear how much of the famed motor-racing company would be sold.

Formula One holds the eponymous races in cities around the world, from Monte Carlo to Kuala Lumpur. The auto-racing franchise markets lucrative television rights and sponsorships for the popular races and negotiates contracts with venues and teams, among other functions. In 2006, private-equity firm CVC Capital Partners bought majority control of Formula One. It has since reduced its stake to around 35%.

CVC has flirted with the possibility of selling its stake for years but for various reasons hasn’t struck a deal.

One complication was a trial Formula One’s colorful founder Bernie Ecclestone faced in Germany related to charges of bribery and fraud. A court in 2014 dropped the case against Mr. Ecclestone, who is known as “Supremo” in Formula One circles, in return for a payment of $100 million.

Mr. Ecclestone is a former used-car salesman who built the race into a powerful marketing force in the late 1970s. The octogenarian remains chief executive of the company. Today, the stars in the sport include Lewis Hamilton and Sebastian Vettel.

Rights to show popular sporting events are considered increasingly valuable for channel distributors and advertisers amid a rise in ad-skipping technology and web-based entertainment.

Sky has a vast pay-TV business, with more than 20 million customers in Italy, Germany, Austria, the U.K. and Ireland. It is a big investor in television content too, with a programming budget of more than £4.6 billion ($6.1 billion), according to the company’s website. Its market value currently stands at nearly £16 billion.

21st Century Fox Inc., which holds a 39% stake in Sky, shares common ownership with News Corp, the owner of The Wall Street Journal.

Discovery, whose properties include Discovery Channel, TLC and Animal Planet, has been trying to build its sports-content holdings abroad, buying control of European sports entertainment group Eurosport International in 2014.

Liberty Global is a global media and content-distribution giant. It has struck a number of content deals in recent years, including one for the U.K.’s All3Media, together with Discovery.

Mr. Malone, Liberty Global’s chairman, has a big stake in Discovery Communications.