Deutsche Boerse cultivates local ties after LSE deal setback

Traders work at their desks at the stock exchange in Frankfurt. (Reuters)
Updated 19 July 2017
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Deutsche Boerse cultivates local ties after LSE deal setback

FRANKFURT, Germany: Deutsche Boerse is planning to spruce up the Frankfurt stock exchange, a familiar backdrop for TV broadcasts on the German economy, as part of a push to try to attract more retail investors.
Deutsche Boerse is seeking to broaden its appeal and burnish its image following the collapse of a proposed merger with the London Stock Exchange.
It is still dealing with the fallout from that deal.
Public prosecutors on Tuesday asked Deutsche Boerse to pay fines of €10.5 million ($12.1 million) for failing to notify the public in a timely way about the LSE merger talks and for the design of its executive share-buying scheme. Deutsche Boerse said the allegations are “unfounded in all respects.”
Potential refurbishments under discussion by the German exchange operator are an enhanced viewing gallery for visitors and a modernized area to showcase new companies making their debut on the market via initial public offerings, three people with knowledge of the situation said.
The changes could bring a little of the New York Stock Exchange-style razzmatazz to Frankfurt, which is seeking to rival London as a financial center after Brexit.
The plans also foresee the creation of a venue for events in vacant parts of the building such as the one formerly used for bond trading.
The exchange’s 19th century building on Boersenplatz in downtown Frankfurt is often used by TV crews when reporting on German financial news even though actual trading at the exchange, which has roots dating back to 1585, is now mostly done electronically.
Deutsche Boerse rents the trading floor areas in the building, which is owned by the Frankfurt am Main Chamber of Commerce and Industry.
The company hopes that investing in this landmark will help to spark greater interest among the German public in share trading, startups and IPOs, two of the people said.
Later this month, board members will debate details and costs of the investment, one of the people said.
Share ownership in Germany was at 14 percent of the population in 2016, according to data from financial industry body Deutsches Aktieninstitut. That compares with 52 percent in the US, according to a Gallup poll.
IPO issuance in Germany also lags other major economies. Despite buoyant stock markets, IPOs in Germany so far this year total $1.5 billion, compared with $21 billion in the US, $20 billion in China and $3.2 billion in Britain, according to Thomson Reuters data.


Tesla rival Lucid Motors wants to build factory in Saudi Arabia

Updated 31 min 23 sec ago
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Tesla rival Lucid Motors wants to build factory in Saudi Arabia

  • Lucid Motors eyes production plant in Kingdom after raising more than $1bn from the Public Investment Fund
  • California-based electric-car maker hopes to sell first vehicles for more than $100,000 

LONDON: A US-based electric-vehicle company that raised more than $1 billion from Saudi Arabia wants to build a factory in the Kingdom, and says its mission to build “the best car in the world” is well underway. 

The California-based Lucid Motors is developing its first model, the Air, which it hopes to sell for more than $100,000 when it enters production in less than two years’ time. 

Financial backing from Saudi Arabia’s Public Investment Fund (PIF), announced last year, will allow Lucid to proceed with the development of the all-electric sedan, as well as fund the $240 million cost of building the first phase of its factory in the US.

Peter Rawlinson, chief technology officer at Lucid Motors — and a former engineer at rival Tesla — said the company wants to eventually build a production plant in Saudi Arabia, and sees a “long-term” partnership with the Kingdom.

“I can see a really bright future, with a tangible manufacturing facility or facilities,” Rawlinson told Arab News.

“We’d love to do that … We’re currently in a period where we are investigating all these options. 

“There is a vision that there will be some sort of production facility in the future.”

Rawlinson added that it is “early days” for such a plan, but said he sees many opportunities for electric vehicles in Saudi Arabia — not least, because of the abundant sunshine and potential for solar power.

“We are undertaking the appropriate studies, but I’m really excited about the potential of this. This partnership is huge for us; we can benefit the Kingdom of Saudi Arabia in a significant, meaningful and long-term manner,” he said. 

“One of the great assets of the Kingdom is its endless reserves of sunshine, and how that can be harvested with solar energy. We’re a battery-storage technology company; that’s a way we could contribute. We’re exploring a number of avenues along those lines.”

Lucid is positioning itself in the luxury market, and Rawlinson said its Air model is looking to compete with the likes of the Mercedes-Benz S-Class. The Lucid Air is the company’s first car, but Rawlinson said an initial public offering (IPO) could be on the cards to develop future models.

The engineer brushed off the idea of a competitive threat from Elon Musk’s Tesla, where he once worked as chief engineer for the Model S.

“We don’t see Tesla as a key, direct competitor. We see the German gasoline cars — the petrol engine cars … as our core competitive set,” he said. 

“I’ve spoken to many people … who would gladly buy an electric car but say they’re not going to give up their Mercedes-Benz to buy a Tesla because of the interior. You’ve only got to step inside a Tesla to realize it’s not true luxury.”