Tech valuations, Greek vote, and in Silicon Valley’s shadow?

The daily briefing “FirstFT” from the Financial Times.

Apple disappointed investors despite a surge in China, as sales of its flagship iPhone fell short of high Wall Street expectations. The world’s most valuable company saw $66bn sliced off its market valuation as investors closed positions, sending shares more than 7 per cent lower.

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The company’s third-quarter revenues were ahead of analyst forecasts, rising 33 per cent year on year to $49.6bn, while earnings climbed 45 per cent to $1.85 a share. Apple sold 47.5m iPhones in the period, shy of Wall Street targets for 49m, although the average selling price of $660 suggested that consumers were taking to the larger 6 Plus model.

Although the company did not break out sales figures for its new Watch, finance chief Luca Maestri said that sales in the first nine weeks had out-gunned that of the original iPhone and iPad at the same point after their respective launches. (FT)

In the news

Commodities and critics How Noble Group – Asia’s biggest commodity trader – reports profits on long-term commodities deals has become the centre of a fierce battle between the trading house and its critics. Detractors of the company, which acts as a middleman for buyers and sellers of oil, coal, iron ore and metals, say it is providing a misleading picture of its financial performance. The attacks have hit the company’s shares, which have already been affected by a downturn in commodities prices. Noble has strongly defended its financial reporting. (FT).

Sour results from two tech groups Apple investors were not alone watching shares deteriorate following results. Microsoft shares dipped after the company swung to a loss of $3.1bn in its latest quarter, as the Windows maker wrote down the value of the business it acquired from Nokia. Yahoo reported a loss of $22m as the cost of acquiring traffic ate into its earnings. However the search portal reported its fastest revenue growth in nine years. (FT)

IPO application China International Capital Corp, the country’s top domestic investment bank, has filed for an initial public offering on the Hong Kong stock exchange that could be worth up to $1bn. The application could see the Beijing investment bank list as soon as September. (WSJ)

Democratic deficiencies UK Foreign Secretary Philip Hammond has warned that “cumbersome” democratic processes could put western countries at a disadvantage when dealing with Russia. The UK and other Nato members were less able to react quickly to changing world events as they typically have to secure support from parliament, the public and the media, Hammond told MPs. (FT)

Airstrike targets Syrian cell The leader of a shadowy Al Qaeda-linked cell known as the Khorasan Group was killed in an airstrike in Syria, the Pentagon announced. Muhsin al-Fadhli was so close to Osama bin Laden that he was among a small group who knew about the 9/11 attacks before they were launched, according to US authorities. (NYT)

Citi hit with bill US regulators have demanded that Citibank pay about $700m to millions of its credit card customers who were affected by “deceptive” marketing, billing and administration of debt protection and credit monitoring products. The New York-based bank will also have to pay a penalty of $70m to the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. (FT).

Deal denied North Korea has brushed aside the possibility of a nuclear deal similar to the one Iran forged with global powers last week. A statement by the country’s foreign ministry said that it was “not interested” in such a pact as the situation in North Korea was different to Iran. (Washington Post)

The visible hand Attempts by the Chinese government to subdue its $7.2tn equity market seem to be working – at least from the perspective of options traders, whose expectations of share-price swings on mainland exchanges fell 48 per cent since the end of a June. “The government has won the battle in terms of stemming the rout, but they’ve lost the war if you think of the bigger picture,” said Megan Greene, chief economist at Manulife Asset Management. (Bloomberg)

It’s a big day for

Greek prime minister Alexis Tsipras who has been attempting to rally his left-wing Syriza party ahead of a vote in parliament today on the second package of measures required by the country’s creditors in order to open talks on a new bailout deal. Mr Tsipras has faced discontent within the party over the measures, but is expected to be bolstered by the support of pro-European opposition parties within the legislature in Athens. (Reuters)

Food for thought

Mile-high demand More than half a million new pilots will be needed by airlines around the globe over the next two decades in order to keep pace with booming travel demand and a US$5.6tn jet shopping spree, according to a forecast by Boeing. Asia Pacific countries will account for about 40 per cent of the total number of aviators, but the region will need to work hard to fill the openings as private pilots are rarer than in the US. (Bloomberg)

Swift action US pop sensation Taylor Swift has taken aim at Chinese counterfeiters, who have been peddling a plethora of unauthorised Swift-branded merchandise on the back of her fame. As part of her latest endeavour, the singer has teamed up with two of China’s biggest ecommerce sites, JD.com and Alibaba, in a bid to use her popularity to get them to stop selling products that do not have rights to use her name. (WSJ)

In Silicon Valley’s shadow? Despite more money than ever flowing into European tech start-ups, tough EU regulatory rules could dash hopes of the emergence of a rival to the likes of Google or Facebook. (FT)

Video of the day

Toshiba governance Toshiba chief Hisao Tanaka has resigned after a probe found the group had made a “deliberate” attempt to inflate profits. FT reporters discuss whether this exposes the sluggishness of corporate governance reform or a flaw in Japan’s once lauded business culture.

This article is published in collaboration with The Financial Times. Publication does not imply endorsement of views by the World Economic Forum.

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Author: FirstFT is the Financial Times’ editors curated free daily email of the top global stories from the FT and the best of the rest of the web.

Image: Apple CEO Tim Cook stands in front of a screen displaying apps available for the Apple Watch at a presentation at Apple headquarters in Cupertino, California October 16, 2014. REUTERS/Robert Galbraith.

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