TELECOMS
Nokia bucks supply crunch
Finnish telecoms giant Nokia Oyj yesterday reported a solid increase in profits last year and issued a confident outlook for the coming years as sales rose despite supply problems. “I would like to call it a transformational year,” CEO Pekka Lundmark told reporters after the group posted a net profit of 1.6 billion euros (US$1.8 billion), driven by a 1.6 percent increase in sales to 22.2 billion euros. “The board is proposing a 0.08 euro per share dividend for 2021 and we are also initiating a share buyback program to return up to 600 million euros over two years,” Lundmark said. Nokia also predicts a comparable operating margin of between 11 and 13.5 percent for this year, following 12.5 percent last year.
ELECTRONICS
Panasonic tests battery line
Panasonic Corp is renovating a facility in Japan to start testing mass production of a new type of lithium-ion battery that is championed by Tesla Inc as the key to unlocking cheaper electric vehicles. Panasonic will start test production of a next-generation “4680” battery at a facility in Wakayama Prefecture, chief financial officer Hirokazu Umeda said on Wednesday. The company will also set up a prototype production line for the batteries early this year in Japan. The CFO made the comments after Panasonic reported earnings, posting an operating profit of ￥73 billion (US$640 million) for the recently ended quarter.
TELECOMS
BT, Discovery talk sports
Britain’s BT Group said yesterday it had entered exclusive discussions with Discovery to create a joint venture between BT Sport and pan-European TV network Eurosport. Announcing the deal as it said COVID-19 and supply chain issues would hit revenue this year, BT opted to stay in sports television rather than going for an outright sale to streaming service DAZN, which had also made an offer. The new business would be a 50:50 joint venture, BT said, and would remain committed to retaining BT Sport’s existing major sport broadcast rights, such as Premier League soccer.
SHIPPING
Rates drop on China slack
A slowdown in China’s steel production is curbing demand for bulk ships to transport iron ore, driving a free-fall in global freight rates. Capesize rates to ship the steel-making raw material from Brazil to China have fallen 60 percent from October, according to the Baltic Exchange, while the widely watched global Dry Index has slumped 75 percent in the past four months. Shipping rates for every type of vessel from oil tankers to container vessels have fallen since October, easing inflationary pressure even as commodity prices climb.
CRYPTOCURRENCY
S Africa warns on exchanges
South Africa’s financial regulator said traders should be “cautious and vigilant” when using FTX Trading Ltd, one of the world’s fastest-growing crypto exchanges. The Financial Sector Conduct Authority on Wednesday issued two notices warning against dealing with Bahamas-headquartered FTX and Seychelles-based ByBit. It said the companies are not authorized to give financial advice or intermediary services in South Africa. The warnings come as South Africa scrambles to introduce new regulations for the crypto industry following two of the world’s largest fraud cases that originated from the country, with billions of dollars worth of bitcoin allegedly lost.
EUROZONE
Inflation vexes central bank
Record eurozone inflation was to feed a tense debate within European Central Bank over whether to raise interest rates when its policy-setting governing council met yesterday. Inflation unexpectedly rose to 5.1 percent in the euro area last month, figures from Eurostat showed on Wednesday, the highest value since records for the currency club began in 1997. Energy accounted for 28.6 percent of the inflation surge seen in the eurozone, Eurostat said. That weight has grown since December, when it was represented 25.9 percent of the overall price jump. Food, alcohol and tobacco accounted for 3.6 percent, also an increase over the previous month, while services jumped 2.4 percent.
EMPLOYMENT
US firms shed jobs
US private companies shed jobs last month for the first time since December 2020 as the Omicron variant of SARS-CoV-2 again complicated business — a potential harbinger of bad news for the upcoming government employment report. Data from payroll services firm ADP released on Wednesday said private employment declined by 301,000 last month, far worse than analysts expected, which the survey blamed squarely on the new virus strain. Small businesses bore the brunt of the employment downturn last month, losing 144,000 positions, the ADP data said. Large-business employment fell 98,000, while medium-sized businesses lost 59,000 positions.
BRAZIL
Rate into double digits
Brazil’s central bank hiked its benchmark interest rate by 1.5 points on Wednesday to 10.75 percent, bringing it into double digits for the first time in nearly five years to fight rampant inflation. The eighth straight increase to the Selic rate, which was in line with forecasts, comes as Latin America’s biggest economy struggles through a recession and stubbornly high inflation. The nine-member committee, which made the decision unanimously, hinted it would soon slow the tightening cycle, saying it “currently foresees a slowdown in the pace (of rate cuts) as the most adequate policy.”
TURKEY
Inflation at 20-year high
Turkey’s annual inflation rate in January reached its highest level since April 2002, official data showed yesterday, after a currency crisis decimated people’s purchasing power. Consumer prices surged by 48.7 percent from the same period in January last year, up from an annual rate of 36.1 percent in December, according to the Turkish statistics agency. However, independent data collected by Turkish economists suggested that the annual rate of inflation rose to more than 110 percent last month. President Recep Tayyip Erdogan admitted on Monday that Turks would “have to carry the burden” of inflation for “some time.”
BANKING
Santander eyes Mexico
Banco Santander SA expects to be among lenders exploring potential bids for Citigroup Inc’s retail banking operations in Mexico, chairman Ana Botin said in an interview. “When the process begins, we expect to be part of that process,” Botin said on Wednesday. While Santander is focused on organic growth, Mexico is a key market for the Spanish lender, she said in the interview on Bloomberg TV. Santander would not pay for a purchase by issuing new shares, as the bank’s priority is buying back its stock, Botin told analysts on a conference call. A deal there would make Santander a stronger challenger to Banco Bilbao Vizcaya Argentaria SA.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
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