005930.KS - Samsung Electronics Co., Ltd.
| Previous Close | 50,400.00 |
| Open | 50,900.00 |
| Bid | 51,200.00 x 0 |
| Ask | 51,300.00 x 0 |
| Day's Range | 50,700.00 - 51,400.00 |
| 52 Week Range | 36,850.00 - 53,800.00 |
| Volume | 8276625 |
| Avg. Volume | 9,891,316 |
| Market Cap | 341T |
| Beta (3Y Monthly) | 0.90 |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | N/A |
| Earnings Date | Jan 29, 2020 - Feb 3, 2020 |
| Forward Dividend & Yield | 1,416.00 (2.81%) |
| Ex-Dividend Date | 2019-09-27 |
| 1y Target Est | 54,903.00 |
- CNET
Samsung's next foldable to be way less pricey?
A report says Samsung will release a new, clamshell foldable phone, kind of like the new Motorola Razr. The crazy part would be the price: It'd be cheaper than the Razr and cost less than half a Galaxy Fold!
- MarketWatch
3 reasons NOT to do your holiday shopping on your smartphone
Online shopping is expected to hit new highs this holiday season — and a lot of it will happen on smartphones. This year, $1 out of every $5 dollars spent from November through December will go toward an online purchase, according to a forecast from Adobe Digital Insights. Over a third (36%) of e-commerce sales this year are expected to be made on a smartphone, according to Adobe, a 20% increase from a year ago, and smartphones are expected to account for 47% of overall sales growth during the holiday season in 2019.
- Financial Times
Samsung executives guilty of destroying evidence in fraud case
Three Samsung Electronics executives were handed jail sentences of up to two years by the Seoul Central District Court, according to state news agency Yonhap citing a court decision. The case involved employees from two other Samsung affiliates, drugmaker Samsung BioLogics and its subsidiary Samsung Bioepis.
- Reuters
South Korea jails three Samsung Electronics executives over evidence destroyed in probe of alleged fraud
A South Korean court on Monday jailed three executives of Samsung Electronics for their role in a plot that included burying computers under factory floors at its biotech affiliate, in an investigation of alleged accounting fraud. Prosecutors began investigating the suspected fraud at Samsung Biologics after South Korea's financial watchdog complained the firm's value had been inflated by 4.5 trillion won ($3.82 billion) in 2015. The episode is the latest legal trouble for South Korea's top conglomerate, whose leader Jay Y. Lee is embroiled in separate trials in a corruption scandal involving former President Park Geun-hye.
- Reuters
South Korea jails three Samsung Elec execs over evidence destroyed in probe of alleged fraud
A South Korean court on Monday jailed three executives of Samsung Electronics for their role in a plot that included burying computers under factory floors at its biotech affiliate, in an investigation of alleged accounting fraud. Prosecutors began investigating the suspected fraud at Samsung Biologics after South Korea's financial watchdog complained the firm's value had been inflated by 4.5 trillion won ($3.82 billion) in 2015. The episode is the latest legal trouble for South Korea's top conglomerate, whose leader Jay Y. Lee is embroiled in separate trials in a corruption scandal involving former President Park Geun-hye.
- Bloomberg
Xiaomi Takes on Apple in Japan With 108-Megapixel Budget Smartphone
(Bloomberg) -- Xiaomi Corp., the world’s fourth-largest smartphone maker, is entering Japan and taking on Apple Inc. with a budget-friendly smartphone and a connected fitness tracker.The company is making the Mi Note 10 Android smartphone available in Japan for immediate pre-order to be shipped on Dec. 16, according to a statement on Monday. Priced from 52,800 yen ($486), the handset has a high-resolution 108-megapixel camera, a 5,260mAh battery rated to last longer than two days and a 6.5-inch OLED display with curved edges.Alongside the Mi Note, Xiaomi also introduced its Mi Smart Band 4 wearable for 3,490 yen, a portable battery pack for 1,899 yen, an induction-heating rice cooker for 9,999 yen and a premium all-metal suitcase for 17,900 yen, all aggressively priced for the Japanese market.The top Chinese smartphone vendor after Huawei Technologies Co. is looking eastward to help offset declining share in its home market. Xiaomi’s China shipments took a 30% dive last quarter, while hardware sales in India and Europe grew. It faces an uphill battle in Japan, however, where the smartphone market has been shrinking, is dominated by Apple and features unique consumer preferences that have kept domestic brands like Sharp Corp. and Fujitsu Ltd. relevant.“Xiaomi has to keep looking for new markets to recover its smartphone shipment growth, after losing its market share in China,” Bloomberg Intelligence analyst Anthea Lai said. “Outside the home-grown brands, Japanese have a strong preference for the iPhone.”Apple shipped about 45% of all the smartphones in Japan in the fiscal first half to Sept. 30, according to a report by MM Research Institute Ltd. Sharp, Samsung Electronics Co. and Sony Corp. followed, none of which exceeded 13%. Huawei, which ranked fifth last fiscal year, didn’t make the top 5 after carriers earlier this year dropped its models from their lineups amid China-U.S. trade tensions.Over the long run, Xiaomi is betting the worldwide commercialization of fifth-generation wireless technology will juice demand for mobile devices capable of hosting ultra-fast video and game streaming. The company plans to introduce at least 10 5G-enabled smartphone models next year as state-backed carriers in China spend billions of dollars constructing networks. Japan’s smartphone shipments will probably shrink about 10% to 27.6 million units for the full year ending March, before rebounding the following year when 5G models will contribute about 2 million units to the total, according to MM Research.Xiaomi is also expanding its product portfolio beyond smartphones to encompass everything from electric scooters to smart door locks, part of an effort to build an Internet of Things ecosystem. It’s continuing to build out internet services in pursuit of a strategy billionaire co-founder Lei Jun articulated before the company’s 2018 Hong Kong initial public offering. The stock is trading at less than half the price of its peak in July 2018.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Yuki Furukawa in Tokyo at yfurukawa13@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Samsung to Take on iPhone’s Popularity With Big Camera Overhaul
(Bloomberg) -- Samsung Electronics Co.’s response to Apple Inc.’s much-improved iPhone 11 cameras is going to be a giant photographic arsenal strapped to the back of its 2020 flagship phones.The Korean company is preparing the biggest overhaul to the cameras on its flagship phones for next year, according to people familiar with the company’s plans. Its upcoming Galaxy S11 will sport a 108-megapixel sensor for the main camera -- versus the iPhone 11’s 12 -- flanked by three more on the back of the device including an ultrawide-angle lens and 5x optical zoom, they said. The marquee device will also adopt a time-of-flight sensor for depth detection similar to one already in the Note 10+, a feature that can aid portrait photos and augmented-reality applications, the people said, asking not to be identified discussing specifications that haven’t been made public.Samsung will also extend the high-resolution sensor and 5x zoom camera to the Galaxy Fold clamshell device -- which is expected to be publicly unveiled around the time of the Galaxy S11’s launch in February, the people said. The raft of new features signal Samsung’s renewed commitment to mobile photography after years of minimal innovation, as well as an attempt to catch Apple in the camera stakes.The deluge on the camera front joins the introduction of foldable devices and fifth-generation wireless connectivity as core pillars of Samsung’s hardware strategy, features Apple won’t be able to match until its next iPhone refresh in September. A Samsung Electronics representative declined to comment. The company’s shares gained 1.8% Friday.Read more: Samsung Profit Beats on Strength of Smartphones and DisplaysNow that closest rival Huawei Technologies Co. is struggling in Europe thanks to U.S. sanctions, Samsung can consolidate its lead by doing what it’s always done: overwhelming consumers with specs.Affiliate Samsung Electro-Mechanics Co. developed the 5x zoom module and started production earlier this year. Similar technology has figured in devices from Chinese competitors Huawei and Oppo. Both rivals licensed their zoom tech from Corephotonics Ltd., an Israeli company Samsung acquired early in 2019.Heading into 2020, as multi-camera and multi-lens arrays become the norm on smartphones, Samsung stands to benefit from owning a pioneer in this developing field. Camera specs in particular feature heavily in consumer-buying decisions in developing markets such as India, Counterpoint Research data has shown.(Updates with shares in the fourth paragraph)To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Investing.com
StockBeat: Roku Slumps as Morgan Stanley Sounds Alarm on Valuation
Investing.com – Roku (NASDAQ:ROKU) shares fell sharply on Monday after Morgan Stanley sounded the alarm on the streaming media platform's valuation amid rising competition and slowing growth.
- TechCrunch
The Samsung Galaxy Fold is headed to Canada, with in-store pre-orders starting today
The Samsung Galaxy Fold is a very unique smartphone, in more ways than one. Samsung says that customer interest has helped expand that initial pool of availability, however, which is why it's launching pre-orders in Canada today. Pre-orders are also going to be exclusively in-store, at Samsung's Eaton Center, Sherway Gardens and Yorkdale locations, all of which are in Toronto.
- Bloomberg
Apple AirPods Shipments Expected to Double to 60 Million in 2019
(Bloomberg) -- Shipments of Apple Inc.’s popular AirPods wireless earphones are expected to double to 60 million units in 2019, according to people familiar with the Cupertino-based company’s production plans. This has been driven in part by “much higher” than expected demand for the pricier AirPods Pro model unveiled in October.The $249 AirPods Pro -- which offer noise cancellation and water resistance -- have surpassed expectations and demand for them is pushing Apple’s assembly partners against capacity and technical constraints, a person familiar with the matter said. Multiple suppliers are competing for the business of manufacturing the Pro earphones, though some are still building up the technical proficiency. There’s currently a wait time of two to three weeks for the AirPods Pro on Apple’s U.S. website.The most advanced form of wireless headphones is called “true wireless,” defined by the absence of a wire not just between the headphones and the music source but also between the two earbuds -- and the AirPods are the category-leading example. Taiwan-based Inventec Corp. and China’s Luxshare Precision Industry Co. and Goertek Inc. manufacture the AirPods for Apple.Apple spokeswoman Trudy Muller declined to comment on the product’s shipments.The pickup in AirPods sales this year has been helped by the launch of two new iterations: the Pro model in October and a $199 upgraded version of the original in March. The first AirPods were released in 2016. The runway is also mostly clear for Apple to have a successful holiday season, with Microsoft Corp. delaying its rival true wireless buds until spring and Google also not launching its new model until 2020.At the end of August, Apple was the clear leader in the global true wireless earphones market, according to Counterpoint Research. AirPods shipments have dwarfed every alternative and the Beats Powerbeats Pro, another Apple product, also feature in the top 10 sellers. While Samsung Electronics Co.’s Galaxy Buds have emerged as a recognizable competitor, Apple moreover ranked as the most preferred brand for future purchases of true wireless headphones in the U.S., the researchers said.“Apple also edged rivals because true wireless as a category is the preferred choice over wireless earphones, due to factors like better sound quality, portability, and ease of use,” Counterpoint analyst Pavel Naiya wrote on Sept. 26.Wearables like the AirPods and Apple Watch have become a crucial growth driver for the Cupertino company, which is adapting to plateauing iPhone demand in a mature smartphone market. In the past quarter, Apple’s iPhone sales shrunk to $33.4 billion from the prior year’s $36.8 billion, whereas the Wearables, Home, and Accessories segment -- composed of the Apple Watch, AirPods, Beats, HomePod and Apple TV groups -- generated $6.5 billion in revenue, growing by 54%.Total shipments of the AirPods Pro for the year will be determined by how well and how quickly the assemblers overcome the production challenges they currently face. If the overall AirPods range hits 60 million units in 2019 as is now expected, Apple should retain its 50% share of the true wireless market, which Counterpoint expects to surpass 120 million shipments for the year.\--With assistance from Mark Gurman.To contact the reporter on this story: Debby Wu in Taipei at dwu278@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Moody's
Best Buy Co., Inc. -- Moody's reviews Best Buy's Baa1 senior unsecured rating for upgrade
"Today's review action recognizes Best Buy's consistent operating performance over the past few years and strong credit metrics relative to retail peers" stated Moody's Vice President Charlie O'Shea. Best Buy's Baa1 rating reflects the company's strong quantitative credit profile, with debt/EBITDA of around 1.0 times, EBITA/interest of over 10 times, and RCF/net debt over 80%, and the company's conservative financial policy, especially its historical pattern of limiting share repurchases to preserve its credit metrics. Additional rating support emanates from Best Buy's continued progress towards omni-channel, with an online business that leads brick-and-mortar on many fronts.
- Bloomberg
Trump’s 2020 Campaign Collides With Trade War at Apple Plant
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Donald Trump’s effort to tout U.S. economic growth collided with his trade war on Wednesday when he toured an Apple Inc. factory in Texas, where Tim Cook had the chance to plead in-person to keep Macs and iPhones free from tariffs.Trump’s visit to the Austin factory, where Apple contractor Flex Ltd. assembles some of the company’s laptops, was intended to highlight the growth in U.S. manufacturing jobs since his inauguration. Trump has made U.S. economic growth the centerpiece of his campaign for re-election in 2020.But the stop also highlighted the impact of Trump’s trade war with Beijing. The administration is currently considering whether to exempt Apple goods from a 15% tariff that took effect Sept. 1, covering about $110 billion in Chinese imports including the Apple Watch, AirPods and parts for the iPhone.“When you build in the United States you don’t have to worry about tariffs,” Trump told reporters at the plant. In response to a question, Trump said he’s “looking at” exempting Apple from U.S. tariffs entirely, saying that the company’s South Korea-based competitor Samsung Electronics Co. may otherwise enjoy an unfair advantage in the U.S.“I said some day we’re going to see Apple building plants in our country, not in China, and that’s what’s happening,” Trump said. “It’s all happening. It’s all the American dream.”In reality, this is not happening: Apple still has most of its devices assembled outside the U.S., and the company relies heavily on China-based manufacturing partners.Cultivated RelationshipCook, Apple’s CEO, has cultivated a personal relationship with both Trump and his daughter, Ivanka, who is a White House senior adviser. He’s dined twice with Trump at his Bedminster, New Jersey, golf resort, attended a state dinner for French President Emmanuel Macron and even traveled with Ivanka Trump to visit schools in Idaho. But that rapport will be tested if Trump can’t reach what he calls a “phase-one” trade deal with Chinese President Xi Jinping that would roll back U.S. tariffs.A round of tariffs set to take effect in December would be even more painful for Apple, including a 15% levy on the iPhone itself.Apple announced Wednesday that it had begun construction on a $1 billion, 3-million-square-foot campus in Austin. “Building the Mac Pro, Apple’s most powerful device ever, in Austin is both a point of pride and a testament to the enduring power of American ingenuity,” Cook said in a statement that didn’t mention Trump’s visit.The statement emphasized Apple’s U.S. footprint, saying the company relies on 9,000 suppliers in all 50 states and that it would contribute $350 billion to the domestic economy by 2023, including $30 billion in capital expenditures.Trump and Cook toured the plant largely out of sight of reporters accompanying the president. At one point, Cook and factory workers demonstrated for the president how the Mac Pro is assembled.A factory worker showed Trump a silver-colored plate for the Mac Pro that said “Assembled in the USA.”“That’s what we want,” Trump responded.Apple TariffsWhite House spokesman Judd Deere said the factory was “made possible through the president’s pro-growth and pro-business economic policies.” Treasury Secretary Steven Mnuchin and top White House economic adviser Larry Kudlow, two key figures on trade, accompanied Trump, as did senior advisers Jared Kushner and Ivanka Trump.“We’re building the Mac Pro — Apple’s most powerful computer ever — right here in Austin because we believe in the power of American innovation,” Cook said in a statement distributed by the White House.In its appeal for a waiver, Apple claims it cannot identify a manufacturing location outside China able to meet U.S. demand for the products or components that would be subject to tariffs.Apple previously received tariff waivers on 10 of 15 requested items in September. Soon afterward, the company announced it would assemble its new Mac Pro in Austin, Texas, rather than China. Apple said at the time that the decision was “made possible” by the exclusions, which included components for the Mac Pro.Cook’s LeverageThe sequence of events showed that Cook has some leverage on Trump. The president said in August that Cook personally appealed to him by arguing that tariffs would help Apple’s foreign competition.“I have a lot of respect for Tim Cook. And Tim was talking to me about tariffs. And, you know, one of the things — and he made a good case — is that Samsung is their number-one competitor, and Samsung is not paying tariffs because they’re based in South Korea,” Trump told reporters in August.Trump laid out his economic argument for re-election last week in a speech at the Economic Club of New York, highlighting his tax cuts and deregulation as key catalysts for economic growth. The U.S. added about 443,000 manufacturing jobs since January 2017, the month Trump took office, though factories have shed about 41,000 positions in the last two months.Apple had planned to move Mac Pro assembly to China after a number of problems plagued the Austin facility, including trouble retaining skilled labor. The factory produced a previous version of the computer starting in 2013.While Cook has said his company supports 2.4 million jobs in the U.S., only a small fraction are for final assembly. Earlier this decade, the company assembled a small amount of iMacs at a facility in Elk Grove, California, but it currently does not assemble any product in the U.S. outside of Texas. Apple has offices in San Diego, San Francisco, New York, Austin, Denver, Seattle, Florida, and Boston.In December 2018, the company announced plans to invest $1 billion in its existing Austin campus so that it could employ as many as 15,000 workers, according to the White House.(Updates with additional details of trip beginning in 12th paragraph)\--With assistance from Mark Gurman and Mark Niquette.To contact the reporter on this story: Jordan Fabian in Washington at jfabian6@bloomberg.netTo contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua GalluFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Trump Says ‘Looking’ at Exemption for Apple on China Tariffs
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. U.S. President Donald Trump, touring an Apple Inc. assembly plant in Texas, said he’s “looking at” exempting the iPhone maker from tariffs on goods imported from China.Trump made the remarks Wednesday alongside Apple Chief Executive Officer Tim Cook at a Flex Inc. facility in Austin, Texas, that is manufacturing Apple’s new Mac Pro desktop computer. Trump repeated previous comments he’s made that it isn’t fair for Apple to be taxed on iPhones built in China given that South Korean rival Samsung Electronics Co. doesn’t have to pay the China import duties.“The problem we have is you have Samsung -- it’s a great company but it’s a competitor of Apple and it’s not fair if -- because we have a trade deal with Korea, we made a great trade deal with South Korea, but we have to treat Apple on a somewhat similar basis as we treat Samsung.”While Apple was spared on tariffs for the most of the components that go into the U.S.-assembled Mac Pro, the Cupertino, California-based technology giant had five other requests for duty exclusions denied. Apple has 11 requests pending with the Trump administration for tariff relief on the Apple Watch, iMac, parts for the iPhone and other components imported from China.The company is scheduled to have its iPhone, iPad, laptops, and some other products hit with import duties beginning Dec. 15.\--With assistance from Mark Niquette.To contact the reporters on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net;Jordan Fabian in Austin, Texas at jfabian6@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Andrew Pollack, Jillian WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Apple iPhone 11 Scores Early China Success, Official Data Shows
(Bloomberg) -- Chinese consumers are rediscovering their appetite for iPhones.Apple Inc. shipped 10 million iPhones in China during September and October, based on Bloomberg’s calculations from government data on overall and Android device shipments. That’s the first indication of the company’s performance following the autumn release of its latest gadgets, and it shows iPhone shipments up 6% from a year earlier, according to the China Academy of Information and Communications Technology, which is run by the country’s technology ministry.That affirms expectations that Apple’s iPhone 11 is selling more strongly than its predecessor, particularly in a market that’s second only to the U.S. in its importance to Apple’s bottom line. The company had recently been stuck in a rut in China, ceding ground to local rivals like Huawei Technologies Co. and Xiaomi Corp., which offer more enticing pricing, better specifications and increasingly premium design. Apple also lost market share to Samsung Electronics Co. and Huawei globally prior to the iPhone 11’s release. Chief Executive Officer Tim Cook has said new pricing, a monthly payment program and trade-in offers helped the iPhone’s performance in China.“Chinese customers seem to be receiving the iPhone 11 series better than last year’s models because of the lowered retail price,” said Nicole Peng, a Canalys analyst. “We see weaker shipments for old models but the latest products are going strong.”Read more: Apple Assembler’s Profit Beat Signals Good iPhone 11 DemandOverall Chinese smartphone shipments dropped 5% to 69.3 million units during the two months, according to reports published by the academy, which is run by the Ministry of Industry and Information Technology and tracks the number of smartphones that get permits to be sold in China.Apple took major strides to increase battery life in its iPhone 11 and 11 Pro devices while lowering the starting price by $50. After years of stagnation in cameras, the company overhauled the iPhone’s image quality this year, catching up to category leaders Google and Huawei. This approach drew an overwhelmingly positive critical reception.In China, however, Apple still faces an uphill climb against local brands like Huawei and Xiaomi. Beyond new device sales, Apple’s other major challenge there will be to make available more of its lucrative subscription services. As the company transitions to a business model more reliant on recurring fees -- such as via iTunes Music, Apple TV+ and Apple Arcade -- their unavailability in China becomes increasingly a hurdle to growth.Apple Now Has the Best Smartphone Cameras: iPhone 11 Pro Review\--With assistance from Colum Murphy.To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
EM Review: Trade Talk Uncertainty Dominated Amid Mixed Signals
(Bloomberg) -- Emerging-market currencies had the first weekly decline in seven last week as positive developments on a “phase one deal” between the U.S. and China failed to reverse days of largely risk-off sentiment. President Donald Trump’s administration signaled late Thursday that talks with China over the first phase of a broad trade agreement are entering the final stages, though added caveats a day later that a deal is close but not completed. Stocks in developing nations halted a month of weekly gains, falling the most since late September.The following is a roundup of emerging-markets news and highlights for the week ending Nov. 18.Read here our emerging-market weekly preview, and listen to our weekly podcast here.Highlights:U.S. and Chinese trade negotiators held “constructive discussions” in a phone call on Saturday to address each side’s core concerns of phase one of the trade deal.White House economic adviser Larry Kudlow said negotiations over the first phase of a trade agreement with China were coming down to the final stages. Kudlow said a deal is close though “not done yet”President Donald Trump said the U.S. will increase tariffs on China in case the first step of a broader agreement isn’t reached. He also said China is devaluing its currency, supply chains are cracking and they are “dying to make a deal”Trump said trade talks are moving “rapidly”A U.S. demand that China spell out how it plans to reach as much as $50 billion in agricultural imports annually has become a sticking point in negotiations, according to people familiar with the matterChina lowered the cost it charges on open-market operations for the first time since October 2015. The People’s Bank of China cut the interest rate on its seven-day reverse repurchase agreements to 2.5% from 2.55%The country’s economy slowed further in October, signaling that policy makers’ piecemeal stimulus is failing to boost output and investmentFederal Reserve Chairman Jerome Powell stuck to his view that interest rates are probably on hold after three straight reductions, while signaling that the U.S. central bank could resume cutting if the growth outlook faltersTrump renewed his assault against the Fed, saying it was hurting the U.S. by not copying other central banks in deploying negative interest ratesTrump said Wednesday that Turkey’s purchase of a Russian anti-aircraft missile system presents “some very serious challenges” for the U.S., and directed Secretary of State Michael Pompeo to work on resolving the impasseThe Lebanese army was deployed heavily across the country on Wednesday and banks and schools remained shut for a second day as protesters incensed by a call to go home began to converge on the presidential palaceS&P downgraded Lebanon’s long-term foreign currency debt rating to CCC from B-Major political parties agreed to name businessman and ex-finance minister Mohammad Safadi as the country’s new premier, local media reported, a choice that was immediately rejected by anti-government demonstrators pressing for deeper change. Mohammed Safadi put an end to his bid just two days after winning the backing of Lebanon’s major political partiesThe central bank has no plans to impose formal restrictions on the movement of money or force depositors to accept losses, its governor said, but will offer “unlimited” dollars for commercial lenders to finance trade and meet customer demandBanks agreed to lift a restriction on new money coming from abroad and set a withdrawal limit of $1,000 a week for accounts denominated in foreign currency, according to a statement issued Sunday by the Association of Banks in LebanonPresident Michel Aoun appealed to Arab neighbors on Tuesday for help to revive his country’s economyFranklin Templeton said the government will have to renegotiate its debt to stave off an economic collapseEgypt cut its main interest rates by a full percentage point with inflation at the lowest in almost a decade. The deposit rate was reduced to 12.25% and the lending rate to 13.25%Mexico cut the benchmark rate for a third consecutive meeting after inflation slowed to target and economic growth stumbledTwo German citizens were detained by Hong Kong police amid the continuing protests, Deutsche Welle reported, citing an official at Germany’s foreign ministry. The two Germans are receiving assistance from the country’s consulate in Hong Kong, according to the report.Chinese President Xi Jinping called an end to violence Hong Kong’s “most urgent task,” as a scuffle involving the city’s justice minister and the second protest-related death in a week heightened tensions in the paralyzed financial centerHong Kong officials and Chinese state media warned of consequences if violence continuedChilean stocks and the peso rallied the most in a decade on optimism an agreement over a new constitution will help end protests and riots that threatened to upend the country’s economyThe Chilean peso slumped to a record low amid a wave of social unrest and investor concern about a new constitutionCentral bank announced a $4 billion swap program to ease liquidityChile’s government is willing to increase the minimum pension by more than a proposed 20% in response to the biggest civil unrest in a generation, President Sebastian Pinera said in a televised address late SundayOptimism about a trade deal between the U.S. and China encouraged investors to add $1 billion to emerging-market exchange-traded funds in the week ended Nov. 8, the biggest weekly inflow since Feb.Asia:China wants to balance functionality with concerns about anonymity as it works toward launching a digital version of the yuan, according to an official from the People’s Bank of ChinaForeign companies continue to invest more in China even after Trump called on U.S. firms to look elsewhere, as the rising spending power of 1.4 billion people proves too hard to resistSouth Korea will try to achieve economic growth of more than 2.2%-2.3% next year by providing momentum for an economic rebound, Finance Minister Hong Nam-ki saidBank of Korea board member Lim Ji-won said global data in the past few months show the manufacturing slump is easing slightlyHoldings of overseas alternative assets such as real estate, infrastructure, private equity and debt, and hedge funds by investors rose to at least about 201 trillion won ($172 billion) this year, a record, according to data compiled by Samsung Securities Co. and Korea Investors Service Inc.The U.S. and key allies are seeking to hold a United Nations Security Council debate on North Korea’s human rights record after failing to do so last year, according to diplomats familiar with the discussionsIndia’s trade deficit widened less than estimated last month, as a third-straight month of decline in exports offset a sharp plunge in imports amid weak global demand conditions.The country’s retail inflation quickened for the third straight month in October, breaching the central bank’s 4% medium-term target and possibly slowing the pace of monetary policy easingThe nation is considering changes to its dividend distribution tax that will raise returns for investors, according to people familiar with the matter, as authorities try to revive foreign fund inflowsFactory output shrank to the lowest level in eight years, as a sharp fall in capital goods production underlined weak demand in Asia’s third-largest economyIndia plans to reduce its stake in Indian Oil Corp. to below 51% while ensuring the government and state-run companies retain control of the nation’s largest oil refiner, people with knowledge of the matter saidArcelorMittal won approval from India’s top court to complete its $5.8 billion purchase of a bankrupt steel mill, clearing the way for tycoon Lakshmi Mittal to enter the world’s second-biggest marketIndonesia’s customs cleared nine firms to export nickel ore after briefly suspending shipments for inspection, according to Heru Pambudi, director general of Customs and ExciseExports fell 6.1% in October from a year earlier, while trade balance came in at surplus of $161 millionSoutheast Asia’s largest economy may post higher-than-expected budget deficit next year as govt seeks to maintain growth momentum amid lower revenue, according to Finance Minister Sri Mulyani IndrawatiThai Finance Minister Uttama Savanayana said he plans to issue measures to help boost the economy, while adding past steps didn’t do enough for small businesses. The economy will continue to face high risks next year, so the government needs to be well-prepared, he also saidThailand will try to find new markets for products affected by the suspension of some trade preferences under the U.S.’s Generalized System of Preferences, Commerce Minister Jurin Laksanawisit said. The two nations will speak on the issue in late NovemberMalaysia’s economic growth eased in the third quarter to its slowest pace in a year amid declining exports and weaker factory outputA Malaysian judge ordered ex-premier Najib Razak to defend himself against all charges in the trial involving a former unit of troubled state-owned fund 1MDBThe Philippines central bank kept its key rate unchanged at 4%, opting for what it described as a “prudent pause” to monitor how previous easing steps are filtering through to the economy. It trimmed its 2019 inflation forecast to 2.4% from 2.5%Business process outsourcing may grow between 3.5%-7.5% annually from 2020 to 2022, IT and Business Process Association of the Philippines President Rey Untal saidThe candidate representing Taiwan’s China-friendly opposition party in January’s presidential race called for free elections in Hong KongPresident Tsai Ing-wen on Sunday named former premier Lai Ching-te as her running mate in January’s electionEMEA:Istanbul may sell at least $500 million of bonds to fund six metropolitan projects, people with direct knowledge of the plan said, in what would be Turkey’s first municipal debt issuance in 27 yearsTurkish industrial output expanded on an annual basis for the first time in 13 months in September, a sign that the economy is finding its footing after a recession last yearPresident Recep Tayyip Erdogan said interest rates will fall further and again boasted that his firing of the central bank governor has permitted a sharp drop in borrowing costs since JulyPoland’s Premier Mateusz Morawiecki picked Tadeusz Koscinski, a former banker, to become the country’s fifth finance minister in as many months as the ruling Law & Justice party shuffles its cabinet after last month’s electionTens of thousands of Czechs thronged the streets of Prague in one of the largest anti-government protests in the country since the fall of communism, calling on their billionaire prime minister to step downRussian economic growth accelerated to 1.7% in the third quarter, the fastest pace this year, after the central bank delivered four consecutive rate cutsRussia is planning to cut the dollar’s share in its $125 billion sovereign-wealth fund, following a major move last year out of U.S. assets by the central bankThe nation skipped a weekly sale of fixed-coupon bonds for the first time since December, citing rising market volatility as bond yields climbedEgypt sold its longest Eurobond on record, part of a $2 billion deal, as it seized on appetite for riskier assets and spread out the burden of servicing its debtMorocco hired a consortium to arrange a euro-denominated bond offering of 12- or 20-year maturity to investors, according to a person familiar with the matterSaudi Aramco’s gigantic initial public offering could see retail investors returning to the Riyadh stock exchange as local individuals snap up shares in the world’s most profitable companySaudi Arabia put a preliminary valuation on its state-owned oil giant Aramco of between $1.6 trillion and $1.71 trillion, short of the $2 trillion target set by Crown Prince Mohammed bin Salman in 2016Efforts to resolve the standoff between Qatar and a Saudi-led bloc are gathering momentum, with an upcoming soccer tournament in Doha helping to pave the way for a possible breakthrough, according to a Gulf official with knowledge of the matterIsrael’s economy accelerated thanks to both public and private spending, overcoming disruptions in world trade that have threatened local growthSouth African retail sales climbed at the weakest pace in six months in SeptemberGhana will ramp up spending by a fifth next year and plans to raise as much as $3 billion in international markets as it prepares for an election in 13 monthsYields on Nigeria’s one-year Treasury bills fell on Thursday to the lowest since April 2016, while demand for three-month debt surged to a record as local funds pile into the debt after the central bank restricted their access to its higher-yielding securitiesKenya’s 47 counties can begin raising state-guaranteed debt next year, potentially heaping more liabilities on the over-leveraged East African economyLatin America:Chile took a major step toward solving the social crisis that has convulsed the nation for the past month when lawmakers from almost all the parties agreed early on Friday to a mechanism to rewrite the constitutionChile’s government said that it backed plans to rewrite the constitution, weakening the peso by almost 4% in the week, the worst performance among all currencies in emerging marketsGovernment has also said it would pull $1 billion from its sovereign wealth fund in the next few days to help finance increased spendingThe $4 billion credit line opened by Chile’s central bank Thursday fueled a rise in the peso forward marketBrazil launched an employment program that could generate 1.8 million new jobs by 2022, according to an estimate by the Economy MinistryPresident Jair Bolsonaro confirmed he will leave the PSL party and create a new one called “Aliança pelo Brasil,” meaning “Alliance for Brazil”After a pension reform became law this month, Bolsonaro’s administration is now prioritizing measures that increase control over the federal budgetBrazil’s economy likely grew in the third quarter according to a key gauge, indicating a record-low policy rate and government measures are buttressing demandRetail sales notched the fifth straight monthly increase in SeptemberFormer President Luiz Inacio Lula da Silva, who left jail earlier this month after a Supreme Court decision, used a more radical tone in his speechesThe hacker behind a cyberattack that has crippled Petroleos Mexicanos’s computer systems is hoping to squeeze almost $5 million out of the company and appears to have set a deadline of Nov. 30Bolivia’s Evo Morales accepted Mexico’s offer of political asylum, thrusting leftist President Andres Manuel Lopez Obrador’s government into the center of a crisis that has split Latin America’s government allegiancesOpposition lawmaker Jeanine Anez declared herself interim president as the ouster of Morales plunged the nation into a constitutional crisis, triggering a clash between the police and Morales supporters in La PazNew finance minister Jose Parada ruled out changes in the level of the currencyArgentine President-elect Alberto Fernandez is preparing to task the country’s central bank with trying to boost the crisis-torn economy through a weak exchange rate, according to two people with direct knowledge of the strategyFernandez said he will probably announce the economic team on Dec. 10 when he takes officeFernandez said he’ll review the government’s spending plans for 2020 and suggested his predecessor’s draft budget was faultyArgentina bondholders are so worried that the country’s new leader may default that they’ve pushed yields on local notes due two days after his Dec. 10 inauguration to an ear-popping 100%Three hedge funds are demanding more than 384 million euros ($425 million) from Argentina in a U.K. lawsuit that alleges the country restated economic figures to avoid paying out on securities tied to its growthArgentina is lifting controls on crude oil and fuel prices, leaving drillers and refiners to work out how to get back to market levels, according to two people familiar with the matterColombia’s economy grew at its fastest pace in four years as migration from Venezuela and accelerating credit growth boost consumer demandParaguay plans to issue a global bond for approximately $500 million in the first quarter of next year, according to Finance Minister Benigno Lopez\--With assistance from Selcuk Gokoluk, Colleen Goko and Carolina Wilson.To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at yteso1@bloomberg.net;Netty Ismail in Dubai at nismail3@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.netTo contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Karl Lester M. Yap, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Focus - Made in China: Samsung farms out more phones to fend off rivals
Samsung's plan to outsource a fifth of its smartphone production to China next year may help it compete with low-cost rivals such as Huawei and Xiaomi but it's a strategy fraught with risks, people with familiar with the move said. Samsung Electronics, which shut its last in-house Chinese smartphone factory in October, is quietly moving production of some Galaxy A models to contractors such as Wingtech, which are little known outside China. Samsung has been coy about the volumes involved but sources said the South Korean tech giant plans to ship some 60 million phones made in China by so-called original design manufacturers (ODMs) next year out of a total of about 300 million devices.
- Reuters
Made in China: Samsung farms out more phones to fend off rivals
Samsung's plan to outsource a fifth of its smartphone production to China next year may help it compete with low-cost rivals such as Huawei and Xiaomi but it's a strategy fraught with risks, people with familiar with the move said. Samsung Electronics, which shut its last in-house Chinese smartphone factory in October, is quietly moving production of some Galaxy A models to contractors such as Wingtech, which are little known outside China. Samsung has been coy about the volumes involved but sources said the South Korean tech giant plans to ship some 60 million phones made in China by so-called original design manufacturers (ODMs) next year out of a total of about 300 million devices.
- Bloomberg
Trump to Tour Apple’s Austin Manufacturing Plant on Wednesday
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. President Donald Trump is scheduled to tour an Apple Inc. manufacturing plant in Austin, Texas, on Wednesday, the White House said Sunday.The president plans to visit the plant along with Apple Chief Executive Officer Tim Cook, according to a tweet by spokesman Judd Deere. The Austin American-Statesman newspaper reported that Trump will travel with Treasury Secretary Steven Mnuchin and other administration officials.The company announced in September that its new Mac Pro computer will be assembled in Texas after it received exclusions from the Trump administration from tariffs on certain parts imported from China.The visit also comes at a time the U.S. and China are close to finalizing the first phase of a highly-anticipated trade deal.It’s not the first time Cook and Trump have spent time together. They’ve dined at the president’s golf club in Bedminster, New Jersey, twice in the past two years, most recently in August. Cook also attended a state dinner hosted by Trump in 2018 for French President Emmanuel Macron.Trump said after the pair met in August that Cook made a “good case” about the difficulty in competing with South Korean rival Samsung Electronics Co. if Apple products are subject to import tariffs.A month later, the Trump administration announced it had agreed to Apple’s request for tariff waivers on 10 of 15 Chinese components -- a shift from a stance announced by Trump in July that the company’s requests would be denied and that it should make the parts in the U.S.After gaining the tariff relief, Apple announced it would assemble the new Mac Pro computer at the Austin plant, which has produced the previous Mac Pro since 2013. There had been reports the company planned to shift production to China.The Trump administration then said in September it denied Apple’s request for relief from 25% tariffs on other Mac Pro components, including optional wheels, a circuit board for managing input and output ports, power adapter, charging cable and a cooling system for the computer’s processor.The company is also seeking exclusions from Trump’s tariffs that went into effect Sept. 1 on the Apple Watch, iMac, parts for the iPhone and other components imported from China.Last month, Trump criticized Cook for a design change to the iPhone -- the loss of the home button.Apple’s presence in the Texas capital is the biggest after its headquarters in Cupertino, California, the Austin American-Statesman said, and the company has said it will invest $1 billion in Austin to build an office park capable of holding 15,000 additional employees.To contact the reporter on this story: Hailey Waller in New York at hwaller@bloomberg.netTo contact the editors responsible for this story: James Ludden at jludden@bloomberg.net, Ros Krasny, Mark NiquetteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Applied Materials Projects Strong Sales on Bounceback in Demand
(Bloomberg) -- Applied Materials Inc. gave a sales forecast for the current quarter that topped analysts’ estimates, suggesting a slump in orders for chipmaking equipment is ending.The company is the largest maker of machinery used in the manufacture of semiconductors, which are among the most important parts of the electronics supply chain. Customers of the Santa Clara, California-based company include Samsung Electronics Co., Intel Corp. and Taiwan Semiconductor Manufacturing Co., giving it a reach that makes its results and forecasts an important early indicator of business confidence. Intel and other chipmakers order equipment months in advance of starting new factories and production lines.Key InsightsFiscal first-quarter sales will be about $4.1 billion, Applied Materials said Thursday in a statement. That compares with analysts’ average estimate of $3.71 billion, according to data compiled by Bloomberg.Adjusted earnings per share will be 87 cents to 95 cents, the company said. Analysts projected 75 cents a share.The results “reflect a healthy uptick in demand for semiconductor equipment, combined with strong execution across the company,” Chief Executive Officer Gary Dickerson said in the statement.Chip-equipment makers often experience wild earnings swings. Machines cost tens of millions of dollars each. Delaying factory build outs is one of the fastest ways a chipmaker can preserve cash when they’re unsure of future demand.Net income was $698 million, or 75 cents a share in the period ended Oct. 27, compared with $757 million, or 77 cents a share, a year earlier.Revenue was little changed at $3.75 billion. Analysts were looking for $3.68 billion.Stock ReactionShares rose about 4% in extended trading after the announcement. The stock closed at $56.96 in New York and has increased 74% this year.More InformationFor more details, click here.To see the statement, click here.To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Motorola Brings Back the Razr as $1,500 Foldable Smartphone
(Bloomberg) -- Motorola is rebooting the iconic Razr flip phone as a 6.2-inch smartphone with a foldable display that gives the Lenovo-owned brand a unique selling point against Apple Inc. and Samsung Electronics Co.’s finest.The new device reprises the Motorola Razr name and looks like a modernized version of the original. It costs $1,499 and will be available for pre-order in December in Europe and as a Verizon exclusive in the U.S., ahead of its retail arrival in January. For Lenovo Group Ltd., which has a tiny fraction of the global smartphone market, it's an effort to build brand awareness in the U.S. via a halo device.Launched in late 2004, the first Razr became a cultural icon in the U.S., sold 130 million units and was the face of the phone industry before Apple launched the iPhone in 2007. Motorola’s new model has a shot at some fame as well, as it’s set to become the first true foldable phone on the market — every other device so far could more properly be described as a foldable tablet — and company executives have told Bloomberg they are confident that their design won’t succumb to the durability issues that pushed back Samsung’s Galaxy Fold launch.The 2019 Razr is no bargain, but compared to the $1,980 Galaxy Fold or Huawei Technologies Co.’s $2,600 Mate X, it’s the most affordable member of the most expensive modern phone category. The compromise that users will have to accept with the Razr is in some of its specifications: it has a small battery at 2,510mAh and runs the older Android 9 Pie operating system on Qualcomm’s sub-flagship Snapdragon 710 chip. It lacks the 5G option and bountiful memory of its rivals. Aside from the U.S. and Europe, it’ll also be on sale in Latin America, Asia and Australia.Motorola President Sergio Buniac said he doesn’t see the launch as a “silver bullet” for rocketing Motorola’s sales up to Apple and Samsung numbers. Over the past several quarters, Motorola has turned its mobile business from a flailing unit of China’s Lenovo to profitability in many markets, he said. The new Razr is intended to continue that even without strong sales. Buniac said he’s hoping for “a little bit more” demand than supply, while Lenovo Chief Operating Officer Gianfranco Lanci said “it will bring greater awareness to the brand, especially in key markets like North America.”Motorola’s take on foldable phone design is markedly different to the first batch of foldable devices. Instead of a vertical hinge that makes it open like a book, the new Razr opens and closes like a classic flip phone. Closed shut, the phone is a square that’s about half the size of an iPhone 11 Pro Max, and Motorola has used the foldable technology to make one of the most portable phones on the market. In the process, it’s brought back the action of flipping the phone shut to hang up calls, which is something most premium smartphone consumers haven’t done in at least a decade.Samsung is planning to introduce its own square-shaped foldable phone as its second Galaxy Fold device early next year. Until that time, Motorola looks set to be all alone in offering a regular smartphone capable of collapsing into a pocket-friendly clamshell.“We wouldn’t be bringing the product to market if we didn’t think it was ready,” said Buniac, underlining Motorola’s belief in the reliability of its particular hinge and fold design. Samsung’s Galaxy Fold had issues with air bubbles popping up beneath the display and tiny particles getting trapped under the screen. Touting a so-called zero-gap design, Buniac said “Our expectation is that we will have a reliable product, and as we launch you will see, but we are confident in what we achieved.”In a brief hands-on test with the Razr, the handset felt and looked impressive. Its screen felt fragile, but the device’s design chief Ruben Castano said “We feel like we’ve really developed a robust solution,” pointing to stainless steel structural plates between the bottom of the inner screen and the device’s internals. He says that layer will help prevent particles like sand from going into the device’s electronics and breaking the display. There’s also a 2.7-inch exterior touchscreen for quick access to commonly used functions and checking notifications.Similar to Samsung, Motorola will offer 24-hour turnaround replacements under a standard warranty for display failures, and it will charge $299 if the issue falls out of warranty in the U.S. The phone will be sold via Verizon Wireless as the exclusive launch carrier in the U.S. and will be available at Verizon and Walmart stores from January.The Razr’s inner display appeared impressive with a high-resolution panel whose crease was more subtle than the one on the Galaxy Fold. When unfolded, the Razr operates like most other Android phones, running a full touchscreen version of Google’s operating system. The external screen is designed for light interactions like answering calls and texts, but like the front screen on the Galaxy Fold, it’s not something most consumers are likely to use much. The new Razr is a flip phone at heart and that’s how most people will want to use it.Castano said that Motorola started working on a foldable design around 2015 and that its biggest challenge was being able to match the first Razr’s ability for the phone to be fully shut with no gap. Like the original Razr, the 2019 model has a chin at the bottom that houses electronics such as the LTE antenna. it also has a notch at the top of the main display, lacks a headphone jack, and will be available only in black and with 128GB of storage without further upgrade options. Its camera and battery specs are underwhelming, though Motorola promises “all-day battery life” without quoting an exact number of hours.Motorola’s other big task will be to prove itself at the super premium end of the market that’s long been dominated by Samsung and Apple. Since the first Razr, the Motorola brand has worn many hats, having served as a middling iPhone counter with the Verizon Droid, gone through a $12.5 billion Google acquisition and eventually ended up in the hands of Lenovo. It now needs to rebuild its own brand identity.But the Razr’s shortcomings may very well not matter. This device is designed to appeal to those nostalgic for the flip phone era, for whom specs may not be a priority, as well as the early adopters of new technology, who are more tolerant of first-generation imperfections. To contact the author of this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.netTo contact the editor responsible for this story: Vlad Savov at vsavov5@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
China's No. 1 University Has a Big Debt Problem
(Bloomberg Opinion) -- A crown jewel of President Xi Jinping’s Made in China 2025 plan is faltering.Tsinghua Unigroup Co. is the business arm of the prestigious Tsinghua University, Xi’s alma mater. The company has been trying to establish itself as a leader in China’s nascent memory-chip industry since 2015, when it famously tried to acquire stakes in U.S. rivals Micron Technology Inc. and Western Digital Corp. Both advances were rejected amid concerns that U.S. regulators wouldn’t approve the deals on national-security grounds. Rebuffed abroad, Unigroup resolved to become a domestic champion and poured its resources into developing flash-memory technology. One of its subsidiaries, three-year-old Yangtze Memory Technologies Co., is already bringing its know-how to production. It’s impressive how fast the unit has developed despite lagging behind rivals in efficiency, Bernstein Research notes.Yet credit investors are getting nervous: Unigroup’s dollar bond due in 2023 has tumbled in recent days, and is now yielding more than 10%. Last week, the chipmaker hurriedly arranged a conference call to reassure investors that its finances were in good order. Surely an asset of such national strategic importance shouldn’t be trading like a junk-rated firm bordering on bankruptcy, management reasoned. A big question hanging over Unigroup is: Who’s its real daddy? As part of China’s university reform, which aims to separate academic institutions from business endeavors, Unigroup’s controlling shareholder Tsinghua Holdings Corp. has attempted to disentangle itself from the company multiple times. The latest rout comes amid a protracted custody battle.Naturally, debtholders shudder every time speculation swirls about Unigroup’s ownership. Last year, its bonds tanked after Tsinghua agreed to sell its shares to an obscure state-owned entity in the second-tier city of Suzhou, only to recover a month later when the university opted for the cash-rich Shenzhen government instead. The bonds plummeted yet again in recent months when Tsinghua abandoned the Shenzhen deal. Then in a conference call last week, Zhao Weiguo, the holding company’s chairman, said Unigroup should remain under the Tsinghua University umbrella, making multiple references to the wishes of the “paramount leader.” For anyone in doubt, that’s Xi.Figuring out who’s holding the purse strings is particularly important for Unigroup, because like all chipmakers it needs billions of dollars in capital outlays. Industry leader Samsung Electronics Co., for example, splashed out about $25 billion annually in capital expenditure over the past five years. Yangtze Memory, Unigroup’s flash-memory business, has already spent more than 20 billion yuan ($2.86 billion) on a new plant in Wuhan and earmarked $30 billion in total spending there. The key difference is that, unlike Samsung, the Yangtze subsidiary is behind on technology and unlikely to break even until 2022 at the earliest, estimates Barclays Plc. Money has to come from the outside. Sure, Unigroup is getting financial support from China’s various venture-capital-like guidance funds and has a big credit line from China Development Bank. But investors worry that’s not enough. Obscure state-owned entities, and even Tsinghua University itself, don’t have pockets deep enough to bankroll Unigroup as it ramps up production, they wager. Revenue at Unigroup rose 7.5% from a year earlier in the first half, but its Ebitda earnings tumbled 27% to a peanut-sized 1.5 billion yuan, driven by a sharp increase in research expenses. As of June, the company sat on 39 billion yuan of cash but had 58 billion yuan of interest-bearing debt due in the year ahead. By now, conspiracy theories abound explaining Tsinghua's decision to scrap its deal with Shenzhen, often considered China’s Silicon Valley. One explanation could be ego: Why would Xi allow his alma mater’s prized asset to be controlled by a mere local state-owned entity?Investors also question whether geopolitics is at play. If Tsinghua offloaded its stake to Shenzhen, Unigroup would become a bona fide state owned enterprise, making it vulnerable to operations restrictions — from intellectual property transfer to preferential taxation — if China strikes a broader trade deal with the U.S. If Unigroup remains under the umbrella of a non-profit university, on the other hand, it could still develop its chip capacity within a gray zone. The naive might argue that Beijing can’t possibly let Unigroup go under. That may well be the case; but as I’ve written, an unhealthy undercurrent is forming in China’s bond market. Increasingly, distressed companies are pushing for quiet deals with institutional investors to delay repayment dates. This is perhaps why investors got even more nervous when news surfaced that Unigroup had asked Credit Suisse Group AG for its help to amend and extend some bank loans. Pinched by the trade war, China is now eager to become self-sufficient, and semiconductors are certainly a good place to start. Last year, China’s trade deficit in chips continued to widen to $228 billion, more than double levels from a decade earlier. But if you think Tsinghua Unigroup will emerge a clear winner from this, think again. As we’ve seen in the past, national service doesn’t necessarily get you a glittering credit score, with local government financing vehicles and regional banks alike now languishing with junk ratings. Unigroup investors would do well to remember that they can't take Xi’s school spirit to the bank. To contact the author of this story: Shuli Ren at sren38@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
A Record $173 Billion Flowing from Korea Into Risky Assets
(Bloomberg) -- A hunt for yield is prompting South Korean investors to pile tens of billions of dollars into unconventional assets abroad, raising risks of losses on unfamiliar products.Holdings of overseas alternative assets such as real estate, infrastructure, private equity and debt, and hedge funds by investors in Asia’s fourth-largest economy rose to at least about 201 trillion won ($173 billion) this year, a record, according to data compiled by Samsung Securities Co. and Korea Investors Service Inc. That compares with 158 trillion won held by fund managers, pension funds, insurers and brokerages at the end of 2018 and 118 trillion won in 2017.Korean investors are joining peers around the world in putting more money in alternative assets as equity and bond returns sag. The global amount of such products under management has risen more than three-fold over the past decade to $9.5 trillion in 2018, and it’s forecast to grow to $14 trillion in 2023, according to Preqin data. The assets can expose buyers to bigger risks than conventional securities, because they are often less liquid with less information about them available to the public.Some signs of trouble are already emerging.An Australia real estate fund sold by KB Securities Co. is trying to retrieve its investments after a dispute with a local partner, according to a spokeswoman at the brokerage. Institutional investors put 236 billion won in the fund and retail investors parked 90.4 billion won in it.Some derivative-linked securities tied to a German real estate fund sold by Shinhan Investment Corp. extended their maturities because of problems with the underlying assets, a Shinhan spokesman said. About 380 billion won of such securities were sold.Lime Asset Management Co., Korea’s biggest hedge fund firm, said last month it had frozen $710 million in withdrawals from its funds, some of which invested in collateralized loan obligations repackaging trade finance assets.Korean brokerages have more overseas alternative assets on their books that they haven’t been able to sell, and that could pose risks for them, a local ratings firm warned in September. Unsold assets that big brokerages have held for more than six months jumped to 1.3 trillion won at the end of June from about 500 billion won in 2018.“We should learn from those examples and set up an adequate process to mitigate risks,” said Andy Kim, a credit analyst at Samsung Securities. “Selecting asset classes is getting more important among alternative assets due to fierce competition for the products and high valuations.”Kim expects demand for infrastructure investment to rise further and recommended 5G facilities and European renewable energy projects because those assets are less affected by swings in the economic cycle.Korean institutions need to boost returns on their investments to help provide for an aging population, and the national pension fund has 708 trillion won in assets. But with a global economic slowdown and sliding interest rates dragging down returns, there are signs that some investors have grown less cautious when opportunities to earn extra yield arise.Skepticism NeededLee Do-yoon, chief investment officer at the Police Mutual Aid Association in Seoul, said that his staff recently suggested that the fund invest in a power plant in New York state because the potential return was high.“I asked him if he visited the site or if he even knew where the plant was located exactly, and he said no,” said Lee, whose organization oversees about 2.6 trillion won in assets. Lee rejected the proposal.See also: Korean CLO Demand Jumps Even as Neighbor Japan Warns About ThemLee said he doesn’t think all alternative investments are bad but that fund managers should avoid indiscriminate investment in unfamiliar assets. He said it’s “just nonsense” that funds that avoid junk-rated bonds have no objections to putting their money in direct lending with no credit ratings because it’s considered an alternative investment.(Updates with tout.)To contact the reporter on this story: Kyungji Cho in Seoul at kcho54@bloomberg.netTo contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ken McCallumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Investing.com
StockBeat: Micron's Wings Clipped as UBS Downgrades Outlook
Investing.com – Micron (NASDAQ:MU) is up about 50% for the year, but UBS cut its outlook on the chipmaker Friday amid worries that falling memory prices are likely to keep a lid on growth.
- Bloomberg
Qualcomm Projects Strong Revenue, Suggesting Smartphone Gain
(Bloomberg) -- Qualcomm Inc. gave a stronger-than-predicted forecast for the current quarter, indicating that smartphone demand -- fueled by new wireless technology -- may be picking slowly up after a prolonged slump. The company’s shares rose in extended trading.Investors have been waiting to see whether Qualcomm, after five consecutive annual revenue declines, can parlay its claim of leadership in fifth generation, or 5G, wireless technology into a return to sales growth. While revenue is still declining from a year earlier, the market is stronger than feared and the company is poised to benefit from the rapid uptake of 5G early next year, Chief Executive Officer Steve Mollenkopf said in an interview. Hitting the top end of its revenue range would provide the chipmaker with the first quarterly sales expansion in six quarters.“There’s a lot of activity on 5G,” Mollenkopf said. “The quarterly performance and the forecast reflects “our confidence in the inflection point of 5G next year.”Fiscal first-quarter revenue will be $4.4 billion to $5.2 billion, the San Diego-based company said Wednesday in a statement. That mid-point of the estimate, $4.8 billion, compares with an average of analysts’ projections of $4.78 billion, according to data compiled by Bloomberg. Profit and revenue in the fourth quarter topped estimates.Qualcomm, whose chips are the main component in most of the world’s smartphones, has suffered shrinking revenue as consumers hang on to their handsets longer. In China, Huawei Technologies Co., which supplies itself with the majority of its crucial components, has been gaining market share, hurting demand for Qualcomm chips used by Huawei’s rivals. The new services are debuting this year with handsets from Samsung Electronics Co. that will take advantage of the faster downloads and response times offered by the upgraded networks. Mollenkopf said that there are now 230 5G phone models designed on the company’s chips, up from 150 three months ago.After shrinking to as low as 1.7 billion units in 2019, the smartphone market will rebound next year, Qualcomm said. The company expects shipments as high as 1.85 billion units in 2020, including as many as 225 million 5G handsets.Cristiano Amon, the head of Qualcomm’s chip unit, called that 5G estimate conservative. If consumers decide to upgrade phones more often, that number could go up, he said on a conference call with analysts.“The company is clearly pinning future growth on 5G playing out very well with extremely high adoption among consumers,” said Edward Jones & Co. analyst Logan Purk. “We just question how quick the uptake will be. There will be plenty of adopters that will pick it up. It will generate some sort of refresh but at the end of the day it’s not proven technology.”A renewed supply relationship with Apple Inc. for future versions of the iPhone and 5G high-speed networks and phones are causing optimism that the company’s financial performance will improve.Qualcomm still needs to resolve its ongoing technology licensing dispute with Huawei and succeed in its appeal against a sweeping antitrust ruling from a case brought by the U.S. Federal Trade Commission. The company has ongoing talks but isn’t in a position to report any progress, Mollenkopf said. A trade agreement between China and the U.S. might help, he said.Separately, the company said it appointed Akash Palkhiwala as chief financial officer. He has been serving as the interim CFO since August.Qualcomm shares rose about 5% in extended trading after closing at $84.63 in New York. The stock has gained 49% this year, about equal to the rise in the Philadelphia Stock Exchange Semiconductor Index.Net income rose to $506 million, or 42 cents a share, in the period ended Sept. 29, from a loss of $513 million, or 36 cents, a year earlier. Excluding certain items, profit was 78 cents a share, compared with an average estimate of 71 cents. Revenue declined 17% to $4.81 billion. Analysts on average had predicted $4.71 billion in sales.Qualcomm is unique in the chip industry because the company gets the bulk of its profit from licensing patents that it says cover the fundamentals of all modern phone systems. The majority of Qualcomm’s revenue comes from selling chips that run phones and connect them to cellular networks.Technology licensing revenue was up 4% in the quarter from a year earlier to $1.16 billion in the quarter, providing $792 million of profit before taxes, Qualcomm said. Both totals increased from a year ago but declined from the prior quarter. The chip division provided $3.61 billion in revenue and $499 million of profit. Revenue was down 22% from a year ago and profit slid 37%.While Qualcomm settled its broad-ranging legal dispute with Apple and the iPhone maker agreed to resume using its chips, the company lost an FTC case that alleged unfair business practices and has been ordered to renegotiate patent licenses. Qualcomm is appealing the decision and seeking a stay on the decision so it doesn’t have to immediately start those renegotiations.(Updates with comments from analyst in the eighth paragraph.)To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
