Month: April 2015

India monsoons: Another dry season ahead?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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While the stars appear to be aligning for India’s economy, the specter of deficient monsoon rainfall is casting a cloud over the country’s growth and inflation outlook.

The Indian Meteorological Department (IMD) said last week that rainfall during the southwest monsoon season – which falls between June and September – will likely be “below normal” for the second consecutive year due to the impact of an El Niño weather pattern.

“Monsoon rains are especially important this year as the agrarian economy is still reeling from the adverse effects of below-normal rains in 2014 and unseasonable rains in March of this year,” Sonal Varma, India economist at Nomura, wrote in a note.

Monsoon rains are expected to be 93 percent of a long-term average. India’s weather office defines average, or normal, rainfall as between 96 percent and 104 percent of a 50-year average of 89 cm for the entire four-month season, according to Reuters.

EL Niño, a climatic phenomenon caused by a warming of sea-surface temperatures in the Pacific, heightens the risk of droughts in Australia and Asia and heavy rains in South America.

What’s at stake?

These developments will be monitored closely, especially as this comes at a time when India’s inflation has eased and growth is recovering, said Radhika Rao, an economist at DBS.

“If bad weather materializes, the risk is that higher food prices feed into inflationary expectations, pushing inflation off the RBI’s [Reserve Bank of India] disinflationary path,” said Rao.

India’s consumer prices have moderated meaningfully over the past year – to 5.17 percent in March from 8.25 percent in the year-ago period.

Read more: Hygiene, monsoons next big risks for Nepal

“Simultaneous hurt to farm output could be a drag on our FY15/16 GDP [gross domestic product] estimate at 7.8 percent, with hurt to rural incomes and need for the government to step up fiscal support to the agricultural sector,” he said.

Agricultural production accounts for almost 20 percent of total economic output, according to Capital Economics. The country is a major producer of farm commodities including rice, cane, soybean and cotton.

Farmers in India are especially dependent on monsoon rains as over 50 percent of agricultural land in the country does not have irrigation facilities.

Wait and see

Even as the risk of a dry spell looms, economists note that it is too early to assess how disruptive weather conditions will be.

“The true monsoon situation will only be known by mid-July, when the sowing season will be in full swing,” Varma said

To be sure, not all EL Niño occurrences have coincided with drought conditions in India, added Rao.

Last year, the monsoon trends were dire into end-Jun but subsequent rains narrowed the extent of deficiency by September, she said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Not yet: Fed holds rate at zero, no hint for hike

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Following through on indications in March, the Federal Open Market Committee on Wednesday offered no changes to its zero interest rate policy.
Not only did it not hike rates, it also removed all hints for what may lie ahead. Calendar references were deleted completely from the post-meeting statement.

The FOMC indicated after its March meeting that a rate hike in April was unlikely. The US central bank has kept its key funds rate anchored near zero since late 2008, amid the financial crisis.

Officials have indicated a desire to raise rates at some point this year, with the market now anticipating a September increase.

The move came amid a struggling US economy that barely registered any growth at all in the first three months of the year- a meager 0.2 percent increase in gross domestic product, thanks to a stubbornly frugal consumer, strengthening dollar and rough winter.
However, many market participants believe the Fed is still on its course of tightening, though the timing remains a question.

“It’s the long-term trend that matters to the Fed,” said Michael Arone, chief investment strategist for State Street Global Advisors’ US intermediary business. “They’ve been very consistent on the idea of data dependence.:”

Read More: Consumers holding on to their wallets for dear life

Financial markets have come to rely on the Fed’s easing policies over the past six and a half years, and stocks were lower ahead of the FOMC statement release.

The committee noted some progress in the economy, halting though it may be. The statement acknowledged that growth “slowed during the winter months,” though calling the factors leading to the slowdown “transitory.”

“Growth in household spending declined; households’ real incomes rose strongly, partly reflecting earlier declines in energy prices, and consumer sentiment remains high,” the FOMC said.
“They are willing to look through that weakness,” said John Bellows, portfolio manager at Western Asset Management. “They think it’s oil, they think it’s the dollar and they think the economy is going to be stronger in the second and third quarter. And whether or not we hike in September or later really depends on whether they are right on that call.”
There was no post-meeting press conference scheduled for the meeting, so investors were left to their own to read between the lines. Markets reacted little to the announcement, with stocks experiencing a mild decline and bond yields rising. The benchmark 10-year Treasury note yielded 2.05 percent shortly after the announcement.

Read More: Here’swhat changed in the new Fed statement

“The market is quite comfortable that the Fed is going to raise interest rates at some point this year,” Arone said. “What could happen is the volatility could come over when next Fed rate hike is, when that will come and where will it go.”

The April statement differed from the previous month in that it eliminated some descriptions of economic conditions, particularly in employment. March’s payrolls number fell of sharply from trend, registering just 126,000 new jobs.

There were no dissenting votes from this month’s statement.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks fall on US growth jitters; earnings, BOJ eyed

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks sold down early Thursday on the back of declines offshore amid renewed concerns over the US economy.

Fresh data showed US economy expanded a meager 0.2 percent in the first three months of the year, thanks to a strengthening dollar and stubbornly frugal consumers amid the harsh winter. The gross domestic product (GDP) print was much lower than the 1.0 percent estimated by Reuters economists and a big step down from the fourth quarter’s 2.2 percent.

Overnight, Wall Street ended lower after the Federal Reserve offered no changes to its zero interest rate policy following weak first-quarter gross domestic product (GDP) data. The Fed’s April statement also removed all calendar references and showed no new guidance on the timing of the rate hike.

Also in focus is the Bank of Japan (BOJ), which is expected to maintain its massive stimulus program at its monthly policy meeting today. However, according to the Nikkei business daily, the central bank could lower its median inflation estimate for fiscal 2015 from the current 1 percent in its semiannual report. The new figure will likely fall somewhere between 0.5-1 percent, the report said.

Nikkei loses 1.6 percent

Japan’s Nikkei 225 touched a seven-day low as it played catch-up with the region after being closed for the Showa Day holiday on Wednesday.

Early-trade laggards include Honda Motor, down 7.5 percent, following Tuesday’s news that its profit for the fiscal fourth quarter slumped 43 percent, compared with the same period a year ago.

Takeda Pharmaceutical tanked nearly 4 percent after agreeing to pay up to $2.4 billion to settle U.S. suits charging that the drug maker hid the cancer risk of its Actos diabetes drug.

Panasonic hovered in neutral territory as investors digested Tuesday’s earnings release, which beat expectations for the fiscal year with a $1.5 billion net profit.

Domestic data showing a better-than-anticipated industrial production report failed to lift sentiment. Japanese factory output dropped 0.3 percent on month in March, data from the Ministry of Economy, Trade and Industry (METI) showed before the market open, better than expectations for a 2.3 percent decline in a Reuters poll.

Kospi drops 0.3 percent

South Korea’s benchmark Kospi index edged down in early trade amid a fresh batch of corporate earnings releases.

Shares of web search operator Naver Corp percent shed 0.4 percent after missing forecasts with a 3 percent rise in first-quarter operating profit from a year earlier.

Better results are expected from KT Corporation, but shares of the telecommunication service provider still lost 1.3 percent from the get-go.

ASX falls 1 percent

Australia’s S&P ASX 200 index tumbled to a six-week low, on course to chalk up a three-day losing streak, as the Australian dollar strengthened to hover near the 80 US cent mark.

“There was clear exhaustion from the bulls at 5,990 points… and the signs are growing for the ASX to ease after rocketing up 7.8 percent year-to-date. There is nothing wrong with a healthy pullback,” IG market strategist Evan Lucas said in a note.

The banking sector kicked off trade on the back foot, due to bets that next week’s earnings will likely miss expectations. National Australia Bank and Westpac slumped over 2 percent each, while Australia and New Zealand Banking and Commonwealth Bank of Australia opened down 1.9 and 1.3 percent, respectively.

Oil-related counters provided some reprieve for the bourse; Liquefied Natural Gas and Santos advanced 1.8 and 0.5 percent after US crude settled at its highest level since December 11 overnight.

Television broadcaster Ten Network also bucked the downtrend, up 2 percent, despite delivering a steep first-half net loss and warned that it may not be able to survive if advertising revenue falls more than expected.

Meanwhile, New Zealand’s central bank kept interest rates steady as expected early Thursday, but indicated that it remained open to cutting rates if domestic demand weakens. The New Zealand dollar suffered a sharp drop, down 0.9 percent at 0.7616 against the US dollar.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

‘Watch out!’ – Why Fed could move markets after all

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most traders don’t expect to glean any significant market-moving insights from the Federal Reserve’s policy statement due Wednesday afternoon. But those traders risk getting caught unawares by a less-dovish-than-expected Fed, says George Goncalves, head of US rates strategy at Nomura.

Referring to the Fed statement, Goncalves wrote in a Tuesday afternoon note to clients that “given market positioning and pricing, the risk is that if it sounds less dovish (or even neutral) the market will be offside.”

In addition, Goncalves notes the risk that the Fed strikes a more optimistic tone about the economy, after the central bank wrote in its March statement that “economic growth has moderated somewhat.”

“If it were to attribute the weakness in the economy as being backward looking, watch out!”

In other words, the statement could clarify that the Fed’s thoughts on the economy moderating was an observation about the past, not a prognostication about the future. If the Fed is more optimistic about growth, that would give the central bank a reason to think about normalizing monetary policy sooner rather than later.

Either way, it will be interesting to see how the Fed reacts to Wednesday’s surprisingly weak gross domestic product number, which showed the economy growing just 0.2 (annualized) in the first quarter.

Read More: US economy stalls as weather, low energy prices bite

Finally, while the Fed will not release an update of its Rorschachian “dot plot” forecasts, Goncalves notes the additional risk that the Fed updates its “Policy Normalization Principles and Plans” document for the first time since September in order to better explain what policy normalization will look like.

“If that were to come out as well, that could be a sign that, hey look, they really mean business, they want to hike sometime this year,” Goncalves said Tuesday on CNBC’s “Futures Now.”

In sum, given that so many traders expect a mild Fed statement and are consequently buying short-term Treasury bonds “the risk is actually to the downside” for fixed income, Goncalves said.

Want to be part of the Trading Nation? If you’d like to call into our live Monday show, email your name, number, and question to TradingNation@cnbc.com.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Is ‘silver’ the new black for luxury?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Older women have become the new face of several fashion houses in recent months, a sign that global luxury retailers are increasingly switching their focus to elderly consumers.

In January, French brand Celine put renowned author 80-year old Joan Didion on their spring 2015 ad and a few days later, 71-year old singer-songwriter Joni Mitchell appeared in a Yves Saint Laurent feature.

In February, Kate Spade`s spring fashion shoot included 93-year old American style icon Iris Apfel and earlier this month, the world`s oldest supermodel, 86-year-old Daphne Selfe, fronted the new campaign for HandM`s high-end label “and Other Stories”.

The ads celebrating wrinkled faces and grey hair are a concerted effort to target elderly consumers, marking a significant turnaround from traditional marketing to younger, millennial groups.

Brands are waking up to the fact that people over 65 – defined as elderly – make up the one of the fastest growing groups of global consumers. Last year, 5.3 million elderly individuals boasted an annual gross income of at least USD 150,000, Euromonitor said in a new report Tuesday. USD 150,000 is widely considered a high income bracket.

With the global elderly population expected to hit 2 billion by 2050, up from 841 million presently, according to World Health Organization estimates, the wealth of graying consumers is also expected to swell.

“As the aging trend marches on, we predict that this high-income population will increase by a massive 140 percent to reach a global population of 7.4 million,” noted Fflur Roberts, Euromonitor`s head of luxury goods research.

“Their high share in the top income bracket indicates great opportunities in a wide range of luxury goods sectors from fine wines, champagne and luxury spirits to art and antiques.”

Luxury`s recent pivot towards the silver market is still a novelty among broader retailers. A survey by Age UK this month revealed that 39 percent of people aged 65 and over believe businesses have little interest in the consumer needs of older people.

Developed markets like Europe and North America have the wealthiest elderly populations, Euromonitor said. In the U.S., earners aged 65 and over amounted to 40 percent of the high income population while the elderly in Western Europe make up the largest age group with an annual gross income of USD 150,000.

High-income elderly only account for 5 percent of the emerging markets population, but that`s expected to hit 8 percent by 2030, Euromonitor noted. China currently has the greatest elderly high-income population, while Israel, Kazakhstan, Indonesia and Uzbekistan are also seeing robust growth.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Grexit, Grimbo, now Grexhaustion?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The standoff between Greece and its creditors has spawned another bit of rivalry: the battle among analysts to coin the latest buzzword for the painfully protracted drama.

“There`s definitely an element of who can come up with the best word to fit the scenario,” said Chris Weston, chief market strategist at IG.

Word play on Greece has been picking up this month. Last week brought the word “Grimbo,” or Greece in limbo, coined by a group of Citigroup economists – led by Chief Economist Willem Buiter. They are the same people responsible for the now widely-used “Grexit” term in February 2012, when the idea Greece might leave the euro zone first became a possibility.

On Friday, economists at Bank of America-Merrill Lynch decided they wanted in on the game as well, coining “Grexhaustion.”

“There is always a deadline after the final deadline (contributing to the Grexhaustion),” economists Gilles Moec and Ruben Segura-Cayuela wrote, noting that the continual confrontation between Greece and its creditors has had one major casualty: the country`s economy.

“Traders have gotten fairly comfortable with the idea of where Greece is, so there`s a bit of mocking and complacency,” said Weston, who suggested “Gretch” as a potential entrant.

“Outside of the pain clearly evident in Greece, the rest of the world is quite happy to coin these great phrases as long as it doesn`t see a pickup in [market] volatility.”

The Greece situation remains a Sisyphean mire. Over the weekend, media reports said the country`s colorful finance minister, Yanis Varoufakis, faced a tough crowd and numerous snubs at a Latvian meeting with his euro zone counterparts. The country is running out of cash and it needs a last tranche of bailout aid in order to meet debt repayments and to pay its domestic wages and pension bill this month.

On Monday, Greece revamped its negotiating team, taking Varoufakis off the field and tapping Deputy Foreign Minister Euclid Tsakalotos, an economist well liked by officials representing creditors, as coordinator.

Fresh entrants to the Greek vocabulary one-upsmanship are likely already lurking in the wings.

“I`m sure it`ll get worse as the days go by,” said Richard Jerram, chief economist at Bank of Singapore, noting that the first two letters of the country`s name lend themselves well to word play.

“A lot of countries couldn`t really do that,” Jerram noted, although he added that he finds other vocabulary plays more amusing than the ones that involve just “shoving `Gr` in front,” such as “Acropolis Now,” a play on the movie title “Apocalypse Now.”

“You can [use the wordplay to] distract yourself from what`s a pretty horrible problem if you happen to be Greece,” Jerram said.

Indeed, Weston noted that if the Greece standoff leads to the country defaulting with the International Monetary Fund and the European Central Bank, there will likely be “major changes in word-smithing.”

–Holly Ellyatt contributed to this article.

-By CNBC.Com`s Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China to become Apple’s top market next year?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Greater China leapt past Europe to become Apple`s second largest market in revenue terms during the January-March quarter, and analysts say it won`t be long before the region surpasses the U.S. to become the tech giant`s top market.

Apple`s second-quarter revenue from Greater China – defined as mainland China, Hong Kong and Taiwan – totaled USD 16.8 billion, a whopping 71 percent year-over-year jump. This tops the revenue of USD 12.2 billion out of Europe, and closes in on the USD 21.3 billion made from the Americas.

While the US remained the Apple`s most lucrative market, more iPhones were sold in Greater China than its home market during the quarter – an important milestone for the Cupertino-based company.

This was driven by gift-buying for Chinese New Year, demand from upgraders and the expansion of Apple`s retail network in Greater China, say analysts. The tech giant currently has 21 stores in the region, and plans to almost double its presence by mid-2016.

David Garrity, principal at GVA Research, doesn`t see China`s love for Apple dying off anytime soon.

“While the Lunar New Year certainly caused a seasonal spike in Greater China iPhone sales, I do expect Apple to experience continued momentum over the balance of the current fiscal year,” Garrity told CNBC .

Chinese mobile users are in the midst of a “strong upgrade cycle”, he said.”We are seeing a great move away from large, form factor phones [running on] Android operating systems to Apple.”

In addition, the broadening of Apple`s portfolio with the launch of the Apple Watch, should also boost the company`s sales, he said.

At the current pace, China should become “Apple`s largest geographic- end market” before the end of its next fiscal year, which runs through to September 2016, he said.

Tom Kang, research director at Counterpoint Research, expects China could overtake the U.S. as its biggest sales market even sooner – by the January-March quarter of 2016.

“By then, we`ll see more Apple Watch revenue and there will probably be a more affordable version of the iPhone,” he said.

Kang expects Apple will introduce a successor to the lower-cost iPhone 5C this year to target a wider customer base in emerging markets.

From `afterthought` to `priority`

With a growing proportion of Apple`s revenues coming from China, it`s clear that it has become a key priority for CEO Tim Cook, as opposed to an “afterthought”, said Bryan Ma, vice president, client devices research group at IDC Asia/Pacific.

“If you look at the past years, China was kind of an afterthought for Apple compared with other mature markets. China would often be in the second or third batch of countries where products got launched,” he said.

“Some of this was because of priorities, or regulatory issues. Clearly they have been able to address those and now China is a priority for them,” he added, pointing to China`s inclusion in the first round of countries for Apple Watch`s global debut.

Ma says even if China becomes Apple`s largest market, the U.S. will always remain important for the company.

“At the end of the day, the U.S. is still its home base. They launch a lot of their services there first – from movies and music to Apple Pay etc – because of copyright issues,” he said.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Twitter closes 18% lower on disappointing report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Twitter shares closed 18 percent lower after the social media company’s disappointing quarterly report leaked early.

Twitter’s first-quarter profit beat Wall Street’s expectations but sales fell short of estimates. The social media company posted adjusted first-quarter earnings of 7 cents per share on revenue of USD 436 million.

Financial intelligence service Selerity posted four tweets after 3 p.m. ET Tuesday with what it said were first-quarter earnings, revenue and user figures. Twitter issued a press release about 25 minutes later confirming Selerity’s figures.

The New York Stock Exchange said Tuesday afternoon that it is reviewing trades made at 3:47 p.m. ET.

The 18 percent slide marked Twitter’s second-worst day ever, trailing only a 24 percent drop in February 2014. Twitter shares were choppy in extended trading.

Wall Street had expected Twitter to post earnings of 4 cents per share on $457 million in revenue.

Read More: Twitter buys a company backed by…Twitter’s CEO

Revenue jumped 74 percent from the year-earlier period, but the total was worse than even the most pessimistic of the 36 analyst estimates compiled by Thomson Reuters.
The company’s second-quarter revenue outlook of USD 470 million to USD 485 million was also well below the average Wall Street forecast of USD 538 million.

“We anticipate the factors that affected our first-quarter results will also affect our 2015 guidance,” Twitter CEO Dick Costolo said in the company’s earnings call.

Costolo is slated to appear on CNBC’s “Squawk Alley” at 11:30 a.m. EDT on Wednesday.

“This is a company that is still experimenting with parts of monetization across many different fronts. I think these are still very, very early days,” said Chris Sacca, managing director at Lowercase Capital and an early investor in Twitter.

Read More: The crazy moves on Twitter earnings

Average monthly active users (MAUs) came in at 302 million for the quarter, in line with expectations and up 18 percent year-over-year. Mobile MAUs — which accounted for about 80 percent of the total — fell short of Wall Street’s estimates, though.

Twitter — which owned a 1.6 percent share of the digital advertising market last year, according to eMarketer — saw advertising revenue jump to USD 388 million, up 72 percent year-over-year. Mobile advertising accounted for 89 percent of the total.

Even with its ad business growing, Twitter’s share of the digital market lagged well behind the 10.4 percent held by Facebook last year.

“Certainly there is some disappointment but I think this reaction might have been a little bit overdone based on how the news came out,” said Kenny Polcari, director of O’Neil Securities, on CNBC’s “Closing Bell.”

Twitter said it was “investigating the source of the leak.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Has Samsung’s strategy ‘reached its limits’?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Samsung’s net profit slumped 39 percent on year in the January-March period, the sixth consecutive quarterly decline, fueling further doubts over whether the tech giant will be able to turn around its beleaguered smartphone business.

First quarter net profit fell to 4.626 trillion won (USD 4.34 billion), from 7.574 trillion won a year earlier, as troubles in its mobile division amid cut-throat competition from both Apple and low-cost Chinese manufactures overshadowed success in its chip division.

“The earnings reflect that their smartphone strategy has reached its limits; it’s not working,” Tom Kang, research director at Counterpoint Research told CNBC.

Meantime, operating profit for the quarter came in at 6 trillion won, compared with the company’s earlier guidance for 5.9 trillion won.

Mobile division profit for the quarter stood at 2.74 trillion won, lower than the chip division’s profit of 2.93 trillion won. The mobile division now accounts for 46 percent of the company’s overall operating profit, compared with the chip division’s 49 percent contribution.

Samsung said its average selling price for smartphones in the quarter fell from levels in the fourth quarter, but the number of shipments rose.

Read More: How Samsung stacks up against Apple, HTC

“The reason selling prices declined and volume rose is because most of their growth came from low and mid-tier devices,” Kang said, noting that Samsung has stepped up promotions and discounts in key markets such as China.

Samsung, however, expects business performance to improve in the second quarter, citing the launch of its new flagship Galaxy S6 smartphones.

The Galaxy S6 along with the S6 Edge, hailed as the first smartphone with a curved display, received positive reception at their launch last month, boosting hopes that Samsung’s struggling mobile division may finally regain its footing after its share of the global smartphone market shrank to 24.7 percent in 2014 from 32.2 percent in 2013, according to data from Strategy Analytics.

“The Galaxy S6 and S6 Edge are selling well so that will be reflected in second quarter sales,” Kang said.

Lone bright spot

While Samsung’s smartphone division has been a source of disappointment for investors, its chip business is another story.

The company said it saw robust demand for memory chips, while profitability for its system chip business also improved. Profit generated from the chip division in the January-March period was the highest since the third quarter of 2010, according to Reuters.

Samsung has arch rival Apple to thank for this, say analysts. The Cupertino-based company is its biggest external customer for components, according to The Motley Fool.

Read More: Samsung, LG end slug fest over vandalized washing machines

“They are far ahead in their memory business compared to competitors,” said Nam Hyung Kim, managing director at Arete Research Asia.

“We expect Samsung to be a major vendor to make Apple’s processor for upcoming iPhones. This market has been dominated by [Taiwan’s] TSMC, but now TSMC faces a big challenge because Samsung is getting very aggressive,” he said.

Kim has a buy call on Samsung shares, with a 12-month price target of 1.7 million won for its stock – marking 22 percent upside from current levels.

The company’s stock traded up around 1.0 percent on Tuesday at 1.37 million won.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks open mixed on US lead, earnings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian equity markets opened mixed on Wednesday, mirroring Wall Street’s finish overnight, and as investors digested the raft of earnings due in the region.

Also in focus was the Federal Market Open Committee (FMOC) meeting which began on Tuesday and will conclude with the release of a post-meeting statement later in the day.

Overnight, US stocks ended a volatile session mixed, with strong earnings from Merck and gains in IBM leading the blue-chip Dow and S&P 500 higher, closing up 0.4 percent and 0.3 percent each. However, the tech-heavy Nasdaq underperformed, finishing 0.1 percent lower.

ASX slips 0.2 percent

Australia’s S&P ASX 200 index saw modest losses, with the heavyweight banking and mining sectors coming under pressure.

Big miners were mostly lower despite firmer iron ore prices overnight; Fortescue Metals and Rio Tinto lost 2.7 and 0.6 percent, respectively, while BHP Billiton opened up 0.9 percent. Oil majors also lagged in early trade, with Origin Energy and Woodside Petroleum receding 0.6 and 0.3 percent each, respectively.

However, gold producers, which were up for the second straight session on the back of firmer gold prices, provided some positive support. Evolution Mining and Newcrest Mining settled up elevated more than 1 percent each

Wesfarmers, which released its quarterly statement on production, development and exploration, traded little changed.

Kospi gains 0.2 percent

South Korea’s benchmark Kospi index advanced from the get-go, as its top weighted stock Samsung Electronics climbed as much as 1 percent on the back of first-quarter earnings released just before the market open.

The South Korean giant’s operating profit for the March quarter came in at 6 trillion won, in line with the 5.9 trillion won profit the firm guided for earlier this month.

LG Electronics, due to report first-quarter earnings and unveil its flagship G4 smartphone Wednesday, shed 0.2 percent.

Lenders got a boost after the country’s financial watchdog announced that the sector’s combined net profit from overseas operations rose 52.7 percent on-year in 2014 due to a drop in bad debt expenses. Blue-chip KB Financial Group climbed 1.2 percent, while Shinhan Financial rallied 1.4 percent.

Asia’s calendar

The earnings season in China is also in full swing. A flurry of financial firms will release corporate report cards on Wednesday, such as China Construction Bank, Bank of China, alongside the mainland’s biggest brokerage Citic Securities and insurer Ping An Insurance.

Meanwhile, the Bank of Thailand (BoT) is expected to keep its benchmark interest rate unchanged at 1.75 percent when it releases its monthly policy statement at 1530 SIN/HK. Last month, the central bank surprised markets with a 25-basis-point cut, marking its first rate change in a year, in a bid to prop up a sluggish economy.

“Forward indicators of demand haven’t improved much, but the impact of last month’s rate cut will take some time to filter through the economy. The BoT is likely to keep rates on hold until the end of the year,” Moody’s Analytics said in a note.

Japanese markets are closed for the Showa Day holiday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow