Month: August 2013

Syria casts ‘big black cloud’ on emerging markets

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

Listen to the Article (6 Minutes)

As tensions surrounding Syria’s alleged use of chemical weapons intensified this week, emerging markets have taken a further pounding, dousing hopes for an end to the rout.

Reports that the US is gearing up to hit Syria with three days of missile strikes as early as Thursday prompted a steep sell-off across global equity markets that started on Tuesday and persisted into Wednesday.

According to Jack Bouroudjian, CEO of Bull and Bear Partners, Syria is another blow to emerging markets just as they were catching a breath.

“We are almost at a very near term bottom in emerging markets. I would not be surprised to see some of the fund flows work its way out of the US market into emerging markets,” said Bouroudjian.

“But there is a very big black cloud out there [now] – the Syrian situation has to get under control – there is a lot at stake here,” he added.

Already, panic over an imminent scale down of US monetary stimulus has pushed the MSCI Emerging Market index 13 percent lower in the last three months. Now, a fresh headwind in the form of geopolitical tension around Syria is exacerbating the declines.

Shares in Indonesia, the Philippines and Thailand officially moved into bear market territory on Tuesday while the Indian rupee on Wednesday plunged to a fresh lifetime low of 67.8 to the dollar, now over 23 percent weaker than it was at the start of the year. The Turkish lira also hit a record trough of 1.9915 against the dollar overnight.

“The Syrian crisis feels like the spark the markets have been searching for…equities globally look set for a very rough ride over the coming months,” said Evan Lucas, market strategist at IG.

Lucas said near-term relief for emerging markets looked unlikely, as in his view, the recent pain seen in India and Indonesia would likely spread to other emerging markets like Brazil and Turkey.

“This will be amplified by the Fed`s first move on tapering, which will happen before Christmas, increasing the volatility for all markets,” he added.

Not everyone`s convinced of a long-term threat to markets from Syria, however.

“It [Syria] has the potential to unsettle equity markets… (but) it is not clear that we will see lasting disruption to asset markets, as that has not been the case in the past when we have seen these geopolitical flare-ups,” said Todd Elmer, currency strategist at Citi.

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

Samsung’s biggest fear? Becoming ‘too full’ of itself

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

Listen to the Article (6 Minutes)

Samsung has blazed a trail with its highly popular lineup of Android smartphones, reportedly overtaking rival Apple as the world`s most profitable handset vendor in the second quarter. But the boss of the company`s electronics division says his biggest fear is to become complacent.

“My biggest worry is that we might get too full of ourselves for what we have achieved. About 20 of Samsung`s products are number one in their respective category around the world. It`s very important to remain humble,” Boo-keun Yoon, CEO, Consumer Electronics Division at Samsung Electronics told CNBC.

“We need to continue to innovate and strive to be the best with the goal of producing top-notch products for the consumer,” he added.

In the second quarter, the maker of the Galaxy smartphone shipped over three times the number of mobile phones compared to Apple. Profits at Samsung`s handset division also surpassed that of its rival`s for the first time in that period , according to Strategy Analytics.

And, the South Korean electronics giant isn`t backing down any time soon. The company is expected to launch its Galaxy Gear smartwatch – a smartphone device worn on the wrist – as early as next week to rival Apple`s rumored iWatch, which could be unveiled in the next couple of weeks.

“There`s been a lot of media discussion over a wearable device. There`s no doubt that such a device will be out on the market. The issue at hand is how comfortable the device will be for the consumer – so much so that the wearer won`t even realize he or she is wearing it,” he said.

“If we can develop a product that`s like this, then it will be a great success,” he added.

Yoon said the conglomerate – which manufactures products ranging from consumer electronics, to telecom equipment and semiconductors – is continuing to “break new ground” in technology thanks to synergies between its businesses.

“We are continuing to break new ground in technology thanks to the in-house collaboration. The three units share and exchange their new technologies and apply them in their products,” he said.

The vertically integrated nature of Samsung`s business is regarded as an important edge over its US rival, making it less exposed to hurdles such as component shortages, for example.

-By CNBC`s Ansuya Harjani; Follow her on Twitter @Ansuya_H

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

How severe was India’s slowdown in April-June?

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

Listen to the Article (6 Minutes)

India’s economic growth likely languished at a decade-low of around 4.6 percent in the April-June quarter, gross domestic product (GDP) data are expected to show on Friday, with the deepening slowdown sparing few sectors in Asia’s number three economy.

“Manufacturing is weak, construction and fixed investment are growing very slowly, export’facing industries are struggling, and even the once?strong service sector industries have cooled in recent quarters,” economists at Moody’s Analytics wrote in a report on Monday.

“None of this appeared to have turned around in the three months to June, as the instability created by the weak central government continued to weigh on confidence and demand,” they said.

India, which rivaled neighboring China with its near double-digit growth rates just a few years ago, has rapidly lost momentum in recent quarters owing largely to a deceleration in investment growth.

Annual GDP growth has remained below 5 percent in the past two quarters, with the economy expanding 4.7 percent and 4.8 percent, in the December and March quarters, respectively.

Efforts by the government in the past year to attract foreign investment, such as easing foreign direct investment (FDI) limits across industries from telecoms to single-brand retail and oil and gas, have been met with a lukewarm response.

US retail giant Walmart, for example, has put its India expansion plans on hold as it deals with two compliance investigations and unease over the government’s regulations for foreign investment in the retail sector, the Financial Times reported on Monday.

Additionally, domestic private investment has remained sluggish amid the growth slowdown, say economists. “Private sector sentiment is really low at this time; the interest in fresh capital expenditure is very weak,” said Radhika Rao, an economist at Singapore bank DBS.

On top of this, private consumption – a key pillar of the economy that accounts for almost 60 percent of GDP – has also come under pressure in the face of slower wage growth and sticky food inflation.

“Consumption spending is unlikely to register any notable improvement as signaled by the downtrend in the durables goods production and weak passenger car sales,” said Rao.

India’s car sales fell an annual 7.4 percent in July, according to an industry body, marking the ninth straight month of declines on rising fuel costs and high interest rates.

“The rigidity in the retail lending and deposit rates, along with firm inflation prints also possibly eroded real income levels, limiting scope of a marked improvement in consumption levels,” Rao added. High levels of inflation constrain the central bank’s ability to lower interest rates.

Bright spot

While there is little about the economy to cheer, there is one sector that offers a glimmer of hope, say experts.

(Read more: Is India moving closer to a ratings downgrade?)

“The only bright spot would be the agriculture sector because of the timely rains. As of date, we are running above the long-term average and we expect this to provide some support for rural incomes and agriculture output,” said Rao.

India, one of the world’s largest producers and consumers of agricultural commodities, is heavily dependent on the annual monsoon for its harvests of crops such as rice, sugar and cotton.

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

Gold within striking distance of bull-market territory

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

Listen to the Article (6 Minutes)

Gold pushed above the key USD 1,400 psychological level on Monday to its highest in almost three months, putting the precious metal within striking distance of bull-market territory.

A combination of weak US economic data on Friday and concerns about geopolitical tensions in the Middle East helped boost gold prices to as high as USD 1,406 in Asia on Monday, before pulling back slightly to around USD 1400.

(Read more: Gold`s rebound seems believable this time )

That put gold`s gains from the lows hit in late June at about 19 percent, just shy of the 20 percent move that would push bullion into bull-market territory.

“When you look at gold, it only has to travel back through USD 1,416 to re-enter the bull market. So we`re pretty close to that and it [the gains] has been the result of physical demand, geopolitical issues and also in the U.S. and what`s happening with tapering,” Jonathan Barratt, founder of the commodities newsletter Barratt Bulletin, told CNBC Asia`s “ Squawk Box .”

Gold prices rallied more than 1.5 percent on Friday after news of a sharp drop in US home sales prompted investors to re-think the potential timing for a much-anticipated unwinding in US monetary stimulus.

If bond markets start to indicate a delay in the scaling back of tapering by the U.S. Federal Reserve, that could be another factor driving gold higher, Barratt added.

It wasn`t too long ago that the gold market was well in bear territory, falling more than 30 percent between October and June. But analysts say Fed tapering is now largely priced into markets and that the positive sentiment towards gold is growing.

(Read more: Time to start worry about September – yikes! )

One sign of that came in a report from the Commodity Futures Trading Commission on Friday. It showed that hedge funds and money managers boosted bullish bets in gold futures and options to their highest level since early February.

“Further weakness in the US housing market triggered some downplay over the possibility of a QE [quantitative easing] tapering, with gold rising past its USD 1,400 this morning,” analysts at OCBC (Singapore Exchange: OCBC-SG) bank said in a note on Monday. “In fact, the positivity has been observed since last week, with net-long positions gaining.”

On Twitter meanwhile, Marc Faber, author of the Gloom, Boom and Doom Report, recommended moving back into gold.

(Read more: Marc Faber: Look out! A 1987-style crash is coming )

Here`s his tweet:

https://twitter.com/marcfaberblog/statuses/371679910550855680

– By CNBC.Com`s Dhara Ranasinghe; follow her on Twitter @DharaCNBC

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

Why crippled rupee may not head to 70, after all

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

Listen to the Article (6 Minutes)

The beleaguered rupee (Exchange: INR=), which has pared back losses after breaching the 65 mark against the US dollar last week, will head back to 60 in the coming months, according to Crisil, the Indian arm of global ratings agency SandP.

Crisil expects the currency to recover to this level by the end of fiscal year ending March 2014, helped by further narrowing of the current account deficit due to a decline in non-oil imports, including gold, the agency said in a recent note.

The rupee has been heavily hit amid growing concerns around the Federal Reserve scaling back its monetary stimulus, falling over 15 percent against the U.S. dollar in the past three months. Rapid depreciation in the currency prompted some strategists to forecast that it would fall as low as 70.

Crisil forecasts the country`s current account deficit will narrow to 3.9 percent of gross domestic product in the current fiscal year – lower than an earlier estimate of 4.2 percent – compared with 4.8 percent last year.

(Read more: Calls get louder for India to free up currency )

“Our revised forecast of current account deficit is mainly due to the expectation of a sharper slowdown in non-oil import growth, led by a nearly 28-30 percent fall in gold imports. We also expect capital and consumption goods imports to continue to moderate due to weak domestic demand,” Crisil wrote.

Barclays, which expects the rupee to strengthen to 61 in the next six to 12 months, also believes the current account will surprise favorably this year, falling to 3.7 percent of GDP, or $68.2 billion, but noted it could fall to $57 billion “under an optimistic scenario.”

“Given the present fragile market sentiment, the underlying improvements in India`s current account may go unnoticed,” the bank wrote in a recent report.

(Read more: Is the rupee `out of control`? )

Another form of support for the rupee will come from increased foreign capital inflows, Crisil said, as a result of borrowings by public sector companies abroad and improvement in non-resident Indian deposits.

Earlier this month, India announced measures to attract $11 billion in capital inflows including asking some state-run companies such as Indian Railway Finance Corp, Power Finance Corp and India Infrastructure Finance Company to sell debt abroad, and by raising money from Indians abroad, among other initiatives.

(Read more: Are the stars not aligned for the rupee? )

“The third quarter of this fiscal [year] could see high volatility in the rupee if the U.S. Fed begins to taper out its quantitative easing program as scheduled. But the rupee could start seeing some recovery around the same time if the current account starts correcting and capital inflows begin to rise as a result of borrowings by public sector companies abroad and improvement in non-resident Indian deposits,” it said.

-By CNBC`s Ansuya Harjani; Follow her on Twitter @Ansuya_H

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

Data could cast bigger shadow on emerging markets

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

Listen to the Article (6 Minutes)

Economic growth data from India and the Philippines, as well as trade data from Thailand, are expected to be in focus this week as investors assess the outlook for Asia`s battered emerging markets.

Emerging markets in general have taken a beating in recent weeks amid expectations of an unwinding of US monetary stimulus and analysts say there is growing focus on economic data as investors try to assess which markets to move back into and which to stay away from.

(Read more: Emerging markets: Dissecting the good from the bad )

“The direction in emerging markets currencies is clear,” said Khoon Goh, senior currency strategist at ANZ bank told CNBC Asia`s “ Squawk Box .” “We did see a pause on Friday, but the Fed is still poised to unwind stimulus so the pressure on emerging markets will remain.”

India releases gross domestic product (GDP) data for the April-to-June quarter on Friday, while second-quarter GDP data from the Philippines are out on Thursday and Thailand releases its customs-based trade numbers later on Monday.

India`s economy grew 4.8 percent in the January-March quarter from a year earlier and economists say it probably slowed in the second quarter.

“Q2 GDP for India is poised for a further deceleration, deeper into sub-par regions. This risks intensifying the rupee, stocks and bond market sell-off,” Vishnu Varathan, market economist at Mizuho Corporate Bank said in a note.

“To a lesser extent, the slowdown in Philippines` Q2 GDP will cast a pall on emerging Asia prospects, consequently weighing on Asia asset markets,” he added.

The U.S. also releases its second reading of second-quarter GDP this week and the number is expected to be in focus amid speculation over whether the Federal Reserve could start to scale back its asset-purchase program from September.

(Read more: Time to start worry about September – yikes! )

An advanced reading of second-quarter GDP released at the end of July put U.S. economic growth at a 1.7 percent annual pace.

Focus could turn to China towards the end of the week, with the official purchasing managers` index (PMI) on the manufacturing due out at the weekend.

The flash HSBC (London Stock Exchange: HSBA-GB) PMI released last week hit a four-month high of 50.1 in August, raising hopes that a slowdown in the world`s second biggest economy may be showing signs of stabilization.

(Read more: China s `stallion` amid emerging market turmoil )

Japan meanwhile releases a raft of data on Friday, including latest inflation and household spending data which could provide the latest insight into the outlook for Japan`s economy.

Economists polled by Reuters (Toronto Stock Exchange: TRI-CA) forecast Japan`s core consumer price index (CPI) rose 0.6 percent in July from a year earlier, compared with a 0.4 percent rise a month earlier. Household spending is expected rise 0.3 percent in July from a year earlier, versus a 0.4 percent fall in June.

“In Japan, key consumer spending, labor market and industrial production data to be released Friday will be watched closely for signs Abenomics is working after a recent run of mixed data,” Shane Oliver, chief economist and head of investment strategy at AMP (OTCQB: AMPD) Capital in Sydney, said in a note.

“Inflation data is expected to show ongoing evidence that deflation is fading,” he said.

– By CNBC.Com`s Dhara Ranasinghe; follow her on Twitter @DharaCNBC

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

Gold’s rebound: Why it is believable this time

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

Listen to the Article (6 Minutes)

As investors shun risk assets such as emerging market equities and currencies, gold is quietly gaining traction, clawing its way back up to the USD 1,400 level.

The strength of bullion amid growing expectations for the US central bank to scale back its bond buying program in September is a sign that a solid base may have formed in the yellow metal, say strategists.

“If tapering does occur in September, it will be more `buy the rumor, sell the fact.` Certainly the entire market is expecting it already. We`ll see gold prices continue to rise quite strongly over the next couple of months,” said Andrew Su, CEO of Compass Global Markets.

“The reaction to (Fed) minutes was lackluster, under most circumstances you would have gold prices to fall a lot more, and they haven`t. That reflects the strong buying and heavy interest in gold particularly out of Asia,” Su, who expects gold to cross USD 1,400 over the next week, added. Gold has risen 11.5 percent since July, erasing some of the hefty losses seen in the first six months of the year.

According to the Federal Reserve`s July minutes, officials thought it would soon be time to slow the pace of the bond buying “somewhat,” but some counseled patience.

Kelly Teoh, market strategist at IG Markets who believes the upside in gold has legs, said investors are moving into the precious metal because Asian currencies are under tremendous pressure.

“If you look at all the various asset classes, the US equities are at all-time highs, Asian ex-Japan equities are lagging, commodities is the only asset class that`s underperformed so I see value in that,” she added.
Barclays` chief technical strategist Dhiren Sarin says gold has either already formed, or is in the process, of establishing a “very strong base.”

“We are bullish in the medium to long term. Short term, we potentially see a pullback as the US dollar is catching a strong bid, which could undermine gold in the near term,” he said.

Sarin recommends buying gold on pullbacks, noting that September is seasonally the most bullish period for gold. Looking at the yellow metal`s performance since the 1960s, median returns for gold are approximately 2 percent during the month, far outpacing any other month of the year, he said.

“In the coming years though, we believe gold has stronger upside potential towards the average levels of 2012, near USD 1,700, though this will likely evolve next year,” he said.

David McAlvany, CEO, McAlvany Financial Group agrees the longer-term prospects for gold are bullish, pointing to possible supply constraints over the coming months.

“We`re already dealing with projects that are being scuttled in Africa – because you`re dealing with a cost of production which is USD 200-300 above the current price,” he said.

“You would have to move to 2014 for that to have a real positive supply-demand benefit in terms of the price, but you may see that by the mid-year (2014),” he added.

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

Goldman downgrades emerging Asia currencies

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

Listen to the Article (6 Minutes)

US investment bank Goldman Sachs expects the rout in Asian emerging market currencies to continue, downgrading its forecasts for battered currencies in the region.

Goldman revised down its three, six and 12-month targets for the Malaysian ringgit, Thai Baht and Indonesian rupiah on Friday.

The currencies, together with their emerging-market peers, have taken a beating recently amid expectations for an unwinding of US monetary stimulus.

The rupiah should take the biggest hit as investors flee the volatile group of currencies for the safety of developed markets, according to Goldman.

It expects the rupiah to weaken to 11,800 per dollar in the next year, compared with a previous target of 10,500. That implies a fall of 9 percent from current levels of 10,830.

The rupiah hit its lowest level in more than four years on Friday, racking up losses of 12 percent in the year-to-date.

“In particular, downside pressure on the rupiah could persist in the near term if we see elevated inflation prints over the next few months, and given the prospect of Fed tapering,” Goldman said in a note.

Annual inflation in Indonesia, Southeast Asia` biggest economy, surged to 8.61 percent in July — its fastest pace in four-and-a-half years.

Indonesia`s central bank has responded by lifting interest rates by 75 basis points (bps) this year to 6.5 percent, becoming the first Asian central bank to do so since June 2011.

But the monetary tightening appears to have done little to stem the rupiah`s fall.

Goldman expects Bank Indonesia to hike interest rates in September in an attempt to prevent further declines in the currency, but says that may not be enough.

“A bigger rate hike would go further towards stabilizing the currency, but we think policymakers will continue to be restrained by the desire to prevent growth from slowing too sharply, especially since the country is approaching an election cycle,” Goldman said. Parliamentary elections are set to take place in April next year with presidential elections due in June.

Going down

Goldman expects the Malaysian ringgit to weaken to 3.4 per dollar in the next three months, implying a fall of about 3 percent from current levels and compared with a previous forecast of 3.2 percent.

Its new 12-month forecast for the Thai baht is 32 per dollar, a 4 percent downward revision from the previous forecast.

The ringgit fell to 3.31 per dollar on Thursday, its weakest level in more than three years. The Thai baht, trading at about 31.89 to the dollar, is down about 4 percent so far this year.

Emerging Asian countries` weak current account balances will continue to weigh on their currencies as fears of the Federal Reserve unwinding its monetary stimulus highlights liquidity concerns in these markets, Goldman said.

“The market sell-off has its roots in deteriorating underlying fundamental flows, and in particular the weakening broad balance of payments led by current account deterioration in recent quarters,” Goldman said.

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 a ‘stallion’ amid emerging market turmoil

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

Listen to the Article (6 Minutes)

China stands out like a “stallion” amid the turmoil in emerging markets, according to one strategist, as a slowdown in the world`s second largest economy shows increasing signs of stabilization.

“China has been a stallion – in the 1997-1998 Asian financial crisis it played a very stabilizing role, 2008-2009 [global financial crisis], same thing. It is playing a similar role now,” Stephen Schwartz, Asia chief economist at Spanish banking group BBVA, told CNBC on Thursday.

“The situation would be much more severe if we had China continuing to slow on top of the QE [quantitative easing] tapering,” he added.

(Read more: One currency that`s dodged the emerging market rout )

Schwartz pointed to the resilience in recent weeks of the yuan, which has held up in the face of rising concerns about the Federal Reserve unwinding its monetary stimulus. In contrast, emerging market peers such as the Indian rupee and Indonesian rupiah have fallen sharply.

Latest economic indicators, including the HSBC flash manufacturing purchasers mangers index (PMI) for August, are fueling optimism that China should achieve a soft landing for its economy which has slowed in the past two quarters.The PMI, published on Thursday, rose to a four-month high of 50.1 from 47.7 in July, driven by domestic demand and a sharp rise in new orders.

“[The data] confirms that the economy has stabilized in the short term and downside risks for the second-half have declined. Based on this flash PMI, we now see upside risks to our GDP forecast [of 7.4 percent] for the third quarter,” said Zhiwei Zhang, chief China economist at Nomura.

In a sign of improving sentiment, China`s benchmark Shanghai Composite  rose 0.1 percent following the PMI data, bucking the downtrend seen across Asia.

(Read more: China`s good economic news keeps getting better )

Ting Lu, China economist at Bank of America Merill Lynch, said in a note on Thursday that he was confident in maintaining his above consensus 7.6 percent and 7.5 percent year-on-year growth forecasts for the third and fourth quarter.

Economists say that the government`s recent “fine-tuning” policies – including a mini-stimulus package of fiscal measures and efforts to stabilize interbank lending rates, which spiked in June, are beginning to bear fruit.

In late-July, Beijing unveiled measures to support growth including cutting taxes for some small and micro-sized enterprises and steps to help exporters and speed up railway investment.

(Read more: China acts to ease credit crunch-why the change of heart? )

“It`s clearly the policy support and policy clarity – I think people are convinced now that the authorities mean business with their 7.5 percent growth target for this year,” said BBVA`s Schwartz.

-By CNBC`s Ansuya Harjani; Follow her on Twitter @Ansuya_H

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

Messaging apps hit gold as ’emojis’ head west

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

Listen to the Article (6 Minutes)

Stickers used in messaging applications are delivering healthy revenues for Asian technology firms, and as the craze starts to sweep the Western world, more companies are looking for a slice of the cash.

The stickers, otherwise known as emojis are more advanced siblings of emoticons and have been a firm part of Japanese tech culture for the last ten years. After spreading first to the rest of Asia, they are now reaching the Western world, boosted by Apple’s inclusion of them in its iOS5 software.

Stickers can be anything from simple smileys to dancing pandas, and can express a range of emotions. Their global acceptance was underlined last week with the release of pop star Katy Perry’s latest music video, which heavily featured the colorful images.But behind the cuteness lies cash. Japanese company Line, credited as one of the first companies to monetize the trend, announced core revenue of 9.77 billion yen (USD 100 million) in its second quarter. Sticker purchases made up 27 percent (USD 27 million) of revenue, and the company hopes to have 300 million subscribers by the end of the year.

In a press conference on Tuesday, Line revealed there have been over 7 billion messages and 1 billion stickers sent as of August 2013, according to industry blog SD Japan.
Korean rival, Kakao Talk, is having a similar boom. Its mobile games service generated 348 billion Won (USD 311 million) in revenue during the first half of 2013.

“You can see how many tens of millions they are doing every quarter, it’s very profitable,” Riku Salminen, CEO of Jongla, a Finnish messaging app provider, told CNBC.

Jongla launched its first messaging app last year, after the company was established in 2009. Salminen has instituted the “Jongla Way” at the firm, using local content from local illustrators around the globe, who create graphics suited to separate cultures.

The firm’s instant messaging app is free to download, and 50 percent of the stickers are free. But the 50 percent that aren’t free drive nearly all of the company’s revenues, despite selling for less than two dollars per pack.

Fledgling US startup Messageme has also jumped on the bandwagon, as too has Facebook, which has started offering an array of free emojis and has integrated a “sticker store”.

Tessa Mansfield, senior vice president at research firm Stylus, said that from a marketing perspective, the stickers were best used in promotions and merchandising, linked in with a new movie release or pop song.

“The rise of stickers and emoticons is absolutely rooted in the ubiquity of the modern smartphone, and the emergence of a tech-literate generation of teenagers,” she told CNBC.

“This fun, quirky communication method has developed as a kind of ‘digital slang’ for young teens, delivering the rapid, image-led messaging mirrored in apps such as Snapchat.

It also appeals to the desire to collect and accumulate – allowing teens to curate individual collections of special edition and celebrity-led stickers to personalize their digital conversations.”

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