European stocks, whose declines this week drove some benchmark indexes to the lowest in more than five years, may fall further amid concern that a slide in the dollar's value will stunt profit growth.
"Europe gets a kick in the teeth from a weak dollar," because so much of companies' sales and earnings stem from the US, said David Ballance, who oversees US$800 million as head of European equities at Rothschild Asset Management in London. He bought shares of Suedzucker AG, the world's largest sugar maker, partly because almost all of its revenue comes from Europe.
The Dow Jones Stoxx 50 Index this week slumped 6.6 percent, the biggest weekly decline since July, to its lowest since May 1997. The Stoxx 600 Index lost 5.6 percent, its third straight weekly loss.
Speculation that the US may be headed for war with Iraq, damping economic growth and curbing demand in the world's biggest economy, drove the dollar lower against European currencies. The drop may cut the value of US sales by companies such as Bayer AG, Royal Philips Electronics NV and GlaxoSmithKline Plc.
All of Western Europe's 17 national benchmark indexes fell except for Greece's ASE and Austria's ATX. The UK's FTSE 100 extended a losing streak to 10 days, the longest since its 1984 inception, and reached a seven-year low. France's CAC Index sank 5.2 percent and Germany's DAX fell 6.9 percent.
Bayer, Germany's biggest drugmaker, fell 12 percent this week. Philips, Europe's largest consumer-electronics company, dropped 7 percent. GlaxoSmithKline, the world's second-biggest drugmaker, lost 8 percent. Each gets more than one-quarter of sales in the US or North America.
"The mood in Europe is very dark," said Patrick Nielsen, who oversees US$1 billion at Mapfre Inversion in Madrid. "People are worried about how much the dollar's fall is going to hurt exporters."
Earnings at companies in the 12 countries sharing the euro decline by about 6 percent during a year when the dollar drops 10 percent against the euro, according to Deutsche Bank AG. The US currency has lost about 11 percent against the euro since August.
The US currency has dropped against the euro every day since Jan. 14, the longest losing streak since the European currency started trading four years ago. The dollar sank to a three-year low against the British pound and is the lowest in four years against the Swiss franc.
Reports on business confidence in Germany and France next week and earnings from Pechiney SA, Hennes & Mauritz AB and Stora Enso Oyj may give investors more evidence about the prospects for the economy and profits.
Confidence among German executives improved in January for the first time in eight months, according to economists surveyed by Bloomberg News. The report is scheduled for release Tuesday.
As for their French counterparts, a report due Thursday may indicate that confidence this month rose to a seven-month high, according to economists surveyed by Bloomberg.
Pechiney, the world's fourth-largest aluminum producer, will likely report that 2002 profit dropped 42 percent to 173 million euros (US$186 million), according to the average forecast of six analysts surveyed by Bloomberg News. The French company said in October that the dollar's drop will hurt earnings in the fourth quarter. Pechiney releases its figures on Thursday.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last