World Business Quick Take


Thu, Feb 19, 2015 - Page 6


Sony eyes ¥500bn profit

Sony Corp forecast operating profit will reach ¥500 billion (US$4.2 billion) in the year starting April 2017, the Tokyo-based company said yesterday. That compares with its forecast for ¥20 billion in operating profit this year. Sony is also targeting a boost in its return-on-equity to above 10 percent. Sony shares closed at ¥3,174.5 before the announcement. The stock has surged 28 percent this year, compared with a 5.3 percent rise in the benchmark TOPIX. Sony this month forecast an annual operating profit of ¥20 billion, compared with an earlier projection for a ¥40 billion loss.


Shanghai short sales coming

Foreign investors will be able to bet on declines in Shanghai equities through the exchange link with Hong Kong starting on March 2. Short sales will be limited to 1 percent or less of daily turnover for a specific stock, or a maximum 5 percent for the total trading over a 10-day period, Hong Kong Exchanges & Clearing Ltd (HKEx) said yesterday. Traders can only input short-selling orders in multiples of 100 shares, while the price can’t be lower than the most recent execution level for a security, HKEx said.


Neptune sells logistics unit

Singapore container shipping firm Neptune Orient Lines (NOL) said on Tuesday it is selling its logistics business to Japanese freight company Kintetsu World Express Inc for US$1.2 billion. NOL said in a filing with the Singapore Exchange its decision to sell APL Logistics would allow it to focus on its core liner shipping business. Proceeds from the sale will be used to strengthen the company’s financial position, including repaying debts, said NOL, Southeast Asia’s biggest container line. NOL, which is 65 percent owned by Singapore state-linked investment firm Temasek Holdings Ltd, said the transaction would be completed by the middle of this year.


Morgan Stanley seeks exit

Morgan Stanley’s property unit appointed advisers as it seeks to exit its A$9 billion (US$7 billion) real estate business in Australia. Morgan Stanley Real Estate Investing said in a statement it plans to sell its holding in Investa Property Group, Australia’s third-biggest owner of city center offices, and that UBS AG and Morgan Stanley Australia would “explore strategic alternatives.” Morgan Stanley said successful bidders could engage the office management unit to run any of the properties they acquire. Potential overseas buyers include LaSalle Investment Management, the Abu Dhabi Investment Authority and Blackstone Group, the Australian newspaper has reported.


Expedia to raise AAE stake

US online travel operator Expedia Inc announced on Tuesday that it had signed an agreement with AirAsia Berhad to purchase an additional 25 percent equity interest of a Singapore-based joint venture between the two companies. This US$86.3 million investment will increase Expedia’s total ownership in AAE Travel Pte Ltd to 75 percent, the company said in a statement. The joint venture was formed in 2011. The transaction is expected to close in the first half of this year, at which point Expedia expects to include the joint venture financial results in its consolidated financial statements. The company said its consolidated sales this year may show a strong growth from US$5.76 billion last year.


Household spending tumbles

Japanese household spending last year declined at its fastest pace in eight years, official data showed on Tuesday, underscoring the impact of the country’s first sales tax hike in nearly two decades. The world’s No. 3 economy posted zero growth in economy over the full year, partly due to weak private spending which accounts for about 60 percent of GDP. Last year, the average household spent ¥251,481 (US$2,115) each month, down 3.2 percent from the previous year and marking the first year-over-year decline since Japan’s quake-tsunami accident in 2011.


Inflation hits new low

British officials say the inflation rate fell last month to an annual 0.3 percent — the lowest on record — amid falling energy prices and supermarket price wars. The Office of National Statistics said on Tuesday the rate is down from December’s rate of 0.5 percent. Bank of England Governor Mark Carney has predicted that inflation may turn negative in the coming months, but said he believed low inflation to be a short-term phenomenon that would boost spending among consumers. Inflation is well below the central bank’s 2 percent target rate, but Carney said last week the bank will “look through” what it sees as temporary drops.


Investor confidence rises

A survey shows that investor confidence in Germany, Europe’s biggest economy, has risen to its highest level in a year though the increase was a little short of expectations amid concerns over Ukraine and Greece. The ZEW institute said on Tuesday its monthly confidence index, which measures investors’ economic outlook for the next six months, rose to 53 points for this month from 48.4 last month — the fourth consecutive increase. Economists had predicted a rise to 55 points. ZEW president Clemens Fuest said the European Central Bank’s decision to start buying government bonds with newly printed money improved sentiment along with robust fourth-quarter German economic growth.


Hutchison steps up talks

Hong Kong’s Hutchison Whampoa Ltd (和記黃埔) has intensified negotiations with VimpelCom Ltd to combine their wireless assets in Italy, according to two people familiar with the matter. The companies have made progress in resolving disagreements over ownership structure, with talks focusing on Hutchison’s 3 Italia unit buying VimpelCom’s Wind Telecomunicazioni SpA, one of the people said. The combined businesses, with more than 30 million mobile subscribers and about 6.7 billion euros (US$7.6 billion) in 2013 revenue, would challenge market leader Telecom Italia SpA. In the UK, Hutchison started exclusive talks last month to acquire Telefonica SA’s O2 unit for as much as £10.25 billion (US$15.8 billion).


Tesco names chairman

Troubled British supermarket giant Tesco on Tuesday named John Allan as chairman, ending a four-month search after Richard Broadbent resigned amid an accounting scandal. Allan, 66, will join the board and be appointed chairman on March 1, when Broadbent will step down from the board, Tesco said in a statement to the London Stock Exchange. Allan is currently on the boards of electrical retailer Dixons Carphone and postal operator Royal Mail, but is to step down from those positions when he takes up his new role at Tesco.