MACROECONOMICS
South Korean exports dive
South Korean exports, the main driver of the national economy, suffered their sharpest drop in more than six years last month, extending what is now a 13-month losing streak. Government data released yesterday showed exports of US$36.7 billion, representing an 18.5 percent annual decline — the steepest rate since August 2009. The report cited a host of factors, such as slowdowns in major economies, including South Korea’s largest trade partner China which accounts for a quarter of the nation’s exports. Falling international oil prices also contributed to the figure, hitting petroleum products that are a mainstay export item for Asia’s fourth-largest economy. South Korea’s exports declined every month last year, resulting in the slowest annual economic growth since 2012. Overseas shipments for the whole year were down 8 percent — the first annual contraction for three years.
STEELMAKERS
Nippon call for buyback
Nippon Steel & Sumitomo Metal Corp cut its full-year profit forecast by more than 20 percent, announced a stock buyback and said that it is in talks to take control of domestic partner Nisshin Steel Co. The world’s second-largest mill reduced its net-income forecast for the year to March by 22 percent to ￥140 billion (US$1.16 billion), while saying it planned to spend as much as ￥100 billion on the buyback. The company is to enter discussions to make Nisshin a subsidiary by March next year, potentially boosting its current minority holding. The international steel industry is in crisis as producers from Asia, Europe and the US contend with a glut. The slump has forced mills worldwide to issue profit warnings, while raising the pressure for consolidation.
BANKING
Nordea eyes liquidity drop
Scandinavia’s largest bank is preparing adjustments that would address a drop in liquidity in the US$400 billion mortgage bond market in Denmark. Nordea Bank AB said it is responding to the fragmentation of issuance that has, in part, followed tighter regulation. The same concern has already prompted Nykredit, Denmark’s largest mortgage lender, to explore changes it said would be unveiled by March. Nordea Kredit, the bank’s Danish mortgage lending unit, is now “working with a number of things,” Nordea chief executive officer Peter Lybecker said. The goal is to “make sure that we, as a large mortgage bank, are able to issue in series which have enough liquidity to attract the right investors,” he said.
AVIATION
Dubai retains pole position
Dubai International Airport remained the world’s busiest for international passengers last year as traffic grew 10.7 percent, boosted by the addition of new airlines and routes, the airport’s operator said yesterday. Annual traffic rose to 78 million passengers from 70.5 million in 2014. In December alone, traffic climbed 8.5 percent to 7.05 million people. The addition of 12 new passenger destinations from Dubai International lifted traffic through the airport as local carriers Emirates and flydubai expanded. Air Canada, German Eurowings and China Southern also began operating in Dubai. Last year saw regional tensions and conflicts in nations including Yemen, Iraq and Syria, but Dubai Airports chief executive officers Paul Griffiths said in a telephone interview: “We haven’t seen any impact from regional conflicts.”
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
CHEMICAL FIRE: 10 Indian employees were injured by smoke inhalation at a Tata Electronics plant in Tamil Nadu state that produces components for Apple Inc At least 10 people received medical treatment, with two hospitalized after a major fire on Saturday disrupted production at a key Tata Electronics Pvt Ltd plant in southern India that makes Apple Inc’s iPhone components. The fire occurred at the plant in the city of Hosur in Tamil Nadu state that makes some iPhone components. It broke out near another building inside the Tata complex, which was to begin producing complete iPhones in the coming months. The fire was contained to one building and has been extinguished fully, top district administrative official K.M. Sarayu said. No decision has been made on when
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