TELECOMS
ZTE shares dive 39%
Shares in Chinese telecom equipment maker ZTE (中興) collapsed 39 percent yesterday as trading in the company resumed in Hong Kong after it reached a settlement with the US over its handling of a sanctions violation. ZTE shares dived 39.22 percent to HK$15.56 in the first few minutes of trade. It also plunged by its 10 percent daily limit to 28.18 yuan in Shenzhen. Trading in the firm had been suspended since Washington said in April that it had banned US companies from selling crucial hardware and software components to it for seven years. That wiped about US$2.7 billion off ZTE’s market value yesterday. “While the nightmare is now over, ZTE will likely have to deal with many changes,” Jefferies Group LLC analysts Edison Lee and Timothy Chau wrote in a note. “We expect significant near-term selling pressure and a volatile stock price.”
AUTOMAKERS
Toyota to buy Grab stake
Toyota Motor Corp is to buy a US$1 billion stake in Singapore-based GrabTaxi Holdings Pte in one of the largest investments by an automaker in a ride-hailing provider, underscoring the push by the auto industry to move from manufacturing to services. The deal extends Toyota’s cooperation with Grab, the largest ride-hailing service in Southeast Asia, the automaker said in a statement yesterday, without disclosing what percentage of Grab it would own. A Toyota executive is to be appointed to Grab’s board, and another Toyota employee is to be seconded to Grab to as an executive officer.
TELECOMS
US mega-merger approved
A US federal judge on Tuesday approved the US$85 billion mega-merger of AT&T Inc and Time Warner Inc, potentially ushering in a wave of media consolidation, while shaping how much consumers pay for streaming TV and movies. US District Judge Richard Leon green-lit the merger without imposing major conditions as some experts had expected. The US Department of Justice had sued to block the US$85 billion merger, arguing that it would hurt competition in cable and satellite TV, and jack up costs to consumers for streaming TV and movies. The department could still appeal the ruling.
FOODMAKERS
CVC buys Munchy Food
London-based CVC Capital Partners acquired Malaysian snack producer Munchy Food Industries Sdn as the private-equity firm deepens its exposure to the fast-growing consumer industry in Southeast Asia. The investment firm’s Asia Fund IV on Friday last week completed the purchase of a 100 percent stake in Munchy Food, it said in an e-mailed statement yesterday. CVC paid about US$250 million for the business, a person with knowledge of the matter said earlier this week. It decided to buy Munchy in part because it saw potential in the Malaysian firm’s strong export business, the person said. The company makes crackers, as well as biscuits and wafers sold in more than 50 countries, its Web site shows.
APPAREL
Inditex benefits from tech
Inditex SA is benefiting from investments in technology that are boosting efficiency online and in stores, helping the Zara owner contend with Amazon.com Inc’s foray into the fashion aisle. Earnings before interest and taxes rose 2 percent to 851 million euros (US$1 billion) in the three months through April, the Arteixo, Spain-based company said in a statement yesterday, beating analysts’ estimates.
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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