TELECOMS
Nokia bucks supply crunch
Finnish telecoms giant Nokia Oyj yesterday reported a solid increase in profits last year and issued a confident outlook for the coming years as sales rose despite supply problems. “I would like to call it a transformational year,” CEO Pekka Lundmark told reporters after the group posted a net profit of 1.6 billion euros (US$1.8 billion), driven by a 1.6 percent increase in sales to 22.2 billion euros. “The board is proposing a 0.08 euro per share dividend for 2021 and we are also initiating a share buyback program to return up to 600 million euros over two years,” Lundmark said. Nokia also predicts a comparable operating margin of between 11 and 13.5 percent for this year, following 12.5 percent last year.
ELECTRONICS
Panasonic tests battery line
Panasonic Corp is renovating a facility in Japan to start testing mass production of a new type of lithium-ion battery that is championed by Tesla Inc as the key to unlocking cheaper electric vehicles. Panasonic will start test production of a next-generation “4680” battery at a facility in Wakayama Prefecture, chief financial officer Hirokazu Umeda said on Wednesday. The company will also set up a prototype production line for the batteries early this year in Japan. The CFO made the comments after Panasonic reported earnings, posting an operating profit of ￥73 billion (US$640 million) for the recently ended quarter.
TELECOMS
BT, Discovery talk sports
Britain’s BT Group said yesterday it had entered exclusive discussions with Discovery to create a joint venture between BT Sport and pan-European TV network Eurosport. Announcing the deal as it said COVID-19 and supply chain issues would hit revenue this year, BT opted to stay in sports television rather than going for an outright sale to streaming service DAZN, which had also made an offer. The new business would be a 50:50 joint venture, BT said, and would remain committed to retaining BT Sport’s existing major sport broadcast rights, such as Premier League soccer.
SHIPPING
Rates drop on China slack
A slowdown in China’s steel production is curbing demand for bulk ships to transport iron ore, driving a free-fall in global freight rates. Capesize rates to ship the steel-making raw material from Brazil to China have fallen 60 percent from October, according to the Baltic Exchange, while the widely watched global Dry Index has slumped 75 percent in the past four months. Shipping rates for every type of vessel from oil tankers to container vessels have fallen since October, easing inflationary pressure even as commodity prices climb.
CRYPTOCURRENCY
S Africa warns on exchanges
South Africa’s financial regulator said traders should be “cautious and vigilant” when using FTX Trading Ltd, one of the world’s fastest-growing crypto exchanges. The Financial Sector Conduct Authority on Wednesday issued two notices warning against dealing with Bahamas-headquartered FTX and Seychelles-based ByBit. It said the companies are not authorized to give financial advice or intermediary services in South Africa. The warnings come as South Africa scrambles to introduce new regulations for the crypto industry following two of the world’s largest fraud cases that originated from the country, with billions of dollars worth of bitcoin allegedly lost.
EUROZONE
Inflation vexes central bank
Record eurozone inflation was to feed a tense debate within European Central Bank over whether to raise interest rates when its policy-setting governing council met yesterday. Inflation unexpectedly rose to 5.1 percent in the euro area last month, figures from Eurostat showed on Wednesday, the highest value since records for the currency club began in 1997. Energy accounted for 28.6 percent of the inflation surge seen in the eurozone, Eurostat said. That weight has grown since December, when it was represented 25.9 percent of the overall price jump. Food, alcohol and tobacco accounted for 3.6 percent, also an increase over the previous month, while services jumped 2.4 percent.
EMPLOYMENT
US firms shed jobs
US private companies shed jobs last month for the first time since December 2020 as the Omicron variant of SARS-CoV-2 again complicated business — a potential harbinger of bad news for the upcoming government employment report. Data from payroll services firm ADP released on Wednesday said private employment declined by 301,000 last month, far worse than analysts expected, which the survey blamed squarely on the new virus strain. Small businesses bore the brunt of the employment downturn last month, losing 144,000 positions, the ADP data said. Large-business employment fell 98,000, while medium-sized businesses lost 59,000 positions.
BRAZIL
Rate into double digits
Brazil’s central bank hiked its benchmark interest rate by 1.5 points on Wednesday to 10.75 percent, bringing it into double digits for the first time in nearly five years to fight rampant inflation. The eighth straight increase to the Selic rate, which was in line with forecasts, comes as Latin America’s biggest economy struggles through a recession and stubbornly high inflation. The nine-member committee, which made the decision unanimously, hinted it would soon slow the tightening cycle, saying it “currently foresees a slowdown in the pace (of rate cuts) as the most adequate policy.”
TURKEY
Inflation at 20-year high
Turkey’s annual inflation rate in January reached its highest level since April 2002, official data showed yesterday, after a currency crisis decimated people’s purchasing power. Consumer prices surged by 48.7 percent from the same period in January last year, up from an annual rate of 36.1 percent in December, according to the Turkish statistics agency. However, independent data collected by Turkish economists suggested that the annual rate of inflation rose to more than 110 percent last month. President Recep Tayyip Erdogan admitted on Monday that Turks would “have to carry the burden” of inflation for “some time.”
BANKING
Santander eyes Mexico
Banco Santander SA expects to be among lenders exploring potential bids for Citigroup Inc’s retail banking operations in Mexico, chairman Ana Botin said in an interview. “When the process begins, we expect to be part of that process,” Botin said on Wednesday. While Santander is focused on organic growth, Mexico is a key market for the Spanish lender, she said in the interview on Bloomberg TV. Santander would not pay for a purchase by issuing new shares, as the bank’s priority is buying back its stock, Botin told analysts on a conference call. A deal there would make Santander a stronger challenger to Banco Bilbao Vizcaya Argentaria SA.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
RSS