The Star Online: Business
The Star Online: Business |
- World's top technology firm Samsung posts US$7.4bil profit on strong Galaxy sales
- Report: Dirty money cost China US$3.8 trillion 2000-2011
- IMF's Lagarde urges action on unfinished financial reforms
| World's top technology firm Samsung posts US$7.4bil profit on strong Galaxy sales Posted: 25 Oct 2012 06:48 PM PDT SEOUL: Samsung Electronics Co, the world's top technology firm by revenue, reported record quarterly profit of US$7.4 b i llion on Friday, with strong sales of its Galaxy range of phones masking sharply lower memory chip sales. The South Korean firm said July-September operating profit almost doubled from a year ago to 8.12 trillion won, in line with its earlier estimate. Samsung, reporting its results just hours after main rival Apple Inc, did not detail its third-quarter smartphone shipments, though these are estimated to have soared to 58 million. Apple said it shipped 26.9 million iPhones in July-September. It launched its latest iPhone 5 on September 21. Profits from Samsung's mobile division more than doubled to 5.63 trillion won - more than two-thirds of the group's total - as sales of the Galaxy S III, introduced in late May, powered ahead of the iPhone 5 launch. Samsung is estimated to have shipped 18-20 million S IIIs in July-September. Earnings from the chip division, where Samsung competes against Toshiba Corp <6502.T> and SK Hynix Inc <000660.KS>, dropped 28 percent to 1.15 trillion won as prices of dynamic random access memory (DRAM) chips sagged, though a recovery in NAND flash chips, widely used in mobile devices, helped offset the weakness. The company said it expected DRAM oversupply to run on into the current quarter, but sees a tight NAND flash memory market. Samsung's run of four straight record quarters is likely to end in December, with profit growth slowing even more next year as TV markets stagnate and growth in the high-end smartphone market eases from the recent breakneck speed. Profit growth is expected to slow to 16 percent next year from this year's forecast 73 percent, according to Thomson Reuters I/B/E/S. Samsung competes against Sony Corp <6758.T> and LG Electronics Inc <066570.KS> in televisions, and LG Display <034220.KS> in screens. Shares in Samsung have climbed 24 percent so far this year, easily outpacing the benchmark KOSPI's <.KS11> 5 percent gain, but only half the gains made by Apple. |
| Report: Dirty money cost China US$3.8 trillion 2000-2011 Posted: 25 Oct 2012 06:45 PM PDT WASHINGTON: China has lost US$3.79 trillion over the past decade in money smuggled out of the country, a massive amount that could weaken its economy and create instability, according to a new report. And the outflow - much of it from corruption, crime or tax evasion - is accelerating. China lost $472 billion in 2011, equivalent to 8.3 percent of its gross domestic product, up from $204.7 billion in 2000, Global Financial Integrity, a research and advocacy group that campaigns to limit illegal flows, said in a report on Thursday. "The magnitude of illicit money flowing out of China is astonishing," said GFI director Raymond Baker. "There is no other developing or emerging country that comes even close to suffering as much in illicit financial flows." The lost funds between 2000 and 2011 significantly exceeded the amount of money flowing into China as foreign direct investment. The International Monetary Fund calculated FDI inflows at roughly $310 billion between 1998 and 2011. Illicit capital flows rob a government of tax revenues and potential investment funds. Capital flight on this scale can be politically destabilizing by allowing the rich to get richer through tax evasion, GFI said. China has a low level of tax collection given the size of its economy, according to the IMF. Beijing has recognized that corruption and bribery is a significant problem, an issue brought into sharp focus recently by the Bo Xilai scandal. The country has announced a major crackdown as it prepares for its once in a decade leadership transition. GFI calculates how much money leaks out of a country unchecked by analyzing discrepancies in data filed with the IMF on import and export prices between trade partners and calculating discrepancies in a country's balance sheet. The developing world overall lost $903 billion in illicit outflows in 2009, with China, Mexico, Russia and Saudi Arabia in that order showing the largest losses, it said. Trade mispricing was the major method of smuggling money out of China, accounting for 86.2 percent of lost funds, the GFI report found. This scheme involves importers reporting inflated prices for goods or services purchased. The payments are transferred out and the excess amounts are deposited into overseas bank accounts. Trade mispricing is most common for nuclear reactors, boilers, machinery and electrical equipment, the report said. The bulk of the money ends up in tax havens - on average, 52.4 percent between 2005 and 2011. Much of this money eventually makes its way back to China as foreign direct investment for a double hit to the economy. FDI benefits from special tax breaks and subsidies, essentially setting up an elaborate form of money laundering for Chinese businesses, GFI added. - Reuters |
| IMF's Lagarde urges action on unfinished financial reforms Posted: 25 Oct 2012 06:41 PM PDT TORONTO: Unfinished financial reforms are holding back a recovery in key parts of the global economy, the head of the International Monetary Fund warned on Thursday. In a speech in Toronto, IMF Managing Director Christine Lagarde urged world leaders to "do whatever it takes" to rebuild the world's financial system, which is still recovering from the 2007-09 financial crisis and has been further weakened by the euro zone debt crisis. The financial crisis prompted a new order of financial regulation in every part of the financial system from over-the-counter derivatives to bank capital requirements. But Lagarde said the global financial system was still not functioning well and there were powerful industry groups working against the implementation of the new rules. "There are many vested interests working against change and push-back is intensifying," Lagarde told the Canadian International Council, according to prepared remarks. "It is interesting how some banks say the new regulations will be too burdensome, but then spend hundreds of millions of dollars lobbying to kill them," she added. Lagarde said progress was needed for financial institutions that are viewed as too big to fail and regulators should coordinate and align their rules. "Most countries have committed to adopt some or all of the new regulations, and some have moved further ahead with their own national policies," she said. "The challenge now is to proceed to the end of the reform path all together." - Reuters |
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