The Star Online: Business
The Star Online: Business |
- Changing channels; Sony, Sharp in turnaround battle
- Asian buyers, including M'sians, snap up London luxury apartments as China flags
- Blue chips start November trading on firm note
| Changing channels; Sony, Sharp in turnaround battle Posted: 31 Oct 2012 06:25 PM PDT TOKYO: Sony Corp is likely to say it returned to an operating profit for July-September after it sold a chemicals business, but investors still aren't sure a consumer electronics revamp will deliver the profit growth the group seeks. Sony shares, valued at less than $12 billion, have dropped 16 percent since end-June and its 5-year credit default swaps - the cost of insuring against debt default - have jumped by almost 60 percent. The benchmark Nikkei average <.N225> is down by less than 1 percent. The maker of Bravia TVs, Vaio laptops and PlayStation game consoles, battling weak demand and tough competition, is expected to say it earned operating profit of 33.8 billion yen in its second quarter, after losing 1.6 billion yen a year ago, according to an average estimate from five analysts on Thomson Reuters I/B/E/S. Sony has sold a chemicals unit to state-backed Development Bank of Japan for 58 billion yen, and other asset sales may further inflate operating profit this business year. The Japanese group, which blazed a trail in the early 1980s with its Walkman portable music players, is closing the Shinagawa Technology Center, a 31-storey Tokyo office built in 1998 and may even sell the 37-storey Sony Tower, the New York headquarters of its U.S. business, according to media reports. Sony has said it expects to reduce its global workforce by 10,000 people by end-March, around 6 percent of its total, as it seeks to lop 30 billion yen off its costs. HIGH-RISK Kazuo Hirai, who took over as CEO in April, has pledged to rebuild Sony around gaming, digital imaging and mobile devices, and nurture new businesses such as medical devices, as the TV business shrinks - Sony has lost close to $9 billion in TVs over the past 8 years. In late-September, Sony agreed to pay 50 billion yen to become the biggest shareholder in Olympus Corp <7733.T>, a world leader in medical endoscopes. "The areas in which Sony is continuing to focus are of course high-risk, high-return markets," said JP Morgan analyst Yoshiharu Izumi in a recent report. "Although we expect (full-year) margin improvement in the electronics segment, we think it's too early to appraise a sustained recovery." While battling weak demand for its products, fierce competition from Apple Inc and Samsung Electronics <005930.KS> and others, Sony is also up against a strong yen and a depressed global economy. Panasonic Corp <6752.T>, a rival Japanese TV maker, said on Wednesday it will lose almost $10 billion this business year as it cleans its house of risky assets - writing down billions of dollars of goodwill and assets in its mobile and energy units and preparing for more restructuring that is likely to see it shift away from money-losing TVs and other consumer electronics. For Insider video: Sony next? click http://reut.rs/QZxKao OUTLOOK DIMMER In August, Sony cut its full-year operating profit forecast by more than a quarter to 130 billion yen, still some way above the average forecast by 19 analysts for 107 billion yen. At a net level, Sony sees annual profit of 20 billion yen, while the market prediction is for around a third of that. "It's unclear if Sony will cut its full-year operating profit guidance, but we see considerable potential for second-half shortfalls, mainly in smartphones and games," Goldman Sachs analyst Takashi Watanabe said in a client note. Sales of Sony's handsets, including its Xperia smartphones, are expected to have slid by more than a fifth in July-September, to below 8 million devices, a Reuters poll found last month. Next year it is forecast to sell 34.4 million mobiles, about the same as Samsung shifts each month. The South Korean firm and Apple are also encroaching on Sony's gaming business, and Hirai has cut the forecast for annual sales of the hand-held Vita and PSP consoles to 12 million from 16 million. After four straight years of net losses, Hirai is also hampered by weakened finances. At end-June, Sony's shareholder equity ratio fell to below 15 percent - a rate of 20 percent is generally considered a healthy minimum. While selling off non-core assets, Sony has also spent to bolster its business portfolio - laying out $1.8 billion in four months on the Olympus stake, a cloud gaming firm and a website for doctors, but this has prompted both Moody's and Standard & Poor's to lower their long-term debt rating on the company to the second-lowest investment grade. SHARP DOWNTURN At rival Japanese TV maker Sharp Corp <6753.T>, which also announces quarterly earnings on Thursday, the need to return to profit is more urgent. The maker of Aquos TVs has secured a $4.6 billion bank bailout, and has pledged to axe 10,000 jobs, sell assets, and return to profit. At end-June, Sharp's shareholder equity ratio was 18.7 percent. After adding restructuring charges, valuation losses on stocks of LCD display panels and other costs, Sharp is expected to post a 400 billion yen net loss for April-September, almost double the company's estimate, the Nikkei business daily reported last week. [ID:nL3E8LP01L] Other media put the figure at 380 billion yen on Thursday, which would put Sharp on track to hit a record 450 billion yen net loss for the full year to March, they said. By frontloading those costs, Sharp may be better placed to return to profit on an operating basis in the current second half of the year, allowing lenders to justify the bailout. The company plans to return to an operating profit of more than 10 billion yen in October-March on stronger sales of home appliances and small displays, the Mainichi daily said on Thursday. Sharp is said to be increasing production capacity for its high-definition power-saving IGZO screens, which it hopes to sell to makers of ultrabook computers, including Lenovo Group <0992.HK>, Dell Inc and Hewlett-Packard , Japanese media have reported. For the second quarter, Sharp is expected to have made a 50.4 billion yen operating loss, according to the average of six analysts on Thomson Reuters I/B/E/S. Both Sharp and Sony may also have felt the impact of a recent dispute with China over ownership of islands in the East China Sea, which triggered sometimes violent protests against Japanese products. Sharp had almost a fifth of its revenues in China, while Sony has around 8 percent of its business there. Sharp shares have more than halved since end-June, to record lows below 150 yen. Five years ago, the stock traded at above 2,440 yen. Its market value has slumped to below $2.4 billion. - Reuters |
| Asian buyers, including M'sians, snap up London luxury apartments as China flags Posted: 31 Oct 2012 06:21 PM PDT LONDON: London's luxury One Hyde Park development has sold its latest five apartments to Asian buyers, in a sign of the region's growing appetite for the relative stability of London property as China's economy slows. The sales mean buyers from Asian countries like China and Malaysia have bought more than 30 percent of flats sold at One Hyde Park, where apartments cost from 7 million pounds up to 136 million each, a higher proportion than any other region. "One of the reasons why Asian buyers are investing so heavily in the London property market is because China's economic growth has slowed down," said Nick Candy, development manager and designer of the scheme close to the Harrods department store. "The Chinese are specifically looking to diversify away from keeping all of their investments in China, and super prime central London real estate is perceived to be and actually is a very safe investment," he said. Asian buyers stepped up investment in the UK capital as the global economy wobbled, fuelled with cash from their region's commodities and manufacturing industries and attracted by the weakness of the British pound and London's safe haven qualities. The rush to invest abroad has accelerated amid political and economic uncertainty in China, which is on course for its slowest annual expansion for 13 years after economic growth slipped for seven consecutive quarters. The Knightsbridge office of property agent Savills, recently sold a house to a Hong Kong buyer at 23 percent above the guide price after the property received 12 bids, a spokeswoman said. The Asian buyers of the latest five flats, which include two and three bedroom apartments, paid about 6,000 pounds per square foot, a One Hyde Park spokeswoman said. The scheme is owned by Project Grande, a joint venture between Guernsey-based group CPC Group and the Prime Minister of Qatar. Ukraine's richest man, mining magnate Rinat Akhmetov, paid 136 million pounds for the penthouse at One Hyde Park, a record price for a UK flat. Seven apartments remain unsold at the development, where other buyers have come from Kazakhstan, Greece and Canada. A record number of offices in London's upmarket neighbourhoods are being turned into luxury flats this year as property developers look to cash in on international demand, property consultancy DTZ said. A spokeswoman for Westminister Council, which decides whether developers can change offices to homes in the Knightsbridge and Mayfair districts said the local authority was reviewing its planning policy to protect the area's office stock. - Reuters |
| Blue chips start November trading on firm note Posted: 31 Oct 2012 06:20 PM PDT KUALA LUMPUR: Blue chips started the first trading day of November on a firm note, despite the cautious regional and US markets, with BAT, PPB Group and Petronas Gas among the major gainers in razor-thin trade. At 9.05am, the FBM KLCI was up 3.92 points to 1,676.99. Turnover was 78.16 million shares valued at RM33.14mil. There were 98 gainers, 42 losers and 111 counters unchanged. Reuters reported that overnight on Wall Street, the Dow Jones industrial average dropped 10.75 points, or 0.08%, to 13,096.46 at the close. The Standard & Poor's 500 Index gained just 0.02%, to finish at 1,412.16. The Nasdaq Composite Index fell 0.36%, to end at 2,977.23. For the month of October, the Dow fell 2.5%, the S&P 500 lost 2% and the Nasdaq dropped 4.5%. At Bursa Malaysia, BAT rose 22 sen to RM63.46 with 400 shares done after falling about RM1 the previous day. PPB and PetGas added 20 sen each to RM13.66 and RM19.80. Genting Plantations gained 12 sen to RM9.10 while PetDag and Carlsberg gaines 10 sen each to RM22.18 and RM13.20 with just 100 shares done. MAHB added nine sen to RM5.90. KL Kepong fell the most, down 14 sen to RM21.28 with 300 shares done while Time dotCom shed seven sen to RM3.43. |
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