1 Argentina heads for default (Heidi Moore &
Angela Mongahan in The Guardian) Argentina is heading for its second debt
default in 13 years after negotiations with bondholders broke down in New York.
Axel Kicillof, Argentina’s economy minister, said US hedge funds rejected the
country’s latest offer. Kicillof has been locked in intense negotiations with
holdout creditors demanding to be paid the full value for bonds they own on
which Argentina defaulted. The talks have been overseen by a mediator appointed
by a US judge who ordered Argentina to pay the creditors.
The court-appointed mediator, Daniel Pollack,
confirmed that no agreement had been reached and “the Republic of Argentina
will imminently be in default”. Pollack said that default “is not a mere
‘technical’ condition, but rather a real and painful event that will hurt real
people,” including Argentine citizens, exchange bondholders and the holdout
investors.
The ratings agency, Standard & Poor’s, had
earlier declared some Argentine bonds to be in “selective default” because the
country did not make a $539m interest payment due on 30 June. Kiciloff denied
the country was in default and suggested that Standard & Poor’s was not an
“impartial referee.
A fresh default is not expected to affect
Argentina’s economy as it did more than a decade ago, when dozens were killed
in street protests and the authorities froze savers’ accounts to halt a run on the
banks. There will still be consequences, however, as it is expected to worsen
an economy already in recession, weaken the currency as more Argentines seek to
hold dollars, and put pressure on foreign reserves. It could also raise soybean
prices, as the country is the world’s third-largest soybean exporter.
2 US economy beats forecast with 4% growth (Dominic
Rushe in The Guardian) The US economy bounced back strongly in the spring,
shaking off the effects of an unusually harsh winter, the Commerce Department has
said. Gross domestic product, the broadest measure of the economy, grew by 4%
on an annual basis, better than the average of 3% predicted by economists. In
the first three months of the year the economy shrank by 2.1%, the Commerce
Department announced, softening its first estimate of a 2.9% fall.
Annual revisions show the economy grew by 4% in the
second half of 2013, its fastest pace of growth in a decade. Despite the good
news the economic recovery remains the weakest since the second world war. GDP
has grown by just 1% in the first six months of the year. The pick up in the
economy in late 2013 was wiped out by one of the harshest winters on record and
even at 4% the pace of recovery remains sluggish.
The Commerce Department said the increase in GDP in
the second quarter reflected growth in consumer spending, private inventory
investment, exports, nonresidential fixed investment, state and local
government spending and residential fixed investment.
http://www.theguardian.com/business/2014/jul/30/us-economy-beats-forecasts-gdp-growth-second-quarter
3 Smartphone slow down hits Samsung profit (BBC) Profits
at Samsung Electronics fell 20% in the second quarter, hurt mainly by a
slowdown in smartphone sales and a strong Korean currency. It made a net profit
of 6.25 trillion won ($6.1bn) in the April-to-June period, down from 7.77
trillion won a year ago. When compared to the previous quarter, its profit was
down 17%.
Samsung is the world's biggest maker of mobile
phones and the handset division accounts for the bulk of its profits. Meanwhile,
a stronger Korean currency also hit Samsung's earnings during the period. The
Korean won rose more than 11% against the US dollar and nearly 7% against the
euro between July 2013 and end of June this year.
Samsung's growth in recent years has been powered
mainly by its mobile phone division. However, the pace of growth of the
smartphone market has been slowing down and the competition in the sector has
also increased. Various other smartphone makers including China's Xiaomi,
Huawei and ZTE have been increasing their market share steadily.
4 Billion-dollar bets on India e-commerce (Eric
Bellman & Dhanya Ann Thoppil in The Wall Street Journal) In the past two
days, Amazon and local rival Flipkart have both made billion-dollar bets that
online shopping is poised to take off in India, the world's
second-most-populous country. Amazon said that it would invest $2 billion to
expand its India operations, a day after Flipkart, India's biggest homegrown
e-commerce company, said it had raised $1 billion from backers to help it grow.
In contrast, last year, China racked up $300 billion
in online sales, according to iResearch, while in the US, Internet retail
transactions totaled more than $260 billion. Asia is becoming a hotbed of
e-commerce investment and experimentation. China's Alibaba, which is preparing
a mammoth stock listing in the US, runs the world's busiest online
marketplaces.
India remains far behind. About a third of India's
1.2 billion people live below the World Bank's $1.25-a-day threshold for
extreme poverty. Many others have neither the disposable income, nor the Internet
connection, computer or smartphone they would need to become an online shopper.
Still, the South Asian nation is home to a
burgeoning consumer class estimated at 300 million that does have money to
spend on electronics, clothes and other products. India poses a host of
challenges. Approximately half of Indians don't have bank accounts. The
country's creaking infrastructure can make deliveries costly and time-consuming.
A surge in the number of smartphones available for
less than $100 has improved the outlook for the industry. Flipkart says it
already gets close to half of its orders through its mobile app. The company says
it has 22 million registered users and hosts 3,000 merchants selling millions
of products, from electronics to clothes and books.
No comments:
Post a Comment