Monday, January 2, 2017
Strong growth for Europe manufacturing; India cash queues continue; Samsung warns of slow growth
1 Strong growth for Europe manufacturing (The Guardian) Major European equity indexes climbed to new highs in thin trading on Monday, with strong manufacturing reports from the region lifting sentiment on the first trading day of 2017.
IHS Markit’s 2016 manufacturing purchasing managers’ index for the eurozone registered 54.9 in December, its highest since April 2011. The 50 mark separates growth from contraction; in November the figure was 53.7.
German manufacturing growth reached its highest in almost three years, driven by rising demand from Asia and the US. French manufacturing hit a five-and-a-half-year high, and Italian manufacturing activity grew at its fastest rate since June.
2 India cash queues continue (BBC) There have been long queues outside many banks in India as people tried to deposit discontinued banknotes ahead of a deadline that has now passed. An estimated 40% of cash dispensers are empty, meaning people are unable to withdraw new notes to replace the old ones they have handed in.
There has been widespread disruption since Prime Minister Narendra Modi said in November that 500 and 1,000 rupee notes would no longer be legal. The move was meant to curb corruption. It has divided opinion, especially over how the ban was implemented.
Early last month the government scrapped the 500 and 1000 rupee notes to crack down on undeclared money and fake cash. Some people, including those of Indian origin living abroad, will be able to exchange the notes in branches of India's central bank until 31 March 2017 - but the process will be more complicated than going to a regular bank.
Parliament is preparing laws that will make it a criminal offence to hold the old notes from 1 April 2017 onwards. Together the two notes represented 86% of the currency in circulation and there have been chaotic scenes in India ever since, with people having to spend hours queuing outside banks and cash machines which have been running out of money.
Local firms which allow people to make digital payments both online and in shops have reported a surge in transactions as people look for cashless alternatives. The government says the move has been a success with the banks flush with cash and significant increases in tax collection.
But critics argue the move has failed to root out corruption and unearth illegal cash, since most of the money in circulation has been put back into the financial system. Instead, they say, the economy which was growing at a rapid pace, has slowed down significantly.
3 Samsung warns of slow growth (Gulf News) Samsung Electronics Co sees growth slowing in key markets and uncertainties increasing around trade protectionism and currency fluctuations. In his annual New Year’s speech, Samsung vice-chairman and co-chief executive officer Kwon Oh-hyun urged employees to learn from costly failures as the consumer electronics giant seeks to recover from 2016’s bruising debacle surrounding the Note 7 smartphone.
The Note 7’s tendency to catch fire prompted a global recall and the marquee product was eventually scrapped. The fiasco cost the world’s largest smartphone maker more than $6 billion and pushed profits at its mobile business to a record low in the third quarter. The company was also embroiled in allegations being investigated by South Korean prosecutors that the merger of its two affiliates in 2015 may have received favourable government treatment.
While Samsung has been battling these kinds of challenges, its rivals have been focusing on and investing in key future technologies such as artificial intelligence and big data, Kwon said. He asked employees to help the company widen its technology leadership through continued innovation and business enhancements.