China warned on Wednesday of a
"grim" outlook for trade as the world's
second-largest economy surprised financial markets by reporting a fall in
exports and imports when both had been expected to rise.
The figures,
which follow a government crackdown on the use of fake invoicing that had
exaggerated exports earlier this year, are likely to raise fresh concerns about
the extent of the slowdown in the economy and global demand.
The June
data, showing that exports fell 3.1 percent from a year earlier and imports
dropped 0.7 percent, may now reflect the true trade picture, customs officials
said.
"China faces relatively stern challenges in trade currently,"
customs spokesman Zheng Yuesheng told a news briefing on the June trade
figures.
"Exports in the third quarter look grim," said Zheng.
The Australian dollar briefly fell about a third of a cent after the China data,
reflecting worries about Chinese demand for Australia's commodities, such as
iron ore and coal.
The
MSCI Asia-Pacific ex-Japan index <.MIAPJ0000PUS> was up 0.5 percent after
gaining as much as 1.2 percent to a one-week high before the trade figures came
out.
The export fall was the first since January 2012. Economists had
expected exports to increase 4.0 percent and imports to rise 8.0 percent.
China's
trade data is volatile and has been distorted by speculative capital flows
across the country's border. Doubts about the accuracy of the figures had abated
slightly since the customs office and top foreign exchange regulator launched a
campaign in May to crack down on fake export invoices.
Fake invoicing
inflated China's official import and export totals by $75 billion in the first
four months of 2013, local media reported on June 14, citing an internal review
by China's commerce ministry.
The customs data showed that exports to the
United States, China's biggest export market, fell 5.4 percent, while exports to
the European Union dropped 8.3 percent.
"The surprisingly weak June
exports show China's economy is facing increasing downward pressure on
lacklustre external demand," said Li Huiyong, an economist at Shenyin &
Wanguo Securities in Shanghai.
"Exports are facing challenges in the
second half of this year. The appreciation of the U.S. dollar and the Chinese
government's recent crackdown on speculative trade activities also put pressure
on exports."
China had a trade surplus of $27.1 billion in June, the
customs administration said, largely in line with the $27.0 billion expected by
economists.
China's reform-minded new leaders have shown a tolerance of
slower growth, although they still need to avoid widespread job losses that
could threaten social stability.
Economists expect data next week to show
that annual growth in China for the April-June quarter slowed down to 7.5
percent.
A continued slide in growth could test leaders' resolve to
tolerate a short-term slowdown in the economy while pressing ahead with efforts
to revamp the economy for the longer term.
Wednesday, July 10, 2013
BlackBerry CEO says outright sale of the company an option under consideration
BlackBerry Ltd signaled on Tuesday that a licensing deal, or even an
outright sale of the company, was still a possibility, pleasing shareholders
still reeling from the disappointing debut for its new line of
smartphones.
Chief Executive Thorsten Heins, responding to a question about whether he was looking into strategic alternatives, said he is open to all options that create value for shareholders. He emphasized that the company has so far focused on creating value through the launch of its new devices powered by an all-new BlackBerry 10 operating system.
"This is a long-term transition for the company, but I can assure you that we're pushing very hard," Heins said at the company's annual shareholder meeting. "BlackBerry will pursue every opportunity to create value for shareholders."
His remarks that BlackBerry was also open to any and all licensing opportunities, sent shares higher in morning trading.
John Goldsmith, deputy head of equities at Montrusco Bolton, which owns more than 1.5 million BlackBerry shares, believes that BlackBerry may well be pressed into striking such a deal.
"I think they're on a very short leash," said Goldsmith, referring to BlackBerry's management. "I wouldn't be surprised if within the next two quarters there is a definitive announcement with regard to other options that this company could be looking at whether that's putting itself for sale or some other option."
The company's stock had dropped more than 30 percent after it posted disappointing second-quarter results in late June and forecast an operating loss in the current quarter.
A bigger concern for investors, was the fact that it sold fewer-than-expected BlackBerry 10 devices in their first full quarter on the market, offering little evidence that it could quickly win back market share from Apple Inc'siPhone, Samsung's
<005930 .ks=""> Galaxy devices, and other phones powered by Google's
Android operating system.
Even so, some investors believe many other companies would relish the prospect of getting their hands on the new platform.
"I can see why this guy is confident," said Ross Healy, a portfolio manager with MacNicol & Associates, whose clients own BlackBerry shares. "He is talking about partnerships and being open to talks and I don't think you say that unless you've really had a talk or two with interested parties - and that gives you some confidence."
At the meeting, held at BlackBerry's home base in Waterloo, Ontario, Heins conceded that BlackBerry has a tough road ahead as it attempts to turn around its fortunes, but he insisted it was on the right track.
Heins said BlackBerry was already seeing small signs of market-share gains in the top-end of the ultra-competitive smartphone market.
"Before you go into any strategic option, I think you have to create value. And the value of the company 15 months ago was way less than what it is today," he said.
CLOCK TICKING
Despite the company's confident tone, many investors agree that the clock is ticking for BlackBerry, which is caught in a squeeze on both the high- and low-ends of the smartphone market.
BlackBerry 10 devices hit store shelves this year just as the high-end smartphone segment had begun to show some signs of saturation. Last week, Samsung reported results that fell shy of expectations, while Apple earlier this year reported its first quarterly profit decline in more than a decade.
On the mid- to low end, competition is growing intense, with Chinese manufacturers such as Huawei Technologies [HWT.UL] and ZTE <000063 .sz=""> gaining ground.[ID:n3N0FA0WP][ID:nL2N0DA2DR]
Even so, BlackBerry said it remains determined to stick to its plan and is not re-thinking its strategy in any manner.
"We as a board remain completely supportive of management," said the company's chair, Barbara Stymiest, adding that she was confident the turnaround plan would succeed.
Shareholders voted on Tuesday to elect all the company's director nominees to its board. They also approved the plan to change the company's name to BlackBerry Ltd from Research In Motion Ltd, a move that had been announced in January.
BlackBerry shares closed almost 1 percent higher at $9.64 on the Nasdaq on Tuesday.
Chief Executive Thorsten Heins, responding to a question about whether he was looking into strategic alternatives, said he is open to all options that create value for shareholders. He emphasized that the company has so far focused on creating value through the launch of its new devices powered by an all-new BlackBerry 10 operating system.
"This is a long-term transition for the company, but I can assure you that we're pushing very hard," Heins said at the company's annual shareholder meeting. "BlackBerry will pursue every opportunity to create value for shareholders."
His remarks that BlackBerry was also open to any and all licensing opportunities, sent shares higher in morning trading.
John Goldsmith, deputy head of equities at Montrusco Bolton, which owns more than 1.5 million BlackBerry shares, believes that BlackBerry may well be pressed into striking such a deal.
"I think they're on a very short leash," said Goldsmith, referring to BlackBerry's management. "I wouldn't be surprised if within the next two quarters there is a definitive announcement with regard to other options that this company could be looking at whether that's putting itself for sale or some other option."
The company's stock had dropped more than 30 percent after it posted disappointing second-quarter results in late June and forecast an operating loss in the current quarter.
A bigger concern for investors, was the fact that it sold fewer-than-expected BlackBerry 10 devices in their first full quarter on the market, offering little evidence that it could quickly win back market share from Apple Inc's
Even so, some investors believe many other companies would relish the prospect of getting their hands on the new platform.
"I can see why this guy is confident," said Ross Healy, a portfolio manager with MacNicol & Associates, whose clients own BlackBerry shares. "He is talking about partnerships and being open to talks and I don't think you say that unless you've really had a talk or two with interested parties - and that gives you some confidence."
At the meeting, held at BlackBerry's home base in Waterloo, Ontario, Heins conceded that BlackBerry has a tough road ahead as it attempts to turn around its fortunes, but he insisted it was on the right track.
Heins said BlackBerry was already seeing small signs of market-share gains in the top-end of the ultra-competitive smartphone market.
"Before you go into any strategic option, I think you have to create value. And the value of the company 15 months ago was way less than what it is today," he said.
CLOCK TICKING
Despite the company's confident tone, many investors agree that the clock is ticking for BlackBerry, which is caught in a squeeze on both the high- and low-ends of the smartphone market.
BlackBerry 10 devices hit store shelves this year just as the high-end smartphone segment had begun to show some signs of saturation. Last week, Samsung reported results that fell shy of expectations, while Apple earlier this year reported its first quarterly profit decline in more than a decade.
On the mid- to low end, competition is growing intense, with Chinese manufacturers such as Huawei Technologies [HWT.UL] and ZTE <000063 .sz=""> gaining ground.[ID:n3N0FA0WP][ID:nL2N0DA2DR]
Even so, BlackBerry said it remains determined to stick to its plan and is not re-thinking its strategy in any manner.
"We as a board remain completely supportive of management," said the company's chair, Barbara Stymiest, adding that she was confident the turnaround plan would succeed.
Shareholders voted on Tuesday to elect all the company's director nominees to its board. They also approved the plan to change the company's name to BlackBerry Ltd from Research In Motion Ltd, a move that had been announced in January.
BlackBerry shares closed almost 1 percent higher at $9.64 on the Nasdaq on Tuesday.
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