Global smartphone sales pick up on fierce competition

Samsung remained the top vendor, delivering 84.5 million handsets or 23.5 per cent of the total market, followed by Apple's 48 million which gave the US firm 13.5 per cent. 

PHOTO: AFP

OCT 29, 20157:21 AM

[WASHINGTON] Global smartphone sales gained in the third quarter as major vendors ramped up special deals and financing to attract buyers, a survey showed Wednesday.

A survey by IDC showed global smartphone sales of 355.2 million in the July-September period, up 6.8 per cent from a year ago and the second highest quarterly total on record.

Samsung remained the top vendor, delivering 84.5 million handsets or 23.5 per cent of the total market, followed by Apple's 48 million which gave the US firm 13.5 per cent.

China's Huawei cemented its hold on third place with a 7.5 per cent market share and 26.5 million units, followed by Chinese rivals Lenovo and Xiaomi, which each captured slightly more than five percent.

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IDC analysts said consumers are seeing new buying options including unlocked handsets which can be used on several carriers, and financing plans to pay for the device over time.

Apple this year began these strategies to entice buyers for its high-end iPhones.

"The vendor landscape and product offerings are really unique at the moment as many markets are seeing consumers become more aware of alternative buying options when it comes to paying for their smartphone," said IDC's Ryan Reith.

"In mature and subsidized markets, we now have a wide range of operators offering equipment installation plans), as well as early trade-in options. At the same time the number of unlocked/off-contract offerings has increased significantly and it's slowly starting to resonate with consumers." IDC said there is intense competition at the high end between Apple and Samsung, each of which introduced new models this year, as well as in the budget range.

"The third quarter placed a substantial emphasis on flagship devices as vendors tried to outclass each other in both features and design," said IDC research manager Anthony Scarsella.

"New flagship models translated to fiercer competition at the high-end for most players as many will try to challenge both Samsung and Apple for a place among the elite.

However, despite the glitz and glamour at the high-end, we still expect the bulk of volume and growth to once again sprout from low to mid-range handsets, particularly in emerging markets."

The survey showed Huawei as the fastest growing vendor, boosting sales 60.9 per cent from last year. The firm's partnership to produce Google's Nexus 6P phone "could signal that Huawei is finally ready to seriously compete in the US," IDC said.

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P

Malaysia seeks more classes in English as proficiency declines

      

Malaysia is encouraging schools to teach more classes in English as manufacturers and company chiefs say a deteriorating command of the language is hurting the country's competitiveness. 

PHOTO: REUTERS

OCT 29, 20157:38 AM

[KUALA LUMPUR] Malaysia is encouraging schools to teach more classes in English as manufacturers and company chiefs say a deteriorating command of the language is hurting the country's competitiveness.

Over 90 per cent of the 190,000 respondents in an online poll this month said there should be an option to take more subjects in the language, Idris Jala, head of the government's Performance Management and Delivery Unit, said in an interview on Monday. Prime Minister Najib Razak introduced a dual-language programme during his budget speech last week.

The poll highlights the challenges for Malaysia even as the World Bank's annual Doing Business report showed the country is making progress on becoming more investor-friendly, having made it easier and less costly for companies to pay taxes.

"Malaysia has lost its competitiveness due to our standards in English going down," AirAsia co-founder Tony Fernandes wrote on Twitter this month. It's a critical time "to reverse decades of decline in English," he said. "Our children have suffered."

The government has flip-flopped on policies for English for over a decade. A delay in August on making it a compulsory pass subject in a major exam for high-school students renewed debate about the education system. It drew criticism from manufacturers who say the move would weaken efforts to make Malaysian graduates more employable amid a goal of becoming a high-income nation by 2020.

'MORE PREVALENT'

"As it moves toward this goal it's inevitable that the use of English, be it in education or business, will be more prevalent," said Weiwen Ng, a Singapore-based economist at Australia & New Zealand Banking Group Ltd.

Measures to boost the use of the language are "a long-awaited step in the right direction."

The country shifted to the Malay language known as Bahasa Melayu from English as the primary language used by teachers in a bid to promote integration between the ethnic Malay majority and ethnic Chinese.

The government revived maths and science lessons in English in 2003, only to reverse that in 2012.

In 2013, an education blueprint said it would be compulsory to pass English for fifth-year high-school students taking a national exam starting 2016. That too changed in August.

MORE TIME

The Federation of Malaysian Manufacturers, which represents more than 2,600 companies, said it was disappointed with the education ministry's decision to postpone making English a must- pass subject. "The employability and quality of Malaysia's human capital is at stake; and also the country's efforts to achieve developed nation status," it said.

Mr Jala defended the government's move, saying it would give educators and students more time to prepare. He cited a competency assessment several years ago where 70 per cent of English teachers failed the Cambridge Placement Test.

"The fundamental problem is we have been entrenched for such a long time on Bahasa," Mr Jala said. "When you have the teachers not making the grade, surely you have fundamental problems."

Mr Najib has announced plans to spend more than RM135 million (S$44 million) in next year's budget to raise the proficiency in English, as well as Malay. The government is maintaining the budget allocation for the education ministry even as a separate one overseeing tertiary institutes faces a cut in proposed spending.

DECLINING PERFORMANCE

Still, the quality of Malaysian education hasn't kept pace with most peers in East Asia, the World Bank said in a 2013 report, highlighting a declining student performance in maths, science and deteriorating English proficiency. Critics say the focus of Malaysia's spending may have been misplaced.

"It's all about building schools but not about changing the curriculum," Bridget Welsh, a senior research associate at National Taiwan University's Centre for East Asia Democratic Studies, said about Mr Najib's spending plan next year.

BLOOMBERG

      

Singapore to focus on 5 futures, says Swee Keat

Future Economy panel to dive deep into issues to propose fresh ideas for jobs, firms, resources, tech and markets

By

Kelly Taykellytay@sph.com.sg@KellyTayBT

Mr Heng doubts success can be measured by one or two metrics, and prefers to look at whether good jobs and opportunities have been created for citizens.

OCT 29, 20155:50 AM

Singapore

THERE are five key "futures" that Singapore needs to pay attention to, in charting its economic path: the future of jobs, companies, resources, technology, and markets, said Finance Minister Heng Swee Keat on Wednesday.

"These areas are all inter-related. If we have a strong strategy for each of these, and how these different strengths come together, we will prepare ourselves well for the future economy. And if we're able to do that well, we will be able to achieve our goal of creating good opportunities in Singapore and good jobs for Singaporeans."

Sharing for the first time details on the Committee for the Future Economy - a new panel he chairs - Mr Heng said that the focus would be on keeping Singapore competitive in a rapidly-changing and technology-intensive world.

While the exact composition of the group has yet to be firmed up, he revealed that Minister for Trade and Industry (Industry) S Iswaran will play a key role as deputy chair.

"Both of us are looking at forming the committee; I will announce the names of the committee by early December," said Mr Heng.

He expects the panel to submit its report around December 2016. This means the process will span a 12-month period - similar to the time frames of previous review committees.

Stressing the interlinked nature of the five "futures", Mr Heng said that jobs would need to be redesigned to support a technology and innovation-driven economy. Individuals, too, will require deep skills that eventually translate into increased productivity - which will in turn result in higher wages.

Alongside this, Singapore must build its companies' capabilities - both by bringing in firms that can introduce new know-how into the economy, and by supporting the development of local enterprises.

Mr Heng also emphasised the need for companies here to venture further abroad - especially to emerging markets such as Africa and Latin America.

And with Singapore's resource-scarce profile, the committee will look at ways to optimise land and labour use here. It will devote attention to business costs as well.

Speaking to reporters after a two-hour closed-door dialogue with the Singapore Business Federation (SBF), Mr Heng stressed that the committee must be ready to go deep into the issues at hand, and not shy away from confronting the challenges head-on.

"I hope that our conversation will be frank and deep . . . We need to do deep dives into what are the underlying issues, and not discuss it in a very general way. We will look at the data and do some deeper analysis of the issues. I think we should be prepared to ask difficult questions and propose fresh ideas for Singapore."

As for how he intends to measure the success of the new restructuring drive, Mr Heng said that he doubts success can be measured by one or two metrics, and prefers to look at whether good jobs and opportunities have been created for citizens.

"At the end of the day (this is about) creating good jobs and good opportunities. Now, that doesn't mean that from time to time we will not fall into a recession and we will not have some unemployment . . . But it means that over a medium-term period, we continue to keep the Singapore economy vibrant. And that will be the result we are driving towards."

Mr Heng is expected to give further details on one of the five "futures" on Nov 4, at an SBF event.

    
 

Oil surges after better-than-expected stockpiles report

Oil prices surged on Wednesday after a US stockpiles report showed oil supplies rose less than expected last week, bringing a whiff of relief to concerns about the global glut. 

PHOTO: AFP

OCT 29, 20157:02 AM

[NEW YORK] Oil prices surged on Wednesday after a US stockpiles report showed oil supplies rose less than expected last week, bringing a whiff of relief to concerns about the global glut.

Braced for another large increase in US crude supplies, traders were heartened by the Department of Energy's (DoE) report, with crude supplies rising 3.4 million barrels, slightly below estimates, in the week ending October 23.

Declines in stockpiles of gasoline and distillates also were positive for the market.

"Demand for the products was a nice, encouraging thing," said Matt Smith of ClipperData.

"The market has been pummelled lower, beaten down and beaten down... a kind of selling exhaustion," he said, and "there is just a surge of buying interest." US benchmark West Texas Intermediate (WTI) for delivery in December soared US$2.74, or 6.3 per cent, to US$45.94 a barrel on the New York Mercantile Exchange.

Brent North Sea crude for December delivery, the global benchmark, closed at US$49.05 in London, up US$2.24 (4.8 per cent) from Tuesday's settlement.

WTI was already moving higher before the DoE report, which was "modestly supportive to the market," Mr Smith said. "But the market was very much oversold and this has just given a reason for it to rebound." He cautioned that the market remains oversupplied, not just in crude oil but in products, too.

"There doesn't seem to be too much out there that would encourage us too much higher from here" in prices, he said.

Meanwhile, traders digested news of a US-Mexico deal to swap oil.

Mexico's state-run energy giant Pemex announced Wednesday that it would, for the first time, import 75,000 barrels of light-crude oil per day from the United States to improve its refinery system, and in return send heavy crude to its northern neighbor.

The swap will allow Mexico to reduce production of fuel oil while obtaining gasoline and diesel for higher value, the company said.

AFP

      

Fed statement boosts US dollar

The dollar rallied on Wednesday, buoyed by the Federal Reserve's policy statement suggesting an interest rate hike could come in December.

PHOTO: AFP

OCT 29, 20156:46 AM

[NEW YORK] The dollar rallied on Wednesday, buoyed by the Federal Reserve's policy statement suggesting an interest rate hike could come in December.

After a two-day meeting, the policy-setting Federal Open Market Committee kept its benchmark federal funds rate unchanged near zero, as expected, and downplayed concerns about international developments that it had cited in September as reason to delay a hike.

It presented a rosier view of the economy than it had last month, highlighting "solid" increases in consumer spending - the key driver of the economy - and business investment.

The dollar jumped more than one cent against the euro, which dropped below US$1.10 for the first time since early August. Around 2100 GMT, the euro traded at US$1.0921, down from US$1.1041 at the same time Tuesday.

The greenback advanced to 121.09 yen from 120.48 yen the prior day.

Amid expectations before the meeting that the Fed could delay the rate move until at least March, the FOMC clearly put a hike on the table "at its next meeting", which is December 15-16.

"With the Fed still on track to raise interest rates before long, we maintain our outlook for a stronger US dollar," said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities.

AFP

      

Germany mulls abandoning balanced budget goal due to refugee crisis: report

The German government is discussing whether to abandon its goal of achieving a balanced budget due to the rising costs of coping with a record influx of refugees, German newspaper Handelsblatt reported.

PHOTO: EPA

OCT 29, 20157:30 AM

[BERLIN] The German government is discussing whether to abandon its goal of achieving a balanced budget due to the rising costs of coping with a record influx of refugees, German newspaper Handelsblatt reported.

The business daily said politicians with budgetary expertise in the ruling coalition - comprised of Chancellor Angela Merkel's conservatives and the centre-left Social Democrats (SPD) - expected the government to spend around 10 billion euros (S$15.3b) on dealing with the refugee crisis in 2016 compared with the nearly 7 billion that had previously been expected.

Germany achieved a balanced budget for the first time since 1969 in 2014 - a year earlier than planned - and the coalition has promised to balance the budget from this year through 2019.

But, in an advance copy of an article due to be published on Thursday, Handelsblatt said there were currently discussions in the government about whether it was sensible to insist on achieving a balanced budget in 2016.

The finance ministry was not immediately available to comment.

Earlier on Wednesday, when asked whether the goal of a balanced budget was setting limits to aid for refugees, German Finance Minister Wolfgang Schaeuble said: "Of course we won't say to a refugee drowning in the Mediterranean 'Man, we've run out of money!'"

He also said German aid for refugees would not fail due to financial issues, referring to the balanced budget. "We have the means in Germany to deal with the challenge," he said, adding that the refugee crisis was currently the biggest task and "other things have to subordinate themselves to that to some extent".

Mr Schaeuble is due to present tax estimates next week and Handelsblatt said he would at that point announce whether he would stick to the balanced budget goal for 2016.

It cited sources in the finance ministry as saying that giving that goal up now would be like bursting a dam from a budgetary point of view and that it was likely the balanced budget would remain for the time being, partly because tax revenues are expected to rise next year and interest expenditure is expected to be lower than previously thought.

REUTERS

    
 

Federal Reserve sees better outlook; December rate hike possible

The Federal Reserve kept its benchmark interest rate unchanged on Wednesday but, showing more confidence in US economic growth, made clear an increase is possible in December. 

PHOTO: REUTERS

OCT 29, 20156:56 AM

[WASHINGTON] The Federal Reserve kept its benchmark interest rate unchanged on Wednesday but, showing more confidence in US economic growth, made clear an increase is possible in December.

After a two-day meeting, policy makers at the US central bank expressed more faith in the strength of the economy than expected, brushing over recent weak spots and focusing on what they called "solid" consumer spending and business investment.

The Federal Open Market Committee also dropped its warning from September that the global downturn could affect the US, even as worries mount over China's slowdown and falling commodity prices.

Data since the September meeting "suggests that economic activity has been expanding at a moderate pace," the FOMC said in a statement.

"Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further," it said.

The FOMC decided, as expected, to keep the federal funds rate at 0-0.25 per cent, where it has sat since 2008.

But, amid pre-meeting expectations that a rate increase would be delayed until at least March, the FOMC explicitly pointed to the possibility in its "next meeting," which takes place on December 15-16.

While a rate hike has been long-awaited, it nevertheless raises the prospects of higher costs of capital and weaker emerging-market currencies around the world.

In reaction, the dollar moved sharply higher, gaining about 1.5 per cent on the euro at US$1.0910.

US stocks plunged on the news but rebounded by the end of trade, the S&P 500 finishing with a 1.2 per cent gain for the day.

"The FOMC statement shows the Fed has become less concerned about global risks feeding back into the US economy," said Ian Shepherdson of Pantheon Macroeconomics.

"The December hike now hinges on the next two employment reports. Some combination of payrolls, unemployment and wages signaling continued improvement will be enough," he said.

'FINGER ON THE TRIGGER'

The FOMC shrugged off some recent data, including a downturn in US monthly job creation numbers, that for many indicated the US economy has been slowing in recent months.

But the panel argued that anyway the jobs market has been tightening "since early this year." It also accepted that inflation is weak, but partly blamed the fall in energy prices and cheaper imports, a function of the strong dollar.

The FOMC expressed confidence that inflation will move up toward its 2.0 per cent target "as the labour market improves further and the transitory effects of declines in energy and import prices dissipate."

The FOMC also dropped a key line that appeared in the September policy statement showing some worry about how the turmoil in global markets and China's downturn would impact US growth.

Rather than saying, as before, that global developments "may restrain (US) economic activity somewhat", the committee simply said it is "monitoring global economic and financial developments."

The FOMC statement was closely aligned with the view of Fed Chair Janet Yellen, who has repeatedly said that, if the economic data holds up, a rate increase could come before the end of the year.

Earlier this month two more dovish Fed governors, both also on the FOMC, appeared to break with her when they made clear they favored waiting until next year.

But the policy statement showed only one dissent in the 10-person vote, from a policy hawk, Jeffrey Lacker, who was already pressing for an immediate rate hike in September.

The statement stressed, as Ms Yellen always does, that any decision will depend on what the most recent data tells the FOMC.

Even so, said Jason Schenker at Prestige Economics, "today's Fed statement further confirmed that the FOMC's finger is on the rate hike trigger."

AFP

    
 

US House passes two-year budget deal that averts default

The deal is the result of weeks of secret negotiations between the White House and outgoing House Speaker John Boehner, who has stated his desire to clear the decks of any fiscal crises before his successor takes the gavel. 

PHOTO: EPA

OCT 29, 20156:43 AM

[WASHINGTON] The US House of Representatives on Wednesday passed a bipartisan, two-year budget deal that boosts federal spending by US$80 billion, reduces a government shutdown threat and raises the debt ceiling through the end of Barack Obama's presidency.

Nearly 80 Republicans joined a united front of Democrats in favour of the legislation, which passed 266 to 167.

The deal is the result of weeks of secret negotiations between the White House and outgoing House Speaker John Boehner, who has stated his desire to clear the decks of any fiscal crises before his successor takes the gavel.

Congress must raise the federal borrowing limit by November 3, or risk Washington ending up in default.

The bill now goes to the Senate where it is expected to pass, effectively bringing to a close a series of fiscal fights as the two parties gear up for the 2016 presidential race.

Republican and Democratic lawmakers fought several battles over borrowings between 2011 and 2014 that roiled financial markets, caused an unprecedented downgrade of the country's triple-A debt rating by Standard & Poor's, and forced a partial government shutdown for 16 days in 2013.

Republican Harold Rogers, chairman of the House Appropriations Committee, said it was important to approve the deal so that Congress does not "lurch from one crisis to another." "It's not perfect," Mr Rogers said of the bill. "It's not ideal by any stretch of the imagination. But it's the best we can do with what we have, and the alternative would be disaster." The legislation raises federal spending caps by some US$80 billion until September 30, 2017.

Another roughly US$31 billion in "contingency operations" funding would go to the Pentagon, offset by tweaks to entitlement programs including Social Security.

Several conservative Republicans opposed the deal over the way it was negotiated in secret, but also because it failed to reduce the US$18 trillion deficit.

"Instead of passing this bill, which pushes us in the wrong direction by increasing spending and raising the debt limit, we should have answered the call of the American people to reduce the national debt and balance our budget," House Republican Gary Palmer said.

The deal is one of the final accomplishments for Mr Boehner. Republicans on Wednesday elected Paul Ryan as their candidate to be the next speaker of the House, and a final floor vote is set for Thursday.

AFP

    
 

China's growth could beat forecast in 2015: IMF official

OCT 29, 201512:10 AM

[WASHINGTON] China's economy could overshoot the International Monetary Fund's forecast and grow close to 7 percent this year although the outlook for the medium term is more uncertain, a senior IMF official said on Wednesday.

Changyong Rhee, director of the IMF's Asia and Pacific Department, said potential spillovers from China to other regional economies were larger than expected.

China's growth rate of 6.9 percent between July and September meant the country could beat the IMF's forecast of 6.8 percent expansion in 2015, he said. "Actually at this moment the ... overall 2015 growth rate may be close to 7 (percent) and above our 6.8 percent," he said at an event at the Carnegie Endowment for International Peace.

Rhee said the Fund did not see a hard landing for China and was more concerned about the potential impact of slower growth on other countries in the region, partly due to closer trade ties.

A one percent growth shock from China could take more than 0.3 percentage point from overall Asian growth, IMF staff calculations showed.

REUTERS