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Apple Laptop Maker Profit Halved after the Chinese Plant Stumbles

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Apple Laptop Maker Profit Halved after the Chinese Plant Stumbles
Apple Laptop Maker Profit Halved after the Chinese Plant Stumbles
Apple Laptop Maker Profit Halved after the Chinese Plant Stumbles
Apple Laptop Maker Profit Halved after the Chinese Plant Stumbles

Apple Inc.’s MacBook assembler Quanta Computer Inc. said its Shanghai campus recovered from Covid-related disruptions more slowly than expected, halving its profits.

Net income for the second quarter came in at NT$3.96 billion ($132 million). It has down 50% and is below the average estimate of NT$4.3 billion. Sales totaled NT$270.5 billion, compared to analysts’ average estimate of NT$258.4 billion.

Must Read: Apple plans an extreme sports watch with a larger screen and metal case

Quanta has announced in April. Shanghai site halted its operations to follow the local government’s Covid restrictions. Spokeswoman Carol Hsu said the company got approval to resume operations on a closed-loop system that same month. The restart was bumpy due to logistical disruptions and worker shortages. The Shanghai unit returned to full production only at the end of June, he said.

“The significant recovery took longer than expected,” Hsu told analysts on a call about its Shanghai operation. He called the company’s results “disappointing.”

Quanta incurred significant expenses for keeping workers on campus and training new staff, he added. Shanghai’s disruptions will continue to weigh on earnings in the third quarter. The extra incentives it is paying to keep enough workers, according to Chief Financial Officer Elton Yang.

Quanta makes some Apple laptops at its Shanghai plant. In the face of prolonged government-imposed lockdowns. The site saw violent clashes and growing infections earlier this year, Bloomberg News reported.

The extent to which that delayed Apple’s shipments remains unclear. While MacBook Pro models are immediately available in the United States. There’s still a two-week wait for the updated MacBook Air, according to Apple’s official website.

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China Provinces Promise to Meet GDP Targets Despite Falling Growth

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China Provinces Promise to Meet GDP Targets Despite Falling Growth
China Provinces Promise to Meet GDP Targets Despite Falling Growth
China Provinces Promise to Meet GDP Targets Despite Falling Growth
China Provinces Promise to Meet GDP Targets Despite Falling Growth

Several Chinese provinces pledged to meet their growth targets for the year. Top leaders downplayed the national target of “around 5.5 percent” after repeated Covid-19 outbreaks and a housing market slump.

At least 10 local governments said they will strive to reach their gross domestic product targets. At least seven others said they will keep the targets in mind and do their best. It is an analysis of official reports released by the provinces shows. Several others pledged efforts to stabilize the economy.

Economic powerhouse coastal province of Guangdong had the highest GDP of China’s 31 regions last year. Their goal is to expand their economy by “about 5.5 percent” this year. Growth reached 2 percent in the first six months of the year. Province’s economy will have to expand about 9 percent or more in the second half of the year to achieve the full-year goal. It is according to Bloomberg calculations.

Must Read: Asian Unicorns Trade 40% Cheaper on Private Markets

The province said it should “take serious political responsibility for stabilizing the macroeconomy”. It is according to a reading from a regular meeting of the provincial government in July. “It will do its best to drive good economic growth in the third quarter and strive to achieve annual economic development goals,” he said.

None of the economic growth rates of China’s provincial jurisdictions in the first half of the year exceeded their respective targets for the full year. The national economy grew 2.5 percent during the period, well below the annual target of “about 5.5 percent.”

China’s top leaders have been downplaying the importance of the GDP growth target in the face of mounting economic pressure. High-level Politburo meeting held last month. they softened the tone on the growth target. They concluded that the country should achieve “the best outcome” possible for economic growth.

In the same week as the Politburo meeting, leaders told government officials about the growth target. The growth target should serve as guidance rather than a difficult goal that must be achieved. This is according to people familiar with the discussions.

Many provinces have not given up on reaching their year-round targets. It includes some of the smaller economies such as Ningxia and Shaanxi. But they also rarely acknowledged how difficult it would be to achieve their goals. It is an exception being the northeastern province of Liaoning. It concludes at a July meeting that it “must be aware that it is very arduous to complete the annual objectives and tasks. The task which is set by the provincial people’s congress.”

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SoftBank Gives Up a Third of Alibaba Stake for a $34 Billion Profit

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SoftBank Gives Up a Third of Alibaba Stake for a $34 Billion Profit
SoftBank Gives Up a Third of Alibaba Stake for a $34 Billion Profit
SoftBank Gives Up a Third of Alibaba Stake for a $34 Billion Profit
SoftBank Gives Up a Third of Alibaba Stake for a $34 Billion Profit

SoftBank Group Corp. expects to post a profit of more than $34 billion from the sale of its stake in Alibaba Group Holding Ltd. leveraging its most historic investment to shore up finances as global markets deteriorate.

The investment giant’s board on Wednesday approved the early physical settlement. The settlement, of prepaid forward contracts for some 242 million U.S. depository receipts. After the deal, which will run from August to September, its stake in China’s e-commerce leader will fall to 14.6% from 23.7% at the end of June.

The move increases the likelihood that SoftBank will reduce its stake in Alibaba over time. Alibaba of the Japanese company falls below the 20% threshold. That’s to count the Chinese e-commerce giant as a stock subsidiary.

A series of record losses in falling technology valuations. It has raised concerns about SoftBank’s financial stability prompting founder Masayoshi Son. Financial stability speeds up asset sales and emphasizes pure return on investment over strategic synergies between his holdings.

Investors have long pressed SoftBank to cash out its shares in Alibaba. Investors monetizing one of the most lucrative bets in venture capital history. And one that made Son’s reputation as a startup investor. It may also be the opportune time to reduce exposure to regulatory uncertainties roiling the world’s No. 2 economy, and SoftBank has been trying to reduce its holdings there.

“Competition in China’s e-commerce space is heating up with many new entrants,” said Bloomberg Intelligence analyst Marvin Lo. “It may not be easy for Alibaba to stay on top forever.”

Must Read: Toyota Shares Fall After Sticking to Conservative Earnings Outlook

SoftBank has raised money by selling derivatives tied to Alibaba shares for years, SoftBank opting for such complex transactions rather than a direct sale. The complex transaction is to reduce pressure on the Chinese company’s share price. In the past four months, it raised a huge amount of capital by selling forward contracts on Alibaba. The raising is $10.5 billion during the June quarter and another $6.8 billion through such contracts starting July 1.

The physical settlement of contracts means that SoftBank will waive its right to buy back the shares in the future, as it has often done. A rare moment when SoftBank pledged to reduce its Holdings in Alibaba was in 2016 when it needed to fund its chip architect Arm Ltd.

But a prolonged global stock market slump has undermined SoftBank’s ability. The ability, to list its investment portfolio for liquidity to drive more big bets. The company has funneled billions of dollars into hundreds of startups around the world over the past five years. It is now cutting holdings and cutting costs while waiting for valuations to rise. It expects to make big profits in Arm’s eventual initial public offering.

Son said he will play defense and reduce costs across all SoftBank operations. The investment group has begun talks to sell asset manager Fortress Investment Group. They are selling some or all of its 9% stake in SoFi Technologies Inc.

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Singapore Prime Minister Warns Inflation and Interest Rates Cloud Remain High

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Singapore Prime Minister Warns Inflation and Interest Rates Cloud Remain High
Singapore Prime Minister Warns Inflation and Interest Rates Cloud Remain High
Singapore Prime Minister Warns Inflation and Interest Rates Cloud Remain High
Singapore Prime Minister Warns Inflation and Interest Rates Cloud Remain High

In Singapore, inflation and interest rates are set to remain high. Singapore prepares to ramp up support measures to help deal with the rising cost of living, Prime Minister Lee Hsien Loong said.

“The world is not likely to return anytime soon to the low levels of inflation and interest rates. As that is we have enjoyed over the past few decades,” Lee said in a televised message Monday on the eve of the country’s National Day. “I know the cost of living is on everyone’s mind.”

Rising living costs have always been a hot topic for the wealthy city-state. Lee’s political party has dominated since independence in 1965. Households are now feeling the pressure of rising costs driven by the war in Ukraine.

Must Read: India’s Currency Dove urges slow hikes as rates approach neutrality

Singapore’s consumers are spending more relative to income. The expense-to-income ratio rose to 64% in May from 59% a year earlier, according to an analysis by DBS Bank.

Lee said the government has carried out many support packages. The government helps those who need it most. More such measures will be “implemented in the coming months,” he added.

Singapore will have to make a “deeper response” by transforming industries. Increasing productivity to ensure local wages keep pace with inflation, Lee said.

The country’s key indicator of core inflation jumped in June to the highest level in 14 years. The economy stagnated in the second quarter, with rising prices weighing on activity.

Lee painted a bleak picture of U.S.-China ties in his speech. Lee said Singapore had to be “psychologically prepared”. In the coming decades, the region will not be as stable and peaceful as it has been.

His comments came just as China’s military announced a new exercise near Taiwan on Monday. The exercise is to keep up pressure on the island after the visit of U.S. House Speaker Nancy Pelosi.

“Relations between the United States and China are worsening with intractable problems, deep suspicions, and limited engagement between them,” Lee said. “This is unlikely to get any better anytime soon. Also, miscalculations or mishaps can easily make things much worse.”

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Two Islamic Savings Schemes Launched

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Two Islamic Savings Schemes Launched
Two Islamic Savings Schemes Launched

ISLAMABAD: The Central Directorate of National Savings (CDNS) will launch two Shariah-compliant schemes. Sarwa Islamic Savings Account (SISA) and the Sarwa Islamic Term Account (SITA). It is starting next month.

Two Islamic Savings Schemes Launched
Two Islamic Savings Schemes Launched

The CDNS has established an Islamic window called Rafa National Savings (RNS). Their role is to provide different Sharia-compliant investment accounts. This account will be under the Sarwa Islamic Savings Account Rules 2019. These rules have already been approved by the federal cabinet. The operation of this scheme will be allowed in all national savings centers.

To ensure Sharia compliance with schemes and operations, the CDNS has appointed a supervisory board composed of renowned academics.

Must Read: How a Strong Dollar Affects the Economy and Your Wallet

While SISA will not have a tenor, SITA will comprise four different tenors: one, three, five, and 10 years. Initially, three- and five-year SITA will be offered.

A notification issued by the Finance Ministry on Friday said the expected rate of profit payable on deposits made at SISA would be 13.50 percent. SITA deposit yields will be 12.60 percent and 13.28 percent for five- and three-year terms, respectively.

A senior CDNS official explained that the SISA will be open for an unlimited period. It will remain valid for the payment of capital and the payment of profits from it. It is linked to the SITA or the investment is collected or withdrawn by the registered holder.

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Google Sued Early Adopters for Nixing Free Workspace Software

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Google Sued Early Adopters for Nixing Free Workspace Software
Google Sued Early Adopters for Nixing Free Workspace Software
Google Sued Early Adopters for Nixing Free Workspace Software
Google Sued Early Adopters for Nixing Free Workspace Software

Alphabet Inc.’s Google has been sued by an early adopter of its Workplace cloud productivity software. This software claims that the company reneged on a promise to provide it with free access to the program for life.

Google Workplace, known as Google Apps and G Suite, offers a host of services. These services include Gmail, Calendar, Drive for storage, and Google Docs for content creation. Some programs are free for everyone, but business features, such as custom email addresses and shared Drive storage, cost more.

Stratford Company LLC sued on behalf of all early adopters who lure to use the software in its early stages. It allows Google to adjust it and then sell it for a fee. In return, Stratford Company said early adopters promises a free version of Workspace as long as Google offered it.

Must Read: Shopify unveils new tools for e-commerce

In 2012, Google began charging new customers $12 a month for using the software. Then, in 2022, Google notified legacy users that they would also be charged. Though it later excluded non-commercial users from the software.

Must Read: Apple plans an extreme sports watch with a larger screen and metal case

“Google’s abandonment of the ‘don’t be evil’ creed is well illustrated in this case.” Stratford Company said this in the lawsuit, filed Friday in San Jose federal court. “Google, as the best part of a conglomerate two trillion dollars. It breaks a promise to loyal customers who helped Google develop a profitable product, to increase its already huge profits.”

The Stratford Company is seeking class-action status for all early adopters and damages to be determined at trial, but more than $5 million.

Google did not immediately respond to an emailed request for comment, sent after regular business hours.

The case is The Stratford Company LLC v. Google LLC, 5:22-CV-4547, United States District Court, Northern District of California, San Jose.

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Crypto Has No Place in Private Banking Right Now, Pictet Says

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Crypto Has No Place in Private Banking Right Now, Pictet Says
Crypto Has No Place in Private Banking Right Now, Pictet Says
Crypto Has No Place in Private Banking Right Now, Pictet Says
Crypto Has No Place in Private Banking Right Now, Pictet Says

Pictet Group and the Swiss wealth manager is warning against cryptocurrency investments. Which amid recent industry turmoil.

“Crypto will be an asset class we can’t ignore. Today there’s a place for private bankers and private bank portfolios,” Tee Fong Seng. Tee Fong Seng chief is the executive of the Geneva-based firm’s Asia wealth management arm. He said on a panel at the Bloomberg Asia Wealth Summit in Singapore on Thursday.

The cryptocurrency industry has seen a collapse this year. Industry amid ailing valuations is the failure of hedge fund Three Arrows Capital and other companies and many hacker attacks. Between Bitcoin’s November peak and the end of June, $2 trillion erases from the combined market value of crypto assets.

Must Read: The US and South Korea to Share Data on Crypto Cases

Banking giants rejected cryptocurrencies for years: JPMorgan Chase & Co. CEO Jamie Dimon called Bitcoin a “fraud” in 2017.

But with the rise of the asset in the last three years, some began to change their stance. More recently, Julius Baer Group Ltd. said it is working on offering services in digital assets to its wealthy clients. Fidelity Investments is preparing to launch a product. The product will enable Bitcoin investments in retirement accounts in the workplace. Citigroup Inc. and Morgan Stanley have also started helping wealthy clients bet on cryptocurrencies.

Still, token trading remained a challenge for many.

“If you look at the volatility of the last two years, you can make a lot of money, you can lose a lot of money,” Tee said while adding that Pictet has a team that monitors the market. “The question is, when do we bring customers to the scene?”

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Toyota Shares Fall After Sticking to Conservative Earnings Outlook

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Toyota Shares Fall After Sticking to Conservative Earnings Outlook
Toyota Shares Fall After Sticking to Conservative Earnings Outlook
Toyota Shares Fall After Sticking to Conservative Earnings Outlook
Toyota Shares Fall After Sticking to Conservative Earnings Outlook

Toyota Motor Corp. maintained its profit outlook for the current year. Toyota Motor Corp underscores the automaker’s concerns about its ability to produce vehicles amid parts shortages. Shortage rising material costs, and pandemic disruptions in China, even as a weaker yen boosts revenue in its local currency.

Toyota shares fell as much as 3.9%. The world’s largest automaker maintained its operating profit forecast of 2.4 trillion yen ($18 billion). Analysts project, on average, that Toyota will achieve a profit of 3.3 trillion yen.

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Semiconductor shortages, higher raw material costs, and Covid-19-related restrictions in China have caused turmoil on car assembly lines around the world. Three months ago, Toyota said it would put in place an “intentional pause” in production during the April-June quarter to be more “in line with recent realities.”

Toyota sticks to its plan to assemble 9.7 million vehicles by the fiscal year. Blockades in Shanghai and water supply shortages in Aichi Prefecture also disrupted production in recent months.

Must Read: The Perfect Cheap and Cheerful Motorsport

The weaker currency helped boost reported revenue by 195 billion yen. It is rising material prices had a negative impact of 315 billion yen, according to Toyota.

Toyota updated its currency assumption to 130 yen to the dollar from 115 yen to the dollar. Previous prospects explained the gap between Toyota’s earnings opinions and analysts. The conservative earnings estimate suggests. Toyota still sees production challenges in the coming months. In total, operating profit for the fiscal year will receive a boost of 670 billion yen from the weaker currency, Toyota said.

A yen of weakness translates to about 45 billion yen in more profits, according to the company.

For the last April-June quarter, Toyota reported an operating profit of 579 billion yen on sales of 8.5 trillion yen. That compares with analysts’ average projection of a profit of 808 billion yen and revenue of 8.2 trillion yen.

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The Government Plans the Price of Oil Over the Daily Exchange Rate

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The Government Plans the Price of Oil Over the Daily Exchange Rate
The Government Plans the Price of Oil Over the Daily Exchange Rate
The Government Plans the Price of Oil Over the Daily Exchange Rate
The Government Plans the Price of Oil Over the Daily Exchange Rate

ISLAMABAD: The government has decided in principle to change the pricing mechanism. The pricing mechanism is for petroleum products. To reduce its period to cater to the exchange rate of the changing currency and cut the losses of oil trading companies (WTO) and refineries.

The government has also committed to the WTO to increase its margins. The increase is in the sale of petroleum products on par with distributors. Distributors secured a 43 percent increase in the margin in gasoline. Increase 70 percent in high-speed diesel (HSD) to Rs7 per liter each with effect from August 1.

The WTO has now increased its demand for margins to Rs9 per liter to offset the increased fiscal impact.

Senior government officials said a recent meeting, chaired by former Prime Minister Shahid Khaqan Abbasi and attended by Finance Minister Miftah Ismail, Prime Minister Ahad Cheema’s adviser, Oil and Gas Regulatory Authority (OGRA) Chairman Masroor Khan, Oil Secretary Ali Reza Bhutta,  and the managing director of Pakistan State Oil (PSO), concluded that the existing pricing mechanism established in July 2020 had become ineffective after a sharp depreciation of the rupee against the dollar in recent months.

Also on the policy agenda is the question of decreasing price adjustments weekly or daily. Rather than the existing base or letting the industry set its prices after the government’s multi-taxation at the beginning of each month. The regulator asks to oversee the pricing mechanism in the market based on established factors to avoid disorderly pricing by market players.

Only in the previous fortnight had there been “a very pronounced fall in the exchange rate”. The rate used in the previous price determination on July 14 was Rs209.725 against one dollar. The exchange rate used by OGRA for the prices of the first half of August (1-15) 2022 is Rs236.0394 per dollar.

In considering the consequences of the strong depreciation of the exchange rate, during the meeting. it was suggested that the average interbank rate of the previous pricing period should be taken. The calculation of prices, rather than the last day rate under the July 2020 pricing mechanism. Participants believed this would soften the impact of the rupee’s depreciation on oil commodity prices.

The meeting noted that the update was included in the next pricing period based on the actual rate used for the retirement of PSO letters of credit. Thus, there is no impact on WTO revenues and refineries.

The matter was discussed with representatives of OMCs and refineries. They opposed the idea of making any changes during the price review on the eve of the price adjustment with effect from August 1. They wanted some time to return with their comments to improve the price mechanism.

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Asian Unicorns Trade 40% Cheaper on Private Markets

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Asian Unicorns Trade 40% Cheaper on Private Markets
Asian Unicorns Trade 40% Cheaper on Private Markets
Asian Unicorns Trade 40% Cheaper on Private Markets
Asian Unicorns Trade 40% Cheaper on Private Markets

Asia’s best-known startups are trading 40% cheaper than six months ago in private transactions amid a defeat triggered by headwinds from Chinese regulation and a global economic slowdown. 

The multibillion-dollar companies affected range from financial technology and e-commerce to mobility and the consumer, according to AJ Patel, a senior member of the second venture capital team at Toronto-based advisory firm Setter Capital.

“For some of the unicorns, we’re seeing very limited demand,” Patel said. Additionally bid offers are 25% to 50% lower compared to the companies’ latest fundraising valuations. He declined to reveal names.

Must Read: Hong Kong stock market sees uncertain future as China grows

Asia has attracted more than $1 trillion of venture capital money since 2012, according to researcher Preqin, bolstering the valuations of companies like ByteDance Ltd. and Shein. However, both are now trading at significant discounts. Investors are looking for opportunities in North America because of concerns about China’s regulatory environment, Patel said.

Must Read: Asia’s inflation buffers weaken

The region accounted for 28% of the 1,170 private companies valued at more than $1 billion, according to CB Insights’ global list of unicorns. China is home to 174 unicorns alone, making it the largest base for such startups after the United States.

ByteDance’s valuation fell at least 25% to well below $300 billion, people familiar with the matter said last month. Shein’s buyers are evaluating deals 30% cheaper than its $100 billion valuation in April, people familiar with the matter said. The third quarter may see further declines.

“There will be downward rounds, or companies will revalue their shares lower for internal reporting,” Patel said. “Public mutual funds will re-mark their portfolio at a lower valuation” in the third quarter.

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