May 24, 2017

Recovering UK Economy Shows Broader, Faster Growth

Gross domestic product expanded 0.7 percent from the previous quarter, data from the Office for National Statistics showed on Friday, beating its initial estimate and economists’ forecasts and putting Britain’s growth rate on a par with European powerhouse Germany.

“It does look like the recovery is becoming more self-sustaining,” said Philip Shaw, economist at Investec.

Stocks gained after the data, which also showed output rose by a surprisingly strong 1.5 percent from a year ago.

The pound and government bond yields rose, highlighting expectations that the revival could force Britain’s central bank to raise interest rates earlier than it has indicated.

British exports rose at the fastest pace since late 2011 and business investment grew faster than household spending, suggesting a shift towards more balanced growth in an economy that has been driven mainly by domestic consumption and imports.

RATES CONUNDRUM

In an effort to encourage spending and investment, the Bank of England said earlier this month it would not raise borrowing costs while unemployment remained above 7 percent, a level it did not expect to be breached for at least three years.

But the threshold may be crossed sooner if Britain’s recovery maintains momentum, and since the bank gave its forward guidance, the news on the economy has been predominantly upbeat.

Factories’ order books looked in their best shape for two years in August, consumer confidence and retail sales soared in July, and surveys found robust growth across manufacturing, construction and services at the start of the third quarter.

“The Bank of England is therefore facing a growing challenge of how to convince the markets and households that interest rates will not need to rise over the next three years,” said Chris Williamson, economist at financial data company Markit.

In a speech next week, BoE governor Mark Carney is tipped to try to talk down expectations of an earlier rise in the base rate, which have caused conditions to tighten on money markets.

Friday’s data showed that most key output components of GDP expanded more than originally thought.

Britain’s service sector – which makes up more than three quarters of GDP – grew 0.6 percent compared with the first quarter, as estimated earlier.

But manufacturing output growth was heavily revised up to 0.7 percent and the volatile construction sector posted a 1.4 percent rise, also much better than found a month ago.

The increase in building activity is running in parallel with an upturn in the property market, fuelled in part by a state-backed mortgage scheme that critics fear could lead to a new price bubble.

Britain’s economy is still 3.2 percent smaller than at its peak in the first quarter of 2008.

(Editing by John Stonestreet)

Article source: http://www.nytimes.com/reuters/2013/08/23/business/23reuters-britain-gdp.html?partner=rss&emc=rss

Muted Fears of Contagion as Asian Currencies Fall

The most affected large economies have been those of India and Indonesia, two countries where many domestic and foreign investors are now rushing for the exits, exchanging local currencies for dollars. After months of decline, both countries’ currencies dropped further on Thursday, with the Indonesian rupiah and the Indian rupee falling about 2 percent before recovering some of their losses.

Some Asian business leaders say they still hope the region can escape largely unscathed from the broader troubles afflicting emerging markets this summer. Sofjan Wanandi, the tycoon who is the longtime chairman of the Indonesian Employers’ Association, said in a telephone interview on Thursday that he believed Indonesia’s currency troubles were a result of a temporary failure by the government to formulate a response and communicate it clearly.

“We know the economy is O.K., but the government is not taking quick action,” he said, adding that he and other business leaders were working with the government on a policy statement to be issued on Friday. “After that, we hope this will all be calmed down,” he said.

The currencies of Malaysia, the Philippines and Thailand also declined, although by less than 1 percent. Stock markets across most of the region fell on Thursday, but share prices rebounded slightly in India after days of decline there.

At this point, fears of a continent-wide crisis, like in 1997, have been minimized. But economists are still cautious. “Between the two countries, Indonesia has a far better balance of economic growth and a greater chance of revival,” HSBC, referring to India and Indonesia, said on Wednesday in a research report that cautioned investors against buying Indian government bonds.

Largely unaffected on Thursday and in recent weeks have been the currencies of Asia’s two largest economies, China and Japan. The Japanese yen has been little changed over the last month, despite weakening marginally this week, and the value of the Chinese renminbi, heavily managed by China’s central bank, has stayed flat as well. Both countries have begun economic stimulus programs in recent months, although they have done so with very different styles.

China’s stock market has even posted a small rally this month on signs that an economic slowdown may be less severe than expected this autumn, although worries persist about next year.

The preliminary purchasing managers’ index in China, compiled by the research firm Markit and released by the British bank HSBC on Thursday, showed a swing to expansion from contraction in August. The increase, to a four-month high, easily beat analysts’ expectations.

HSBC’s preliminary survey offers one of the earliest indications each month of how the Chinese economy is doing, and Thursday’s reading is likely to solidify expectations that a stabilization that began to show in July has continued into August.

The reading “adds to the number of green shoots indicating a stabilizing economy since July,” Li Wei and Stephen Green, economists at Standard Chartered, wrote in a note, adding that government-led measures aimed at shoring up economic growth, like tax breaks for small businesses and efforts to speed up railway construction, appeared to have begun to take effect.

After years of double-digit expansion rates, the economy has now settled into a slower pace of growth of around 7.5 percent this year. And despite Thursday’s unexpectedly strong survey results, some analysts said the picture could well cloud again next year.

Indonesia and other countries in Southeast Asia have been hurt by their dependence on slower-growing China. They have also been hit by China’s gradual shift away from industries dependent on commodity imports from Asian neighbors, like steel production, and toward service industries.

With chronic trade deficits and a dependence on foreign investment, Indonesia and particularly India have faced the biggest problems in the region. The government of India has resorted to increasingly desperate measures in the last two weeks, like steeply raising taxes on imports of silver and gold, but it has been unable to halt the decline of the rupee, which is down more than 7 percent in August and more than 20 percent since the start of May.

Daily steep declines in the rupee are making it much harder for Indian companies to repay their foreign loans, many of them denominated in dollars. The rupee’s decline has also made real estate and other projects in India less attractive for foreign investors who count their profits and losses in dollars, prompting many of them to pull out as well.

As the Federal Reserve mulls tightening monetary policy in the United States in response to early signs of economic recovery there, rising interest rates on Treasury securities and other American financial instruments are drawing money away from emerging markets around the world.

Indonesia has tried to undertake some difficult overhauls this summer, most notably raising retail gasoline prices in June to limit government subsidies for the country’s millions of drivers. Economists say they expect Indonesia’s trade deficit to start shrinking in the coming months and its government finances to improve as families avoid unnecessary trips and buy less fuel as a result.

Bettina Wassener contributed reporting.

Article source: http://www.nytimes.com/2013/08/23/business/global/currencies-drop-as-dollars-flee-asia.html?partner=rss&emc=rss

OWN to Show ‘All My Children’ and ‘One Life to Live’

“All My Children” and “One Life to Live,” the two soap operas that were canceled by ABC and then resurrected on the Internet, are returning to television, at least temporarily, through a deal with Oprah Winfrey’s cable channel OWN.

Episodes of the soaps will continue to be available on Hulu and iTunes, but starting next month they will also be shown on OWN, potentially exposing the shows to a new audience. OWN, a joint venture between Ms. Winfrey and Discovery Communications, described it as a 10-week “limited engagement” for the soaps, but if the episodes perk up the channel’s daytime ratings, they will most likely become a permanent addition to the schedule.

“All My Children” and “One Life to Live” will be shown back-to-back starting at noon Mondays through Thursdays. The test run will start on July 15.

“For two years you posted, tweeted, Facebooked me. … I heard you,” Ms. Winfrey wrote on Twitter in announcing the addition of the soaps to OWN’s schedule.

Some soap fans had pleaded with Ms. Winfrey to help keep the two shows alive after ABC announced that it was canceling them in early 2011. At that time OWN was just a few months old, and some people wondered if the channel could invest in the shows.

In a Web video response to those fans, Ms. Winfrey pronounced herself a soap opera fan but said the declining ratings for “All My Children” and “One Life to Live” made a revival effort on TV untenable. “There just are not enough people who are at home in the daytime to watch them,” she said.

Much has changed since then. Most important, the company that licensed the soaps from ABC, Prospect Park, came up with a much cheaper production model. For the new version of the soaps, the actors are paid under a different structure, the episodes are shorter (a half-hour each, rather than an hour) and they are filmed in a state, Connecticut, which provides a 30 percent tax incentive.

The soaps came online in April on the streaming Web site Hulu and on iTunes, the online store operated by Apple. Almost immediately Prospect Park realized that the TV-like release schedule — one new episode of each show each weekday — wasn’t working on the Web.

The company needed hundreds of thousands of viewers to watch every episode in order to break even, but the executives there studied Web traffic and concluded that they were “posting too many episodes and making it far too challenging for viewers to keep up,” as they put it in a letter to viewers in mid-May. At that time the release schedule was cut in half.

This week they adjusted the schedule again. “Mondays are now soap days,” Prospect Park said in a statement, explaining a new weekly format. “Now viewers will be able to choose to watch one episode each day or binge view some or all of that week’s shows at once starting each Monday,” the company said.

In essence, Prospect Park is giving soap fans maximum flexibility on the Internet while getting back into a television rhythm with OWN. The terms of the 10-week deal with OWN were not disclosed, but it will almost certainly help Prospect Park recoup some of its production costs.

For OWN, which struggled out of the gate but has been slowly building a loyal audience, the deal provides some fresh daytime programming.

“These shows have proven to be very popular with a significant, loyal fan base, not to mention Oprah herself is a big fan,” Erik Logan, the president of OWN, said in a statement. “Many of our viewers across numerous platforms have expressed their passion for the soaps, so we are especially excited to air this limited engagement on OWN.”

Article source: http://www.nytimes.com/2013/06/27/business/media/own-to-show-all-my-children-and-one-life-to-live.html?partner=rss&emc=rss

DealBook: Loeb’s Third Point Raises Stake in Sony and Presses Split-Off Plan

The activist hedge fund manager Daniel S. Loeb has raised his bet on Sony as he continues his campaign to persuade the embattled Japanese giant into spinning off part of its entertainment arm.

In a letter to Sony’s board sent on Tuesday morning Tokyo time, Mr. Loeb disclosed that his firm, Third Point, had raised its stake to about 7 percent, or about 70 million shares. That is up from 6.5 percent last month.

The letter is a sign that Mr. Loeb, who is embarking on a rare effort by an outsider to shake up one of Japan’s most respected companies, isn’t going away anytime soon.

Mr. Loeb praised Sony’s responses to his calls for change, noting the company’s hiring of banks to weigh the partial spinoff of the entertainment business, and he suggested that Kazuo Hirai, Sony’s chief executive, should serve as the chairman of both companies.

But giving the entertainment business its own board would, in Mr. Loeb’s estimation, provide better oversight over revival efforts and spending plans.

Since going public with his calls for change at Sony, Mr. Loeb has kept a polite, even deferential tone. But his latest letter is slightly more urgent.

“Shareholders should not have to wait any longer,” Mr. Loeb wrote. “We support efforts to create an integrated Sony ecosystem but must not forget that today the company’s most valuable untapped synergies lie within entertainment itself.”

A representative for Sony was not immediately available for comment.

Third Point’s Second Letter to Sony

A version of this article appeared in print on 06/18/2013, on page B5 of the NewYork edition with the headline: Call for a Split.

Article source: http://dealbook.nytimes.com/2013/06/17/loebs-third-point-raises-stake-in-sony-and-presses-split-off-plan/?partner=rss&emc=rss

RIM’s Balsillie and Lazaridis Step Aside

The two men, in developing the innovative device that was the first to reliably deliver e-mail over airwaves, turned a tiny Canadian company into a global electronics giant. But they are stepping aside after disappointing investors and leaving customers wondering whether RIM still has the ability to compete, and perhaps even survive, in the rapidly changing markets for smartphones and tablet computers.

Stiff competition from the Apple iPhone and phones using Google’s Android software drastically eroded RIM’s share of the American smartphone market to about 9 percent in the third quarter of 2011 from nearly half the market two years earlier, according to Canalys, a market research firm based near London. The company’s stock price reflected that by dropping about 75 percent in the last year.

But while Mr. Balsillie and Mr. Lazaridis, who have become the targets of some disgruntled shareholders, are stepping aside, investors and others looking for changes in the company’s strategy may be disappointed.

The company named Thorsten Heins, currently one of RIM’s two chief operating officers, as chief executive. He pledged during an interview on Sunday to follow the strategy Mr. Balsillie and Mr. Lazaridis set in place.

Mr. Heins said he was staking the company’s revival on a new line of phones and a new operating system known as BlackBerry 10. Over the last year, that project has run into a series of delays. The new phones are not expected until the end of 2012, almost five years after the appearance of the first iPhone.

RIM has many other problems, including its PlayBook tablet computer, which lacked crucial features like e-mail when it was introduced; it is now being sold at prices below RIM’s manufacturing cost. But Mr. Heins echoed his predecessors when he said that RIM was, in fact, still a success story.

“We are still very, very convinced that this was the right path to go,” Mr. Heins said. “Now, were there bumps in the road? Sure, but with the kind of growth we had it is not uncommon to hit bumps in the road.”

Barbara Stymiest, a former chief operating officer of the Royal Bank of Canada, will become chairwoman of the company. RIM’s share price rose this month after a report that Ms. Stymiest, who has no background in electronics or consumer products, would become chairwoman.

Mr. Lazaridis, who co-founded RIM with a childhood friend in 1985, will become vice chairman and head a new “innovation committee” of the board. He said in an interview on Sunday that despite his changed status, he intended to remain active in company affairs.

Mr. Balsillie will remain a director. He joined RIM in 1992 and invested $250,000 in the then-struggling company, which was producing a variety of electronic devices including a machine for reading bar codes on motion picture film. While his future role will be more limited, he said on Sunday that he would maintain his stake in the company.

Mr. Heins, who joined RIM about four years ago from Siemens of Germany, needs to prevent additional development missteps in the BlackBerry 10 software project. He will also need to convince investors that the new smartphones will find a receptive audience among buyers in a world increasingly dominated by iPhones and Android-based handsets.

The decision by Mr. Balsillie and Mr. Lazaridis to step aside comes after an agreement RIM reached last year with Northwest and Ethical Investments, a mutual fund company controlled by several Canadian credit unions, to study the relationship between RIM’s directors and its two senior managers.

While a report and recommendations about the company’s governance from a committee of directors, including Ms. Stymiest, was expected to be released shortly, both she and the two former chief executives said the management changes were unrelated.

Mr. Balsillie and Mr. Lazaridis, whose combined holdings rank them among RIM’s largest shareholders, said the pending release of the BlackBerry 10 smartphones, as well as the introduction of an updated version of the company’s aging operating system, made it an ideal time for them to step aside.

Andrew Ross Sorkin and Michael J. de la Merced contributed reporting from New York.

Article source: http://feeds.nytimes.com/click.phdo?i=09c438a19a0307c791548fe327061a7c

Off the Charts: Strong Manufacturing Revival Seems to Be Fading

Surveys of manufacturing companies around the world indicate that business is still improving for many of them, but that the pace of growth has slowed.

In the United States, the Institute for Supply Management reported that the overall reading for its survey in May fell to 53.5 from 60.4. Figures above 50 indicate that more companies say business is improving than say it is getting worse, so that is hardly a sign of a new recession.

Still, it played into a rising fear that the recovery is slowing again at a time when unemployment remains high.On Friday, the Bureau of Labor Statistics reported that the rate rose to 9.1 percent in May, up a tenth of a percentage point.

The drop of 6.9 points was the largest one-month decline since January 1984, a fact that received considerable attention. Less noted was the fact that the earlier decline came off even higher figures and did not presage a return to the recession that ended in late 1982.

The figures show the direction of change, not the magnitude or the existing level. Extremely strong numbers can persist for long periods only if conditions are continually improving.

The accompanying charts show three components of the survey, which is conducted in many countries around the world, and indicate that the slowing of growth is a more general phenomenon. For ease of understanding, the figures are converted to place a 50 reading — one that indicates an equal number of positive and negative responses — at zero.

The slide appears to be worse in Britain, where a strong revival late last year and early this year seems to have vanished. There, readings came in at negative levels for both output and new orders, the first time that had happened since May 2009, when the credit crisis was only beginning to ease. But more companies there continue to say they are hiring rather than reducing payrolls.

In the United States, the figure for new orders remains barely positive, and the output figure also declined, although it remains positive. The figure for employment also fell, but it remained at a level that historically has accompanied good jobs figures. The employment index has been over 55, or 5 in the chart, for 16 consecutive months, the longest such stretch since 1965.

Labor Department figures indicate that the number of manufacturing jobs hit bottom in December 2009 and that employment has been rising more rapidly in that sector than in the economy as a whole, although it fell by 5,000 jobs in May.

On average, the euro zone appears to be stronger than any of the other countries shown, but this is a case where averages can be misleading. The German boom cooled only a little, and France remains strong. But already weak figures in Greece are getting worse, and Spanish manufacturers see some deterioration.

In Japan, the figures show some revival from the blow caused by the earthquake and tsunami in March. The output index went above break-even levels after falling sharply, but as a group, Japanese manufacturers still say they are reducing employment.

Article source: http://feeds.nytimes.com/click.phdo?i=d732a3b4220ed57f90b4dd5ecf4af24b