Business

SEOUL — Samsung Electronics' operating profits fell by more than a third in the fourth quarter, the world's biggest manufacturer of smartphones and memory chips estimated on Wednesday.

Samsung was hit by a series of difficulties in 2019, with chip stockpiles bloating and prices falling, in contrast to the booming market of previous years.

The premium smartphone market has also grown fiercely competitive with buyers waiting longer before upgrading to new models.

But the figures beat expectations, analysts said, with chip demand starting to improve and strong smartphone sales.

The forecast represented a relative improvement — in each of the first three quarters of 2019 net profits fell by more than half year-on-year.

Samsung Electronics is crucial to South Korea's economic health. It is the flagship subsidiary of the giant Samsung Group, by far the largest of the family-controlled conglomerates, known as chaebols, that dominate business in the world's 11th-largest economy.

In an earnings guidance statement, Samsung Electronics projected operating profits in the October to December period at 7.1 trillion won ($6.1 billion), down 34.2 per cent year-on-year. 

Sales were forecast to be flat at 59 trillion won, it added.

For full-year 2019, it predicted operating profits of 27.7 trillion won, down 52.9 per cent, on sales down 5.8 per cent to 229.5 trillion won.

The company has been strained by a protracted trade dispute between China and the US, and been caught up in a diplomatic row between Seoul and Tokyo over historical disputes, with Japan imposing tough restrictions on exports crucial to South Korean tech giants in July.

In another shadow hanging over the firm, its Vice Chairman and de-facto leader Lee Jae-yong is on trial for the second time over the sprawling corruption scandal that led to the impeachment of South Korea's former president Park Geun-hye.

A guilty verdict and long prison sentence would deprive the firm of its top decisionmaker.

Lee was initially jailed for five years in 2017 on multiple convictions including bribery, then released after several of his convictions were quashed, only for the supreme court in august to order a retrial.

Its board chairman Lee Sang-hoon was also jailed last month for sabotaging union activities, prompting a rare apology from the firm.

2020 recovery? 

Samsung Electronics shares reached an intraday one-year high in Seoul on Wednesday and closed up 1.8 per cent, while the KOSPI index was down 1.1 per cent following the Iranian missile attack on US forces in Iraq. 

"Sales in memory chips were strongest along with good numbers in its IT and Mobile division," said Lee Joon-min of Hana Financial Investment.

Analysts expect Samsung to perform better this year on the back of a recovery in chip demand and limited supply, along with new 5G smartphone models and other innovations.

Reduced chip production at one of Japanese rival Kioxia's plants has seen average NAND flash selling prices "start to rebound", Avril Wu, an analyst at the Taipei-based market tracker TrendForce told AFP.

"As for DRAM, we expect prices to increase each quarter in 2020," she said, adding: "The recovery of the DRAM and NAND market is mostly driven by the constriction of supply, but an increase in demand also contributes to this as well."

Samsung is also pinning its hopes on increasing availability of 5G telecom services driving sales of its handsets — it is a world leader in the technology.

It said last week it had shipped more than 6.7 million Galaxy 5G smartphone devices globally last year, claiming it had more than half the world's 5G smartphone market as of November.

It has announced a lineup of new products for 2020 including the world's first 5G tablet, and will unveil new Galaxy devices next month in San Francisco that it said — without offering details — will "shape the next decade of mobile experiences". 

"For Samsung, 2020 will be the year of Galaxy 5G," said TM Roh, head of the company's mobile communication division. 

Samsung withholds net profit and sector-by-sector business performance until it releases its final earnings report, expected later this month.

ISTANBUL — President Recep Tayyip Erdogan and Russian counterpart Vladimir Putin inaugurated a new gas pipeline linking their countries at a ceremony in Istanbul on Wednesday.

Erdogan described the Turkstream pipelines — which will deliver Russian gas to Turkey and Europe via the Black Sea — as a "project of historic importance" for relations between their countries. 

Putin arrived late on Tuesday after paying a surprise visit to Syria — his first to Damascus since the war began — at a moment of acute uncertainty in the Middle East following the assassination of top Iranian Gen. Qassem Soleimani by the United States. 

TurkStream and the Nord Stream pipelines under the Baltic allow Russia to increase gas supplies to Europe without having to rely on Ukraine.

But Moscow's increasing domination of European energy markets has worried the United States, which last month sanctioned firms working on TurkStream and the almost-completed Nord Stream 2.

The ceremony in Istanbul reflected an improvement in ties between Russia and Turkey, who appeared on the verge of war less than five years ago after Turkey shot down a Russian jet.

They have established a regular dialogue over the Syrian conflict, despite being on opposing sides, but now find their relations tested again in Libya. 

Last week, Turkey sent its first troops to help defend the UN-backed Tripoli government, which is under siege from strongman
Khalifa Haftar. 

The TurkStream project, which was temporarily halted during a frosty patch in Russia-Turkey relations, includes two parallel pipelines of more than 900 kilometres.

The pipeline links Anapa in Russia to Kiyikoy in northwestern Turkey and has already begun deliveries to Bulgaria. It is being extended towards Serbia, Hungary and Austria.

LONDON — Equities rebounded while oil and safe-haven gold retreated on Tuesday as fears of a Middle East conflict abated, but investors remained on alert for any escalation after the US assassination of a top Iranian general.

With few major developments in the crisis sparked by the killing of Qassem Soleimani last week, traders were able to turn their attention back to the global economic outlook and the US-China trade deal signing planned for January 15.

Wall Street provided a positive lead, with all three main indexes reversing early losses to end in the green on Monday as traders welcomed strong service sector data from the US, Europe and Britain that provided hope that the worldwide growth slowdown was easing.

 'Happier mood' 

In European late morning deals, London stocks rose 0.1 per cent, Paris gained 0.6 per cent and Frankfurt climbed 1 per cent.

Asian markets were broadly higher, with Tokyo ending 1.6 per cent up, Hong Kong adding 0.3 per cent and Shanghai rising 0.7 per cent.

"Markets were in a happier mood on Tuesday as it looked like investors' fears had subsided over an escalation of tensions between the US and Iran," said Russ Mould, investment director at stockbroker AJ Bell.

"Stocks in Europe and Asia rallied, with supermarkets, tobacco and airlines among the sectors in demand on the London market."

Observers said the limited impact on markets was also because the stand-off was not expected to have a massive impact on global growth.

The shift back to riskier assets saw oil prices retreat, having rallied almost 7 per cent in the previous two days. Gold slipped from six-and-a-half-year highs.

"Putting to one side the heat and noise of the events of the last few days, and in the absence of further violence and escalations, the reality is that very little has changed," said CMC Market analyst Michael Hewson.

But analysts warned that the mood could change in a split second, with Donald Trump warning of a major retaliation if Iran carries out any revenge attacks.

 'Wait-and-see mode' 

"It's wait-and-see mode here," said Steve Chiavarone, at Federated Investors. "How much, if at all, do things escalate with Iran and does it ultimately impact the global economic outlook? Right now, not so much. Could it change? Sure."

The strike on such a high-profile member of the Iranian regime has also raised the question of when and how — not if — Tehran will retaliate, which experts say will likely continue to support crude.

"The US strike in Iraq last week offers up a speculator's delight on the belief that Iran will need to muster up a sufficient response to mobilise local nationalist support," said AxiTrader's Stephen Innes.

"But it's the great unknowns around what form of retaliation will transpire and the unlikelihood of de-escalation that should continue to support the higher risk premiums over the medium term."

He pointed out, however, that there was a lot of production capacity around the world, including US shale, which could prevent prices from soaring.

LONDON — Oil prices surged, gold hit a 6.5-year high and most equities tumbled on Monday after the US assassination last week of a top Iranian general added more fuel to Middle East fires, dealers said.

The leaders of Germany, France and Britain have agreed to work towards a de-escalation of Middle East tensions following the US drone strike that killed Qasem Soleimani.

US President Donald Trump has nonetheless warned of a "major retaliation" if Tehran takes revenge for Friday's killing of the Iranian commander, which triggered a sell-off in stocks and a spike in crude.

Oil extended its gains on Monday and gold shone brightly to briefly touch $1,588.13 per ounce — a level last seen in April 2013 — as investors flocked to the safe-haven precious metal.

It then eased back to $1,574.08 in afternoon European trades.

Asian, European and US stock markets tanked meanwhile, having wobbled before the weekend as news of the assassination flashed across traders' screens. Yet, the Nasdaq posted slight gains in the late New York morning.

According to analysts, equities were hammered less severely than some had feared, mostly because the Middle Eastern stand-off is expected to have only a limited impact on global growth.

 'Middle Eastern tensions' 

"Today's... losses extend the stock market weakness that began on Friday when a US air strike killed Iran's top Military Commander Qasem Soleimani," said London Capital Group analyst Jasper Lawler.

"The prospect of Iran avenging the killing of Soleimani and then a retaliation from the US is keeping de-escalation hopes at bay.

"We would expect the impact of these Middle Eastern tensions to be more durable in commodities markets than in equities," he said.

Iran announced on Sunday a further rollback of its commitments to its nuclear accord, while Iraq's parliament demanded the departure of US troops from the country as fallout from the attack spread.

The crisis has jolted investors who were in an upbeat mood as China and the US prepare to sign their mini trade deal next week, and data indicated a slight improvement in the global economy.

Both main crude oil contracts rallied, with Brent topping $70 for the first time since September when attacks on two Saudi Arabian facilities briefly halved output by the world's top producer.

After facing criticism for the action and calls to dial down the tension, the US president was in a fighting mood, saying the White House had dozens of sites lined up for strikes in case of retaliation by Iran — adding that he did not need Congressional approval, even for a "disproportionate" hit.

"Geopolitical tensions look like remaining elevated in coming days, so lending support to oil prices and keeping risk asset markets on the defensive," said Ray Attrill at National Australia Bank.

 Energy firms boosted 

On Wall Street, falls from record highs last week were followed by more losses as trading began on Monday, after all seven bourses in the Gulf Cooperation Council (GCC) states finished sharply lower.

Energy firms rallied, meanwhile, since higher crude prices tend to lift their profits and revenues.

Inpex jumped more than 4 per cent in Tokyo while in Hong Kong, PetroChina added 4 per cent and CNOOC surged 3.6 per cent.

Back in London, BP jumped almost 2 per cent in value and Royal Dutch Shell “A” shares added 1.1 per cent.

OSLO — Sales of new electric cars in Norway hit a record high last year, sector experts said on Friday, reaching 42.4 per cent of all nearly-registered cars in 2019, mostly thanks to strong demand for Tesla's Model 3.

Norway, a major oil producer that has pioneered electric mobility, offers a very advantageous tax regime for clean vehicles, making them highly competitive in cost terms against petrol and diesel vehicles. 

New e-car models arriving on the market should help push their share higher still this year, said OFV, a body which monitors Norway's car market.

In 2019, 60,316 all-electric new cars were sold in Norway out of a total of 142,381, a rise of 30.8 per cent from the previous year when the market share of e-cars was 31.2 per cent.

The Norwegian car importer association said it expects e-cars to take a market share for new cars of 55 to 60 per cent in 2020.

New models including the Volkswagen ID.3, the Ford Mustang Mach-e, the Polestar 2 and the Peugeot e-208 are expected to boost e-car sales.

"Today, in 2020 and in the years to come, a much larger range of cars is coming, with increased autonomy, greater size and in affordable price segments," said OFV boss Oyvind Solberg Thorsen.

US firm Tesla was the biggest single seller of e-cars in Norway last year, with its latest Model 3 alone selling 15,700 units.

Norway's Electric Vehicle Association called the numbers "very positive" but told AFP it had hoped for e-cars to account for 50 per cent of new car sales last year.

The association's secretary general, Christina Bu, called on the government to maintain tax breaks for electric cars, which have become the topic of much debate in the Scandinavian country.

Norway, where electricity is almost exclusively generated by hydropower, has a 2025 target for all new cars to be zero-emission models.

Hybrid cars, which run on both thermal and electric energy, accounted for 25.9 per cent of the new car market in Norway last year, while petrol and diesel cars accounted for around 16 per cent each.

BEIRUT — Banks in a region of northern Lebanon were closed until further notice on Saturday, the National News Agency (NNA) said, after lenders balked at customer anger over a liquidity crisis.

Since September banks have arbitrarily capped the amount of dollars that can be withdrawn or transferred abroad, sparking fury among customers who accuse lenders of holding their money hostage.

There is also a limit on Lebanese pound withdrawals.

Clients wanting dollars often have to stand in queues for hours to make withdrawals, only to be told bills have run out once they reach the counter.

On Saturday all banks in the northern region of Akkar were closed, the NNA said, following a call from the Association of Banks for them to shut their doors "until further notice".

On Friday, citizens entered a bank branch in the town of Halba to protest about customers being unable to withdraw enough dollars or their salaries in Lebanese pounds in full, NNA reported.

They said they would not leave until a customer — who suffered an unspecified health complaint while waiting — was given a guarantee that he would be paid in full.

The 10-hour stand-off — which included security forces firing teargas inside the building — ended with the man being taken to hospital and management promising to pay him in full.

The Association of Banks the same day called for lenders in the area to close over the incident, which it described as an "attack" and "a threat to the lives and safety of employees".

Unprecedented anti-government protests have gripped Lebanon since October 17, in part to decry a lack of action over the deepening economic crisis.

The Lebanese pound has been pegged to the dollar for more than two decades at 1,507 to the greenback, and both currencies are used in everyday interactions.

But with banks limiting dollar withdrawals, the rate on the unofficial market has topped 2,000 Lebanese pounds to the dollar and the cost of living has increased.

In the southern city of Saida on Saturday, protesters moved trucks and a crane in front of a bank to force management to hand a man his dues in Lebanese pounds after he left his job, NNA said.

They removed the vehicles after the man was paid in full.

In the area of Bikfaya outside Beirut, people threw eggs at a bank building overnight and scrawled "revolution" on it, the same news agency said.

Tears and screaming have become common in banks in recent weeks as citizens accuse lenders of stealing their money. 

Some have filed law suits against banks.

The head of the Bar Association Melhem Khalaf on Friday called on banks to lift restrictions on transfers and withdrawals, calling the measures "unconstitutional". 

LONDON — Global stock markets powered ahead on Thursday as investors welcomed 2020 with a raft of gains after China's central bank announced fresh stimulus, dealers said.

Asia kicked off the New Year on the front foot, with most rallying out of the blocks on Thursday on lingering trade optimism and the stimulus news.

Europe also shone as investors remain upbeat about the global outlook after Washington and Beijing eventually reached a trade agreement to ease tensions between the two.

Wall Street joined the global trend, with all three major US indices solidly higher in the late New York morning.

Some Brexit uncertainty has meanwhile been removed with Britain set to leave the European Union on January 31, but the pound still slipped after news that Britain's manufacturing activity slumped in December for the eighth month in a row.

 'Wasting little time' 

"2019 was a good year on the whole for stock markets and they seem to be wasting little time in attempting to push higher again with the bourses following the lead of their Asian peers," said XTB analyst David Cheetham.

"Expectations that a 'Phase One' trade deal between the US and China will be signed in less than two weeks have boosted sentiment but the main driving force appears to be the announcement of a further easing of monetary policy from China's central bank."

However, geopolitical worries resurfaced following a warning from North Korean leader Kim Jong-un that moratoriums on nuclear and intercontinental ballistic missile tests had ended, with talks with the US going nowhere.

Shanghai and Hong Kong led gains after the People's Bank of China said it would lower the amount of cash lenders must keep in reserve, freeing up more than $100 billion for loans to small businesses.

The move comes as leaders try to kickstart growth in the world's number two economy, which is running at its weakest for almost three decades.

 'Not suddenly ok' 

Prices also won support after Donald Trump said the mini China-US trade deal will be signed off in Washington on January 15, and he will later travel to Beijing for the next phase of talks.

The signing will smooth concerns that the pact could suffer a last-minute collapse, which has niggled some traders.

But some analysts warned that investors shouldn't expect the stock market party to go on forever.

"There's plenty of reason to be more optimistic heading into 2020 but then, there's also plenty of reason for caution too," said Craig Erlam, senior market analyst at Oanda.

"Everything is not suddenly okay because the US and China are about to sign a phase one trade deal, or because the UK and EU are preparing to discuss the future relationship rather than the divorce. It could be another turbulent year with many surprises along the way," he said.

LONDON — Stock markets mostly retreated on Tuesday in shortened end-of-year sessions, but rose sharply overall in 2019, thanks to late surges on receding recession fears and easing China-US trade war tensions.

London's benchmark FTSE 100 index closed down 0.6 per cent from the previous session — but jumped 12.1 per cent in 2019 as it bounced back from a 12.5 per cent slump a year earlier.

In the eurozone, the Paris CAC 40 index ended 0.1 per cent lower, yet soared by more than a quarter over the year. 

Frankfurt's DAX 30 finished its year on Monday with an annual gain of 25.5 per cent, also following a sharp loss in 2018. 

The pound finished a volatile year with gains on Tuesday against the dollar and euro.

"It has been a year for rallies in equities," said Chris Beauchamp, chief market analyst at IG trading group.

"We endured plenty of Brexit and trade war headlines in 2019, but these will go with us into next year, ensuring more volatility for traders and investors."

Asian stock markets also closed mainly lower on Tuesday, following a subdued lead overnight from the US where investors took profits after Wall Street's recent record highs. 

Hong Kong ended a half-day of trading almost 0.5 per cent down, although the bourse rallied more than 7 per cent in December. Tokyo was shut for a public holiday. South Korean stocks closed at 2,197.67 in the final trading session of 2019, on Monday.

"While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020's uncertainty," Stephen Innes, chief Asia market strategist at AxiTrader, said in a client note.

Asian investors were also watching for key policy announcements early in the New Year. 

North Korean leader Kim Jong-un was due to give his New Year's speech on Wednesday, with all eyes on nuclear-armed Pyongyang's threat of a "new way" after its end-of-year deadline for sanctions relief from the US, analysts said.

An address by China's Xi Jinping would be followed closely by the markets as well.

On Monday, media reports said the US and China would shortly sign a partial trade deal, with White House economic aide Peter Navarro telling Fox News the signing could occur "within a week or two".

"The P1 [phase one] deal is still 'skinny' relative to a full trade de-escalation scenario," cautioned AxiTrader's Innes.

"Investors will then press to consider the P2 risks, after all — how much more progress can be realistically expected ahead of the US elections next year?"

Elsewhere on Tuesday, oil prices slid despite reports Iran had seized a vessel suspected of smuggling fuel near the Strait of Hormuz — a chokepoint for a third of the world's seaborne oil.

Traders were also waiting for the release of US crude production data on Tuesday. 

Over the year, the price of Brent North Sea crude jumped by almost one quarter and New York benchmark contract WTI soared more than one third in value, helped by a tighter supply situation.

PARIS — French union leaders upped their calls on Monday for President Emmanuel Macron to give ground on a planned pension overhaul, amid signs that support is flagging for a gruelling transport strike now in its 26th day.

Macron was due to address the country on Tuesday in his annual New Year's Eve speech, having largely left it to his government to defend one of the most contested reforms of his term.

The president would reaffirm his "determined ambition [for] a project of social progress that corrects a number of inequalities", an official at the Elysee Palace told AFP on condition of anonymity.

"At this stage he is not expected to go into the details of the reform," which would scrap 42 separate pension schemes for a single, points-based system, the official said.

It would also set a "pivot age" of 64 at which retirees would benefit from a full pension, though they can legally leave at 62, a change the unions fiercely oppose.

Macron's speech "is a non-event for us", Fabien Dumas of the SUD-Rail union told AFP.

"I'm not expecting any announcements," he said, ahead of new talks between unions and the government starting January 7.

 'Coming apart' 

After three weeks of strikes — the longest since the mid-1980s — the government has conceded that some workers, like police and firefighters, would still be able to have early retirements.

Paris Opera dancers were told over the weekend that the reform would apply only to new recruits from January 2022.

"It's obvious that his plan is coming apart," Yves Veyrier of the Force Ouvriere union told France Info radio on Monday.

"You can see that it doesn't work for different sectors, whether it's pilots, firefighters, Opera dancers," he said, reiterating his demand that Macron drop the plan outright.

The transport strike has cast a pall over the holidays, snarling daily commutes in big cities like Paris and spelling travel misery for thousands over Christmas.

Half of the country's high-speed TGV trains were cancelled on Monday, with more severe disruptions for regional trains, and similar disruptions are expected through the week.

But rail operator SNCF said just 7.1 per cent of employees were on strike, including a third of train drivers, the lowest rate since the protest was launched on December 5.

In Paris, only two of the 16 metro lines were shut down completely — though most others were offering only minimal service, and only during morning or evening rush hours.

"It's starting to get tiring, we're tired," said real estate employee Julie at Saint-Lazare station in Paris.

"At the same time we support the movement," she acknowledged. "But it's tiring."

 New Year's doubts 

The strike is also likely to crimp New Year's festivities.

Interior Minister Christophe Castaner said nearly 100,000 police would be on duty nationwide on New Year's Eve to prevent drink driving as more revellers opt to get around by car.

In Paris, 250,000 to 300,000 people usually gather on the Champs-Elysees to ring in the new year, with the city's 16 metro lines open — and free — all night.

But this year just two metro lines will run, and only until 2:15am, though transit operator RATP vowed to step up night bus services.

On Monday, CGT union members blocked ports in Lorient, Le Havre and other cities to protest the reform, and lawyers have called for a "hard strike" from January 6.

Paris Opera dancers have also maintained a strike that has led to cancellations of some 50 performances so far, promising an outdoor concert at the Bastille on Tuesday after one at the ornate Garnier palace on Christmas Eve that went viral.

Labour leaders have already called a fresh day of mass demonstrations for January 9.