Samsung considers splitting firm into 2
Samsung Electronics Co yesterday said it was considering splitting the company into two, a move seen as necessary for heir-apparent Lee Jae-Yong to take over the firm from his father. Samsung has also come under pressure from foreign investors, including US hedgefund Elliott Management, to improve its corporate governance through the establishment of a holding company and to increase dividends for shareholders. The move comes as the tech giant struggles to contain the fallout from a global recall of its Galaxy Note 7 smartphone prompted by exploding batteries. Samsung said in a statement it would consider breaking the company into a holding firm and a producing and operating unit and would take at least six months to study the option. Analysts said a split would give Samsung Electronics’ Vice Chairman Lee Jae-Yong a tighter grip on the company through a holding firm. Elliott and other investors have urged Samsung to set up a holding company as a way to address its complicated layers of cross shareholdings with sister companies.
Qatar bank launches plan to stem losses
Commercial Bank of Qatar will cut its exposure to the property market and lend more to the public sector as it set out a turnaround plan under its new chief executive aimed at stemming a dismal earnings run as more loans soured. The Gulf Arab state’s thirdlargest lender by assets, like other banks in the region, has seen bad loans rise steeply due to the fallout of lower oil and gas prices on the wider economy, which has forced cutbacks in state and consumer spending, as well as layoffs in a number of industries. The fiveyear plan follows a review by its new chief executive Joseph Abraham, a former Australia and New Zealand Banking Group banker, aimed at halting five consecutive quarters of falling profit. The lender reported a near-tripling of net impairment charges against bad loans to 504.9 million riyals ($134.62 million) in the third quarter. The bank said it aimed to cut its non-performing loan ratio to the market average of 2 percent from 5.3 percent currently.
Maersk Line targets German acquisition
The container shipping unit of Danish conglomerate AP Moller-Maersk yesterday refused to comment on a report that it was mulling an acquisition of German peer Hamburg Sud. The company was interested in buying the entire business, which had $6.7 billion (6.3 billion euros) in revenue last year, and “not just... a few vessels”, The Wall Street Journal reported on Monday, citing a person familiar with the matter. “Out of principle we do not comment on rumours,” Maersk said in an email to AFP yesterday. Hamburg Sud’s owner, the family-owned Oetker Group, was discussing a sale of its shipping business, the same newspaper reported last week. “Hamburg Sud is one of the players in the industry that is probably too small to survive in the long run. It only has three percent of the market,” Sydbank analyst Morten Imsgard told Danish news agency Ritzau. The shipping industry is undergoing a wave of consolidation after suffering its worst downturn in six decades amid overcapacity and slumping global trade.
Turkey tourism down 25 percent in October
The number of foreign visitors to Turkey fell by a quarter in October, official data showed yesterday, the smallest contraction in seven months as arrivals from Russia showed a marked recovery after Ankara restored ties with Moscow. Tourism, which adds about $30 billion to gross domestic product each year, has been hammered after a spate of bombings this year, including an attack on Istanbul’s main airport, and a failed coup in July, scared away Western European tourists. But the drop-off in Russian tourists, who traditionally flock to Turkey’s Mediterranean beaches and make pilgrimages to its Byzantium-era Orthodox churches, had been particularly painful. Relations soured after Turkey shot down a Russian warplane over Syria last year. Ties were formally restored in August, sparking hopes for an improvement in tourism. “With the lifting of Russian sanctions it appears that side has to a large extent returned to normal,” said Deniz Cicek, an economist at QNB Finansbank.
Japanese household spending falls again
Spending among Japanese households fell for an eighth successive month in October despite the unemployment rate sitting at a 21-year low, government data showed yesterday. Japan needs stronger consumer spending if Prime Minister Shinzo Abe’s plans to revitalize the world’s third-largest economy-now nearly four years old-are to succeed. Last week, the internal affairs ministry core consumer prices, which exclude volatile fresh food costs, fell again in October to extend the longest run of declines for five years. The ministry said yesterday that household spending last month dropped 0.4 percent from a year earlier. It was, however, a smaller decline than the 2.1 percent drop in September, partly because of higher vegetable prices.