Monday, October 28, 2013

Summary - U.S. Impasse Finally Gives Turkey Benefit the Doubt

Summary - U.S. Impasse Finally Gives Turkey Benefit the Doubt
It is Eid in Istanbul, everyone is taking a week off in Turkey. Most importantly, the Turkish government should be thankful for the shutdown of the U.S. government. Due to the shutdown, bond buying plan would continue as it was originally planned. Turkish government has put a huge emphasis on reducing its current-account deficit, which has account for 7% of GDP as of August. However, due to the unsustainability of the deficit, the government moderated GDP growth forecasts and bumped inflation expectations. In light of the optimism, one economist at Bank of America Merrill Lynch quoted that the Turkish government is making progress ahead of others in significant measures, particularly for its efforts of narrowing the current-account deficit and macro-prudential measures. With global backdrop provides more room for emerging markets recently, more time are granted to make necessary periodic economic adjustments, which will assist Turkey obtain the markets benefit of the doubt. Turkish government has demonstrated its willingness and capability to adjust accordingly during the financial crisis and the euro-zone debt crisis with its effective medium-term economic program. However, to a certain extent, Turkey remained vulnerable to the external financing risks potentially, because of its high short-term debt and weak liquidity. Nonetheless, the upcoming forecasts on the current-account deficit and inflation are promising. The fact that the Turkish government intended to keep interest rates near record low would largely restraint itself with a slower pace of economic growth.

Sunday, October 27, 2013

Malaysia to Impose Tax on Goods, Service

Malaysia to Impose Tax on Goods, Service
            Unveiled during a presentation of Malaysia's budget, a prime minister of Malaysia, Mr.Najib Razak, would introduce a long-delayed tax on goods and services in 2015 and gradually cut costly fuel subsidies to fix Malaysia's finances after a large budget deficit.
          Mr. Najib used the 2014 budget to push through some reforms to avoid a potential credit-rating downgrade and to try to balance the budget by 2020. Malaysia benefited from cheap global credit following the global recession, growing more than 5% annually between 2010 and 2012. Much of its growth was fueled by credit, including large government borrowing to fund ambitious infrastructure projects, such as an urban railway system. The government ran up a large budget deficit, now 4% of gross domestic product, which it funded largely through local currency bonds.
            With expectations that the U.S. Federal Reserve will soon pull back on its easy-money policies, this model is looking unstable. Foreign investors this summer pulled out of emerging markets, including Malaysia, on expectations global rates will soon rise. That leaves Malaysia, which relies on foreigners to fund almost half of its local government bond market, under pressure to show it is reining in its budget deficit and curbing government debt.
            Malaysia's inflation rate in September rose 2.6% from a year earlier, staying within the central bank's comfort range of 2% and 3% despite a fuel-price increase during the month. So now it is the best time to introduce a goods-and-services tax as inflation is low. the proposed 6% goods-and-services tax, which would be effective April 1, 2015, would replace the current sales tax and services tax. It won't be imposed on basic food items, nor on transport systems. Moreover, the government also announced reductions in personal- and corporate-tax rates.
            Furthermore, the government needs to channel subsidies only to the low-income population while charging higher fees for food, fuel and cooking oil to those who can afford it. The goods-and-services tax as a way to boost government revenue and reduce its reliance on dividend payouts from the state-run oil-and-gas company.


            The government expects revenue to edge up to MYR224.1 billion next year from this year's MYR220.4 billion, helped by expected economic growth of 5.0%-to-5.5%. That in turn should help reduce the deficit. Malaysia's economy grew 4.1% in the first six months of this year.

Source :

It’s not your imagination: smaller seats inside airplanes

Taking a plane today is really frequent. Maybe some travelers will find their trip no comfortable, because airplane seats are a little smaller than in the past. The standard seat measures is 17.2 to 18 inches, which means that a person with more than a 36 inch hip measurement will probably feel compressed in his seat.

Some airlines use their bigger seats as a promotion point. First class and business or executive class flights also offer wider spacesAnother essential difference in plane seats is the measurement between seats aligned vertically. This measurement, the pitch, has changed, significantly. In long trip, there is the incapability to move legs properly because of small pitches.

In the past, some groups tried to increase pitch, but as result the ticket prices rose since for the equivalent amount of fuel the airplane carried less people.

Additional chairs raise the capacity to generate more profit at a low marginal cost. However, a plane’s best seat depends on the operator’s marketing strategy. If an airline company is targeting price-sensitive consumers, for example leisure travelers, an airline will try to take full advantage of the number of seats in order to keep prices low. The solution should be to find the equilibrium between business and customers.

Today, the most important airlines companies are installing the “slim line” seats: removing old seats in favor of smaller seats, chair width to about 17”, adding five or six more seats on each aircraft.

The change will involve the most common planes on domestic and international itineraries, as results the airplane company will have more passengers and a decreased fuel bill because the seats are lighter.

Even though the new seats will be closer, Airlines companies declared that travelers will not notice it. For example customers on Alaska Airlines will have a little smaller tray tables, and Southwest’s 737s will have thinner seatback magazine pockets.

New seats on United Airlines’ Airbus A320 will be closer together from front to back. The airlines will be able to insert an additional row of six seats to each plane. For instance, Southwest will have from 137 seats from 143.

United declared that the new seats made A320 544 kilograms lighter. Southwest confirmed that the weight savings will cut about $10.3 million a year in fuel spending.

Delta Air Lines has already added extra smaller seats because rising density is a priority for them, from the viewpoint of maximizing income.

As a business traveler, I believe that the size of the seats is one of the crucial factors in the mood of the passenger on a plane. For a frequent business traveler, probably the plane is the best place where a person can spend the greatest amount of time in the peace outside the crowd business environment. Adopting this new strategy it means: extra seats at the expense of customer comfort. In the meantime first class passengers will still receive leg space. 

I hope this new challenge will not produce a negative effect on the industry.

WSJ Articles

Saturday, October 26, 2013

The Box Office in China

     China experienced a significant growth in its box office, a drastic increase of 35% but most of this growth was attributed to China’s domestic sales. In fact, the sales of imported films declined by 5.2%. Hollywood studios are hoping that sales in China could more than offset the decline in sales in North America. The Chinese domestic filmmakers are starting produce higher-quality films as they start to produce more 3-D films. In addition, China’s film market is booming due to rapid growth of theaters opening across the country. China has added 625 new theaters in the first nine months of 2013 and the growth is expected to continue.

Time for Samsung to Download More Cash

Time for Samsung to Download More Cash

Samsung, the world largest smart phone manufacturer, is meeting some problems currently. It was another record-breaking profit quarter at Samsung Electronics

Since smart phone market is really sensitive, little changes will lead to some serious consequences as Nokia and Blackberry did. Problems always occur when the business is at the top.

Analyses believe the reason why Samsung has no profit gain in stock price is that they pay fewer dividends for stockholders. On the contrary, Apple’s dividend paid gain lead to a 30% of stock price increase.

On the other hand, besides financing aspect, Samsung behaves a little bit silence recently in operation. The latest product, Smart Watch, does not obtain good sales. The target market for smart watch is American. However, I think Samsung should extend the market to world scale, because the product is pretty new in the world. Taking as much as market share before competitor begin to sell same product will increase investor’s the evaluation for Samsung.

Friday, October 25, 2013

BlackBerry to Slash Workforce by Up to 40%

BlackBerry to Slash Workforce by Up to 40%

Regarding to this article, I am in agreement with Blackberry. I think that since Apple and Samsung have been bring in the big bucks they should start to break down there high and might walls. For me be a past Blackberry user, I hated to pay more just to have the Blackberry internet service. Most of my friends and family did too. We didn’t understand why we had to pay more, if we had payed for the phone, the service and then the internet as well! Most people that I know have left for that same reason. Therefor, if Blackberry wants to come back from this down fall they have to get new ideas running and put more stuff their customers want! By getting rid of the internet charge, that would be a good start!
Good Luck Blackberry, your going to need it!

Nokia Unveils Its First Tablet

Nokia Corp. NOK1V.HE -0.38% took the wraps off its first tablet device and a pair of supersize smartphones, representing one of the latest attempts by the company to better compete with Apple Inc. AAPL -0.29% and Samsung Electronics Co.005930.SE +0.55% in the months before its handset business is acquired byMicrosoft Corp. 

The new products were the cornerstones of an event for telecom operators, suppliers and other constituents in Abu Dhabi on Tuesday. Nokia also launched three models priced under $100 to its more basic Asha line of mobile phones.
Most of the equipment should be on shelves in time for the coming holiday-season sales rush. Later on Tuesday, Apple executives are holding theirannual preholidays gadget event.
Nokia has launched its first tablet into a competitive market. WSJ’s Rory Jones takes a closer look at its features. Photo: Nokia
Nokia's event isn't only significant for the Finnish company. It is also an important steppingstone forMicrosoft executives scrambling to improve the U.S. company's performance when it comes to hardware. The second version of Microsoft's Surface tablet, which fell short of expectations during its first year on the market, also goes on sale Tuesday.
Last month, Microsoft announced it will pay about $7 billion for the once -dominant Nokia handset business. The unit has gradually lost market share to Apple, Samsung and a number of Chinese consumer-electronics companies.
To date, most of Nokia's Lumia smartphones have been comparable in screen size to Apple's iPhone, and Nokia has emphasized high-end camera features and sleek design as selling points.
Now the lineup includes a tablet device that could be a replacement for people's laptop computers, and two supersize smartphones with six-inch screens that will compete in a lucrative "phablet" market currently dominated by South Korea's Samsung. Phablets function like phones, but are closer in size to a tablet than the conventional handset.
Lumias run exclusively on Microsoft's mobile software, and have been the best-selling Windows handsets since they hit the market more than 18 months ago. While still a fraction of Samsung shipments, Lumia sales have grown for four straight quarters and eclipsed the 8 million sales mark in the June-through-September period.
Microsoft's foray into mobile software, however, has been disappointing and the poor performance is under a spotlight amid sluggish demand for personal computers, the lifeblood the Redmond, Wash., company's revenue.
Shipments of tablets are expected to grow more than 50% this year, reaching 184 million units, according to GartnerIT -0.15% a research firm. Less than 2% of these tablets will be running Microsoft's Windows operating system, while Google'sGOOG +0.37% Android and Apple's iOS each have approximately 49% market share, the firm said.
Nokia's tablet, dubbed Lumia 2520, is equipped with a 10-inch screen and will run Windows RT, a special version of Microsoft's Windows 8 operating system that only works on devices with processors designed by ARM Holdings ARM.LN -3.37% . It has features that the Surface doesn't have, including LTE technology that makes Internet accessibility and data connectivity far easier and faster. The $499 Lumia 2520 also comes in multiple colors and has a keyboard accessory that adds up to five hours of extra battery life.
The two phablets, meanwhile, are intended to appeal to both premium buyers and bargain seekers in emerging markets. Samsung is widely considered to have launched the phabletmarket in 2011 when it introduced the Galaxy Note range.
Do men spend more time on their iPads than women? How much money does the average tablet owner earn? Will Apple maintain its tablet dominance? Will tablets overtake PC's in terms of units sold? WSJ's Jason Bellini has #TheShortAnswer. (Data from
The more expensive of Nokia's supersize smartphones—the Lumia 1520—is equipped with a high-end camera and will start to ship this quarter with a price of $750. The Lumia 1320 has fewer features and a lower-resolution screen, but comes at less than half the price. Nokia said Vietnam, China and India are among the markets where it will be sold.
"We want everybody on the planet to have a smartphone," saidStephen Elop, the company's former chief executive who now runs the company's device business and will soon transfer toMicrosoft.
"We want everybody on the planet to have a smartphone," saidStephen Elop, the company's former chief executive who now runs the company's device business and will soon transfer toMicrosoft.
Nokia also said the official Instagram app, which hasn't yet been available on Lumias, will finally come to Windows Phones in a matter of weeks. This will give Lumia users access to view and share photos on one of the world's fastest-growing social networks.
The absence of Instagram and other popular apps for Windows Phone has represented one of the obstacles facing Microsoft in establishing the operating system. Microsoft now was some 175,000 apps in its store but apps in Google's and Apple's stores each number closer to a million.

Summary, Nokia have failed in smartphone market with Lumia's family. Now Nokia try to jump into tablet market.

In my opinion, Nokia was number one in the world in phone devise market. It have advantage of it experts. But all the time it was late,no it too late. Many company go into cellphone market and take whole the cake of it hand. And now it try to compete Apple, Samsung.... these large success companies with regular tablet. What they thinking? Also with windows OS which it failed also!!!
It should do same what Korean companies, start with it country market.Then move to other markets. Also Apple do this strategy. 

Thursday, October 24, 2013

Aging Population Could Trim 3% off China GDP Growth

Aging Population Could Trim 3% off  China GDP Growth

As we know, for the past 20 years, china’s GDP has grown fastly which it looks more like a rich nation. Recently, due to the working-age rises, it’s bad news for China. This report shows working- age represents economic risk of China include economic-plus of the one-child policy.
China’s working age populations has risen,which helped many young people incomes, as they left rural areas. That was the economic-plus of the one- child policy. Moreover, the share of the working-age population will decline in china. Those of working age had fewer responsibilities to care for little kids or aged parents.
In conclusion, this report estimate that China’s growth ceiling over the coming two decades is 6.9% annually. There are measures help China ease the problem that people work longer and use more automation.

How are India banks seizing the prefer opportunity to enter a new market?

India, the seventh-largest country by area, is currently the second-most populous country with over 1.2 billion people. However, according to the World Bank, there are only 35% of Indians have a bank account due to the fact that there are not enough banks to server this tremendous population in India. In order to seize this huge opportunity in the market, India’s largest and second-largest private-sector banks are heading out to rural areas in the country.

In the last 18 months, these two banks’ operations in small towns and villages are booming.  ICICI Bank, the largest private-sector bank has doubled its rural network to 656 branches, which stands for 20% of its total of 3,384 branches. Also, the second largest player in the market – HDFC Bank, has been expanding their businesses into rural and semi-urban areas during the same time period. Currently, more than 50% of HDFC’s branches are in these areas. The bank has brought more than two million never-banked families into the financial system. For these who had never had a bank account, this is definitely a fantastic chance to finally open their first bank accounts and have their own debit cards.

This is a perfect timing for more banks expanding their business into the new market – rural areas. One of the main reasons is that India government encourages locals to have their own bank accounts. People who receive handouts from government will be able to have the capital sources for food, employment, education through these bank accounts directly. In addition, people living in rural areas nowadays are making more money as well as having more capital needs than traditional market thought – according to ICICI, its bank lending in rural areas was as high as $170 billion last year. It also believes that the number will climb up to $900 billion by 2020.

Entering a new market which is full of potentials at the right timing with the incentives from government, banks in India will definitely thrive in rural areas in the next five years.

South Korea Moves Closer to Selling Woori Finance

Woori Finance Holdings founded in 2001 after the Asian financial crisis of 1997-1998 when the South Korean government bailed more than five financial companies. Woori Finance Holdings is South Korea’s largest banking/finance organization by assets, which the South Korean government have attempted to sell its stake and failed in three attempts in as many years. However, the governments is now closer to offering its 57% stake after receiving the required minimum numbers of bids from regional and international  organizations. The South Korean government stake in the banking group is prized at $5.7 billion.
After considering the initial bids, the South Korean government abandoned its initial plan to sell its entire stake in the banking group in one batch to three batches. The three batches include Woori’s two regional lenders Kwangju Bank and Kyongnam Bank, which both received a total of seven bids. The second batch comprised of Woori’s brokerage unit (Woori Financial Co. and Woori-F&I Co.), where the government received approximately three bids prized at $1.65 billion. The third batch for sale that has not yet been launch is the group’s flagship Woori Bank
Most of the bids for Woori’s stake came from both international and local private equity
firms such as The Carlyle International Group and local firms such as the IMM Private Equity and Hahn & Co,. Other bidders included local brokerage companies KB financial and Daishin Securities, which aimed at diversifying its revenue collection base from their traditional brokerage fees. However, other bidders opted out of the contest as the competition pushed Woori’s stake higher than expected.









At McDonalds, Salads Just Don’t Sell: Oct 18th 2013.

McDonalds has received criticism regarding its high calorie menu that is making America fat. Claims that the company’s products were a leading cause of obesity and other health issues have led McDonalds to introduce healthier menus in a bid to fix its tainted image. The interesting issue here is that this attempt has failed to get back the company’s image, but is instead affecting its sales. One would expect that by introducing a healthier menu, customers would flock in more. This though has not been the case.
Introduction of salads have only crowded the McDonalds’ menu, complicating the assembly process, leading to a slow service and consequently dissatisfied customers. Customers already identify McDonalds with cheap fast food. Introducing new products that costs more is only driving clients away.
This is a marketing strategy that is aimed at re-branding the company’s image which has been tainted. The article is thus very relevant to this class, this being a marketing class. McDonalds need to stick to the brands it is known far. The healthier menus are failing by the day. The salads sales were only 2 to 3 percent of their total sales, meaning that their clients still go for the traditional McDonalds’ products.
This knowledge can be applied to other business as well. If a product is doing well in the market despite the criticism, aim to improve the same product while maintaining the same service and value accorded to the customers. An attempt to abandon a product that customers already identify and are comfortable with in a bid to replace it with a more expensive product might be detrimental.
McDonalds’ products are consumed worldwide despite them being branded by critics as unhealthy. Customers go to McDonalds for value rather than for health. Introducing salads in their menu is not working even in their foreign chains. Customers already identify with the cheap fast foods. If they have to introduce anything healthy, they should do so gradually rather than replacing their traditional menu.

Airbus Aims to Double Market Share in Japan

Tokyo airbus Chief Executive, Fabrice Bregier is in a mission to increase the ownership of the Japanese market from the currently 13% to 25% by 2020, and by the next quarter of a century up to 50% of the market. His strategy in doing so is by growing the companies market share by strengthening the shares of A350 jets to low-cost carriers. JAL has ordered 31 A350 jets from the European Aeronautic Defence & Space in which many see this as possibly the “beginning of the end” of Boeing CO. dominance in Japan. Analysis’s say this will increase pressure on Boeing in part that 80% of JAL’S force is made from Boeing. Airbus making for the other 7% of the force of Japan’s other large carrier. If Mr. Bregier’s statistics for expansion work, he will be efficiently gaining larger claim of the Japanese market. This will give Tokyo Airbus a better advantage to provide bigger sales of Airbus planes in Japan in the future, possibly also leading to a better global marketing advantage also.

GM Europe to Oversee Company's Russian Operations

General Motors Co. on Friday said it is folding its Russian automotive operations into GM Europe partly to extend the reach of Adam Opel AG, its struggling car business in Western Europe.
The move underscores GM's efforts to return the money-losing Opel unit to profitability and the potential it sees in the Russian auto market. GM's Russian joint venture, called GM-AvtoVAZ, had been under the company's International Operations unit, which includes Asia and the Middle East.

Russia has become a focus for auto makers and parts suppliers as a strengthening economy has lifted consumer sales in recent years. GM's sales in the country last year rose around 20%, to around 290,000 cars, and a market share of around 10%. This year, the Russian market has cooled, down 7% year to date compared with a year-earlier, according to the Association of European Businesses in Russia, a leading trade group.
Previously, the company's operations in Russia reported to General Motors International Operations, based in Shanghai. All GM operations in Russia are due to be integrated into GM Europe effective Jan. 1. In addition to Opel, GM brands in Russia include Chevrolet and Cadillac.
Foreign auto makers are looking increasingly at Russia, where levels of car ownership are relatively low compared with the saturated Western European market. The alliance between France's Renault SA and Japan's Nissan Motor Co. is due to take full control next year of Russia's biggest auto maker, OAO AvtoVAZ. It has just nominated former GM executive Bo Andersson to become AvtoVAZ's first foreign president.

Wednesday, October 23, 2013

BlackBerry Deal Would Be a Risk for Lenovo

Lenovo, a Chinese Computer maker is at risk after news of sealing a non-disclosure agreement to check BlackBerry smart phone company for a potential acquisition. This agreement aimed at improving market shares for the computer company in the stock market but contrary Lenovo’s shares significantly depreciated after signing this agreement. Investors turned their focus to the Smart phone’s ratings in the stock market. Blackberry’s shares in the market are low because consumers are not popular with its services and products as well, a demoralized workforce and a decreasing client base. In countries such as China, Lenovo sells large amounts of smart phones and it hoped to widen customer base when it signed the agreement. This move could be disadvantageous to Lenovo as the Blackberry brand has depreciated worldwide even in its stronghold of North America. This would mean Lenovo’s main objective of expansion In North America will not be achievable in the short run and this deal demoralizes investors as displayed by share dip after announcement of a potential acquisition. Additionally, Blackberries technological patents are aging and its lower client decreases the manufacturing capabilities is a drawback to Lenovo.

Apple's Dual iPhone Strategy in Doubt

Apple is a mobile company owned by Apple Inc. It provides mobile services to consumers in the world. It had hoped to attract more users in the market when it came with a low-priced mechanism to sell phones. Demand for the new product, iPhone 5C, was low. Many consumers bought the earlier version of the phone. High prices of the phone have attracted low sales volume. This has been a setback for the mobile company. Other mobile competitors such as Samsung and Motorola have taken advantage of this situation by selling their mobile appliances at reduced prices in the international market. Consumers preferred 5C version of the phone because it had attractive features such as finger print sensor. The number of orders made by large companies significantly reduced. This led to reduced profit realization for the mobile company. A high price of the mobile product makes it hard for the company to penetrate the mobile market in China as also its lower model of iphone 5s is much cheaper and almost similar features to the 5 s model.

Samsung Plays Catch-Up on Software

Samsung Electronics Company was among the first mobile company to hit the world market through the manufacture of smart phones. As part of its long-term strategy of self-reliance in order to overcome competition from other mobile companies such as Microsoft Corp and Apple, it has an objective to produce 90% of its softwares via research and development as opposed to earlier methods of acquisition. It is striving to develop its own software to reduce its dependence on Google’s Android operating system. Several attempts to develop its mobile software by the company have resulted to losses. Bada, a mobile operating system was rejected in the market as it had applications that consumers disliked. Samsung has also placed more focus on upgrading software for mobile as it has placed concentration of software startups for games and mapping services. Comparing Samsung and other mobile companies, it has performed poorly in terms of software development achievements.