Taiwan and Thailand exited recession last quarter and Malaysia probably followed, as Asian economies lead the global recovery.
Taiwanese gross domestic product rose 9.2 percent in the fourth quarter from a year earlier and the Thai economy expanded 5.8 percent, according to reports today. Malaysian figures for the three months to Dec. 31, due for release on Feb. 24, may show GDP increased 3.4 percent last quarter, according to the median estimate of 14 economists surveyed by Bloomberg News.
Asian economies are paving the way for a global recovery from the worst worldwide recession since the Great Depression after central banks in the region slashed interest rates to record lows and governments increased spending by more than $1 trillion. The strength of Asia’s rebound has seen policy makers lead the way in withdrawing stimulus.
“Asia’s recovery is at least two quarters ahead of the U.S. and monetary authorities have been contemplating exit strategies for some time,” said David Carbon, head of economic and currency research at DBS Group Holdings Ltd. in Singapore. “With higher U.S. rates on the cards, Asia’s central banks can pursue their exit strategies with less to fear on the inflow and currency front.”
Policy makers in China, India and Vietnam are tightening monetary conditions amid signs that accelerating growth is fueling inflation and may led to asset bubbles. The U.S. Federal Reserve, which increased its discount rate by a quarter point to 0.75 percent on Feb. 18, has left its benchmark policy rate unchanged for more than a year.
Rising Demand
Asian stocks jumped by the most since November on speculation Federal Reserve Chairman Ben S. Bernanke will say in a report due to be released this week that U.S. interest rates will be kept low to spur economic growth. The MSCI Asia Pacific Index gained 2.4 percent to 118.14 as of 2 p.m. in Tokyo, the biggest increase since Nov. 30.
The emergence of the world economy from the global recession is encouraging companies in Asia to boost production and hire more workers. Singapore last week raised its economic growth forecast for 2010, predicting an expansion of as much as 6.5 percent this year.
Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp., the world’s largest makers of custom chips, are boosting capital spending this year after fourth- quarter profits beat analysts’ estimates.
‘Very, Very Strong’
Demand has been “very, very strong” in the computer, automotive and consumer electronics sectors over the past few quarters, Richard Han, chief executive officer of Hana Microelectronics Pcl, said in an interview with Bloomberg Television in Bangkok today. Hana makes parts for computers and mobile phones including Apple Inc.’s iPhone.
Taiwan’s fourth-quarter economic growth was the strongest since June 2004 and Thailand’s increase in GDP was the most in seven quarters.
China’s central bank on Feb. 12 ordered lenders to set aside larger reserves, aiming to rein in credit growth after banks extended 19 percent of this year’s 7.5 trillion yuan ($1.1 trillion) lending target in January and property prices climbed the most in 21 months. Goldman Sachs Group Inc. expects the Chinese economy will expand 11.4 percent this year.
Reserve Bank of India Governor Duvvuri Subbarao on Jan. 29 increased the cash reserve ratio to 5.75 percent from 5 percent, exceeding the median forecast for a half-point move in a Bloomberg News survey of economists. India is due to release GDP data for the December quarter on Feb. 26, along with the budget for the next fiscal year.
Emerging Asia
India’s $1.2 trillion economy may grow 7.2 percent in the current fiscal year through March, accelerating for the first time since 2007, the statistics office said Feb. 8.
“We expect GDP growth in emerging Asia to stay strong in coming quarters,” said Kevin Grice, an economist at Capital Economics Ltd. in London. “The most trade-dependent economies will eventually see slower GDP growth later this year and in 2011 as the global upswing loses momentum. But Asia’s rebound will not come to a complete halt and growth, by some distance, will stay higher than in any other part of the world.”
Brazil created a record number of jobs for the month of January, increasing the odds that policy makers may start raising the benchmark interest rate as early as next month to keep inflation in check.
Latin America’s biggest economy created 181,419 jobs last month, led by manufacturers, compared with a loss of 101,748 jobs a year earlier, the Labor Ministry said in a report today in Rio de Janeiro.
Yields on interest rate future contracts due January 2011, the most traded on Sao Paulo’s BM&F exchange, rose 1 basis point, or 0.01 percentage point, to 10.25 percent. Traders bet the central bank will raise rates by at least a quarter point next month, according to Bloomberg estimates based on rate futures.
“This figure clearly reinforces the view that the economy is expanding at a strong pace,” Pedro Tuesta, senior economist for Latin America at 4Cast Inc., said in a phone interview from Washington. “It increases the odds that the central bank may start raising rates in March.”
According to the median forecast in a central bank survey of about 100 analysts published yesterday, faster economic growth, fueled by domestic demand, will prompt policy makers to raise the benchmark interest rate in April from a record low 8.75 percent for the first time since September 2008 to keep inflation in check.
“Brazil is on track to reach an all-time high in job creation in 2010,” Labor Minister Carlos Lupi told reporters. “If there is an interest rate increase this year, it will be very small,” Lupi said.
Brazilian companies will continue to hire more workers throughout the year, driven by forecasts that the country will post “strong” growth in 2010, Aurelio Bicalho, an economist at Itau Unibanco, Brazil’s biggest non-state bank, said in an e- mailed comment.
Gross domestic product will expand 5.8 percent this year, after growing 0.2 percent last year, according to central bank estimates.
The government-registered job creation number is a balance of posts created minus job dismissals. Registered jobs, or so- called formal work, assure employees a range of benefits such as unemployment insurance, bonuses and retirement payments by the government.
Haitian Prime Minister Jean-Max Bellerive told an aid conference in Montreal that his country needs help with a “colossal” reconstruction from the Jan. 12 earthquake that left the nation in shambles.
“Haiti will need massive support in the medium and long term from its partners in the international community,” Bellerive said today at the conference attended by 20 governments and multi-lateral organizations. “The challenge will require that we do more, that we do better and certainly that we do differently.”
Aid groups called on those attending the meeting to cancel the Caribbean nation’s $890 million foreign debt. The meeting, to discuss long-term reconstruction and plan a full donor conference in March, is being hosted by Canadian Foreign Affairs Minister Lawrence Cannon. The U.S. is represented by Secretary of State Hillary Clinton.
Haiti was already the poorest country in the Western Hemisphere before the temblor, which killed more than 150,000 people and destroyed a third of the buildings in the capital, Port-au-Prince. The country’s infrastructure, including the water system, has collapsed and the government is unable to deliver services. Relief groups and foreign military forces are trying to reach the estimated 3 million of Haiti’s 9 million people affected by the quake.
‘Path to Development’
The donor nations’ plans must aim to “bring the country back on the path to development,” Bellerive said in a speech to the group. “Going back to the status quo ante is not an option.”
Reconstruction will have to include moving some people out of shantytowns that have overrun the capital, and fostering economic development outside Port-au-Prince, he said.
“The Haitian government is at work in precarious conditions, but it is able to provide the leadership the Haitian people expect of it in the colossal challenges on the way to development,” Bellerive said.
Most government offices and computer systems were destroyed the quake.
The U.S. has taken control of aid deliveries through Haiti’s sole international airport, and the United Nations has taken responsibility for the country’s security
Cannon said the delegates at the conference support the Haitian government’s effort to join in the reconstruction planning. Today’s meeting will help set out a “coherent” and “consistent” approach for supporting Haiti in advance of a major conference to be held in coming months.
‘Ready to Help’
“Your role is key, and your voice is clear guaranteed payday loans. We stand ready to help,” Cannon said.
Haiti’s foreign debt must be cancelled immediately, “accompanied by urgent action to support farmers and prevent a man-made food crisis exacerbating the hardship,” Oxfam Executive Director Jeremy Hobbs said in an e-mailed statement.
Cancelling debt is “indispensable to help the government of Haiti marshal the most resources possible” to rebuild the country, said Eric Faustin, president of Regroupement des Organismes Canado-Haitiens pour le Developpement, a Montreal- based non-profit aid group that focuses on Haiti.
Rescuers today wound down operations seeking survivors among the wreckage, and the UN reported that security in Port- au-Prince “remains calm but fragile, with isolated instances of looting.”
More than 150,000 bodies have been buried and 200,000 residents of Port-au-Prince have left the city, the New York Times reported Jan. 23, citing Marie-Laurence Jocelynn Lassegue, Haiti’s culture and communications minister.
Aid Groups
UN humanitarian chief John Holmes and UN development head Helen Clark are attending the Montreal meeting, along with representatives from the International Monetary Fund and the Inter-American Development Bank. Other participating nations include Japan, Mexico, Costa Rica, France and Spain.
Japan will pledge $70 million in aid at Montreal, Chief Cabinet Secretary Hirofumi Hirano told reporters today in Tokyo. The nation, which has the world’s second-biggest economy, had initially pledged $5 million, compared with the U.S. pledge of $100 million and $10 million promised by South Korea.
Japan also intends to send about 300 members of its Self- Defense Force to Haiti, serving with the UN peace-keeping troops, Hirano said.
Norway today doubled its humanitarian aid to Haiti to 200 million krone ($34 million).
Venezuela, Nicaragua and Bolivia said they will boycott the meeting to protest the U.S. military’s presence in the Caribbean, according to the German news service Deutsche Presse Agentur.
Former Cuban President Fidel Castro wrote in the official Cuban newspaper Granma that U.S. troops have “occupied” Haiti. The U.S. bolstered its presence in the country and offshore to 11,000 soldiers and sailors last week to help provide humanitarian assistance and security.
Treasurys were mixed late Wednesday following the government’s $21 billion offering of 10-year notes and after the Federal Reserve said economic activity is weak but recovering.
What prices are doing: The benchmark 10-year note was down less than 1/32 at 96-19/32, and the yield rose to 3.78% from 3.72% late Tuesday. Bond prices and yields move in opposite directions.
The 30-year bond was up less than 1/32 to 94-20/32 and its yield was 4.72%. The 2-year note was flat at 100-2/32 and yielded 0.96%.
What’s moving prices: Investors submitted bids totaling $63 billion at Wednesday’s auction of reopened 10-year notes. The bid-to-cover ratio, a measure of demand, was 3. That compares with 2.62 at the last 10-year sale in December.
It was the second of three auctions this week aimed at selling $84 billion worth of U.S. debt. On Tuesday the government received solid demand at its sale of 3-year notes. On Thursday, it will auction $13 billion worth of reopened 30-year bonds.
Meanwhile, the Fed’s reading on the economy, known as the Beige Book, said that while the economy remains weak, conditions are improving.
Separately, the Treasury posted a deficit of $91.9 billion in December, nearly double the shortfall of a year earlier need a personal loan with bad credit.
Bond prices were also pressured by comments from a key Federal Reserve official.
Charles Plosser, president of the Philadelphia Federal Reserve, said late Tuesday that the Fed should raise interest rates before unemployment reaches an "acceptable" level.
Plosser also said the central bank should not deviate from its plan to stop buying mortgage-backed securities this quarter.
What analysts are saying: Bill Larkin, a portfolio manager at Cabot Money Management, said Treasurys have been trading in a range since last week’s dour jobs report damped enthusiasm for more risky assets.
Government data showed Friday that employers cut 85,000 jobs in December after adding 4,000 jobs the month before. The nation’s unemployment remains at 10%.
Larkin said the market is also focused on the corporate sector as the quarterly reporting period gets into full swing.
"If earnings are mixed, we’ll probably stay where we are," he said. "If we get more strength in earnings, we could break out to higher yields."
CARACAS–A senior minister and close confidant of Venezuelan President Hugo Chavez resigned Sunday in a growing banking scandal that has triggered a purge of businessmen with ties to the government.
In a move likely to win him support, Chavez said he had accepted the resignation of Science and Technology Minister Jesse Chacon, whose brother was arrested Saturday following the closure of the bank he headed.
"Yesterday Jesse Chacon asked if the best thing for the government would be that he offered his resignation and I said I believe so. He will have to leave the government," Chavez said in his weekly television show where other ministers were among the audience.
Chacon took part in a 1992 coup that sought to bring Chavez to power and both men were jailed for their actions. He has held numerous posts under Chavez.
Police have also arrested Giuzel Mileira, the director of the Banco Real, bringing to eight the number of bankers in custody.
Another banker with government ties fled to Miami, Chavez said.
Those detained include a businessman who made more than one billion dollars partly by selling corn to government-subsidized supermarkets.
Venezuela last week closed the seven small banks for regulatory breaches including capitalization problems and unexplained funds, causing market turmoil as Chavez threatened to nationalize the financial system.
Most analysts agree that Chavez is unlikely to risk instability through a widespread nationalization of the country’s best-capitalized and profitable banks.
The rise of a new mega-rich elite during his decade in office has been a liability for Chavez, who wants to build a socialist society in Venezuela and took office in 1999 promising to end corruption.
The arrest of executives widely considered to be corrupt is likely to be popular with Chavez’s supporters before legislative elections in September.
More detentions are expected because authorities have issued 27 warrants including nine requests to Interpol for international arrests.
Reuters News Agency
Amelia A.J. Bond is opening a St. Louis office for George K. Baum & Co., a Kansas City-based public finance firm.
Bond worked as managing director and head of public finance for Wachovia Securities for two years after its merger with A.G. Edwards in 2007. Before the merger, she served for seven years as senior vice president and director of public finance for A.G. Edwards.
While leading the A.G. Edwards public finance department from 2001 to 2007, Bond supervised the doubling of annual revenue for the department.
From 2003 to 2006, Bond served on the Municipal Securities Rulemaking Board, the regulator for U.S. municipal bonds, and she was elected by fellow board members to serve as its chairman during the 2005-2006 fiscal year. She is only the second woman to have held that position in the organization’s 30-year history.
Stocks slumped Friday, in a broad-based selloff that was especially hard on the leaders of the most recent leg of the rally — banks, energy shares and transportation companies.
The Dow Jones industrial average (INDU) lost 109 points, or 1.1%. The S&P 500 (SPX) index lost 13 points or 1.2%. The Nasdaq composite (COMP) lost 11 points or 0.5%.
Stocks had risen in the morning after upbeat results from Microsoft and Amazon.com, and an encouraging reading on existing home sales. But the tone turned negative in the afternoon.
The three major indexes all ended lower for the week, after two weeks of gains amid a bigger multi-month advance.
"After seven months of mostly rallying, the buyers weren’t really here this week and the bears took that as an opportunity," said Paul Brigandi, vice president of trading at Direxion Funds.
Investors getting tired?: Since bottoming at a 12-year low on March 9, the S&P 500 has surged over 62% through its rally high earlier this week.
Although repeated predictions for a big 10% to 15% selloff haven’t materialized, smaller selloffs of 1% to 3% have popped up periodically during the past 7 months. Friday appeared to be an extension of that trend.
While the S&P 500 lost 1.1% Friday, for individual sectors, the declines were bigger.
The Dow Jones Transportation (DJT) average, which includes railroads, truckers and airlines, had surged 88% through its rally high earlier this week. On Friday it lost 3.5%.
Some market pros have said the rise in the transports is a good indicator of the economic recovery. But downbeat comments Friday from railroads Union Pacific and Burlington Northern put that optimism into question. It also gave investors an opportunity to cash out after the massive rise in the sector.
The KBW Bank (BKX) index, which tracks 20 financial firms, including Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and Wells Fargo (WFC, Fortune 500), has rallied over 140% between March and its peak this week. The bank sector slumped as well Friday, losing 1.6%.
A strong U.S. dollar — bouncing back from one-year lows against a slew of other currencies — added to the downturn Friday. A strong dollar pressures dollar-traded commodities including oil, which in turn drags on energy shares. Big multinationals that benefit from a weak dollar also slipped.
Stocks had rallied Thursday following upbeat earnings from 3M (MMM, Fortune 500), AT&T (T, Fortune 500) and other blue chips. The advance propelled the Dow back above 10,000 and the S&P 500 closer to 1,100. But that advance proved unsustainable Friday, even though corporate news was upbeat.
"Investors know that the earnings for the third quarter are going to be better than expected," Brigandi said. "That’s no longer going to be a catalyst. They are going to want to see something else."
Results: Microsoft (MSFT, Fortune 500) reported weaker quarterly sales and income Friday morning that easily surpassed analysts’ estimates. Cost cutting and strong sales of its Windows operating system fueled the advance.
On Thursday, Microsoft rolled out its new Windows 7 operating system, expected to boost PC sales in the coming months.
Shares of Microsoft, a Dow component, rose over 9% Friday morning, touching a one-year high, before giving up nearly half of that advance.
Late Thursday, Dow component American Express (AXP, Fortune 500) reported weaker quarterly sales and earnings that beat analysts’ forecasts. Shares fell 5% Friday.
Also late Thursday, Amazon.com (AMZN, Fortune 500) reported a big surge in earnings and revenue, thanks in part to strong sales of its e-reader, Kindle. Shares jumped 27% Friday, hitting a ten-year high.
So far, 199 companies, or 40% of the S&P 500, have reported results. Profits are currently on track to have fallen 18.2% versus a year earlier, according to the latest from Thomson Reuters. Revenue is expected to have dropped over 10% from a year ago.
Bernanke: The Federal Reserve chairman, speaking Friday, said that the financial turmoil is abating, but that lawmakers have to reform the system to help prevent a crisis of this magnitude happening again.
On Thursday, the Federal Reserve proposed a broad overhaul of pay policies at 28 of the largest U.S. banks. Also Thursday, White House "pay czar" Kenneth Feinberg called for the seven biggest recipients of federal bailout money to cut in half what they pay their top executives.
Economy: Existing home sales jumped to a 5.57 million unit annual rate in September, according to a National Association of Realtors report released Friday morning. Sales were expected to have risen to a 5.35 million unit annual rate from 5.1 million unit annual rate in August.
World markets: Global markets were mixed. In Europe, London’s FTSE 100 gained 0.7%, France’s CAC 40 lost 0.3% and Germany’s DAX gave up 0.4%. Asian markets ended higher.
Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.48% from 3.42% late Thursday. Treasury prices and yields move in opposite directions.
Currency and commodities: The dollar gained versus the euro, after falling to a 14-month low earlier in the week. The dollar gained versus the yen.
U.S. light crude oil for December delivery fell 69 cents to settle at $80.50 a barrel on the New York Mercantile Exchange, edging off a one-year high.
COMEX gold for December delivery fell $2.20 to settle at $1,056.40 an ounce. Gold has surpassed records repeatedly this month due to the weak dollar and longer-term worries about inflation.
Private equity shop Cerberus plans to float gun-maker Freedom Group soon. It had better hurry. President Barack Obama’s victory sent weapon sales — and the valuations of firearms producers — shooting upward. Falling backlogs hint sales could plunge. The U.S. gun bubble may backfire.
Two sparks set off this speculative burst in the gun business. First, fears of economic calamity inspired sales of weapons — Sturm, Ruger’s 30 shot autoload SR-556 rifle is useful according to the company for shooting varmints and for "personal defense", presumably pesky biped varmints.
Second, gun collectors feared a Democratic president would restrict gun ownership. After all, you can’t buy the SR-556 in blue-state strongholds California and Massachusetts.
There’s plenty of anecdotal evidence of mania in the sector. Retailers reported ammunition shortages. Gun show attendance overflowed. Firearms factories are running flat out.
Meanwhile, insiders are preparing for a slowdown. Smith & Wesson diversified into security systems. Cerberus’ decision to sell may be indicative of a top — the durability of recent demand is indeed listed as a risk factor in Freedom Group’s prospectus.
The figures are more damning. Total U.S. firearm sales should be around $3 billion this year. That’s twice to three times as much as is typically spent according to estimates derived from Treasury excise taxes. Background checks over the past 12 months, which are a leading indicator of gun sales, were 50% higher than the levels reported during the middle years of the decade.
Naturally, rising sales lit a fire to stocks of gun makers and sellers. Armaments manufacturers Smith & Wesson (SWHC) and Sturm, Ruger (RGR) saw their stocks rise 115% and 85% respectively since the election last November. Hunting superstore Cabelas (CAB) has risen 70%.
This bubble may already be deflating. Smith & Wesson’s backlog hit $268 million earlier this year and shrank to $177 million last quarter due to cancellations and fewer orders. Considering it only stood at $50 million in April 2008, the backlog could have much further to fall. Sturm, Ruger reported roughly similar figures.
This could prove painful for all involved. If sales fell to more typical levels of recent years, up to two-thirds of U.S. gun sales could disappear. And they could fall further. There are somewhere between 200 million and 300 million fireable guns (estimates vary widely) already in the U.S. Firearms have a very long lifespan if properly treated.
Gun buyers may well decide their now-stuffed racks don’t need more company for a few years.
Microsoft is banking on Windows 7 to breathe new life into a PC world where most computer users are running XP — an operating system that was released in the early days of the Bush administration.
Experts expect that PC users will change their operating system for the first time in about eight years when Microsoft (MSFT, Fortune 500) launches Windows 7 on Oct. 22.
Microsoft’s last operating system, Windows Vista, was a disaster when it was released in 2007. Vista was plagued by bugs, software incompatibilities, sluggishness and annoying security alerts. The episode nearly destroyed the tech giant’s reputation with consumers.
"The stakes for Microsoft are astronomically high after the Vista debacle," said Scott Anthony, managing director of Innosight Ventures, a venture capital and consulting firm. "There is a lot of hunger for computing power around the world, and this release will be a real test for Microsoft."
Positive reviews for Windows 7 have been pouring in. Computer experts say that Windows 7 is good — if not perfect — and has a shot at eventually usurping XP as the world’s most prevalent operating system.
Right now 71.5% of PCs are still running XP, according to OS market share tracker netmarketshare.com, while 18.6% of PCs are running Windows Vista.
"There was lots of negativity around Vista, and Microsoft lost a lot of goodwill with its customers," said Ken Allen, a portfolio manager at T. Rowe Price who manages a tech fund that includes Microsoft as one of its holdings.
Microsoft has aggressively been rolling out products and services (think Bing and Zune HD) to boost its sales, which have declined in the previous two quarters. Its third quarter ended March 31 marked the first time sales fell in Microsoft’s 23-year history as a public company.
"The ‘bad will’ that Microsoft engendered could be reversed if Windows 7 is well received," said Allen.
It appears Microsoft is on the right road. Demand for new computers is starting to heat up again, and many users are looking for an operating system upgrade. Windows 7’s release coincides with holiday season shopping. With the economy showing signs of recovery, consumers may be more willing to loosen their purse strings.
What XP users can expect: Windows 7 is faster, more secure and easier to network with other computers than XP. Microsoft has also added a number of features to simplify tasks.
For instance, Windows 7 unveils a more efficient task bar allowing users to switch more easily between programs than the current Alt-Tab function in Windows XP. It also allows users to preview programs by hovering over icons on the taskbar.
Users will also be able to simply shake their mouse to unclutter their desktop rather than having to minimize multiple windows.
"Windows 7 is a far superior product than previous versions, and no one will be disappointed if they use it," said Vishal Dhar, co-founder of iYogi, a global tech support company for consumers. "At the right price point, [consumers] will upgrade for the new features."
Dhar said people used to XP will be most pleased with Windows 7’s video editing capabilities, which XP did not accommodate, and speed. He also said the $119 upgrade price is likely low enough to lure people to upgrade.
But there’s one hitch and it’s a biggie: upgrading is far from easy. XP users who choose to upgrade their computers to Windows 7 will have to either wipe their hard drives or re-install all of their applications. That means finding the product keys and old CDs. As a result, some experts say XP users interested in Windows 7 are better off just buying a new computer.
Slow boost to PC sales: While many experts expect a brief pop in PC sales from Windows 7, most anticipate the bulk of those sales to occur next year.
"Adoption of Windows 7 may take a while longer than some expect," said Scott Anthony, managing director of Innosight Ventures, a venture capital and consulting firm. "A lot of consumers are going to wait because they heard about people getting burned on Windows Vista."
Tech analysts also expect businesses to delay adoption of Windows 7 until next year.
"We don’t expect the release of Windows 7 to significantly influence PC demand at year-end," said George Shiffler, analyst at Gartner. "At best, Windows 7 may generate a modest bump in home demand and possibly some added demand among small businesses."
Shiffler said he doesn’t expect most larger businesses to start switching to Windows 7 en masse until late 2010, and believes vendors have overestimated how many people will be interested in the product right off the bat.
Even Microsoft CEO Steve Ballmer said earlier this month that the rise in PC sales as a result of 7’s release "will probably not be huge."
Experts say it will be difficult to judge the success of Windows 7 for a year or maybe more, but what’s clear is that Microsoft has a lot riding on the latest update to the world’s favorite operating system.
The world’s top cellphone maker Nokia surprised investors by taking a major writedown at its struggling networks unit and revealing a fall in its smartphone sales from the previous quarter.
Nokia, battling aggressively with competitors Apple (APPL) and RIM (RIMM) , said its smartphones market share fell to 35% in July-September from 41% the previous quarter.
"Consumer demand may be showing early signs of improvement but these results show sustained pressure on smartphone margins. Apple’s iPhone is defying gravity in the high tier," said CCS Insight analyst Geoff Blaber.
Nokia booked a $1.35 billion hit from its networks unit, citing challenging market conditions, and dragging the reported group result to a loss per share of 0.15 euros compared with expectations of a 0.09 euros per share profit Nokia’s key handset unit performed slightly better than expected in the July-September quarter as consumer demand for mobile devices started to improve in many markets.
Shares in Nokia (NOK) were down 11% to $14.30 in pre-market trading.
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