27/01/2025

BIZ & FINANCE MONDAY | JAN 27, 2025

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Political crisis hits South Korean growth

Nissan to procure EV batteries from SK On for US market TOKYO: Nissan Motor plans to procure batteries for electric vehicles sold in the US from South Korea’s SK On from around 2028 onwards, the Nikkei newspaper said, as the troubled Japanese automaker looks to ramp up its EV business as part of a planned turnaround. Separately, a Nissan executive said the firm was considering plans to produce compact EVs at its plant on Japan’s southern island Kyushu, confirming a 2024 Reuters report. Nissan, which is in talks to merge with Honda Motor , has been seeking to slash 9,000 jobs and 20% of its global manufacturing capacity in a turnaround plan laid out last year. Success in that plan would impact how its talks with Honda play out. The automaker and SK On agreed on the supply of 20 Gigawatt-Hour (GWh) worth of ternary lithium batteries, equivalent to roughly 300,000 standard EVs, Nikkei said. Last Wednesday, Nissan executive vice-president Hideyuki Sakamoto said the company was considering plans to produce compact EVs at its plant on Kyushu island. He also said it is not planning to cut its production capacity in Kyushu as part of the cost-cutting. “The Kyushu region is also a highly competitive base geopolitically, so we would like to utilise it,” said Sakamoto, who is in charge of manufacturing and supply chain management. Sources had told Reuters in last March that Nissan may bring the production of its ultra-compact EVs in-house by making them at its Kyushu factory from the business year starting April 2028, a move that would allow it to boost profit margins. Nissan and Honda are in talks to merge by 2026, a historic pivot for Japan’s auto industry that underlines the threat Chinese EV makers now pose to the world’s long-dominant legacy car makers. – Reuters SINGAPORE: Southeast Asian cell tower firm EdgePoint Infrastructure is looking to expand its portfolio to over 20,000 towers in two to three years from around 15,000 currently, its chief executive told Reuters. CEO and co-founder Suresh Sidhu said the company, which is backed by US-listed DigitalBridge, would expand in Indonesia, Malaysia and the Philippines, markets where it already has a presence. The company is also open to opportunities in new markets such as Thailand and Vietnam via acquisitions, he added. “They’re large countries, lots of population, very similar dynamics to Malaysia, Indonesia, Philippines, young populations, fast growth in data, tech, that sort of sector as well,” he said, referring to Thailand and Vietnam. Helping drive demand for digital network infrastructure is expansion of 5G services and data consumption in Southeast Asia. The Asian Development Bank has projected the region’s economy will grow by 4.7% this year, with Vietnam and the Philippines expanding by 6.6% and 6.2%, respectively. Founded in 2020, EdgePoint has more than 15,600 towers in Indonesia, Malaysia and the Philippines and more than 25,200 tenants, according to the company. In addition to DigitalBridge, EdgePoint is backed by the Abu Dhabi Investment Authority and International Finance Corporation. Florida-based DigitalBridge managed US$88 billion (RM385 billion) worth of digital infrastructure assets globally as of end-September, 2024, its website showed. – Reuters EdgePoint aims to add more than 5,000 cell towers

martial law attempt is hitting the economy more than the Bank of Korea anticipated,” Bloomberg economist Hyosung Kwon wrote. “That leaves the door open for the central bank to resume cutting rates at its February meeting.” The figures come after the government this week unveiled a US$250 billion (RM1.1 trillion) support package for exporters amid growing concern over possible tariffs from the Trump administration. South Korea, heavily dependent on exports and driven by key industries such as advanced chips produced by conglomerates Samsung Electronics and SK hynix, saw exports rise 6.9% on-year in 2024. The volume of imports also recorded an annual increase of 2.4 percent. Meanwhile, SK hynix posted last Thursday reported record sales in the fourth quarter, marking a 75% surge on-year to 19.7 trillion won (RM60 billion) thanks to its strong performance in churning out highly advanced chips used in artificial intelligence. SK has been supplying US titan Nvidia with its high-bandwidth memory (HBM) chips, which are used for in the highly competitive AI sector. In a press release, SK said the strong numbers demonstrated the “possibility of stable profit gain by supplying product in right time to meet customers’ needs”. – AFP

In that forecast it also revised its 2025 growth forecast down to 1.6%-1.7% from an earlier projection of 1.9%. “Korea’s economy continued to struggle in Q4 and we suspect that the weakness in activity could persist in the near term due to the ongoing political crisis,” said Shivaan Tandon of Capital Economics in a note. “Domestic demand remains the main source of the weakness in the economy. “The weakness of consumption in Q4 is in line with the latest consumer confidence and labour market data and suggests that perhaps the ongoing political crisis has already started to weigh on growth.” Yoon’s brief suspension of civilian rule saw him deploy soldiers to Parliament but lawmakers voted the measure down and later impeached him. He is now being held for a criminal probe on insurrection charges and also faces impeachment hearings. Soon after the crisis erupted, consumer sentiment fell to its lowest level since the Covid-19 pandemic. Even after the impeachment, the won plunged against the dollar and the country’s unemployment rate recently spiked to its highest level since 2021. “The anaemic growth in South Korea’s GDP in the fourth quarter shows that the political crisis sparked by (Yoon’s) failed

o Martial law declaration and Jeju Air plane crash ‘dampened economic sentiment’: Central bank SEOUL: South Korea’s economy grew less than expected in the fourth quarter, data showed, as it was hit by the fallout from President Yoon Suk Yeol’s brief declaration of martial law that hit consumer confidence and domestic demand. The ongoing political crisis comes as leaders of the export-reliant country prepare for the second US presidency of Donald Trump, who has warned key trading partners that he will hit them with painful tariffs. The brief declaration of martial law on Dec 3 by South Korea’s now-impeached leader jolted Asia’s fourth-biggest economy, which the central bank said expanded 0.1% on-quarter in October-December and 1.2% on-year. For the full year, the economy grew 2%, which was an improvement on 2023 but 0.2 percentage points below forecasts. The Bank of Korea warned last week that the martial law declaration and Dec 29 Jeju Air plane crash that killed 179 had “significantly dampened economic sentiment”.

Yoon supporters attending a rally on a

road near the Constitutional Court in Seoul. – AFPPIC

Zee Entertainment reports sharp rise in Q3 profit MUMBAI: India’s Zee Entertainment Enterprises reported a sharp rise in third-quarter profit and margins last week, boosted by cost cutting measures which offset lower advertisement revenue. “sluggish festive season” that resulted in lower marketing spend by consumer facing companies. cost, while total expenses fell 10%. Meanwhile, core losses in Zee5 narrowed to 1.36 billion rupees from 2.4 billion rupees a year ago, and revenue rose 8% as it attracted more paying customers with a new slate of content.

As a result, total revenue declined 3%. With recovery in ad revenues still elusive, the company has in recent quarters sharpened its focus on cutting costs and reducing losses in its streaming business Zee5. Zee reported third-quarter core profit margin of 16.1% compared to 10.2% a year ago. It has said it is targeting a margin of 18%- 20% by fiscal year 2026. Zee Entertainment’s operational costs declined by 16% year-on-year, driven by lower programming and technology

Zee reported a profit of 1.64 billion rupees (RM83 million) for the three months ended Dec 31, compared to 585 million rupees a year ago. Its subscription revenue rose 6.6% to 9.8 billion rupees, benefiting from the implementation of a 2022 tariff order which gave broadcasters more leeway to increase prices of TV channels. However, ad revenue declined 8.5%, due to what the company described as a

India’s US$28 billion (RM122 billion) media and entertainment sector has witnessed intense competition in recent years, with the likes of Netflix and Sony striving to strengthen their foothold. Zee previously said the merger of media assets of Reliance Industries and Walt Disney would likely give the combined entity more advertising leverage due to their larger market shares. – Reuters