02/10/2025

BIZ & FINANCE THURSDAY | OCT 2, 2025

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Nike turnaround takes root

Kuwait raises US$11b from bond sale KUWAIT CITY: Kuwait, a top oil producer, raised US$11.25 billion (RM47 billion) from a three-part bond sale, drawing hefty investor demand for its first US dollar issue since 2017 in a strong return to global debt markets after years of domestic political gridlock. The Gulf state was the latest sovereign from the region to tap the bond market as strong global appetite and attractive borrowing costs allow governments to diversify funding sources to help plug budget deficits and invest in economic diversification strategies. Kuwait sold US$3.25 billion in a three-year portion at 40 basis points (bps) over US Treasuries, US$3 billion in a five-year tranche at 40 bps over the same benchmark and US$5 billion in a 10-year portion at 50 bps. Order books were over US$23 billion at launch, fixed-income news service IFR reported, which allowed pricing to tighten from early guidance. Although there were concerns about Kuwait’s governance, public finances, oil dependence and limited non-oil economy, its low level of outstanding debt was reassuring to investors, said Justin Alexander, director at Khalij Economics and Gulf analyst at GlobalSource Partners. Kuwait has estimated sovereign wealth assets of more than US$1 trillion. It does not disclose exact figures. It passed a new public debt law in March, after the previous one expired years ago. That raised the borrowing ceiling to 30 billion dinars (RM413 billion) from 10 billion dinars previously and allowed for the possibility of longer borrowing terms. The law, like other reforms, had been gridlocked for years over persistent clashes between appointed governments and Kuwait’s directly elected parliament. The emir dissolved Parliament last year for up to four years, paving the way for the government to push through reforms. Despite plans to diversify revenue sources away from hydrocarbons, oil revenue accounted for almost 90% of government revenue in the last fiscal year. – Reuters will lower drug prices WASHINGTON: The Trump administration on Tuesday announced a deal granting Pfizer a three-year reprieve on planned tariffs as the pharmaceutical giant vowed to voluntarily lower the prices of unspecified drugs for US purchase. President Donald Trump, flanked by top health officials, was scant on details regarding what or how many drugs were included in the agreement, the announcement of which came as Washington faced a looming government shutdown. Under the deal Pfizer is to charge “Most Favoured Nation” pricing – matching the lowest price offered in other wealthy nations – to Medicaid, the US health insurance programme for low-income Americans. The White House also said it would unveil a website – called TrumpRx – that would allow consumers to directly purchase some medications from manufacturers at discounted rates. Like Trump, Pfizer CEO Albert Bourla heralded the deal as a great achievement, although a statement from the company was equally vague on specifics. The company did say a “large majority” of “primary care treatments and some select specialty brands” could be offered at savings from 50% to 85%. “We now have the certainty and stability we need on two critical fronts, tariffs and pricing, that have suppressed the industry’s valuations to historic lows,” said Bourla. – AFP Trump announces Pfizer deal he says

recently as ambassadors, adding that he expects sports like running and basketball to drive growth in the region. “Nike beat the low bar set for EPS and showed some wholesale strength, but the underlying fundamentals are still shaky. DTC weakness, margin pressure, and China softness are flashing yellow lights,” said David Bartosiak, stock strategist at Zacks Investment Research. While wholesale revenues rose 5% on a currency neutral basis, margins still faced a drag from higher costs of products due to tariffs. The company’s first-quarter revenue rose 1% on a reported basis to US$11.72 billion. Analysts had expected a fall of 5.1% to US$11 billion, according to data compiled by LSEG. Nike’s finance boss Matthew Friend said the company’s direct-to-consumer business will not return to growth in fiscal 2026, with North America leading recovery and China lagging behind. Nike reported first-quarter earnings per share of US$0.49 handily beating estimates of US$0.27, as it gained some ground in reducing inventory levels in the quarter. But the company’s gross margin decreased 320 basis points to 42.2%, following a 440-basis-point fall in the preceding three-month period. – Reuters

weak quarters, and to producing the kind of cutting-edge products Nike was known for. “We’re also realistic that we are turning our business around in the face of a cautious consumer tariffs uncertainty and teams that are still settling into this sports offence,” Hill said on a post-earnings call. In the company’s earnings statement, Hill admitted Nike still had “work ahead to get all sports, geographies, and channels on a similar path”. Nike forecast second-quarter revenue to fall in the low-single digits, compared with estimates of a 3.1% drop. It expects its struggling wholesale business to record growth for fiscal 2026 as well. China, Nike’s third-largest market, has been a particular problem, and executives said recovery there would take longer. The country accounted for 15% of overall sales in fiscal 2025. Sales in Greater China fell for the fifth straight quarter for the three months ended Aug 31 as Nike struggled to drum up demand in the face of stiff competition from domestic brands including Anta and Li-Ning. The company has also lost market share to younger rivals such as On and Deckers’ Hoka. Hill said Nike sent US basketball stars LeBron James and Ja Morant to China

NEW YORK: Nike on Tuesday reported a surprise rise in first-quarter revenue and beat profit expectations as the storied sportswear brand’s turnaround effort gained traction despite weakness in China and tariffs pressuring margins. Shares rose 3.4% in choppy extended trading as the company also managed to clear some of its bloated inventory and wholesale revenues returned to growth in a sign of early success for CEO Elliott Hill’s plan to get Nike back to its former glory. Executives warned the recovery was still a way off. Nike now expects tariffs to cost it about US$1.5 billion (RM6.3 billion) this year, compared with the US$1 billion expected earlier. The sportswear brand makes nearly all its shoes in countries such as Vietnam that have been hit with steep duties under US President Donald Trump. Hill, a Nike veteran, took the reins last year and has vowed to refocus the brand around core sports like running following a string of o CEO warns of more work ahead as China lags

The Nike logo is seen at a shopping mall in Vietnamese capital Hanoi. – AFPPIC

OpenAI launches Sora 2 with TikTok-style app SAN FRANCISCO: OpenAI on Tuesday released Sora 2, its most advanced video generation model yet, alongside a TikTok-style social app that will let users insert themselves into AI-created scenes through a feature called “cameos”.

The Sora 2 video generator will initially be free with “generous limits”, though usage will be constrained by the shortage of computing power needed for video generation. On the app, users can share their creations in a feed similar to TikTok or Instagram Reels. Meta, which owns Instagram, last week added its own AI video feed called “Vibes” to encourage users to experiment with image generation on its Meta AI app. The rapid-fire release of increasingly powerful AI tools comes amid growing concerns about AI-generated content proliferation and the environmental toll of the massive computing power required to create it. OpenAI also acknowledged the ongoing debate about social media’s impact on mental health – including worries about“doomscrolling, addiction, and isolation” – and said it is implementing safeguards like user wellbeing checks and content controls. – AFP

real-world physics, the company said. Sora 2 replaces last year’s Sora and represents the latest salvo in the AI arms race that began with ChatGPT’s launch in 2022. In video generation, OpenAI faces stiff competition from Google, Runway AI, and Midjourney, all of which offer apps that can produce short clips in seconds – tools that are either celebrated or feared as potential replacements for human-created content. Perhaps more surprising than Sora 2 itself is the standalone social app, Sora. The platform will allow users to appear in AI-generated videos with what OpenAI calls “remarkable fidelity” of both appearance and voice. “We think a social app built around this ‘cameos’ feature is the best way to experience the magic of Sora 2,” the company said. The app is currently available by invitation only in the United States and Canada.

The company behind ChatGPT described the release as a major leap forward in artificial intelligence’s ability to create realistic video. The system can now generate synchronised dialogue, sound effects, and physically accurate motion, according to the company. “Sora 2 can do things that are exceptionally difficult – and in some cases outright impossible – for earlier video generation models,” OpenAI said, pointing to examples like capturing Olympic gymnastics routines or basketball moves. Unlike earlier systems that would “morph objects and deform reality” to fulfill text prompts, Sora 2 better follows