Asian traders cautious, Samsung Note 7 crisis returns

By AFP October 10, 2016 13:15

Asian traders cautious, Samsung Note 7 crisis returns

HONG KONG: Asian investors trod warily in holiday-thinned trade Monday and the dollar climbed after last week’s drop on below-par US jobs data, while Samsung Electronics was hit by a renewed crisis over its troubled Galaxy Note 7.

The labour department said Friday that fewer jobs than expected were created in the world’s top economy in September.

The news left all three main indexes on Wall Street in negative territory and sent the dollar lower against the yen Friday.

However, analysts said the figures were unlikely to prevent the Federal Reserve raising interest rates by year’s end.

In afternoon trade on Monday, the dollar was at 103.10 yen from 102.93 yen in New York but well down from the 103.87 yen earlier Friday in Asia.

The pound was stuck at 31-year lows against the dollar after a flash crash in Asia Friday saw it plunge, with investors on edge over Britain’s plans to leave the European Union.

Samsung suspends production of recalled Note 7: report 

Analysts said it was unclear if sterling’s sudden plunge was down to a computer generated sell-off or other reasons but Brexit was at the root of it.

China set the yuan’s central parity rate weaker than 6.7 to the dollar for the first time in six years Monday, the first day of trading after it joined the IMF’s “special drawing rights” reserve currency basket.

The currency has been declining for months in the face of a stronger dollar, slowing growth at home and capital outflows.

– Trump in crisis –

In share trading, Shanghai, which was closed last week for a national holiday, ended up 1.5 percent, while Sydney closed 0.2 percent higher.

However, Singapore and Wellington eased, while Bangkok tumbled three percent after officials said King Bhumibol Adulyadej’s health was “not stable” in an update that raised fears for the 88-year-old.

There are fears his demise could lead to economic instability, especially as there is no official discussion on how the country will handle his passing.

Tokyo, Hong Kong and Taipei were closed for public holidays.

In early European trade London added 0.1 percent while Paris and Frankfurt were both flat.

Seoul ended up 0.2 percent but Samsung Electronics was battered by reports that it had suspended production of its flagship Galaxy Note 7 handset after distributors stopped offering replacements because of continued safety concerns.

US telecoms firm AT&T and German rival T-Mobile said they had stopped exchanges of the Note 7 pending probes into reports of some replacement handsets catching fire.

Samsung announced a global recall of 2.5 million handsets last month after complaints that some had exploded owing to a battery problem.

The firm said it would exchange the devices but its image suffered another hit following reports that the replacement handsets have also been involved in fires.

Samsung fell four percent in morning trade before recovering in the afternoon to end down 1.5 percent. After the market closed the firm said in a statement it was “adjusting production” of the gadget “to enhance quality control and to enable thorough investigations”.

Asian sentiment was given a lift by the emergence of a tape of Donald Trump making lewd comments about women, which analysts said could deal a severe blow to his presidential hopes.

“It tends to be the case that when it looks more likely that (Hillary) Clinton will win, markets tend to rally,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, told Bloomberg News.

Others said they considered Clinton was still favourite to beat Trump after a vicious second debate late Sunday, but warned of volatility ahead of the November 8 election.

Sim Moh Siong, a currency strategist at Bank of Singapore, said: “Clinton should still maintain her lead. For risky assets, it’s still a bumpy period heading into November 8. There’s still a third debate coming up.”



By AFP October 10, 2016 13:15

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