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UPDATE 2-Investors demand answers, new phone from Samsung after Note 7 fire fiasco

Signage is seen at the Samsung 837 store in the Meatpacking District of Manhattan, New York, U.S., October 10, 2016.  REUTERS/Andrew Kelly

Signage is seen at the Samsung 837 store in the Meatpacking District of Manhattan, New York, U.S., October 10, 2016.REUTERS/Andrew Kelly

UPDATE 2-Investors demand answers, new phone from Samsung after Note 7 fire fiasco


By Se Young Lee

Samsung Electronics Co Ltd needs to quickly find the cause of the fires that led to it pulling its Galaxy Note 7 smartphones and get a new model to market, investors said on Wednesday, as shares in the company slipped to a one-month low.


The world’s top smartphone maker on Tuesday scrapped the $882 flagship smartphone in what could be one of the costliest product safety failures in tech history.

Samsung announced the recall of 2.5 million Note 7s in early September following reports of the phones catching fire. The firm appeared to have the situation under control as it issued replacement devices with different batteries, until the new phones also began to smoke and combust.

Investors and analysts agreed that the damage to Samsung’s brand and future earnings would deepen the longer the market was left in the dark about the origin of the fault, with some already predicting lost revenue in the region of $17 billion.

“It’s good that Samsung made a firm decision on the Note 7, but people are concerned about the situation because people don’t know what the problem is,” said Kim Hyun-su, a fund manager at IBK Asset Management, which owns shares in Samsung.

“There needs to be explanation from Samsung in order for consumers to understand that problems won’t occur in the next models … Samsung needs to clearly explain and admit what went wrong.”

Samsung would likely push ahead to get the latest version of its premium S-series smartphones to market as soon as possible, fund managers said. Typically, the South Korean company unveils a new Galaxy S phone on the sidelines of the Mobile World Congress trade show in the first quarter as it battles Apple Inc to stay at the top of the smartphone market.


“We’ll have to see what the future plans are but I suspect Samsung will move quickly to get the Galaxy S8 ready; they have the manufacturing and production capabilities,” IBK’s Kim said.

Experts are baffled by what could be causing the overheating in the replacement phones, if not the batteries, and Samsung has not commented.

An official at the Korean Agency for Technology and Standards, which is investigating the problem alongside Samsung, said the fault in the replacement devices might not be the same as the problem in the original product. The official asked not to be identified as he was not authorized to speak publicly.


Aviation authorities and airlines around the world are telling passengers to switch off their Note 7s and keep them out of checked baggage, amid fears they could bring down a plane.

Samsung shares were down 1.6 percent as of 0436 GMT after touching a one-month low of 1.494 million won ($1,340), reflecting concerns about fourth-quarter earnings as well as the potential long-term impact on its smartphone business.

The stock is down 11 percent so far this week, on track for worst weekly percentage fall since December 2008.

“Damage control at Samsung will face an uphill battle to redeem the company’s tarnished image owing to the dangerous and dramatic nature of the phone’s failure,” Vijay Michalik, an analyst at research firm Frost & Sullivan, said.


A permanent end to Note 7 sales could cost Samsung up to $17 billion, according to calculations based on analysts’ projected sales of the phone.

While the damage to Samsung’s brand remains hard to quantify, negative publicity from the botched recall could touch off a turf war among Android smartphone manufacturers, analysts said.

Consumers tend to commit to their choice between Apple’s iOS operating system and Google’s Android, leaving Samsung’s fellow Android manufacturers such as G Electronics Inc and Alphabet Inc’s Google in prime position to strike.

($1 = 1,114.7500 won)

(Reporting by Se Young Lee; additional reporting by Joyce Lee; Writing by Lincoln Feast; Editing by Stephen Coates)

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Published at Wed, 12 Oct 2016 04:48:56 +0000

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Q&A: The musical and money evolution of hip hop’s Wyclef Jean

By Couleur from Pixabay

Q&A: The musical and money evolution of hip hop’s Wyclef Jean


By Chris Taylor

If anyone on Earth is familiar with the extremes of money – poverty and wealth – it is Wyclef Jean.


The famed musician, who founded The Fugees, along with bandmates Lauryn Hill and Pras Michel, overcame humble origins in Haiti to become a global superstar.

For the latest in Reuters’ “Life Lessons” series, we talked with Jean about what he has learned about money.



A: My papa and mama left for America when I was one, so I was actually raised by my grandmother for a few years. She was incredible and very wise. We were very poor, but she made sure we never felt it. We didn’t have anything like Disney World, so when the rains came, she let us go outside and run in puddles. That was our amusement park.



A: I used to get five cents for doing chores for people in my village. Sometimes I would milk cows, sometimes I would walk the cows from one area to another, sometimes I would go to the well to get water for my neighbors. I started working literally when I was six years old.


A: It was definitely culture shock. I ended up at one of the worst housing projects in New York City, in Coney Island, but to me it seemed like everyone was rich. Remember, I was coming from Haiti, where my house was a hut, there was hardly any electricity, and for light, we used oil in a lamp.



A: Your business manager is one of the most important people in your life. When you are young and making money for the first time, you want to buy everything, like fancy cars. Your business manager has to be the bad guy and tell you to wait.




A: At first, you feel like you have to give everyone money, and you automatically become a bank for a certain number of people. That is the biggest mistake I ever made. If I had to do it again, I wouldn’t give anyone a penny. Instead, I would say, ‘Bring me a business plan of something you want to invest in.’ I had to learn how to say ‘no’ when people ask for money.



A: The name ‘Fugees’ stands for ‘Refugees,’ so that is a cause that has always been close to my heart. So many friends and family made their way over the seas, from places like Haiti and Cuba, to start new lives in America. I have performed in support of refugees many times, whether for Tibet or for Africa or for Haiti.




A: The tricky part is that when you are using your name, no one cares who the charity’s CEO or president or accountants are. Any scrutiny that goes down, it goes down on the celebrity. We had some accounting problems, we fixed them, and at the end of the day, you have to move forward. What I learned is that the person you put in charge has to be accountable for every part of that foundation.



A: My wife and I actually have to tell her to save her money. She is always giving it away, for things like cancer benefits or shoe drives. It dates back to when she was four and I brought her to Haiti, to one of the most dangerous slums in the world, where she handed out Christmas gifts. For a dad, it is the best feeling in the world to see her give back.



A: One of the greatest is something my dad taught me. It basically translates to, ‘Don’t bow down to anyone until you go to their funeral and see them rise from the coffin.’ In other words, no matter who you are, you are equal to everybody. Whether it is a king or queen or president, look them right in the eye.

(Editing by Lauren Young and Bernadette Baum)

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Published at Tue, 11 Oct 2016 13:12:20 +0000

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Banks ponder the meaning of life as Deutsche agonizes

Banks ponder the meaning of life as Deutsche agonizes

A statue is pictured next to the logo of Germany’s Deutsche Bank in Frankfurt, Germany September 30, 2016.

REUTERS/Kai Pfaffenbach/File Photo


By Carmel Crimmins and Olivia Oran | WASHINGTON

It wasn’t just Deutsche Bank that was grappling with big questions about the future at the International Monetary Fund meetings in Washington last week.

The German bank is scrambling to overhaul its operations as it faces a multi-billion dollar fine for selling toxic mortgage-backed securities in the United States.

But many others in the banking industry are also still figuring out what they should be doing, nearly a decade after the financial crisis, as they grapple with anemic economic growth, wafer-thin returns on lending and the possibility that regulators will further hike their cost of doing business.

“This new world of low interest rates and even negative interest rates is something that is very difficult,” said Frederic Oudea, the chief executive of French bank Societe Generale.

“It is a game changer, not just for banks but for the whole financial industry,” he told an audience from the Institute of International Finance (IIF), a trade group for big banks that holds its annual meeting alongside the IMF.

Deutsche Bank’s immediate obstacle is the U.S. Department of Justice’s demand for a massive fine over the sale of bad mortgage bonds that could far exceed the 5.5 billion euros ($6.2 billion) in provisions that the bank has set aside. Such a bill could require it to raise more capital.

But Deutsche Bank’s fundamental problem is that its large investment banking business doesn’t fit the post-crisis era.

Chief Executive John Cryan is in the middle of an overhaul, cutting jobs and selling assets. But with interest rates showing no signs of lifting, he needs to move fast.

Since the crisis of 2008, banks on both sides of the Atlantic have shored up their defenses against future losses, adding hundreds of billions of dollars in equity capital and shedding loss-making assets.

Sergio Ermotti, the chief executive officer of Swiss bank UBS, said those defenses had proved their worth in recent weeks when other European banks were largely insulated from the lurch in Deutsche Bank’s shares.

But with rates expected to stay lower for longer, more banks will be under pressure to change with the IMF warning last week that lenders in Germany, Italy and Portugal needed to take urgent action to address old, non-performing loans and bloated, inefficient business models.

“Crisis is the wrong word. We are in the middle inning of the reshaping of the financial landscape,” said Mark McCombe, global head of institutional client business at asset manager BlackRock.


U.S. bankers attending the IIF meeting were far more upbeat than their European counterparts.

JPMorgan Chase CEO Jamie Dimon, Morgan Stanley head James Gorman and Citigroup boss Michael Corbat, did their version of the “Three Amigos,” taking to the stage together to talk up the strength of the U.S. consumer and their own roles in the global economy.

In a separate session, Goldman Sachs Group President Gary Cohn said the U.S. banking system was in the “best shape it has ever, ever been by far.”

Like their European rivals, many U.S. banks are struggling to get shareholder returns above their cost of capital, but they are making more progress because they wrote off larger portions of their bad loans earlier – enabling them to return to growth more quickly – and most of their crisis-era litigation costs are behind them. The U.S. economy is also improving at a faster clip than Europe.

“Is it sustainable for any sector to have a return on equity in the long-term that is below what shareholders expect? I don’t think so. Shareholders have been, so far, relatively patient. We should aim to sort out what can be sorted out,” said Oudea.

Britain’s vote to exit the European Union, known as “Brexit,” is another headwind facing international banks, with the UK financial industry risking a loss of up to 38 billion pounds ($48.34 billion) in revenue if the country has only limited access to the European Union’s single market, according to one study.

“The big winner for Brexit will be New York; you’ll see more business moving to New York,” Gorman said at the IIF meeting.

The competition from technology companies in banks’ traditional markets, such as lending and payments, has also ramped up the pressure to change.

In the pre-crisis days, banks would have merged to cut costs, but regulators are now much less in favor of allowing the creation of big, cross-border lenders which could disrupt markets if they got into trouble.

Instead, banks are left to swing the ax where they can and ideally build big market positions in areas that are not penalized by big capital charges, such as consumer lending and asset management.

“The transformation process is still ongoing and it is painful,” said Alex Manson, global head of transaction banking at Standard Chartered Bank. “But the quicker you can define what it is you stand for, the quicker you can go to execution from meaning of life mode.”

($1 = 0.8928 euros)

(Editing by Bill Rigby)

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Published at Sun, 09 Oct 2016 11:05:19 +0000

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UPDATE 1-Alibaba Pictures, Amblin to co-produce films for global, Chinese audiences


UPDATE 1-Alibaba Pictures, Amblin to co-produce films for global, Chinese audiencesSteven Spielberg (L), film director and chairman of Amblin Partners and Jack Ma, chairman and chief executive of Alibaba Group, attend an event to announce partnership between Alibaba Pictures Group Limited and Amblin Partners, in Beijing, China, October 9, 2016. REUTERS/Shirley FengSteven Spielberg (L), film director and chairman of Amblin Partners and Jack Ma, chairman and chief executive of Alibaba Group, attend an event to announce partnership between Alibaba Pictures Group Limited and Amblin Partners, in Beijing, China, October 9, 2016. REUTERS/Shirley Feng


Steven Spielberg’s Amblin Partners and Alibaba Pictures Group Ltd, the film unit of Chinese billionaire Jack Ma’s Alibaba Group Holding Ltd, said on Sunday they will co-produce and finance films for global and Chinese audiences.


They will also collaborate on the marketing, distribution and merchandising of Amblin Partner films in China, the companies said in a joint statement.

Amblin Partners creates film, television and digital content under the Amblin Entertainment, DreamWorks Pictures and Participant Media brands.

Big Chinese companies including Dalian Wanda Group Co are looking to bring more Western films and movie-making prowess into China even as they seek to expand their footprint in Hollywood.

China’s masses have the ability to keep Hollywood movies afloat, industry watchers say. They expect China to soon surpass the United States as the world’s biggest movie market.

This year’s ‘Warcraft’, which was a box office flop in the United States, raked in hundreds of millions of dollars in China, making it one of the country’s highest-grossing films of the year.


“Some of the stories I’m hoping Jack and I can tell in this new partnership between Amblin Partners and Alibaba Pictures will be able to bring Chinese-themed stories to the American audience, and we can do co-productions between our company and your company,” Spielberg said at a briefing in Beijing.

“And we can bring more of China to America, and bring some more of America to China.”

Hong Kong-listed Alibaba Pictures has yet to release any films, although the company formerly known as ChinaVision Media Group Ltd has several projects in production.


Alibaba Pictures began investing in Hollywood films in 2015 with its stake in ‘Mission: Impossible – Rogue Nation’. It was an investor in this year’s blockbusters ‘Star Trek Beyond’ and ‘Teenage Mutant Ninja Turtles: Out of the Shadows’.

Chinese e-commerce giant Alibaba Group paid about $800 million for a controlling stake in ChinaVision Media in 2014.

Under the terms of the partnership, Alibaba Pictures will also acquire a minority stake in Amblin Partners, which is chaired by Spielberg, the award-winning U.S. movie director and producer.


Dalian Wanda, the conglomerate controlled by China’s richest man Wang Jianlin, is partnering with Sony Pictures under which Wanda will market Sony Pictures’ films and co-finance some upcoming movie releases of Sony Corp’s film unit in China.

In January, Wanda paid $3.5 billion for a controlling stake in U.S. film studio Legendary Entertainment. The group has also since said it would start co-investing in global blockbusters next year.

“I heard a lot of people say the movie industries are dead. I think that’s a lack of imagination,” Ma said at the briefing. “All the cinemas in the future are going to be changed because of technology. So people will definitely have all kinds of experiences watching movies.”

(Reporting by Ryan Woo; Editing by Paul Tait and Clelia Oziel)

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Published at Sun, 09 Oct 2016 14:11:22 +0000

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IMF members to push spending, revive trade to boost growth

0msUFa.jpgIMF members to push spending, revive trade to boost growth


By David Lawder and Leika Kihara

The International Monetary Fund’s member countries on Saturday pledged to revive flagging global trade, boost government spending and remove barriers to business to fight weak growth that has left too many people behind.


The pledge came as world finance leaders fretted over a rising populist backlash against trade and globalization at the IMF and World Bank annual meetings in Washington.

“The persistently low growth has exposed underlying structural weaknesses and risks further dampening potential growth and prospects for inclusiveness,” the Fund’s steering committee said in a communique.

Britain’s vote in June to leave the European Union, U.S. Republican presidential candidate Donald Trump’s anti-trade rhetoric and a global slowdown in trade volumes have prompted policymakers to try do a better job selling the benefits of global economic integration to the general public.

The International Monetary and Financial Committee said uncertainty and downside risks to the global recovery were elevated, and that it was increasingly threatened by protectionist policies and stalled reforms.

“We reinforce our commitment to strong, sustainable, inclusive, job-rich and more balanced growth. We will use all policy tools – structural reforms, fiscal and monetary policies – both individually and collectively,” it said.


The steering committee, made up of people who represent the fund’s 189 member countries, also included a pledge to “design and implement policies to address the concerns of those who have been left behind and to ensure that everyone has the opportunity to benefit from globalization and technological change.”

IMF Managing Director Christine Lagarde has been urging countries to do more to boost growth, spending more on infrastructure and education where possible and relying less on loose monetary policy that is already reached the limits of its influence. She also has sought more pro-market reforms in many countries

“We certainly decided to come up more loudly on this occasion to say, ‘central bankers cannot be the only game in town,'” Lagarde told a news conference. “Let’s get on with it and see some action on the part of the other authorities as well.”


The members repeated their pledge to refrain from competitive currency devaluations, to not target exchange rates for competitive purposes and to clearly communicate their policy stances.

“We will also redouble our commitment to maintain economic openness and reinvigorate global trade as a critical means to boost global growth.”

In addition, the IMF panel said it would “intensify” efforts to deal with bad loans and other financial sector problems left over from the last financial crisis in some advanced countries. The pledge comes as questions over Deutsche Bank’s (DBKGn.DE) financial health also prompted considerable discussion around the talks.


The IMF statement said that 26 member countries had pledged $360 billion in bilateral financing that can be used to supplement the Fund’s normal lending resources.

The members agreed with Lagarde’s proposal to delay the next review of the Fund’s “quota” shareholding system by about two years. They pledged to complete the review by no later than October 2019, compared with an original timetable for completion in 2017.

The last quota review, completed in 2010 but only ratified by the U.S. Congress in late 2015, resulted in a greater share for China, Brazil and other major emerging market economies.

(Reporting by David Lawder and Leika Kihara; Editing by Andrea Ricci)

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Published at Sat, 08 Oct 2016 20:19:54 +0000

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