경제 뉴스
Home
지식 허브
Peru and China to sign strengthened free-trade agreement in Xi's APEC visit

(This Nov. 8 story has been refiled to drop the repetition of Xi's title and to correct the spelling of his given name, in paragraph 6)


By Marco Aquino


LIMA (Reuters) - Peru and China will sign an updated free-trade agreement during President Xi Jinping's upcoming visit to the Andean nation that would boost commerce by at least 50% between the countries, Peru's foreign minister said on Friday.


In an interview with Reuters, Minister Elmer Schialer said the Chinese president would travel to Peru with a delegation of 400 business people interested in investing in infrastructure and technology projects in the country.


The free-trade agreement was originally signed in 2009 and the "optimized" version will be signed alongside 30 other agreements designed to improve cooperation between the countries.


"China is our main trading partner, experts say this will increase that dynamism by at least 50%," Schialer said. Bilateral trade between the two countries reached nearly $36 billion last year according to data from the Peruvian Ministry of Commerce.


China has large mining and infrastructure projects in the country, including the Chancay mega port by Cosco Shipping Port.


"The port will launch Peru to another level of trade," Schialer said. The port will be "virtually" inaugurated by Peruvian President Dina Boluarte and Xi from the government palace in Lima on Nov. 14.


Schialer added that Peru's portfolio of mining projects totals $54 billion while its infrastructure projects yet to be developed total $157 billion. He noted that "China is particularly interested" in these projects.


The minister said he doesn't expect changes with the United States given the recent election of President-elect Donald Trump.


"The only thing we hope for and are sure that will happen is an expansion of the United States' presence in investments," he said, adding that both the outgoing and incoming US administration have "given us clear signals of interest" in terms of investment.


2024-11-12 14:48:20
Asian stocks retreat, bitcoin soars to record on Trump euphoria

By Ankur Banerjee


SINGAPORE (Reuters) - Asian stocks eased while the dollar held at four-month highs on Tuesday, though all the excitement was centred on bitcoin as it soared to a record peak underpinned by investor bets on assets that are likely to benefit from Donald Trump's election win.


Investors anticipate Trump's second four-year term in office will bring equities-boosting tax cuts and looser regulations, lifting the world's biggest and best-known cryptocurrency, bitcoin, to an all-time high of $89,637.


But the threat of possible tariffs from the new White House administration has put the euro under pressure, with the single currency touching near seven-month lows of $1.0687 overnight. It was last at $1.0658 in Asian hours on Tuesday. [FRX/]


The dollar on the other hand is expected to benefit from some of the policies that will likely keep U.S. interest rates relatively higher for longer. The dollar index, which measures the greenback versus six peers, was at 105.57, just shy of the 4-month high hit on Monday.


Vasu Menon, managing director of investment strategy at OCBC, said the decisive win by Trump and the Republican party removes the overhang of an unclear or a contested U.S. election outcome.


"The medium-term outlook could become cloudier if Trump pursues aggressive tariff hikes ... This could fuel inflation eventually and stop the Fed from cutting rates. Tariffs also carry the risk of retaliation from the major trading partners."


"But this is a story for another time and Trump’s victory has unleashed the animal spirit in markets for now," Menon said.


Data provider DDHQ projected on Monday that Trump's Republican Party had won a majority in the U.S. House of Representatives, signalling a majority for Republicans in both chambers of Congress.


MSCI's broadest index of Asia-Pacific shares outside Japan was down 1%, with Taiwan shares sliding 2% and South Korean stocks 1% lower.


Chip stocks in the region have been reeling this week after Reuters reported that the U.S. ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in AI applications.


Japan's Nikkei was an outlier in the region and was up 0.5% on a weak yen, which was hovering close to more than three-month lows and last fetched 153.93 per dollar.


Overnight, Wall Street's main indexes notched record high closes, with Tesla (NASDAQ:TSLA) gaining around 9% after touching $1 trillion in market value on Friday on bets that the automaker would benefit from CEO Elon Musk's backing of Trump.


Trump's victory and the election of pro-crypto candidates to Congress have supercharged a bitcoin rally to record highs closer to 90,000, and targeting $100,000 next. It was last at $88,709.


"After such a performance, one could ask whether the Trump trades are already played out? Our take is 'No', as we think these trades still have plenty more legs," said Manish Kabra, lead U.S. equities & multi-asset strategist at Societe Generale (OTC:SCGLY) in a note.


Meanwhile, Chinese shares inched higher, while Hong Kong stocks slid 1%. Sentiment remained largely downbeat after Beijing's latest stimulus package failed to deliver the direct spending aimed at consumers that investors have been expecting.


On the macro side, investor focus will be on U.S. consumer price inflation data on Wednesday, with a parade of Federal Reserve speakers also due to speak this week, including Fed Chair Jerome Powell on Thursday.


Markets are pricing in 87% chance of the Fed cutting rates in December by 25 basis points.


In commodities, oil prices were little changed in early trading as China's stimulus plan and oversupply concerns took the wind out of markets in prior sessions.


Brent crude futures was at $71.88 a barrel, up 0.06% while U.S. West Texas Intermediate crude futures inched 0.09% higher to $68.10 a barrel. [O/R]


Spot gold was steady in Asian hours at $2,624 per ounce after touching its lowest level in a month on Monday. [GOL/]

2024-11-12 12:16:18
US stock futures steady after record-high run; CPI awaited

Investing.com-- U.S. stock index futures steadied in evening deals on Monday after Wall Street hit a series of record highs on optimism over Donald Trump’s election victory, with focus now turning to upcoming inflation data this week.


Futures steadied as a rally on Wall Street now appeared to be slowing, although benchmark indexes still eked out record highs. Wall Street has been on a tear after Trump’s victory in the 2024 presidential election last week.


S&P 500 Futures fell slightly to 6,028.00 points, while Nasdaq 100 Futures steadied at 21,208.75 points by 18:41 ET (23:41 GMT). Dow Jones Futures fell 0.1% to 44,394.0 points. 


Trading volumes were slower on Monday on account of the Veterans Day holiday. 


CPI data, Fedspeak awaited 

Wall Street’s rally now appeared to be cooling as investors grew wary before key consumer price index inflation data due on Wednesday.


Inflation is expected to have remained steady in October from the prior month amid continued resilience in the U.S. economy. But sticky inflation stands to potentially delay the Federal Reserve’s plans to cut interest rates further. 


The Fed had cut rates by 25 basis points last week, and reiterated that it would maintain a data-driven approach to further easing. 


Recent signs of sticky inflation spurred some doubts over just how much further interest rates will fall. Traders were seen pricing in a 70.7% chance for another 25 bps cut in December, and a 29.3% chance rates will remain unchanged, CME Fedwatch showed.


Beyond the CPI data, focus this week is also on addresses from a slew of Fed officials for more insight into the central bank’s plans for rates.


Fed Governor Christopher Waller and Richmond Fed President Thomas Barkin are set to speak on Tuesday. 


Wall St steadies as Trump rally cools 

Wall Street indexes still eked out record highs on Monday. But their pace of gains now appeared to be cooling, as investors sought more insight into what a second Trump presidency will entail for the economy. 


Trump is widely expected to enact more protectionist policies, especially in trade and immigration. Analysts warned that these could push up inflation in the long term, keeping interest rates relatively high. 


The S&P 500 rose 0.1% to 6,001.35 points on Monday, closing above 6,000 points for the first time ever. The NASDAQ Composite rose 0.1% to 19,303.57 points, while the Dow Jones Industrial Average rose 0.7% to 44,293.13 points. 


The Dow benefited greatly from positioning in economically sensitive sectors, as investors looked to more expansionary policies from Trump. 

2024-11-12 10:19:16
Take Five: Bracing for 'Trump 2.0'

(Reuters) -Donald Trump's sweep to victory in the U.S. presidential election has ignited the so-called "Trump trade", with the dollar, crypto and U.S. stocks all surging, as investors assess the global implications of his return to power.


Germany is grappling with a political crisis, Britain's finance minister delivers a key speech and policymakers head to Baku for a climate summit.


Here's a look at the week-ahead for markets from Kevin Buckland in Tokyo, Lewis (JO:LEWJ) Krauskopf in New York, Sinead Cruise, Dhara Ranasinghe and Karin Strohecker in London.


1/ WATCHING THE USA


    Focus turns to U.S. inflation data on Nov. 13, as markets wait to see if President-elect Trump will push ahead with economic policies that could be inflationary.


    Economists expect the consumer price index to have climbed 0.2% for October. September's 2.4% annual increase was the smallest in more than 3-1/2 years, reinforcing Federal Reserve rate-cut bets.


    But the central bank may have been thrown a curveball with Trump's election, since the Republican's plans to raise tariffs could fuel price rises. Following the Fed's 25 bps rate cut on Thursday, Chair Jerome Powell gave little guidance on how fast and far rates will now fall.


Markets are also watching whether "Trump trades" - including a stronger dollar and buying shares of banks and small-cap companies - will continue as investors assess the impact of the election result.


2/ OVER IN BEIJING


A closely watched gathering of China's top legislative body wrapped up on Friday with the announcement of a 6 trillion yuan ($835 billion) spending package aimed at cleaning up off-the-book debt at local governments.


For investors who had been hoping for extra spending to counter the potential impact of a Trump-led trade war, that was a massive let-down. Hong Kong-traded mainland property shares tumbled as much as 4.6% on Monday (NASDAQ:MNDY). The yuan fell, and commodities from crude to copper sold off.


Some analysts had warned it would be too early for Beijing to formalise a strategy only days after Trump's election victory. Macquarie, for one, said the goal of the stimulus is achieving the around-5% growth target for 2024, and "not to reflate the economy in any meaningful way".


With Trump's threatened 60% tariffs dwarfing those from eight years ago, meeting that growth target may be the least of Beijing concerns.


3/ POLITIK CHAOS


A collapse in Germany's ruling coalition puts a crisis in Europe's biggest economy in the spotlight just after Trump's win.


Chancellor Olaf Scholz's decision to fire his finance minister, from coalition partner the Free Democrats, points to a vote of no confidence in January and possible snap elections in March.


Scholz's Social Democrats now rule with remaining coalition ally the Greens in a minority government but face pressure to hold a no-confidence vote sooner. A contentious draft budget also needs to be finalised.


The timing is unfortunate. Germany has just dodged recession after a series of setbacks, while higher tariffs may loom under Trump.


Uncertainty could hurt business investment and slow M&A. As an election-packed year globally winds down, Germany could be gearing up to hold a poll of its own.


4/ COP-ING MECHANISMS


Policymakers and climate activists head to Azerbaijan's capital Baku from Nov. 11 for the 29th annual United Nations Climate Summit, known as COP29.


The summit has been dubbed the "climate finance COP" for its central goal: to agree on how much money should go each year to helping developing countries cope with climate-related costs.


Governments are also eager to resolve rules for trading carbon credits earned through the preservation of forests and other natural carbon sinks.


But coming just days after the U.S. elections and amid rising geopolitical tensions, the meeting is expected to be a subdued affair. Trump, a climate denier, wants to ramp up fossil fuel production and pull out of the Paris Climate Accords, a framework for reducing global greenhouse gas emissions.


5/ PENSION POTS


UK finance minister Rachel Reeves will serve up her latest plans to reinvigorate Britain's sluggish capital markets in her first Mansion House speech on Thursday, with a slew of pension fund reforms topping industry wish-lists.


UK defined benefit retirement schemes, most of which are closed to new members, are collectively sitting on an estimated 300 billion pounds of cash that could be funnelled into housing, infrastructure, unlisted company investments and unloved stocks for the greater good of the UK economy, industry sources say.


But while change is broadly welcome, the idea of mandating pension fund investment in so-called UK productive finance has been criticised because of the risk that good intentions may not always lead to good outcomes for retirement savers, particularly as UK equities continue to perform poorly against global peers.

2024-11-12 08:58:25
China chip index nears 3-year high as TSMC order fuels self-reliance bets

SHANGHAI (Reuters) - China's semiconductor index leapt close to a three-year high on Monday (NASDAQ:MNDY) on bets a U.S. order halting Taiwan Semiconductor Manufacturing Co's shipments of advanced chips to Chinese customers could accelerate Beijing's self-reliance efforts.


TSMC will from Monday suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the U.S. Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday.


Analysts said that while the move might lead to some short-term pain for Chinese firms involved in designing chips for artificial intelligence accelerators and graphics processing units, it could benefit the domestic chipmaking sector as companies would have few alternatives.


The CSI Semiconductor Index jumped more than 6% during trading on Monday to the highest since Dec. 20, 2021, while the CSI Integrated Circuits Index rose 5%. Shares in SMIC, China's largest foundry and the country's main alternative to TSMC, rose more than 4%.


"In the medium and long term it will force the reorganization of the supply chain, increase the demand for domestic advanced process production capacity, and promote technological breakthroughs in upstream semiconductor equipment and materials," Chinese brokerage Cinda Securities said in a note published on Sunday.


Several Chinese technology firms and chip designers have in recent years sought to design their own advanced processors after the U.S. sanctioned Huawei Technologies and barred the likes of Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD) from selling their most sophisticated chips to China.


Many rely on Taiwan-based TSMC, the world's leading contract chipmaker, for production. In the third quarter, 11% of TSMC's revenue came from China, the company said.


The U.S. imposed export restrictions on TSMC chips of 7 nanometre or more advanced designs, Reuters reported.

The only foundry in China capable of producing chips at the 7 nm process node is SMIC, which is known for helping Huawei produce chips used in its latest smartphones, including the Mate 60 and Pura 70.

Analysts said SMIC has been making such advanced chips using equipment supplied by companies like the Netherlands' ASML (AS:ASML) and U.S.-based Applied Materials (NASDAQ:AMAT), which it managed to stockpile before U.S. sanctions took effect.

However, SMIC has faced difficulties in ramping up production due to U.S. export controls barring it from purchasing equipment necessary for advanced chip manufacturing, while domestic alternatives are not yet ready for the effort.

Reuters reported in February that due to manufacturing constraints, SMIC has had to prioritise producing AI chips for Huawei over smartphone chips, as the former is seen as more strategically important.
2024-11-11 17:05:38
Exclusive-ADB increases climate finance after US, Japan give world's first sovereign guarantees

By Simon Jessop, Karin Strohecker and Katy Daigle


BAKU (Reuters) - The Asian Development Bank will increase its climate-related lending by up to $7.2 billion after the United States and Japan agreed to underwrite risk for some existing loans, an ADB executive said, marking the first ever sovereign guarantees for climate finance.


The new strategy, shared exclusively with Reuters, offers a potential template for other development banks to follow as the U.N.'s COP29 climate summit in Baku, Azerbaijan, starting this week focuses on ramping up the amount of finance available to developing nations.


The ADB has set a long-term cumulative climate finance lending target of $100 billion between 2019 and 2030. In 2023, it lent $9.8 billion.


The U.S. election victory last week of Donald Trump, who has vowed to remove the United States from the Paris Agreement on climate, has overshadowed the start of the Baku talks, adding pressure on Europe and China to help get a strong result, negotiators said last week.


Under the ADB plan, the world's richest country would guarantee up to $1 billion of existing loans from Asia's top development institution, while Japan would underwrite $600 million – freeing the bank to lend more for climate-related projects.


"The structure is a fantastic way of extending a multilateral development bank's (MDB) lending capacity without going through the politically difficult situation of a general capital increase," which would need to come from fresh country donations, Jacob Sorensen, director of partner funds at the ADB, told Reuters.


An ADB spokesperson declined to comment on whether the deals, which were finalised last week, would be affected by the incoming Trump administration.


The extra lending headroom the guarantees generate will be deployed over the next five years, while the duration of the guarantees themselves will be 25 years, according to the ADB.


COOKING OIL TO JET FUEL


One of the first beneficiaries from this new ADB push will be a project in Pakistan to generate sustainable aviation fuel from cooking oil, Sorensen said. About half of the $90 million needed would come from the ADB scheme with the deal expected to be signed on Nov. 20, the bank said.


The ADB, based in the Philippines, has spent three years developing the guarantee deal with a group of Western governments and hopes other countries will follow soon, he added.


It has also been sharing its experience with the World Bank, Inter-American Development Bank and European Investment Bank as part of broader, collaborative efforts to scale up climate-related lending.


"We have been extensively in consultation with multiple other MDBs," Sorensen said.


While the deals mark the first use of sovereign guarantees for climate finance, they have previously been used to fund other areas of lending such as education.


Public lending institutions have also begun to guarantee other, third-party investments for climate projects. Earlier this year, the World Bank launched a platform to house all such guarantees for loans and investments from across the various branches of the organisation, in an effort to expand their use.


The programme was going "very well", having guaranteed more than $10 billion through the programme in 2023 with a goal of doubling that annual figure by 2030, Axel van Trotsenburg, the bank's senior managing director told Reuters last month in Washington.


As climate change increases the threat of extreme weather and disaster worldwide, developing countries are forecast to need more than $2 trillion a year by 2030 to transition to clean energy and prepare for the conditions of a warmer planet.


Rich nations are hoping that a financing deal at COP29 goes beyond relying on donations from them for climate finance, and instead looks to development banks as well as private investors for the bulk of the world's climate cash.

2024-11-11 15:05:00
Asia stocks fall as China stimulus disappoints, deflation persists

Investing.com-- Most Asian stocks fell on Monday (NASDAQ:MNDY) as fresh fiscal stimulus from China largely underwhelmed, while data over the weekend showed deflation in the country remained in play. 


Regional markets brushed off a strong lead-in from Wall Street, which rose on Friday and remained at record highs amid persistent optimism over a Donald Trump presidency.


U.S. stock index futures rose in Asian trade, with focus turning to upcoming inflation data and a slew of Federal Reserve speakers this week. 


Chinese stocks dip as fiscal stimulus underwhelms 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.6% and 0.2%, respectively, while Hong Kong’s Hang Seng index slid 2.4% and was the worst performer in Asian markets. 


Investors were mostly underwhelmed by China’s National People’s Congress announcing about 12 trillion yuan ($1.6 trillion) in a debt swap program to improve the finances of local governments. 


But a lack of direct fiscal stimulus and targeted measures to improve the housing market and personal consumption left investors wanting, especially as data over the weekend showed Chinese deflation persisted in October. 


Chinese consumer price index inflation grew at a slower pace last month, while producer price index inflation shrank for a 25th consecutive month. 


Analysts at ANZ said the lack of direct stimulus was likely to accommodate any potential headwinds from a change in U.S. administration, after Trump’s victory. Trump has vowed to impose steep trade tariffs on China, which bodes poorly for the country.


This notion had also weighed on Chinese markets over the past week. 


Japanese stocks pressured by BOJ rate hike uncertainty 

Japan’s Nikkei 225 and TOPIX indexes fell about 0.3% each, weighed by uncertainty over interest rates after the summary of opinions of the Bank of Japan’s October meeting showed policymakers split over when to hike interest rates.


The BOJ had kept rates steady in October after hiking them twice earlier this year, as the bank saw a virtuous cycle of higher wages and inflation. 


But the bank’s plans for more rate hikes were clouded by heightened political uncertainty, after a coalition led by Japan’s ruling Liberal Democratic Party lost its parliamentary majority. 


Still, Governor Kazuo Ueda signaled at the October meeting that interest rates were still set to rise eventually. 


Broader Asian markets retreated as weakness in China spilled over. Australia’s ASX 200 fell 0.5%, as the country’s exposure to China weighed.


South Korea’s KOSPI fell 0.9%, weighed by losses in technology stocks.


Futures for India’s Nifty 50 index pointed to a flat open, as the index languished near three-month lows. Indian stocks were walloped by heavy foreign capital outflows over the past month.


Indian CPI inflation data is due on Tuesday.

2024-11-11 12:13:33
Bitcoin hits record high above $81k as Trump rally persists

Investing.com-- Bitcoin briefly hit a record high above key levels on Sunday evening, extending a stellar run of recent gains after Donald Trump was elected as the U.S. president, sparking hopes of friendlier crypto regulation.


Bitcoin rose nearly 6% to a record high of $81,373.5, before settling around $80,362.9 by 18:16 ET (23:15 GMT). 


The world’s largest cryptocurrency, along with broader crypto markets, have been on a tear since Trump’s election victory last week. The president-elect had vowed to make the U.S. the “crypto capital” of the world.


Bitcoin had surged some 10% over the past week, and was trading up 91% so far in 2024. 


World no.2 crypto Ether rose 1.8% to $3,190.0- a three-month high. 

2024-11-11 10:25:39
Top 5 things to watch in markets in the week ahead

Investing.com -- After a historic week for markets in the wake of Donald Trump's resounding win in the U.S. presidential election investors will be turning their attention to inflation numbers for indications on how the economic outlook may begin to shift in the light of election results. Market participants will also get a chance to hear from several Federal Reserve officials after last week’s rate cut. Here's your look at what's happening in markets for the week ahead.


1. CPI

Investors will be closely watching Wednesday’s U.S. inflation data for October, as markets wait to see if president-elect Trump will push ahead with economic policies that could be inflationary.


Economists expect the consumer price index to have risen at an annual rate of 2.4% in October, matching September’s pace. September's annual increase was the smallest in more than three-and-a-half years, reinforcing Fed rate-cut bets.


But the central bank may have been thrown a curveball with Trump's election, since many believe that his proposals, in particular higher tariffs, could push up consumer prices. Following the Fed's 25 bps rate cut on Thursday, Chair Jerome Powell gave little guidance on how fast and far rates will now fall.


2. Market rally to face inflation test

Market watchers will be waiting to see whether this week’s inflation numbers will help sustain the record-breaking stock rally that has received a boost from Trump's election win.


The benchmark S&P 500 surged to an all-time high and hit the 6,000 level for the first time on Friday, as expectations of tax cuts and looser regulations under Trump boosted risk appetite.


A reassuring economic outlook from the Fed, which delivered a widely expected 25 basis point rate cut on Thursday, also helped boost sentiment.


 The central bank's ability to keep cutting rates, however, will be tested by whether incoming data shows inflation continuing to moderate.


3. Fedspeak

Investors will get a chance to hear from several Fed officials this week, starting with Governor Christopher Waller on Tuesday.  Richmond Fed President Thomas Barkin and Philadelphia Fed president Patrick Harker are also due to make appearances the same day.


Markets will likely pay closer attention to officials speaking after Wednesday’s inflation numbers, starting on Wednesday with Dallas Fed president Lorrie Logan, St. Louis Fed president Alberto Musalem and Kansas City Fed president Jeff Schmid.


Fed Chair Jerome Powell is to deliver what will likely be closely watched remarks on Thursday. Meanwhile, New York Fed president John Williams will cap off the week's speaking docket later the same day at NY Fed event on "Making missing markets".


4. Bitcoin hovering near $80,000

Bitcoin is on the verge of reaching $80,000 for the first time, boosted by expectations that Trump will roll out more crypto-friendly regulations.


The world’s largest cryptocurrency hit a record high of $79,692 overnight Sunday and was trading at $79,333.50 as of 5:13 ET (10:13 GMT).


During his campaign, Trump vowed to make the U.S. the “crypto capital” of the world by creating a strategic Bitcoin stockpile and appointing friendlier regulators.


He has emerged from last Tuesday’s election in a stronger than expected position with his Republican Party in control of the Senate and on the verge of holding a narrow majority in the House.


Bitcoin was also bolstered after Jay Powell said Thursday that the Fed's path was unchanged in the face of near-term political changes in the U.S.


His comments helped spur gains across most risk-driven assets, including crypto.


5. Oil prices

Oil prices fell on Friday as China’s latest package of stimulus measures left energy traders underwhelmed, but despite the losses still managed to notch up a weekly gain.


U.S. crude futures settled at $70.35 per barrel, down by 2.7%. Global benchmark Brent crude futures fell by 2.3% to $73.87 per barrel.


Chinese authorities announced a package easing debt-repayment strains for local governments, but analysts said the measures will do little to directly target demand. Deflationary pressures on the Chinese economy have been a heavy drag on oil prices this year.


But prices still ended the week higher amid expectations for tighter sanctions on Iran and Venezuela under the incoming Trump administration, which could cut oil supply to global markets.


Prices also received a boost from Thursday’s Fed rate cut. Interest rate cuts typically boost economic activity and energy demand.


--Reuters contributed reporting


2024-11-11 09:06:51
Nissan shares slump after unveiling plan to cut jobs, production

TOKYO (Reuters) -Nissan Motor shares slumped as much as 10% in Tokyo trade on Friday, a day after the Japanese automaker said it would cut 9,000 jobs and 20% of its manufacturing capacity as it struggles with sales in China and the United States.


The stock was on track for its biggest one-day price drop since August. It last traded down 6.5% at 383.5 yen, just above a four-year low.


Japan's third-biggest automaker on Thursday slashed its full-year operating profit forecast by 70% and scrapped its net forecast altogether due to restructuring, which it said would cut costs by 400 billion yen ($2.61 billion) in the financial year to March-end. 


Like many global automakers, Nissan (OTC:NSANY) is struggling in China where BYD (SZ:002594) and other domestic rivals are winning market share with affordable electric vehicles and petrol-electric hybrids equipped with advanced software.


Nissan is also challenged in the U.S. where it lacks a line-up of hybrids just as that vehicle type is in strong demand.


CEO Makoto Uchida said on Thursday Nissan had not foreseen hybrids' sudden popularity in the U.S. and that demand for revamped versions of core models had not been as strong as hoped.


Nissan's restructuring is the latest chapter in a long-running attempt to revitalise its business, having never fully recovered from the 2018 ousting of former Chairman Carlos Ghosn and scaling back of its partnership with Renault (EPA:RENA).


On Friday, Minister of Economy, Trade and Industry Yoji Muto declined to comment to reporters when asked his views on potential government support for Nissan.


Tokai Tokyo Intelligence Laboratory analyst Seiji Sugiura placed much of the blame for Nissan's U.S. hybrid situation on management that he said was mainly pinning hope on selling new EV and traditionally powered models.


"The company released its mid-term plan this spring, but it in the end there was no meaning to that. I think their understanding of the situation is completely wrong," Sugiura said.


Nissan's mid-term plan announced in March involved 30 new models over the next three years, raising global sales by 1 million vehicles, an operating profit margin exceeding 6% by the end of fiscal 2027 and total shareholder returns of more than 30%.


($1 = 153.2000 yen)


2024-11-08 13:57:25