Latest news with #US-centric
Korea Herald
3 days ago
- Business
- Korea Herald
Time to pivot to China, India and move beyond US: Mirae Asset vice chairman
As cracks emerge in the US-centered investment landscape -- driven by geopolitical uncertainty and waning global confidence -- Mirae Asset Securities Vice Chairman Heo Sun-ho called for a strategic rebalancing toward China and India. Speaking at a global asset allocation forum hosted by Mirae Asset in Seoul on Thursday, Heo said the global financial market has relied heavily on the US as its primary growth engine over the past three years. However, with the return of President Donald Trump and the onset of a high-tariff era, he warned that the global trade order is being reshaped. 'The recent depreciation of the US dollar reflects weakening global confidence, spurred by growing nationalism and ballooning fiscal deficits,' Heo said, urging investors to pivot from a US-centric strategy and realign their portfolios with the shifting global innovation landscape. China and India, he said, represent promising alternatives. 'Innovative technology that once fueled US growth is no longer its exclusive domain,' he added, pointing to China's accelerating technological self-reliance, supported by pro-market policy shifts. He cited examples such as Chinese AI startup DeepSeek positioning itself as a challenger to OpenAI, and BYD, which in April overtook Tesla in the European electric vehicle market for the first time. Meanwhile, India is emerging as a vast consumer market, Heo said, powered by robust digital infrastructure and a rapidly expanding population. His remarks come amid a noticeable cooling of Korean retail interest in US equities following a period of record buying. As of May 26, Korean individual investors had sold a net $1.065 billion (1.46 trillion won) in US stocks -- their first net sell-off in seven months. Even longtime favorites like Tesla and Nvidia saw combined net sales of about $306 million during the week of May 19-23. Echoing the call for a diversified investment strategy, Lee Phil-sang, director and head of Asia Pacific Research at Mirae Asset Hong Kong, highlighted China's healthcare tech sector as a compelling opportunity. He cited the country's deep talent pool as a key factor driving its progress toward catching up with the more established US biopharmaceutical industry. 'China has made significant strides in new drug development over the past four years. In 2010, its output in this field was minimal, but it now ranks second globally,' Lee said. Chinese biotech firms such as Beigene, Akeso, Hansoh, and Eccogene have been expanding globally through out-licensing deals and international clinical trials. Lee said that China is also taking the lead in advanced drug modalities, including antibody-drug conjugates, targeted cancer therapies linking antibodies to toxic agents, and bispecific antibodies, designed to bind two different antigens for enhanced efficacy. Policy shifts in China are also creating a more favorable environment for foreign investors, Lee said. Whereas past periods of double-digit economic growth often led to excessive government investment and harmful oversupply, a slowing Chinese economy is now helping to differentiate true market leaders. 'China's slow growth isn't necessarily negative,' Lee said. 'It's in low-growth conditions that world-class enterprises emerge. When a leading company dominates the domestic market and expands overseas, it sets the stage for the rise of truly global champions.'
Korea Herald
3 days ago
- Politics
- Korea Herald
How Korea's next leader should set foreign policy compass
JEJU ISLAND -- The crux of the new Korean government's foreign and security strategy, former foreign ministers said, must be adapting to a shifting, more inward-looking US -- one demanding greater burden-sharing from its allies under President Trump's 'America First' doctrine -- while keeping the alliance at the core of its foreign policy at this critical crossroads. Facing a wave of increasingly interconnected global crises and a more inward-looking Washington, the former top diplomats urged Seoul's next leadership to move beyond the conventional US-centric approach and adopt a more holistic, big-picture foreign policy suited to the shifting global order. 'What's most important as Korea's new government takes office is that we are facing not just one or two challenges, but a complex web of simultaneous crises. We all know that these issues are unfolding on multiple fronts at once,' former Foreign Minister Yun Byung-se, who served under the former conservative Park Geun-hye administration, said during Thursday's session at the Jeju Forum held on the southern island of Jeju. 'Therefore, the new administration should not approach strategy solely through the lens of relations with the US, but should instead adopt a broader, more comprehensive perspective,' Yun said during a session on South Korea's diplomatic and security strategy ahead of the early presidential election on June 3. With no transition period before taking office, the new South Korean leadership will also need to quickly find its footing as it responds to growing US calls for greater responsibility in national and regional defense, as well as increased demands across the board within the bilateral alliance framework, Yun said. He also noted that, unlike in the past when North Korea's provocations were the main concern for an incoming administration, this time will be different: "the new government will need to prioritize how quickly it can formulate its own position in response to US priorities." 'Ultimately, it comes down to two main points: the role of US Forces Korea and South Korea's own regional role,' Yun explained. In Seoul, concerns are growing that the operational scope of US Forces Korea could extend beyond the Korean Peninsula and expand to regional defense, including being repurposed for a potential Taiwan contingency. 'In 2003, some units from US Forces Korea were redeployed to Iraq. Now, if they are redeployed -- not to Iraq, but to areas near Taiwan -- that could present a whole new set of challenges, and it's something we need to think about very carefully,' Yun said. 'From what I see, neither (presidential election) camp is fully prepared to address this issue yet.' Both the classified 'Interim National Defense Guidance,' as reported by The Washington Post, and Secretary of Defense Pete Hegseth's statement on the development of the 2025 National Defense Strategy make clear that US forces will prioritize deterring China as the sole pacing threat. Another key point is that allies should shoulder more responsibility for defending against other regional threats -- for South Korea, this means threats posed by North Korea. Former Foreign Minister Song Min-soon underscored that 'Korea needs to transform its current alliance system -- which is now overly dependent on the US -- into a more autonomous alliance, while still faithfully upholding the Korea-US alliance.' "This is something the US also wants," Song said. "However, in Korea, there is a fear that moving toward a more self-reliant alliance could lead to isolation from the US, and how to overcome that fear is the challenge." Song, who served in the former liberal Roh Moo-hyun administration, also called for the next South Korean government to 'more actively explore ways to achieve a nuclear balance between the two Koreas,' instead of merely relying on US extended deterrence. Extended deterrence refers to Washington's commitment to deter or respond to coercion and external attacks on its allies and partners with the full range of its military capabilities, including nuclear weapons. 'However, it doesn't necessarily mean that we need immediate nuclear armament,' Song continued. Former Foreign Minister Kim Sung-hwan, however, said the next government should continue to focus on diplomacy with the United States and ensure that US extended deterrence is well maintained, opposing the idea of South Korea independently seeking a nuclear balance against North Korea. On the diplomatic front, Kim emphasized that the key challenge is how to navigate between the Korea-US alliance and China amid the shifting global order. "From the perspective of our diplomatic and security interests, regardless of who becomes the next president, the most important point is what stance South Korea should take between the US, our ally, and China, given our geopolitical realities," Kim said. "This remains our greatest diplomatic challenge." But Kim also pointed out that the US is no longer willing to unilaterally provide public goods as it did in the past, as it needs to focus its limited capacity on addressing mounting domestic challenges. Kim, who served under former conservative President Lee Myung-bak, expressed his concerns over a potential return to what's known as the 'Kindleberger Trap,' highlighting this as a key factor for South Korea to consider in devising its foreign policy. The trap refers to the failure of the international system due to the under-provision of global public goods and the dangers inherent in a shifting balance of power. "Looking at the current global order, if the US stops providing public goods, who will take on that role? Is Europe economically strong enough to take on that responsibility?" Kim said. "These are the kinds of questions we need to seriously consider in the context of international affairs."
Business Times
25-05-2025
- Business
- Business Times
US dollar tumbles as Trump's EU tariff talk spurs investor flight
[NEW YORK] The US dollar dropped across the board on Friday (May 23), as investors dumped the currency after US President Donald Trump once again ratcheted up his trade war, recommending that the European Union (EU) be hit with 50 per cent tariffs beginning Jun 1. That rekindled concern about the impact of duties on the world economy and global trade. Trump said in comments on social media that the EU was 'very difficult to deal with' and 'our discussions with them are going nowhere'. He threatened in a separate post to impose a 25 per cent tariff on Apple iPhones not made in the United States, as well as Samsung and other smartphone makers. 'The key theme that is weighing on the dollar right now is the loss of confidence in US policy,' said Elias Haddad, senior markets strategist at Brown Brothers Harriman in London. 'There's an ongoing trade war and that's leading countries to reassess their dependency on the US.' In afternoon trading, the US dollar sank 1 per cent versus the safe-haven Japanese yen to 142.48 after earlier falling to a two-week low. For the week, the greenback was down 2.2 per cent against the Japanese currency, on track for its largest weekly fall since Apr 7. The euro rose 0.8 per cent against the US dollar to US$1.1363. Earlier in the session, it touched a two-week peak, and was on track for its biggest weekly rise in six weeks. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The dollar index, which measures the greenback against a basket of currencies, fell 0.8 per cent to 99.09, hitting a three-week trough. For the week, the greenback was down 1.9 per cent, on track for its biggest weekly percentage decline since early April. Treasury Secretary Scott Bessent noted that Trump's tariff comments were in response to the EU's pace on tariff talks, noting that the US president does not believe the EU's trade offers to the United States are of sufficient quality. US stocks also fell in tandem with the US dollar. Jayati Bharadwaj, a global FX strategist at TD Securities, said the US dollar and stocks selling off in unison highlighted the US currency's failure this year to act as a haven currency. 'The dollar's correlation with equities is also broken ... it's flipped completely in the last few weeks and we expect it to stay that way. That's because the risks that we've been dealing with since the start of the year are US-centric,' she added. The Japanese currency, meanwhile, got a boost earlier from data showing Japan's core inflation accelerated at its fastest annual pace in more than two years in April, raising the odds of another interest rate hike by year-end from the Bank of Japan. The data underscores the dilemma facing the Bank of Japan, which must grapple with price pressures from persistent food inflation as well as economic headwinds from Trump's tariffs. Super-long Japanese government bonds have also scaled record highs last week, although yields dipped on Friday. After Moody's last week downgraded the US debt ratings, investor attention has focused on the country's US$36 trillion debt pile and Trump's tax bill, which could add trillions of dollars more to it. The bill narrowly passed the Republican-controlled US House of Representatives and now heads to the Senate for what is likely to be weeks of debate, keeping investor sentiment fragile in the near term. Sterling strengthened 0.9 per cent against the US dollar to US$1.3533 after earlier climbing to a more than three-year high. For the week, the pound was up 1 per cent, posting its largest weekly gain in five weeks. REUTERS
Yahoo
14-05-2025
- Business
- Yahoo
Samsonite Group SA (SMSEY) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
Revenue: $797 million for Q1 2025, down 4.5% constant currency from last year. Gross Margin: 59.4% for the quarter, slightly down from 60.4% last year. Adjusted EBITDA: $128 million with a margin of 16.0%, decreased by $34 million from last year. Adjusted Net Income: $52 million, compared to $87 million last year. SG&A Expenses: $318 million, flat compared to Q1 of last year despite opening 64 net new stores. Operating Profit: $110 million, down from $150 million last year. Adjusted Free Cash Flow: Negative $41 million, impacted by pre-purchasing inventory. Net Debt: Just shy of $1.2 billion, with a net leverage of 1.8x. Store Openings: 64 net new stores opened during the period. Regional Performance: Asia down 7%, North America down 8%, Europe up 4.4%, Latin America flat. Brand Performance: Samsonite down 4.5%, Tumi down 2%, American Tourister down 10%. Advertising Spend: $42 million, 5.3% of sales, down from 6.1% last year. Non-Travel Sales: 36% of net sales, up from 35.1% last year. E-commerce Growth: 7.5% growth on a constant currency basis. Warning! GuruFocus has detected 1 Warning Sign with ACHC. Release Date: May 13, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Samsonite Group SA (SMSEY) is confidently managing through market uncertainties with agility and focus, leveraging its strong global teams. The company has a strong correlation with travel, which remains a priority for consumer spending, with expected growth in the near term. Samsonite Group SA (SMSEY) has a strong financial position, focusing on driving profitable and sustainable growth while maintaining cost discipline. The company is taking decisive actions to mitigate the impact of tariffs, leveraging its diversified and strong sourcing platform. Samsonite Group SA (SMSEY) continues to innovate with new product launches, such as the Paralux and Lite Geo collections, which are expected to perform well in the market. The macroeconomic environment is uncertain, impacting consumer sentiment and demand, particularly in North America. Sales in Q1 2025 decreased by 4.5% compared to the previous year, with a notable decline in the American Tourister brand. Gross margins slightly decreased to 59.4% from 60% last year, affected by geographic sales mix. The company faces significant uncertainty regarding tariffs, which could impact demand and cost pressures in the back half of the year. Consumer confidence is impacted in North America and parts of Asia, affecting retail traffic and demand. Q: At the beginning of the presentation, you mentioned slightly better current trading in Asia and LATAM. However, you later implied that Q2 should be in line with Q1. Could you clarify this? Also, how do you see the correlation between travel trends and sales growth for your business? Lastly, regarding pricing, how much have you priced so far this year, and is this global or more US-centric? A: On a blended basis, Q2 will look similar to Q1, with slight improvements in Asia and LATAM. The travel trends remain correlated with our sales, and while consumer sentiment affects us, travel remains a priority. We are taking pricing actions to offset tariff impacts, primarily in the US, but it's fluid, and we're managing it carefully. Q: Regarding the sales trend in Q2, do you see any order pull forward, especially in North America? Also, could you elaborate on the broad-based weakness in Asia and its continuation into Q2? A: There isn't significant order pull forward in Q2. In Asia, while China and India show positive trends, other regions like South Korea are impacted by political instability. Overall, Asia's performance is steady, with slight improvements expected in Q2. EBITDA margins are expected to be better in Q2 due to seasonality. Q: With American Tourister down 10%, what is your strategy for this brand? Are there plans to expand the price range or focus on profitability? A: The strategy for American Tourister remains intact. The decline is due to cautious wholesale buying and consumer sentiment, not a strategic issue. We maintain a wide price range, especially in Asia, and expect improvements as conditions stabilize. Q: With the tariff overhead in the US, how are you managing relationships with suppliers and wholesalers, especially with the peak season approaching? A: We are in constant communication with our customers, managing the timing of pricing actions carefully. We have long-standing relationships and are working closely to ensure we are well-positioned for the peak season, despite the uncertainty surrounding tariffs. Q: Can you provide more details on the impact of tariffs and your mitigation strategies? A: We are taking decisive actions to mitigate tariff impacts, including strategic price increases and leveraging our diversified sourcing platform. We expect tariffs to resolve over time, and our focus is on neutralizing cost impacts through supplier negotiations and product reengineering. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
NZ Herald
13-05-2025
- Business
- NZ Herald
Capital Markets: US investment market undergoes a re-rating
Sharemarkets fell, the US dollar cratered and US treasury note yields (the interest rate on government debt) rose sharply. It was this rapid rise in rates – the 10 Year Treasury Note yield went from below 4% to as high as 4.5% in one of the largest weekly moves in recent memory – that seemed to force Trump's hand. By month's end he had paused the implementation of the tariff plan leading to a sharp rebound in share prices and a fall in US interest rates. Despite the 90-day pause, and market speculation that the eventual tariff levels will be much lower than those initially announced, it's hard not to feel that this signals a change in the world order. This will have implications for managing money. Jasper says 'we have grown up in a world that has been US-centric. The US dollar has been the clear global reserve currency, and we bought the US multi-national companies, the dollar and bonds. Since World War II, it's been the smart and powerful way to invest. Most investors matured in a world built on US exceptionalism. 'There were clear lines of sight for us to follow. US companies were globally dominant, the US dollar was strong and provided a safety valve for trading economies to improve competitiveness. Inflation was well contained and generally falling.' Jasper says that this US investment narrative has been fraying at the edges for some time. ' If you backed the US, you did well, but that is less clear now. Trump's tariff announcements were a symptom (of that fraying) rather than the cause of it, and 'Liberation Day' was another nail in its coffin. 'In its place, we are entering a multipolar world. Rather than the US being a clear world superpower attracting global capital, other regions and countries are gaining relative power and catching up with the US in both economic and geopolitical significance.' He cites the European bloc, China and India as having increased influence. The lines are being drawn. 'The US has dismantled its international aid agency and appears to be retreating from Europe and Nato. Tariffs are the next iteration. 'The European bloc is taking on more responsibility and authority with defence spending, and the future of Ukraine.' Jasper says the multipolar world is likely to be characterised by a wind-back in openness and a pivot towards protectionism. It may mean a realignment of trade patterns and potentially require significant new capital investment, not just in manufacturing but also in defence. He says, despite the sharemarkets bouncing back since 'Liberation Day', the US dollar has weakened as investors retreated from US assets and repatriated capital back to their home markets. 'The DXY Index, which measures US dollar performance against a basket of currencies, fell by 5.3% from April 2 to its intra-month low point. This is a dramatic fall for the world's reserve currency. 'If the multipolar world takes hold, there will be more repatriation of capital out of the US and we need to make sure our portfolios have exposure to other countries and businesses.' While market participants seem to have shrugged off their initial fears of the US tariff regime, risk remains, says Jasper. 'The echoes of this can be seen in the elevated gold price and the US dollar, which despite a small bounce near month's end, remained 9.2% off its highs as measured by the DXY index. 'This is the exact opposite from what economic theorists would expect on the imposition of a tariff; theory points to a stronger not weaker currency on the country imposing the tariff. 'Something strange is going on.' Jasper says 'a change in economic leadership is underway and companies have to be more thoughtful about the way they operate. The US idea was having manufacturing offshore because it was cheaper to produce and then developing logistics (supply chain) and growing markets to sell more products. 'Since 'Liberation Day' companies are more concerned about their risks and thinking of bringing more manufacturing onshore. There is a move to a multipolar world in managing manufacturing. Managing money and risk is far more important now than it was 10 years ago.' Advertise with NZME. The new economic and investment landscape means megatrends have to be built into portfolios, says Jasper. 'The idea of mega trends is that there are structural trends or themes driving asset pricing over extended periods of time. In the more stable US-centric world that had existed, these themes tended to be less important to achieving investment success. 'We are of the view that explicitly considering them as we build portfolios today will be central to delivering tomorrow's investment outcomes.' He says the megatrends include: ● Geopolitical fragmentation: The change to a multipolar world will result in a change in supply chains. ● Artificial intelligence (this has a geopolitical theme): The arrival of the Chinese AI assistant app DeepSeek was a big wake-up call for the industry and will change business operating models. ● Low carbon economy: The transition to lower carbon-intensity economy will require significant investment. ● Demographic divergence: The demographics in the developing world are still growing while birth rates in the Western World are low, affecting potential economic growth. ● Future of finance: More money will be spent on defence, and manufacturing and the sources needed to fund this will change. This may provide further impetus to the growth of private assets like private credit. Jasper says while there are strong reasons to believe 'we are entering a new investment paradigm, exactly how this plays out, is in many ways, unknowable. 'The US does one thing and we don't know how China will respond until we hear from them.' Portfolios must be dynamic and able to respond to changing conditions, he says. Advertise with NZME. 'Set and forget is not a winning strategy in a rapidly-changing world. Being able to adapt your investment portfolio as new insights come to hand will be critical. 'That doesn't mean you trade every five minutes as you reassess the risk in different parts of the world. But it's important to look through the noise and isolate the signals.' During last month's market volatility when the NZ dollar fell to US55c, ASB reduced its level of exposure to international currencies. 'That's paid off,' says Jasper. 'We increased the size of our hedge at 55c to partially offset any rise back against the American dollar. We also paid a small cost for the put option to do this. It's a shorter-term position and it's like an insurance policy – you get a pay-out if the market moves beyond a certain level. And we have an allocation of gold to act as a defensive asset.' Jasper says when building its investment portfolio, ASB factors in a medium-term outlook of three to five years, considering the mispricings in the markets and which parts of the world are benefiting from the mega trends. This results in the portfolio being varied from its typical long-term exposures. 'You can't assume the future will be like the past. There will be different ways to look at investing, and the value of diversification has just gone up. When everything is changing, working out the end-game is complex. 'Being dynamic and moving money around will ensure portfolios are well-diversified and well-positioned,' says Jasper.
