Asian markets down on bleak results
Dismal earnings figures from electronic giants Samsung and Sony send stock prices sliding.
Samsung lost 20 billion won ($14.4m) in the three months ending on December 31.
“The global economic slowdown had an adverse effect on consumer purchases of electronics goods in the fourth quarter, traditionally a strong period for electronics companies,” Samsung said in a statement.
Last year, Samsung had reported a net profit of $1.6bn.
Demand down
The news came a day after South Korea’s LG Electronics posted a record quarterly net loss and Japan’s Sony warned that it could lose a record $2.9bn.
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The electronic giants have all cited a plummet in demand as consumers cut back sharply on their spending amid economic recession in Britain, Europe, Japan and the United States.
“With Sony the way it is, it’s easy to imagine how other electronics makers are faring. On top of that, many companies haven’t yet priced in the recent strength in the yen into their earnings forecasts,” said Fumiyuki Nakanishi, manager at SMBC Friend Securities in Tokyo.
In more grim economic news, the Bank of Japan cut its economic growth forecast on Thursday, predicting the world’s number two economy would contract for two full years, until March 2010.
China’s growth also slowed by 6.8 per cent in the December quarter.
The Chinese slowdown would mean a $3.3bn drop in Australian exports and could endanger jobs there, Kevin Rudd, Australia’s prime minister, announced.
In a speech late on Thursday, Rudd said China’s latest growth figures – the lowest in seven years – meant its gross domestic product (GDP) would be $200bn less than previously anticipated.