The world’s biggest memory-chip and smartphone maker forecast operating profit of $11bn (£8bn) for the three months to the end of June.
It said strong demand for memory chips had offset weaker sales of devices due to the shortage of components.
A year ago, in the first few months of the pandemic, Samsung saw sales of products such as phones and TVs slump.
Since then demand for electronics components has surged as people shifted more of their lives online, while many chip makers struggled to keep up with demand.
The South Korean electronics giant’s outlook easily beat analysts’ expectations, signalling continued strength for the technology industry.. If the figures are confirmed later this month, it would be Samsung’s biggest second quarter profit since 2018.
In recent months, computer chip makers in particular have had much greater power to increase their prices during the historic supply crunch.
In March, Samsung’s co-chief executive and mobile chief, Koh Dong-jin told shareholders: “There’s a serious imbalance in supply and demand of chips in the IT sector globally.”
He also said that the company was working with overseas partners to meet demand as global shortages caused supply disruptions.
The chip shortage has also hit car makers hard, with major motor manufacturers around the world being forced to halt production at various times.
In recent months, auto brands including Ford, General Motors, Volkswagen and Jaguar Land Rover have all suspended their production lines.
Last month, US President Joe Biden and European commissioner Margrethe Vestager unveiled plans to manufacture more computer chips in Europe and the US.
The initiative is one of the key focuses of a new trans-Atlantic technology alliance known as The Trade and Technology Council.
A statement on a summit between President Biden and Commissioner Vestager included a pledge to build “an EU-US partnership on the rebalancing of global supply chains in semiconductors”.
The European Union wants to increase its share of the global chip-manufacturing market from 10% to 20% and has promised $150bn towards the effort. Meanwhile, the US has allocated $52bn to domestic chip manufacturing.
Seven factors of concern at upcoming Monetary Policy Review
by Sanath Nanayakkare
The Central Bank of Sri Lanka (CBSL) is scheduled to announce its latest monetary policy review on 20th January 2022, with all eyes on dwindling foreign reserves and foreign currency exchange in the country.
In this context, First Capital Research has named 7 factors of concern that could be taken into account at the upcoming monetary policy review. They are as follows.
* Foreign Reserves USD 3.1 billion – Dec 2021
* Inflation CCPI 12.1% – Dec 2021
* GDP Growth -1.5% – 3Q2021
* Private Credit LKR 60.5 billion – Nov 2021
* 03M T-Bill rate 8.38% as at 12.01.22
Liquidity and CBSL Holdings LKR -364.0 billion and LKR 1.42 trillion
Balance of Trade (BOT) and Balance of Payment (BOP) USD -6.5 billion and USD -3.3 billion for Jan-Oct 21
First Capital Research’s Policy Rate Forecast – Jan 2022-Apr 2022 notes that they believe the CBSL may highly consider tightening the monetary policy rates in this policy review but given the concerns over economic growth, there is a probability of 40% for CBSL to maintain its policy stance at current levels.
“With high frequent indicators improving in line with expectations, we have eliminated any probability of a rate cut. We expect a continued increase in probability for a rate hike in order to prevent overheating of the economy amidst the given fiscal and monetary stimulus,” they said.
As per First Capital’s view, CBSL either can choose to hike policy rates by 50bps or 100bps or hold policy rates steady, while a rate cut is off the table due to the high debt repayment and the high domestic borrowing requirement.
First Capital believes that there is a 60% probability for a rate hike due to the remedial actions required in achieving external stability.
However, there is also a 40% probability to maintain the policy rates at its current level in order to further improve the high frequency indicators.30%, they noted.
Sri Lanka’s dash brand enters international markets
Multichemi International Ltd, which manufactures and distributes a wide range of products under dash, one of Sri Lanka’s leading detergent and household care brands, has begun exporting its products to several international markets in Asia and Oceania, with plans also to enter Africa. The dash brand includes a wide range of products in car care, household care, home fragrances and laundry care sectors. Multichemi International Ltd, which has been awarded ISO 9001:2015 certification, is a Sri Lankan pioneer in environment-friendly cleaning products, having launched the country’s first biodegradable, safe cleaning products over 28 years ago.
Amila Wijesinghe, General Manager of the Company said,”Having conquered the domestic market, we are now ready to capture the international market. We are confident that our products which are of high quality will receive a good demand overseas as well. The feedback we have received so far from our overseas customers is extremely encouraging. We are dedicated to taking our products to the international market, to bring in foreign currency to the country and help uplift the economy”,
Janaka Abeysinghe appointed SLT CEO
Sri Lanka Telecom PLC has announced the appointment of Janaka Abeysinghe as its Chief Executive Officer (CEO) with effect from February 1, 2022.
The incumbent CEO Kiththi Perera will be overseas on leave for a period of two years to pursue higher studies, according to a stock market filing by the company.
Abeysinghe joined SLT in 1991. In his present role, he leads the enterprise and wholesale business of SLT that provides integrated voice and data solutions to enterprises, government institutions, domestic telco operators and global wholesale carriers.
In his career at SLT spanning 29 years, he has held a number of senior positions, including general manager Enterprise and International Sales and has extensive experience in the areas of Enterprise Digital Services, Enterprise Communications Solutions, Data Communications, Business Development, Domestic and International Switching Operations and Global Wholesale Voice & Data Business.
He holds a Master’s Degree in Electrical and Computer Engineering from the University of Kansas, USA and a BSc degree in Electronics and Telecommunications Engineering with a First Class Honours from the University of Moratuwa.
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