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Samsung Electronics plans initial production of five million Galaxy S7 phones: report

SEOUL Samsung Electronics Co Ltd, the world’s top smartphone maker, plans an initial production run of about 5 million of its upcoming Galaxy S7 smartphones, South Korea’s Electronic Times reported on Monday, citing unnamed sources.

The paper said Samsung is planning to launch two different versions of its new flagship smartphone: a 5.2-inch flat-screen version, and a 5.5-inch, curved-screen version that will be called the ‘Galaxy S7 edge’.

Samsung plans to initially make 3.3 million of the flat-screen devices and around 1.6 million of the curved-screen version, the report said, with plans to launch the handset in February.

A Samsung Electronics spokeswoman declined to comment on the report.

(Reporting by Se Young Lee; Editing by Kenneth Maxwell)

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Japan November factory output down 1 percent month-on-month: government

TOKYO Japan’s factory output fell for the first time in three months in November and retail sales slumped, suggesting that a clear recovery in the world’s third-largest economy will be delayed until early in 2016.

While manufacturers expect to increase output in coming months, the weak data casts doubt on the Bank of Japan’s view that an expected pick-up in exports and consumption will help jump-start growth and accelerate inflation toward its 2 percent target.

Industrial output fell 1.0 percent in November from the previous month, more than a median market forecast for a 0.6 percent decline, data by the trade ministry showed on Monday.

Separate data showed that retail sales fell 1.0 percent in November from a year earlier, more than a median forecast for a 0.6 percent drop, as warm weather hurt sales of winter clothing.

“We’re finally seeing signs of pick-up in exports, but the economy has yet to make a clear turnaround,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“There’s a risk consumption will remain sluggish and prevent economic growth from picking up,” he said.

Japan’s economy narrowly dodged recession in July-September and analysts expect only modest growth in the current quarter, as consumption and exports lack steam.

Some analysts warn the economy may suffer a contraction in October-December if household spending remains weak. Taro Saito, senior economist at NLI Research Institute, expects consumption in the current quarter to have risen less than a 0.4 percent quarter-on-quarter increase in July-September.


Wary of soft growth, the government plans nearly $800 billion in record spending in the budget for the fiscal year that will begin on April 1.

The BOJ has signalled readiness to expand stimulus if risks threaten Japan’s recovery prospects. The central bank fine-tuned its stimulus programme on Dec. 18 to ensure it can keep up or even accelerate its money-printing.

While sluggish emerging market demand dims the export outlook, analysts expect output to gradually increase early in 2016 as automakers ramp up production of new models.

Manufacturers surveyed by the trade ministry expect to increase production by 0.9 percent in December and raise it by 6.0 percent in January.

Many analysts share the BOJ’s view that output is bottoming out, though some doubt manufacturers will boost production as much as they now project.

“There may be expectations that factory output will improve early next year. But it’s uncertain whether the forecasts can be realized,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

(Additional reporting by Kaori Kaneko; Editing by Richard Borsuk)

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Valeant CEO Pearson remains hospitalized for pneumonia: Bloomberg

NEW YORK Valeant Pharmaceuticals International Inc (VRX.TO) Chief Executive J. Michael Pearson has been moved to another hospital where he is being treated for a severe case of pneumonia, a company spokeswoman told Bloomberg on Sunday.

Elaine Andrecovich, a public relations manager at Morristown Medical Center, where Pearson initially was admitted for treatment on Friday, confirmed that Pearson is not at the hospital but declined to provide more details.

Laurie Little, a Valeant spokeswoman, told Bloomberg that Pearson is still in a hospital but declined to say where. Little did not immediately respond to a Reuters email requesting comment on Pearson’s condition.

Pearson, 56, joined Valeant as CEO in September 2010 after a 23-year career at McKinsey Company and became chairman of the board in 2010.

Pearson’s illness comes as investors are turning up pressure on the Canadian drugmaker to provide a more detailed plan on how it will grow profits in 2016. Under Pearson’s leadership, the company has come under U.S. government scrutiny for acquiring off-patent drugs and drastically hiking the prices.

Valeant’s U.S.-listed shares, down about 20 percent this year, closed at $114.11 on Thursday.

(Reporting by Saqib Iqbal Ahmed; Editing by Diane Craft)

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Taiwan economy: an aging tiger in need of cubs

TAIPEI Jason Tsai is among the few in Taiwan with excellent English, but two years after graduating from university the highly sought language skill has failed to secure him a well-paying job.

Tsai has been pulling in an average monthly pay of T$15,000 ($455) through part-time work, below the minimum wage of T$22,000 for college graduates and one-fourth of the retirement-pension received by state employees.

“I cannot afford a place of my own with my low income… All I have been able to find were part-time jobs,” the 25-year-old said.

The plight of young workers such as Tsai highlights a serious problem for Taiwan which has gone from a young and vibrant Tiger economy to aging and unsteady in just two generations: the working-age population is not growing fast enough, nor earning nearly enough to pay for their parents’ retirement.

As Tsai struggles to find a better paying job in a recession-hit economy, a wave of barely middle-aged mostly government employees are racing to retire on generous taxpayer-funded pensions before these are watered down.

To make matters worse, a government policy designed to protect young workers during the 2008-2009 global financial crisis has created a perverse incentive for employers to lock young workers into a minimum wage.

The dissatisfaction among the youth has boiled over into student protests and has become a hot-button issue for voters as Taiwan goes to the polls next month.

Tsai isn’t waiting for politicians to come to the rescue, and is instead looking to move to Japan to secure a better job.

A flight of young people in search of greener pastures is the last thing Taiwan needs, especially as its rapidly graying population is diminishing the number of skilled workers required to propel the economy on its next growth phase.


In fact, the alarming drop in Taiwan’s fertility rate to less than 1 per woman – among the lowest in the world – from around 1.7 in 2000, has created a major demographic challenge for policymakers.

As more of today’s youth transfer the burden of caring for their parents to the state, government resources are getting stretched to breaking point amid spiraling health-insurance and pension costs.

“Reforms need to be carried out soon or state employee pensions will collapse. The government cannot sustain it for long,” Wu Chung-cheng, deputy minister of the civil service ministry, told Reuters.

But fears of a political backlash have discouraged lawmakers from watering down a taxpayer-funded generous average monthly retirement pension of T$60,000, even though a flagging economy can no longer sustain these costs.

A look at some of the numbers makes for glum reading.

Public debt burden is now at a record $550 billion, while pension costs are set to rise to an all-time high of 7.37 percent, or T$147.2 billion in 2016, of the total government budget.

Taipei mayor Ko Wen-je has warned that 10 percent of the city’s budget will go into paying city employee pensions in 2016.

And the pressure on finances continues to grow as state employees rush to lock-in the generous pension. Between 2010 and 2013, the number of retired state employees jumped more than 50 percent to 32,000.

The lopsided pension plan is causing resentment among those like Tsai.

“What the state employees have is like a dream that would never come true for our generation,” he said.


Still, the dramatic aging of the population means the government will be forced to act sooner rather than later. Official statistics show those 65 and older are growing faster than in most Asian countries, making up 12 percent of the total population of 23 million in 2014.

By some estimates, one in five Taiwanese will be 65 or older by 2025, an unenviable future for an aging Tiger economy and its younger people.

“As Taiwan’s population is aging at a fast rate, it is putting a burden on young people who are already pressured by their low wages,” said Wu of the civil service ministry.

“Everybody knows that these are big problems facing Taiwan.”

(Reporting by Faith Hung; Editing by Shri Navaratnam)

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Samsung SDI to sell 5 million Samsung C&T shares after ruling

SEOUL South Korean conglomerate Samsung Group said on Sunday its battery-making arm Samsung SDI Co Ltd (006400.KS) will sell $622 million worth of shares in sister firm Samsung CT Corp (028260.KS) to comply with regulatory requirements.

South Korea’s Fair Trade Commission (FTC) had said earlier in the day that Samsung Group must weaken or break three of its circular shareholding chains that it deemed had been strengthened by the all-stock merger in September.

The ruling concerns Samsung SDI’s stake in Samsung CT Corp (028260.KS), which was formerly known as Cheil Industries Inc before it took the name of a sister construction firm it merged with. SDI held stakes in both firms prior to the deal, and the FTC said the deal added shares held by SDI in three chains – two involving SDI and Cheil and another involving SDI and the construction arm. This is against South Korean laws.

Samsung Group has until March 1, 2016 to either have Samsung SDI sell a 2.6 percent stake in Samsung CT, worth 727.5 billion won ($621.8 million) based on Thursday’s closing price, or break the three chains completely. SDI currently holds a 4.7 percent stake in CT.

The ruling could weigh on Samsung CT’s share price but will not endanger the founder Lee family’s hold over the firm or the larger electronics-to-fashion conglomerate. De facto leader Jay Y. Lee and his siblings control nearly 40 percent of the firm through direct stakes and shares held by other related parties, including affiliates. Samsung CT is considered a key vehicle through which the Lees control top affiliates such as Samsung Electronics Co Ltd (005930.KS) and Samsung Life Insurance Co Ltd (032830.KS).

A Samsung Group spokeswoman said SDI would comply by disposing the 5 million Samsung CT shares and consider options to minimise the potential market impact from selling the shares. She said SDI was considering asking the regulator for an extension on the sale deadline.

(Reporting by Se Young Lee; Editing by Jacqueline Wong)

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Valeant says CEO J. Michael Pearson hospitalized with severe pneumonia

NEW YORK Valeant Pharmaceuticals International Inc (VRX.TO) Chief Executive J. Michael Pearson was hospitalized with a “severe case of pneumonia” on Friday and is receiving treatment, a company spokeswoman said.

“We wish him a speedy recovery and look forward to him returning to work when he is feeling better,” the spokeswoman, Laurie Little, said in a statement.

She declined to provide further details on Pearson’s condition, citing privacy concerns, but told Reuters via email that the company plans to “provide further details on his condition as appropriate.”

Little did not respond when asked if the disease was life-threatening.

Pearson, 56, joined Valeant as CEO in September 2010 after a 23-year career at McKinsey Company and became chairman of the board in 2010.

His illness comes as investors are turning up pressure on the Canadian drugmaker to provide a more detailed plan on how it will grow profits in 2016. Under Pearson’s leadership, the company has come under U.S. government scrutiny for acquiring off-patent drugs and drastically hiking the prices.

It also has close ties with Philidor RX Services, a pharmacy that has been criticized for aggressive billing practices. Valeant has cut ties with the company, and it is closing down.

Valeant’s shares have fallen 55 percent since August, though they have rebounded off more than 2-year lows in the past month to close on Thursday at C$157.68 ($114.10) per share.

Valeant has said it plans to rebuild lost business in 2016 through a new distribution agreement with Walgreen’s pharmacies. Still, Valeant’s price hikes are the subject of investigations by the U.S. Congress and federal prosecutors in New York and Massachusetts.

Pearson’s hospitalization was first reported by The New York Times.

($1 = 1.3820 Canadian dollars)

(Reporting By Luc Cohen; Editing by Steve Orlfofsky and Dan Grebler)

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Ferrari recalls 185 California T vehicles due to fuel leak risk

Ferrari North America Inc., a division of Ferrari NV (RACE.N), is recalling some 2016 California T vehicles due to the risk of a fuel leak in the engine compartment, according to a U.S. Department of Transportation (DOT) notice on Friday.

The recall, which began on Dec. 14, affects up to 185 vehicles manufactured between Sept. 8 and Nov. 11, 2015.

The higher risk of a leak, which increases the chances of fire, was the result of a manufacturing defect in a part provided by a supplier, according to a filing with the National Highway and Traffic Safety Administration, a division of the DOT.

The move comes after Ferrari, owned by Fiat Chrysler Automobiles NV (FCAU.N), recalled upwards of 800 cars in the United States to fix a problem with its Takata airbags over the summer.

Ferrari issued a stop sale notice to dealers of the 2016 model California T, which has a list price of just over $167,000 according to The Car Guide, on Nov. 23, filings show. Dealers will replace the line free of charge, the notice read.

(Reporting By Luc Cohen; Editing by Alan Crosby)

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Valeant CEO J. Michael Pearson hospitalized with severe pneumonia

NEW YORK Valeant Pharmaceuticals Chief Executive J. Michael Pearson was hospitalized with severe pneumonia on Friday, the New York Times reported, citing a company spokeswoman.

(Reporting By Luc Cohen; Editing by Steve Orlfofsky)

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China says AIIB up and running early in the new year

BEIJING The China-backed Asian Infrastructure Investment Bank (AIIB) has been formally established and is expected to be operational early next year, the official Xinhua news agency said on Friday.

The bank’s establishment came after 17 funding members of the AIIB, which account for just over 50 percent of its share capital, ratified an agreement on the bank, state television quoted Finance Minister Lou Jiwei as saying.

The bank will hold its opening ceremony in mid-January and formally elect its president, state television said.

The bank will initially focus on financing projects in power, transportation, and urban infrastructure in Asia, the television quoted the bank’s president-elect, Jin Liqun, as saying.

First proposed by President Xi Jinping less than two years ago, the bank has become one of China’s biggest foreign policy successes. Despite the opposition of Washington, major U.S. allies such as Australia, Britain, Germany, Italy, the Philippines and South Korea have joined.

(Reporting by Kevin Yao; Editing by Nick Macfie)

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