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Devere Financial Update – October 2012

Financial

Devere Financial Update – October 2012


Apple iPhone 5 lives up to the hype

Apple’s latest success story, the iPhone 5, has earned itself glowing reviews by gadget critics who praised its lightweight body design, larger screen and smoother data-download.

Apple's iPhone 5 is a phenomenal success
Walt Mossberg, the principal technology columnist for The Wall Street Journal, dubbed iPhone 5 as "the best smartphone on the market", map-software flaws aside. Such positive reviews will therefore only fuel even more hype as Apple’s best-selling product hits stores tomorrow.

Notably, Apple stated on Monday that it received more than 2 million orders in 24 hours, more than double the record set when the company introduced the iPhone 4S in 2011. Critics confirmed that "nearly every feature has been upgraded", as Apple simply grabbed "an already great product and made it better".

Thus far, the iPhone has helped to establish Apple as the world’s most valuable company. Shares rose almost 1% yesterday to a record $701.91.

iPhone 5 sales break Apple’s own record

Smashing ‘records before hitting the shelves’, Apple has once again succeeded in creating a product that is sought after by many. Two million people to be exact – indeed, this is the number of pre-orders Apple has received so far – an ‘initial supply’ that has exceeded Apple’s own estimates, raising concern about whether the production can meet the demand.

The Financial Times reports that many of the orders will not be delivered until October but the majority will be received by this Friday morning. The record sales are not merely a personal triumph for Apple but palpable ‘evidence that American consumers have become more optimistic in recent weeks, amid rising share and house prices, and despite higher petrol costs’.

Apple’s senior vice-president of worldwide marketing, Philip Schiller has commented on the record sales, stating that the ‘response to iPhone 5 has been phenomenal’. So much so, economists are predicting these record sales could ‘boost’ US’s GDP by 0.5%.

China business confidence grows as the country plays role in Euro-zone regeneration

According to a private-sector review, ‘business sentiment’ in China has increased with the index rising to 50.31 from 47.54, showing the country is back to generating its economic wheel. This review comes after the announcement made by the Chinese government of a $150 billion infrastructure plan to ‘boost the economy’.

The review conducted by the Market News International (MNI) shows how there is more confidence among Chinese companies and more positive results are expected as a result of the US Fed’s plan for monetary easing.
The Chinese government has been taking measures to generate more growth in its economy; indeed, Beijing has even ‘cut interest rates twice and eased banks’ reserve requirement ratios’ and consequently, more money for loans was available.

Besides generating more growth for its own country, the Chinese government is also playing a prominent role in helping Europe trigger its economic wheels in motion. The president of the European Council Van Rompuy and Chinese Premier Wen Jiabao have had several meetings discussing the ‘special role of China in the European recovery process’. Mr. Rompuy has said how ‘the Chinese premier made several visits to Europe after the debt crisis started and has offered’ help and support. Mr. Jiabao on the other hand has stated that ‘confidence’ in Europe is ‘more valuable than gold’ and it needs to be reinstated to emerge from the financial crises.

China is the EU’s second-largest trading partner and it being ‘on its way to be the world’s largest economy’, it seems essential this Asian economy sows ‘the seeds’ with the European region

Germany ‘falters’ amid the incessant uncertainty

The largest economy in Europe is ‘suffering headwinds’ due to the incessant bleak cloud overwhelming the Euro-zone.
Reuters reports how business sentiment in Germany declined for the fifth consecutive month – ‘raising fears of a recession’. Despite the country’s ‘resilience’ to its surrounding turmoil, it now seems that it is finally ‘fraying’ as companies are seeing a decline in demand for their products, thus signalling ‘a slowdown in other markets’.

The Munich-based Ifo institute’s monthly sentiment index has shown that ‘German companies remain sceptical about the economic impact of Mario Draghi’s magic’.

Moreover, more gloom for the country is expected as economists predict that ‘the German economy could see a contraction in the third quarter’ as well as in the fourth. Also, German’s Bundesbank’s monthly report sees ‘weaker dynamics’ and ‘great uncertainty’ in domestic economy despite it being resilient to the turmoil.

Despite this bleakness however, other economists do believe that the ECB’s unlimited bond buying programme has not sunk in yet and once it does, it will once again reignite Germany’s economy to the robust glory it has consistently been during this turbulent time.

Contact your local deVere office to learn more about this and other financial issues

deVere Business Contact Details

Tel: (+66) 038 489 372 / 3(Local Pattaya Office)E-mail: [email protected] | [email protected]

Mobile: Greg Hirst 084 421 2331 | John Hayden 084 528 8617

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