Japan’s SoftBank Plunged Into Losses After Investing In China
Japan’s SoftBank plunged into losses after investing in China, know the big reason for this loss.
Japan’s SoftBank Group Corp. After investing in China has gone into a loss. It has caused the most damage in the July-September period, the Japanese technology group has informed.
SoftBank reported that it lost 397.9 billion yen (USD 3.5 billion) in the second quarter of the fiscal year, compared to a profit of 627 billion yen in the same period last year.
Quarterly sales rose 11 percent to 1.5 trillion yen (US$13 billion).
SoftBank said its investment portfolio called Vision Fund suffered losses, including the value of its stake in South Korean online retailer Coupang.
But SoftBank gained shares in DoorDash, an online food-ordering service based in San Francisco.
SoftBank reported that the recent action in China in the technology sector has affected Chinese stock prices.
Its chief executive Masayoshi Sun reported that SoftBank’s Vision Fund lost 1 trillion yen (USD 9 billion) in the July-September quarter.
Sun, who founded the company, acknowledged that the recent losses were in contrast to the rising results reported for the previous fiscal year.
He said a big reason was the sharp drop in the share price of Chinese e-commerce company Alibaba, of which SoftBank is a shareholder.
But he stressed that SoftBank’s core business is shifting to Vision Fund and reducing its reliance on Alibaba’s performance.
However, Vision Fund’s Chinese investments also suffered. Sun said that while the value of the fund’s total investments is rising, its portfolio is constantly changing.
SoftBank has a venture under the Japanese mobile company that launched the iPhone for the first time in the Japanese market.
It has also invested in the US office-sharing venture WeWork. Although the move was criticized by many, Sun said it was doing well.
Investments in US chip company Arm and ride-hailing service Uber are examples that have outperformed expectations.
There is a fall in the stock market, there is a lot of buying in these shares.
Equity indices Sensex jumped over 100 points in early trade on Tuesday led by gains in ICICI Bank, Infosys, and L&T despite a weak trend in Asian markets and continued outflow of foreign funds.
The 30-share index rose 118.07 points, or 0.20 percent, to 60,663.68 in early trade.
But afternoon it registered a decline. It had come down to 158 points. Similarly, the Nifty rose 36.45 points or 0.20 percent to 18,105 amid high volatility. But later it also declined.
