IRELAND
Moody’s cuts credit rating
Moody’s on Friday lowered its credit ratings on the nation by two notches, citing “weaker economic growth prospects” and an “expected decline” in government finances. “Moody’s Investors Service has today downgraded Ireland’s foreign- and local-currency government bond ratings by two notches to Baa3 from Baa1,” a statement said. It added that the outlook on the ratings “remains negative” — meaning further downgrades are possible. Downgrades by ratings agencies can ramp up borrowing costs on financial markets for those hit, making their funding problems more difficult to manage, while Ireland is already struggling to service its huge debt.
JAPAN
TEPCO rescue plan mulled
The government may set up a government-backed insurance fund to put money into Tokyo Electric Power Co (TEPCO) and pay compensation stemming from the disaster at its Fukushima Dai-ichi nuclear plant, the Nikkei Shimbun reported yesterday. The plan is aimed at saving the company from collapse by having the state initially shoulder the compensation costs, which the company would repay over several years via special dividends, the paper said. TEPCO president Masataka Shimizu said yesterday the initial compensation payment would total ¥50 billion (US$600.4 million).
AUTOMOBILES
Toyota limits production
Toyota Motor Co said yesterday it would operate all its domestic plants at half normal volume from May 10 to June 3, citing problems with parts supply following the March 11 earthquake and tsunami. “As [Toyota] continues to address its production situation in Japan following the disaster, it has decided that vehicle production from May 10 to June 3 will proceed at approximately 50 percent of normal,” the firm said. It said in a statement it would “decide on production after this period after assessing the situation of its suppliers and other related companies.” Toyota said last week it would restart work at all its Japanese vehicle facilities from Monday to April 27 at approximately 50 percent of normal pace.
ENTERTAINMENT
Warner Music up for sale
Warner Music Group Corp is seeking to sell the entire company, rather than parts of the business, and could agree on a buyer within weeks, the Wall Street Journal reported on Thursday. The paper, citing “people familiar with the matter,” said Warner Music’s board reached the decision to pursue a sale of the whole company at a meeting on Tuesday after receiving second-round offers from bidders. The Journal said last week’s bids for the entire company, which has a market capitalization of US$1.1 billion, were around US$3 billion, including the assumption of debt.
CONSUMER GOODS
Nestle’s Q1 sales up 6.4%
Food and drinks giant Nestle SA reports first-quarter sales of 20.3 billion Swiss francs (US$22.7 billion), up 6.4 percent in terms of organic growth, but suffering from the strength of the franc. The company said sales were off 9.8 percent because of the strong franc. Nestle said the first quarter reflected “strong, broad-based growth, building on the momentum in 2010.” It said the organic growth was 4.3 percent in the Americas, 3.9 percent in Europe and 13.8 percent in Asia, Oceania and Africa. Earlier this year Nestle boasted a full-year net profit for last year of SF34.23 billion, inflated by the sale of its stake in Alcon that added SF24.5 billion net to its balance sheet.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure