Economy shrank in Q3
The Italian economy contracted in the third quarter, signaling the country may have entered its fifth recession since 2001 as the government adopts new austerity measures that will further weigh on growth. GDP dropped 0.2 percent from the second quarter, when it grew 0.3 percent, Rome-based national statistics institute Istat said in its final GDP report yesterday. It was the first contraction since the final three months of 2009 and matched the median forecast for a 0.2 percent contraction in a survey of 23 economists by Bloomberg News. The economy expanded 0.2 percent from a year earlier, Istat said. Consumer spending declined 0.2 percent from the second quarter, with investment declining 0.6 percent. Exports grew 1.6 percent in the quarter, while imports fell 1.1 percent.
Siemens to cut 1,600 jobs
Siemens AG, Europe’s largest engineering company, plans to cut as many as 1,600 jobs at its health-care division and will scale back the business after falling behind competitors including Roche Holding AG. The planned cuts amount to as much as 8 percent of workers at the diagnostics subsidiary, said Michael Sen, the chief financial officer of the health-care operations. Another 400 jobs will go as Siemens stops making linear accelerators that create radiation for cancer treatment. Order intake and sales at the health-care unit failed to grow in the most recent quarter, and profitability at the diagnostics business has slumped to less than half the rate two years earlier.
Saab declared bankrupt
Famed Swedish car maker Saab was declared bankrupt by a court on Monday, ending a nine-month survival battle by its Dutch owner. Saab, which has made cars for 64 years, has suffered cash problems since March after last year’s sales fell short of target amid the disruption of its sale by General Motors. It has not made any vehicles since April and several rescue attempts have failed. Saab owner Swedish Automobile said former owner and key licence holder General Motors had blocked a last-ditch rescue plan by Chinese investor Youngman. It also criticized the court-appointed administrator who had been overseeing its creditor protection process and who, it said, had meddled in the deals. Saab proposed a new rescue involving Zhejiang Youngman Lotus Automobile, but that was rejected by GM at the weekend. “That, basically, was the last nail in the coffin of this beautiful company,” Swedish Automobile chief executive Victor Muller told reporters hours after handing in a request to a Swedish court to have Saab made bankrupt. The court later approved the request and appointed two receivers to run the company.
Interest rate could go up
Hungary may need to raise the EU’s highest benchmark interest rate next year as talks over a bailout stalled and the government and the central bank spar over monetary-policy independence. The Magyar Nemzeti Bank increased the two-week deposit rate by a half-point for a second month to 7 percent yesterday and said it would raise borrowing costs further if country risk worsens. Policymakers also considered a quarter-point increase. The European Commission and the IMF suspended talks on a financial aid package to Hungary last week, citing objections to a draft law on the central bank that they say may undermine policy autonomy. The forint is the worst-performing currency in the world since June 30, Bloomberg data show.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to