INVESTMENT
CIC to get extra funding
China Investment Corp (CIC, 中國投資公司), China’s sovereign wealth fund, will receive as much as US$50 billion in additional funding, Reuters reported, citing two people familiar with the matter. Government agencies reached an agreement that will allocate cash from China’s US$3.2 trillion foreign exchange reserves each year, and “chart the future” of domestic unit Central Huijin Investment Ltd (中央匯金). CIC declined to comment on the report when contacted by reporters. Chairman Lou Jiwei (樓繼偉) deployed almost all the fund’s cash last year as an improving world economy prompted a 10 percent gain in the MSCI World Index. Net income rose 24 percent while the Beijing-based fund posted an 11.7 percent return on its overseas investments, according to its July annual report. CIC will receive additional funding annually based on its performance in the previous year, according to a report by Weekly on Stocks that was posted to Web sites including that of the China Securities Journal and Sohu.com in June. The fund may get US$50 billion as the first batch of new capital this year, the report said, without saying where it got the information.
INVESTMENT
NYSE Euronext sale okayed
Deutsche Boerse won US antitrust approval to buy NYSE Euronext yesterday in a US$9 billion deal that has hit serious antitrust headwinds in Europe. The US Department of Justice said on Thursday that the deal, which was announced in February, won approval on condition that a Deutsche Boerse subsidiary, the International Securities Exchange, divest its 31.5 percent interest in Direct Edge. Direct Edge is the fourth-largest US exchange, the department said. Despite the divestiture, Deutsche Boerse and NYSE must continue to provide some services to Direct Edge, the department said. In Europe, there have been weeks of negotiations during which EU antitrust staff made clear their reservations about approving a combination of Deutsche Boerse’s Eurex and NYSE Euronext’s Liffe on concerns that the merged entity would have a monopoly over European listed derivatives trading.
RUSSIA
Refinancing rate cut
Russia’s central bank yesterday cut its main refinancing rate for the first time since June of last year, citing uncertainties about global economic growth. The bank said its cut of 25 basis points to 8 percent was “based on the assessment of inflationary risks and risks to stable economic growth, including those caused by uncertainty over the foreign economic situation.” It marks the first time that rates have come down in Russia since June 1 last year and underscores concerns over how Europe’s sovereign debt problems may affect the domestic financial sector.
INSURANCE
AIG CEO wants to stay on
American International Group Inc (AIG) chief executive officer Robert Benmosche, who’s been treated for cancer, may stay in the top job longer than previously planned. Benmosche, 67, has said he’d like to remain CEO past next year, according to an e-mailed statement yesterday from Mark Herr, a spokesman for the New York-based insurer. Benmosche took the CEO post in 2009 and had previously said he planned to complete three years on the job. “He has said he would like to, health-willing, continue to lead AIG past 2012,” Herr said. The Wall Street Journal reported earlier on Benmosche’s plans.
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