GERMANY
GDP contracted 0.2% in Q4
Germany’s economy contracted by 0.2 percent in the fourth quarter on sagging exports and private consumption, data showed yesterday, but analysts said they expected Europe’s growth engine to pick up steam again this year. Investments, particularly in construction, were a bright spot. The seasonally adjusted data from the Statistics Office confirmed an earlier flash estimate and showed trade and private consumption subtracting 0.3 and 0.1 percentage points respectively from GDP. Exports in particular dropped 0.8 percent in the fourth quarter after growing 2.6 percent in the previous quarter. Economists put this down to weaker demand from the eurozone, which is mired in a sovereign debt crisis. “The economy was driven into the red by the decline in exports, but this was weaker than expected,” Berenberg Bank’s Christian Schulz said.
INSURANCE
AIG has record Q4 earnings
American International Group Inc (AIG), the bailed-out insurer, cited a return to “sustainable operating profit” as it booked a tax benefit that fueled record fourth-quarter earnings. AIG’s biggest unit, property-casualty insurer Chartis, and its plane-leasing business swung to operating profits in the period, the New York-based company said in a statement yesterday as it posted a net income of US$19.8 billion. The insurer is projecting that it will generate enough profit to use tax assets, tied to prior losses, that can limit future payments to the government. Shares rose above US$30 in extended trading yesterday, surpassing the average price at which the government would need to sell a majority stake to recoup its investment. The stock has closed below the break-even price on the New York Stock Exchange every day since late July. AIG’s after-tax operating income was US$1.56 billion in the fourth quarter, compared with a loss of US$2.21 billion a year earlier, according to the statement.
COMMODITIES
Oil rises on economy, Iran
Oil prices were higher in Asian trade yesterday, supported by buoyant economic data from the US and Germany, as well as concerns over Iran’s nuclear program, analysts said. New York’s main contract, West Texas Intermediate light sweet crude for April delivery, rose US$0.72 to US$108.55, while Brent North Sea crude for April gained US$0.37 to US$123.99 in the afternoon. “The level oil prices have risen to this week is quite unexpected,” said Ken Hasegawa, energy desk manager at Newedge brokerage in Japan. Positive economic news from the US and Germany, as well as “the continuing tension in Iran, are factors supporting oil prices,” he said.
EMPLOYMENT
US unemployment steady
New US claims for unemployment benefits were unchanged last week, holding at the lowest level since the early days of the 2007-2009 recession and giving a fresh sign the battered labor market was healing. Workers filed 351,000 initial claims for state unemployment benefits, the US Department of Labor said on Thursday. “It’s broadly in line with recent US data showing a gradually improving economic backdrop,” said Omer Esiner, a market analyst at Commonwealth Foreign Exchange in Washington. The last two weekly readings have been the lowest since March 2008. With weekly claims nearing levels last seen before the recession that began in December 2007, economists said employers might be close to ending a long cycle of heavy layoffs, laying the ground for more hiring.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”
HIGH-TECH: As leading-edge process technologies become more complicated, only a handful of players are able to provide design services, the company’s CEO said Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday said that revenue would grow significantly again in 2026 after adding a major AI chip customer, reversing moderation amid a product transition next year. The Taipei-based application-specific IC (ASIC) designer reiterated its strong revenue growth forecast for this year and 2026 after its stock plummeted about 23 percent to NT$3,145 from a peak of NT$4,085 on March 6 amid growing competition. Alchip said it has built strong partnerships with cloud service providers (CSP), denying that it had lost orders to smaller competitors such as Faraday Technology Corp (智原). Faraday said it has secured