BANKING
HSBC ‘undervalued’: CEO
HSBC Holdings PLC CEO Stuart Gulliver said that the bank was “permanently undervalued” by as much as US$28 billion because of UK financial regulations introduced after the debt crisis, the Sunday Telegraph said. The UK banking levy and the Treasury’s demand that banks set aside capital to absorb a loss of as much as 20 percent of their balance sheets will cost HSBC US$700 million and US$2.1 billion respectively this year, the newspaper quoted Gulliver as saying. At a price-earnings ratio of 10, that would shave about 17 percent off the bank’s market capitalization, Gulliver told the newspaper. Gulliver has asked the Treasury to make the banking levy a windfall tax, which would make it tax-deductible and protect HSBC’s dividend, the Sunday Telegraph reported.
SOUTH KOREA
ANZ makes new tax payment
South Korea estimates it will take US$210 million in yearly receipts from a tax on holdings of foreign-currency debt introduced by the government to restrain short-term external borrowing. Australia & New Zealand Banking Group Ltd (ANZ) paid US$760,000, the first fee under the so-called “macro-prudential stability levy,” to the central bank on Tuesday last week, the Bank of Korea and Ministry of Finance said in a joint e-mailed statement yesterday. South Korea adopted the tax in August last year on non-deposit foreign-currency liabilities held by both domestic and foreign banks and will use the funds to help ease the liquidity crunch at financial companies in a crisis. Debt of less than one year is subject to a levy of 0.2 percent and those with longer maturities are subject to lower rates.
PETROLEUM
Sandstorm disrupt shipping
Saudi Arabian Oil Co was shipping crude normally yesterday from terminals in the Persian Gulf, the world’s largest oil exporter said, even as sandstorms stop other kinds of cargo from leaving the nation’s main eastern port. “There was no interruption to company export operations” since the bad weather struck on Thursday last week, the state producer, known as Saudi Aramco, said yesterday in an e-mailed statement. Aramco operates six ports and terminals independently of the government, with two of them — Ju’aymah and Ras Tanura — on the kingdom’s Gulf coast, according to the company’s Web site. Operations at King Abdul Aziz Port in Dammam were suspended on Saturday, the commercial port’s general director Naim al-Naim said, according to the newspaper al-Eqtisadiah.
PETROLEUM
Oil prices new concern
Soaring oil prices have displaced Greece’s sovereign debt as a threat to global economic growth and financial markets, said HSBC Holdings PLC, Europe’s largest bank by market value. “With Greece disappearing, at least temporarily, from the headlines, investors have quickly found a new source of anxiety thanks to the recent surge in oil prices,” HSBC chief economist Stephen King said in a note yesterday. “If the trend persists, a fragile economic recovery in the developed world could quickly be derailed and inflation could return to emerging markets.” Brent crude surged to as much as US$128.40 a barrel late last week, its highest level since July 2008. Brent for settlement next month slipped 1.2 percent to US$124.67 on the London-based ICE Futures Europe exchange on Friday.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to