FINANCE
Portugal banks downgraded
Credit ratings agency Moody’s said it had downgraded five Portuguese banks and was putting seven others on negative watch, in a statement overnight. Moody’s downgraded by one notch Caixa Geral de Depositos, Banco Espirito Santo, BPI and Banif, aligning them with the rating for the Portuguese government, which was downgraded from “Ba2” to “Ba3” on Feb. 13. It downgraded by two notches to “Ba1” the rating of Banco Santander Totta, a subsidiary of the Spanish Santander group. The agency maintained its notation for BCP and Montepio banks, but with negative outlook as for the downgraded banks. The agency explained in its statement late on Wednesday that the quality of assets in Portugal held by these banks was likely to weaken, mainly because of the mediocre outlook for the Portuguese economy. Moody’s also expressed concern about the ability of the banks to access private finance.
FASHION
H&M sees margin shrink
Swedish cheap-and-chic fashion giant H&M yesterday posted strong sales and a slightly higher net profit in the first quarter, but missed analyst expectations and saw its gross margin shrink amid higher purchasing costs. For the December-to-February quarter, H&M posted a net profit of 2.74 billion kronor (US$412 million), up slightly from the 2.62 billion kronor posted for the same quarter a year earlier, but falling short of the 2.99 billion analysts polled by the Dow Jones Newswires had expected to see. Meanwhile, sales grew by more than 13 percent to 27.83 billion kronor in the quarter, but the company’s gross margin shrank to 55.8 percent from 57. 8 percent a year earlier.
UNITED STATES
CEOs upbeat on economy
Chief executives’ view of the economy brightened in the first quarter of this year, with a growing number ready to hire more workers over the next six months, according to a Business Roundtable survey. Improving demand in the US offset concerns that Europe’s economy may be headed into recession, helping to give the Roundtable’s CEO Economic Outlook Index its largest lift since the third quarter of 2009, the group said on Wednesday. On the key metric of employment, 42 percent of CEOs said they planned to add staff over the next six months. That is a 16-point improvement from the December reading and more than double the 16 percent of CEOs who expect to cut jobs. “This suggests hiring will continue,” said James McNerney, CEO of Boeing Co and chairman of the Roundtable.
SOUTH KOREA
Exports create surplus
South Korea returned to a current account surplus last month, official figures showed yesterday, in another sign the export-led economy is coping with slow growth in Europe and the US. The account, the broadest measure of trade with the world, posted a US$639 million surplus last month, the central bank said, compared with a revised US$969 million deficit in January. The surplus was US$1.13 billion in February last year. The bank credited strong exports of cars and ships for the turnaround. The goods accounts recorded a surplus of US$1.39 billion last month, reversing a revised deficit of US$1.62 billion in January. Exports to Europe rose 21 percent last month year-on-year compared with a 38 percent decline in January. Shipments to the US rose 46.7 percent from a year earlier, compared with a 0.5 percent fall in January.
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