Central bank cuts rates
The central bank cut interest rates for a sixth time this year and lowered the cap on deposit interest rates to spur economic growth even as the World Bank warned against easing monetary policy too soon. The State Bank of Vietnam’s refinancing rate was cut to 9 percent from 10 percent, the central bank said on its Web site on Friday. The discount rate was cut to 7 percent from 8 percent. The cap on dong deposit interest rates was lowered to 8 percent from 9 percent. The central bank’s rate adjustments aim “to help companies cope with difficulties in production and business,” according to the press release. The central bank cited a “stable money market and improving liquidity at banks” for the reductions.
GM to sell French plant
General Motors Co (GM) is to sell a French transmission plant to a private Belgian company as part of an effort to end losses in Europe that have totaled US$17.3 billion since 1999. The plant in Strasbourg, France, is to be bought by Punch Metals International, which will retain the employees, according to a GM statement on its Web site on Friday. ZF Friedrichshafen AG, a maker of auto and truck parts, agreed to buy transmissions from the plant. A price was not disclosed. GM will be a customer of the factory next year and in 2014, “to maintain a robust level” of output “to provide for a smooth transition” to a ZF-based product line, the automaker said. The plant employs about 1,000 people.
Nike profit tops estimates
Nike Inc, the world’s largest sporting-goods company, reported second-quarter profit that topped analysts’ estimates as sales gained in North America and the company controlled its marketing costs. Excluding US$137 million in losses associated with the Umbro and Cole Haan businesses Nike is selling or has sold, profit was US$1.14 a share, the Beaverton, Oregon-based company said in a statement on Friday. Analysts projected US$1 a share, the average of 18 estimates compiled by Bloomberg. While sales have dropped in some regions abroad, Nike’s largest market of North America remains a strength, with revenue in the region gaining 17 percent amid demand for running shoes. Those gains should continue, with orders for the Nike brand from December to April gaining 14 percent in North America.
Confidence drops in US
Confidence among US consumers has sunk to its lowest point since July, according to a monthly index. The University of Michigan says its consumer sentiment index for this month fell to 72.9, a sharp drop from last month’s reading of 82.7. Last month’s figure was a five-year high. Peter Newland, an economist at Barclays, says consumer confidence has dropped because of uncertainty over whether the US Congress and US President Barack Obama’s administration will reach a budget deal to avert tax increases and government spending cuts set to take effect next month. Economists said confidence could fall further if the standoff over the “fiscal cliff” persists into next year. Peter Curtin, the University of Michigan’s chief economist for the survey, said the loss of public confidence might be slow to recover even if a budget deal is reached early in the new year.