MEDIA
Murdoch splits News Corp
News Corp chief executive Rupert Murdoch split his corporate empire into two parts on Friday under a long-promised plan to “unlock value” by separating its high-flying entertainment operations from struggling publishing activities. The split became effective at the close of trade in New York, creating a new group called 21st Century Fox, while retaining the name News Corp for the publishing group. Murdoch remains in charge of both. The split of the company, with about US$34 billion in revenue worldwide, is seen partly as a nod to shareholders angered by the damage and costs inflicted by a cellphone hacking scandal in Britain, and partly because of troubles within the group’s publishing arm. Murdoch says he remains committed to his newspaper roots.
CYPRUS
S&P cuts credit rating
Standard & Poor’s (S&P) lowered its credit rating on the debt-stricken island country on Friday, knocking it into “selective default” because of a “distressed” debt exchange. The government is swapping some local bonds for longer-term bonds. Though that eases some of the immediate liquidity pressure on the country, S&P analysts said they thought the new bonds were on “less favorable terms” for the country than the existing bonds. They called it a distressed exchange, implying that the government had to swap its debt because it had few other financing options. The country’s long-term rating was already in “junk” status, but Friday’s move pushed it down three levels, from “CCC” to “SD,” or selective default. A straight default would mean the country was not meeting any of its obligations.
BEVERAGES
UK Starbucks paid no tax
Starbucks, whose thin tax payments in Britain provoked a backlash against corporate tax avoidance, paid no tax for the year to Sept. 30 last year. The coffee giant’s main UK subsidiary reported its 15th straight annual loss at its UK stores in accounts filed on Friday. Reuters revealed in October last year that Starbucks reported consistent UK losses, while telling investors the British unit was profitable and promoting managers of the unit within the group. Friday’s accounts showed a UK loss of £30 million (US$46 million), down from the £32 million loss it reported for the previous year, helped by a 4 percent rise in turnover to £413 million.
MEXICO
Lending to builders pledged
The government promised to help increase lending to homebuilders to sustain construction as the industry’s biggest companies slash output and move to restructure debt. Deputy Finance Minister Fernando Aportela said development banks would provide at least 5 billion pesos (US$387 million) of syndicated credit lines. The lines, issued through Sociedad Hipotecaria Federal and Nacional Financiera, will produce about 50,000 homes, he told reporters in Mexico City. The government will also offer guarantees for debt sales of about 5 billion pesos so that issuances can get higher credit ratings and attract institutional investors such as pension funds, he said. The financing announcement was part of the government’s retooled housing plan, which aims to arrest urban sprawl without prompting further contraction in the industry.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts