ARGENTINA
President to negotiate debt
Investors betting that talks between President Cristina Fernandez and holders of the nation’s defaulted bonds from 2001 will avert a second default in 13 years may be headed for disappointment, TCW Group Inc said. For the first time in a decade, Fernandez agreed on Friday to negotiate with holdout creditors from the nation’s US$95 billion default. The dispute has hit markets since the US Supreme Court on Monday last week left intact a ruling requiring Argentina to pay the investors in full. On Monday next week, the country has an interest payment due on its restructured bonds that would be blocked if the holdouts remain unpaid. The country’s bonds rallied 8.8 percent on average after Fernandez’s comments.
ECONOMY
Official sees bust bubbling
German Federal Minister of Finance Wolfgang Schaeuble on Friday said that central banks’ efforts to inject liquidity into the financial system are feeding asset bubbles that could burst and cause the next crisis. Schaeuble also rejected a recommendation by the IMF that the European Central Bank should resort to large-scale bond purchases — of the kind the US Federal Reserve is making — to help growth and protect the 18-nation eurozone from deflation. “We do not have too little liquidity in financial markets, but rather too much,” Schaeuble said after a meeting of European finance ministers in Luxembourg. “All experience of economic history tells us that such situations lead to bubbles,” he added, saying that the low interest rates in developed economies are pushing investors into riskier markets including real estate.
JAPAN
Panasonic TV plant for sale
Electronics giant Panasonic plans to sell the plant where it first got into the television business half a century ago as it shifts away from the money-losing division, a report said yesterday. The company plans to sell 60 percent of the plant’s 120,000m2 site in Ibaraki, near the western city of Osaka, to major homebuilder Daiwa House by early next year, the business daily Nikkei said. The price tag is estimated at ¥10 billion (US$97.9 million). Daiwa House is expected to build a logistics facility at the site and lease it to parcel-delivery company Yamato Holdings Co, Nikkei said. The plant started producing cathode-ray tube sets in 1958 and helped turn Matsushita Electric Industrial — as Panasonic was then known — into a global electronics company.
SPAIN
Tax cuts pledged, bashed
Spain said on Friday that it would cut income tax and reduce corporate tax to 25 percent for large companies by 2016, aiming to speed up a nascent economic recovery. The cuts are part of a proposed bill that is Prime Minister Mariano Rajoy’s main structural reform this year and also included reducing tax breaks to lift the country’s tax revenue, currently one of the lowest in Europe. The government said the plan would boost GDP by 0.55 percent over the next two years, but it has been roundly criticized by unions and economists over the past few months. Unions say tax cuts are merely a populist measure ahead of elections next year, while some economists say growth is not yet strong enough to justify tax cuts and the move risks hurting the government’s ability to meet its deficit targets.
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
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by