RUSSIA
Credit rating cut: Moody’s
Moody’s cut Russia’s credit rating outlook to “negative” on Friday, a sign of a possible coming downgrade, citing the threat to the Russian economy from its involvement in the Ukraine conflict. Moody’s held Russia’s overall rating at Baa1, in the low range for investment-grade bonds. However, it warned that the spread of the Ukraine conflict from Crimea to the country’s eastern border with Russia has raised the dangers of “geopolitical event risk” for Moscow, including from western sanctions. It said that the lack of a strong plan and reforms in Moscow to address the country’s weak economy also underpin the outlook cut. It said Russia’s annual growth outlook has fallen to 1.7 percent for the next five years from previous forecasts of 3 percent.
FRANCE
BNP to plead guilty
BNP Paribas SA is set to plead guilty to criminal charges tomorrow in a Manhattan federal court, a person familiar with the matter said, ending a wide-ranging probe that may bring the biggest-ever penalty for violations of US sanctions against rogue nations. The French bank has been in talks with state and federal authorities over a penalty that may reach a record US$9 billion, another person familiar with the matter has said. The investigation is being conducted by the US Justice Department, US Attorney Preet Bharara, Manhattan District Attorney Cyrus Vance Jr and Benjamin Lawsky, superintendent of New York’s Department of Financial Services. It involves alleged violations of sanctions against Sudan, Iran and Cuba, mostly dating from 2002 to 2009, with some continuing until 2011, another person familiar with the matter has said.
COMMUNICATIONS
AT&T’s Movil stake bought
Mexican tycoon Carlos Slim has bought out US telephone operator AT&T’s US$5.6 billion stake in telecommunications firm America Movil, the companies announced Friday. The acquisition of AT&T’s shares represent 8.27 percent of America Movil’s stock, said a company statement. “Upon consummation of the transaction authorized today by the board of directors, AT&T will no longer be a shareholder of America Movil,” it said. Last year, the American group sold more than 1.5 million shares.
UNITED STATES
Consumer confidence up
Strong job growth lifted US consumer confidence this month, as Americans looked past the economy’s dismal first quarter performance. The University of Michigan said on Friday that its index of consumer sentiment rose slightly to 82.5 in June from 81.9 in May. That is still below April’s reading of 84.1, which had been the highest in almost a year. Confidence “has remained largely unchanged for the past six months,” said Richard Curtin, an economist at the University of Michigan and director of the survey. “This was remarkable” given that the economy shrank in the first quarter. The survey was mostly conducted when the government had estimated that the economy contracted at a 1 percent annual rate in the first quarter. On Wednesday, that estimate was revised much lower, to show a contraction of 2.9 percent. So far, steady confidence has not translated into more spending. Consumer spending rose just 0.2 percent last month after a flat reading in April.
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