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.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure