MACROECONOMICS
India mulls holding company
The Indian government is considering a demand for a holding company for its stakes in 27 state-owned banks, a move that may make it easier to raise capital as they struggle with their lowest profitability in at least nine years. “We will take a decision at a later stage,” Indian Secretary of Finance Hasmukh Adhia told reporters in Pune, near Mumbai, where a two-day brainstorming session ended yesterday after officials from the government, the regulator and the banks discussed steps to improve the financial health of the lenders. Leaders including Indian Prime Minister Narendra Modi and Reserve Bank of India Governor Raghuram Rajan joined the unprecedented conclave as they sought to address declining profitability, mounting bad loans and poor access to services in rural areas.
TURKEY
Foreign reserve ratios raised
The central bank increased the foreign-currency reserve ratios required of banks and financing companies, after a month in which the lira was among the world’s worst-performing emerging-markets currencies. The revision announced today would add about US$3.2 billion to the central bank’s foreign currency reserves, the bank said in a statement on its Web site. The average reserve requirement ratio for foreign currency, which currently stands at 11.7 percent, is to rise to 12.8 percent, it said. Central Bank of Turkey Governor Erdem Basci on Dec. 10 in Ankara said that the bank would take measures against excessive short-term foreign currency borrowing by domestic banks. The IMF had urged the country to raise reserve requirements for foreign-currency liabilities in a report on Dec. 5, saying that reducing bank incentives to fund themselves in foreign currency would limit the risk of a balance-of-payments crisis.
MACROECONOMICS
UK caps redundancy pay
The ruling Conservatives on Saturday said they would cap redundancy payments for public-sector workers at £95,000 (US$145,588) if they win a general election set for May 7, as part of their drive to rein in state spending. Official forecasts suggest 1 million government jobs are set to go over the course of the next five-year parliament. The Conservative Party and their Liberal Democrat coalition partners have already cut about 400,000 public sector jobs since taking power in 2010 to reduce the country’s large budget deficit. The Uk’s Exchequer Secretary to the Treasury Priti Patel, in an article in the Daily Telegraph newspaper, said the Conservative Party would make an election manifesto pledge to cap the pay-offs to public-sector workers and would introduce legislation in the new parliament.
FOOD INDUSTRY
Olive oil in short supply
Forget scouring this month’s sales for clothes and electrical goods and cheap Christmas wrapping paper for next year — the thing to be stocking up on this month is olive oil. A dreadful 12 months for olives in several major producing countries has led to last year being labeled a “black year” for the industry and to the doubling of the bulk cost of olive oil in some areas. Unusual weather and a proliferation of insects and bacterial blight have devastated the harvest in several countries. Analysts have been predicting a bad year for olive oil since the summer, after it became clear that hot late-spring weather in Spain — the world’s largest producer of olives — would have a key impact on autumn harvests.
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