MACROECONOMICS
German growth slows
Growth of the German economy, Europe’s biggest, expanded by 0.3 percent from the previous quarter in the first quarter, slower than the 0.7 percent seen in the preceding three months, data published by federal statistics office Destatis showed yesterday. The main growth driver was domestic demand, with private household spending rising by 0.6 percent and public-sector spending by 0.7 percent. Exports increased as well, but because imports rose almost twice as fast, the overall net effect from foreign trade was negative, shaving 0.2 percentage points off GDP growth, Destatis said. On a 12-month comparison, GDP grew by 1.1 percent in the January-to-March period from a year earlier, Destatis said.
MACROECONOMICS
US unemployment rises
The number of people in the US filing new claims for unemployment benefits rose slightly more than expected last week, but the underlying trend continued to suggest the labor market was tightening. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 274,000 for the week ended on Saturday last week, the US Department of Labor said on Thursday. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 5,500 last week to 266,250. That was the lowest level since April 2000.
BRAZIL
Figures worse than forecast
The economy in March contracted more than analysts forecast, as President Dilma Rousseff’s administration cuts spending and battles the fastest inflation in over a decade. The seasonally-adjusted economic index, a proxy for GDP, fell 1.07 percent in March from the prior month after a revised 0.59 percent increase in February, the central bank said in a report on Thursday. Meanwhile, the unemployment rate rose last month more than analysts forecast. The jobless rate rose to 6.4 percent from 6.2 percent a month earlier, the national statistics institute said on Thursday.
BANKING
HSBC mulling Brazil exit
HSBC Holdings PLC said it is exploring the sale of its Brazil operation among strategic options for the unit as it retreats from unprofitable markets to reduce costs. No decision has been made and “various” strategic options are being considered, the London-based lender said in a statement yesterday. The sale might raise about US$4 billion and the bank would probably pick a preferred bidder as early as the middle of next month, people with knowledge of the matter said on May 12. Interested banks include Brazil’s Banco Bradesco SA and Grupo BTG Pactual, Spain’s Banco Santander SA and Bank of Nova Scotia from Canada. Industrial and Commercial Bank of China Ltd (中國工商銀行) and China Construction Bank Corp (中國建設銀行) are also assessing the deal, one of the people said.
HEALTHCARE
CVS to buy Omnicare
CVS Health Corp, the US’ second-largest pharmacy benefits manager, agreed to acquire nursing-home pharmacy Omnicare Inc in a deal valued at US$12.7 billion, adding services for the elderly to bolster its position as the biggest US retailer of prescription drugs. CVS is to pay US$98 per share in cash, the companies said in a statement on Thursday. Omnicare, with a market value of about US$9.2 billion, hired advisers to explore a sale earlier this year. The deal includes about US$2.3 billion in debt.
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