MACROECONOMICS
SNB keeps low deposit rate
The Swiss National Bank (SNB) kept its deposit rate at a record low and warned it is ready to take further action to reduce the impact of the overvalued Swiss franc on the economy. The bank maintained its rate on sight deposits at minus-0.75 percent, as forecast by economists in a Bloomberg survey. It also reiterated its pledge to conduct currency interventions after it scrapped its cap on the franc five months ago. In a statement issued yesterday, the central bank said its negative rate should help weaken the currency over time. It added that uncertainty about the global economy “remains high,” highlighting in particular the threat of a Greek default. “Various risks — first and foremost the difficult financial situation in Greece and geopolitical tensions — could jeopardize the recovery,” the bank said.
BONDS
Japan bank to sell in yuan
One of Japan’s biggest banks yesterday said it would sell bonds denominated in yuan as frosty ties between the major trading partners show signs of thawing. Bank of Tokyo-Mitsubishi UFJ said it would raise 350 million yuan (US$56.38 million) through the two-year bond offering that would be sold to Japanese life insurers, regional banks and other institutional investors. The sale next week would be a first for Japan, it said, following yuan bond sales by British and Singaporean lenders and major firms including US fast-food giant McDonald’s and heavy-equipment maker Caterpillar. “We understand this will be the first issuance of yuan bonds in our country,” a company spokesman said.
INVESTMENT
China FDI slows; ODI surges
Growth in foreign investment in China slowed to 7.8 percent in May, the Chinese Ministry of Commerce said yesterday, but outward investment surged almost 50 percent in the first five months of the year. Foreign direct investment (FDI), which excludes financial sectors, increased to US$9.33 billion last month, the ministry said, after a 10.5 percent year-on-year rise in April. “Investment from major countries and regions in China was generally stable,” the ministry said in a statement. Separately, the ministry said overseas direct investment (ODI) from China rose 47.4 percent to US$45.41 billion between January and May. China drew a total of US$119.6 billion of foreign direct investment last year, up 1.7 percent, while overseas direct investment rose 14.1 percent to US$102.9 billion — passing the $100 billion mark for the first time as Chinese companies look elsewhere with the domestic economy slowing.
SOUTH KOREA
Moody’s sees MERS impact
An outbreak of Middle East respiratory syndrome (MERS) threatens to deal a blow to South Korea’s economic recovery, Moody’s Investors Service said yesterday, as the South Korean Ministry of Health reported three new cases, the lowest daily increase in 17 days. WHO Director-General Margaret Chan (陳馮富珍) said the country’s response, although initially slow, has been “exemplary.” There have been signs that the outbreak, the largest outside of Saudi Arabia, might be slowing. The daily number of new cases has dropped to single digits this week compared to as many as 23 last week. Three were reported yesterday — the lowest number since June 1. The outbreak has kept consumers from visiting malls and parks and led to more than 100,000 tourist visit cancellations, denting consumer spending.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last