Fed sees rate hike coming
The US Federal Reserve was divided about whether the US economy is strong enough to withstand an interest rate increase, according to the minutes of its policy meeting released on Wednesday. Although policymakers at the US Federal Open Market Committee meeting on July 28 and July 29 viewed conditions getting closer to allowing the first rate hike in nearly nine years, they cited evidence that the time was not ripe. As expected, the committee left the benchmark federal funds rate unchanged at zero, but Fed Chair Janet Yellen has signaled that a hike is on track this year. The meeting record gave no clear indication of when the Fed would pull the rate trigger.
Norway’s growth slows
Norway’s economic growth slowed in the second quarter, as plunging crude prices sapped investments and drove up unemployment in western Europe’s biggest petroleum producer. Seasonally adjusted GDP, excluding oil, gas and shipping, grew 0.2 percent, after expanding a revised 0.3 percent in the first quarter, Oslo-based Statistics Norway said yesterday. The slump in oil prices is proving painful for the economy, with almost half of its exports related to petroleum. The nation’s central bank cut rates in June for a second time since the price of Brent crude started dropping. It also signaled a probability as high as 70 percent that it would cut rates again this fall.
Qantas swings into profit
Qantas Airways Ltd yesterday posted a A$557 million (US$409 million) full-year profit in a dramatic turnaround since it recorded a US$2.6 billion loss in the previous year. Australia’s largest airline said in a statement that profit for the fiscal year through June reflected strong performances from all business segments, including its troubled international arm, which turned a A$408 million loss last year into a A$267 million profit. The company has not declared a dividend, but will return A$505 million to shareholders through a A$0.23 per share cash distribution in November. The airline’s underlying pre-tax profit for the year was A$975 million, better than analysts’ expectations of a A$960 million profit.
Li & Fung profit falls 20%
Li & Fung Ltd (利豐), the world’s largest supplier of clothes and toys to retailers, yesterday reported that first-half core operating profit slumped 20 percent amid weak demand in the US and Europe. Core operating profit fell to US$182 million for the six months ended June from US$227 million a year earlier, the company said in a statement. “The oil price decline in the US did not help consumption this time around,” Deutsche Bank analyst Anne Ling (林建純) said in a note before the results were released.
Apple ruling appealed
Samsung Electronics Co has filed a petition to the US Supreme Court in its long-running patent infringement case against Apple Inc, according to court documents. The petition was filed after an appeals court upheld part of a ruling by a California jury that found patent infringement by Samsung, ordering the company to pay about US$930 million in damages to its US rival. The petition “will present at least two substantial questions concerning design-patent liability and damages,” and be filed by November, the court documents filed on Wednesday showed.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s