NEW ZEALAND
GDP misses forecasts
The farm-dependent economy is growing more slowly than expected, official figures showed yesterday, feeding expectations of further interest-rate cuts. Statistics New Zealand said the economy expanded 0.4 percent in the three months to June, below consensus forecasts of 0.6 percent. That pushed annual growth in GDP down to 2.4 percent from 3.3 percent last year, the lowest in two years with economists expecting it to fall further. The June quarter improved on the first three months — when dairy prices plunged — but still fell short of economists’ estimates. “The 0.4 percent rebound ... from the 0.2 percent rise in the first quarter, is disappointing and supports our view that the economy is weaker than the RBNZ [Royal Bank of New Zealand] believes,” said Paul Dale, lead Australia and New Zealand economist at Capital Economics.
SWITZERLAND
‘Subdued’ economy tipped
Economic growth will stay below its potential this year and next, the government said yesterday. Output will expand 0.9 percent this year and 1.5 percent next year, the State Secretariat for Economic Affairs said in Bern. Its previous prediction, issued in June, was for growth of 0.8 percent and 1.6 percent respectively. The government said it continued to “expect the economy to remain very subdued in the second half of the year and to only strengthen during the course of 2016,” according to a statement. “The strong downward momentum in prices should gradually ease as the effects of the appreciation in the Swiss franc fade away.”
SLOVENIA
IMF warns over deficits
The nation needs to reduce budget deficits to rein in growing debt after it more than quadrupled since the start of the financial crisis, the IMF said on Wednesday. The fiscal situation remains in “a troubled state” with persistent budget shortfalls and the public debt set to rise to about 90 percent of GDP by 2020, the Washington-based lender said in a report. The fiscal gap widened from near balance in 2007 to a deficit of almost 14 percent of GDP in 2013 after the failure of domestic banks required public support of about 10 percent of total output, it said.
AUTO RENTAL
Hertz sells CAR stake
Hertz Global Holdings Inc sold a US$100 million stake in China Auto Rental Holdings Inc (CAR, 神州租車控股), sending shares of the Chinese car-rental company that it invested in in April 2013 to slump as much as 7.3 percent in Hong Kong yesterday. Hertz had agreed to place 59.57 million shares to an undisclosed third party at HK$13.01 per share, representing a 5.6 percent discount to the closing price on Wednesday. Hertz still owns about 13.6 percent of the company after the sale. CAR, based in Beijing, held its initial share sale in Hong Kong in September last year.
TECHNOLOGY
Oracle revenue declines
Oracle Corp’s fiscal first-quarter revenue fell short of analysts’ projections, crimped by a slowdown in software license sales amid a shift to Web-delivered cloud products. Revenue in the period that ended Aug. 31 fell 1.7 percent to US$8.45 billion, and profit before certain costs was US$0.53 a share, the Redwood City, California-based company said on Wednesday. Analysts on average had forecast sales of US$8.53 billion and profit of US$0.52. Net income in the first quarter declined to US$1.75 billion, or US$0.4 a share, from US$2.18 billion, or US$0.48, a year earlier.
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