Clearinghouses to be rated
The financial health of the firms that form the backbone of the US$630 trillion derivatives market are being assessed for the first time. Moody’s Investors Service last week announced a new methodology for assigning credit ratings to the clearinghouses that guarantee derivative and security trades. The agency previously only graded the clearinghouses’ parent companies. Clearinghouses are meant to lessen the damage when a bank or investor becomes unable to make good their trades because they have gone bankrupt. They collect margin to cushion any future loss, monitor positions daily and require losses to be made up so that risk does not build.
Vehicle sales growth slows
Industrywide vehicle sales rose at the slowest pace in three years even after a fourth-quarter tax cut by the government, as businesses put off purchases with the slowing economy and turmoil in the stock market battered consumer confidence. Wholesale deliveries of passenger and commercial vehicles climbed 4.7 percent to 24.6 million units last year, the smallest rate of increase since 2012, according to the China Association of Automobile Manufacturers. By comparison, US sales of new cars and light trucks rose 5.7 percent to 17.5 million, according to Autodata Corp. Automakers appealed for government support after the slowest economic growth in a quarter century combined with registration curbs in major cities to slow vehicle sales. At one point, Ford Motor Co suggested that the industry might see a fall in deliveries for the year, before the government’s tax cut on Oct. 1 revived demand.
Metro expects profit boost
German retail and distribution giant Metro yesterday said that it expects to have achieved a “significant” increase in quarterly profits, thanks to “very good” Christmas business and gains from the sale of its cash-and-carry business in Vietnam. Metro, which runs its business year from October to September, said in a statement that “we can look back on a very good Christmas business, particularly in our domestic market, Germany… We remain confident for financial year 2015-16, despite the difficult environment, and expect positive development thanks to the range of measures introduced in our sales lines. We retain our original forecast,” chief executive Olaf Koch said. Metro said it had completed the sale of its Vietnam unit at the end of last month. The proceeds were expected to boost underlying or operating profit by “more than 400 million euros” (US$435 million), which would be included in the first-quarter accounts.
Critics slam McDonald’s
A group of McDonald’s Corp’s critics urged the EU to rein in alleged antitrust abuses by the world’s largest restaurant chain in a complaint just weeks after regulators added the company to a growing list of US firms facing a clampdown on tax loopholes. McDonald’s was accused by a coalition of Italian consumer groups and European and US trade unions of distorting competition and harming franchisees and consumers. McDonald’s “hurts everyone: franchisees, consumers, and workers,” said Scott Courtney, an official at the Service Employees International Union, which backs the antitrust complaint filed with the European Commission on Monday. The accusation adds to an EU probe opened last month into suspicions the company unfairly exploited a pact with Luxembourg to avoid tax for more than half a decade.
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US