BANKING
Philippine merger planned
The Philippine government announced plans to combine the country’s two largest state-owned banks at the same time as it injected at least 30 billion pesos (US$629 million) of new capital into the merged entity. Development Bank of the Philippines is to be merged into Land Bank of the Philippines to create the country’s second-biggest lender by assets, eclipsing Metropolitan Bank of the Philippines and Bank of the Philippine Islands, based on central bank data as of end September last year. The merger needs the approval of Bangko Sentral ng Pilipinas. “The merger bodes well for the stability of our banking system,” Finance Secretary Cesar Purisima said in a mobile-phone message.
FAST FOOD
McDonald’s Japan upbeat
McDonald’s Corp’s Japan business forecast that it will return to full-year profitability for the first time in three years, as the company deploys new measures in an attempt to win back customers after being hit by a series of food crises. Net income will probably be ¥1 billion (US$8.7 million) for this year, the fast-food chain said on Tuesday. The company’s net loss for last year was ¥34.7 billion, compared with a loss of ¥21.8 billion the previous year, McDonald’s Holdings Co (Japan) said.
TOYS
Hasbro open to ‘add-ons’
Hasbro Inc chief executive officer Brian Goldner, responding to a question about the company’s merger plans, said he would consider “add-on acquisitions,” even as the toymaker concentrates on its own strategy. “We continue to remain open to ideas that enhance our strategic brand blueprint, but we’re very focused on executing our own strategy,” Goldner said on a conference call on Monday after he was asked if Hasbro would consider a “transformative” deal. “We have looked from time to time to round that out, to build our capabilities.” Hasbro’s earnings rose to US$1.39 a share in the fourth quarter of last year, while revenue rose 13 percent to US$1.47 billion in the period, it said.
AUTOMAKERS
VW truck unit eyes options
Volkswagen AG’s (VW) heavy-truck division is exploring its options for growth that could include acquisitions and an initial public offering as it seeks to reap the benefits of more independence within its rapidly reorganizing parent company. Trucks chief Andreas Renschler said in an interview that the US, the only major market where the unit has no significant presence, and China are among key regions for possible expansion. The strategy would challenge global industry leaders Daimler AG and Volvo AB as well as smaller rivals in emerging markets. Renschler declined to comment on specific plans or targets.
AUTOMAKERS
Cheap gas stifles Tesla
Tesla Motors Inc shares fell to a two-year low amid concerns that cheap gasoline is stifling demand for electric cars as well as whether the company can efficiently produce enough of its new sport utility vehicle. The stock slid 9 percent to US$147.99 in New York for its lowest closing price since January 2014. The shares had already declined 32 percent this year through Friday. The Palo Alto, California-based company is scheduled to report fourth-quarter earnings on Wednesday. Bearish sentiment has been on the rise since the release of the Model X SUV due to concerns about the company’s production ramp and ability to manufacture the complex vehicle in high volumes.
AUTOMAKERS
Cash crisis hits GM Egypt
General Motors Co (GM) has temporarily suspended its operations in Egypt due to a currency crisis, a company source told Reuters on Monday. “The entire sector has a currency crisis. We can’t make a car without some of the parts. We stopped production temporarily as of yesterday until we can clear the imports held up in customs,” the source said. “There is still some leeway with the government and the banks to solve the issue.” General Motors’ Egypt operation includes assembling trucks and cars. It makes 25 percent of Egypt’s vehicles.
PHARMACEUTICALS
Sanofi expects stable profits
Sanofi said profit would not show much change this year as demand for new products offsets sliding sales of the company’s best seller, the insulin analogue Lantus. Earnings per share excluding some costs and currency movements, which France’s largest drugmaker calls business net income, will be “broadly stable” this year, the Paris-based company said in an e-mailed statement yesterday. The drugmaker reported fourth-quarter profit of 1.71 billion euros (US$1.91 billion), or 1.31 euros a share, that beat analysts’ estimates, though sales of Lantus dropped 13 percent to 1.54 billion euros last quarter. Total sales rose 2.3 percent to 9.28 billion.
APPAREL
Gap sales slump in Q4
Gap Inc on Monday reported slumping sales at all three brands for the crucial fourth quarter, which covers the holiday season. The company, which operates Gap, Old Navy and Banana Republic stores, said a key revenue measure, sales at established stores, fell 7 percent in the November-January period. Gap also said that it expects adjusted profit for the year to be at the high end of the range it had previously predicted. It now expects US$2.41 to US$2.42 per share, from its prior forecast of US$2.38 to US$2.42 per share. Gap is slated to report full-year results on Feb. 25. Shares of the company rose 2.5 percent in after-hours trading, to US$24.60, after the updated forecast. Shares are down 41 percent for the past 12 months and closed at US$23.99 on Monday.
IT
Whitman’s pay drops 13%
Meg Whitman’s pay package dropped 13 percent last year as she oversaw the split of Hewlett-Packard Co and changed her leadership roles. Whitman received compensation of US$17.1 million in the 2015 fiscal year, from US$19.6 million in the previous year, according to a regulatory filing on Monday. She became chief executive officer last year of Hewlett Packard Enterprise Co, which targets businesses with products such as servers and services, and is the chair of HP Inc, which sells computers and printers. While her compensation package declined, it was close to her 2013 total pay of US$17.6 million.
ECONOMY
French growth to pick up
France’s economic growth is set to pick up slightly in the early part of this year, data showed on Monday, after the economy grew by 1.1 percent last year — its best rate since 2011. The Bank of France said it expected the economy to grow by 0.4 percent in the first three months of this year. That is a small increase from 0.2 percent in the fourth quarter of last year. The Bank of France based its GDP growth estimates on its monthly survey of businesses, which anticipate a slight improvement in industrial activity, as well as the services and construction sectors this month. The government is aiming for growth of 1.5 percent for this year.
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