DRONES
DJI eyes Japanese market
Major Chinese consumer-drone maker Dajiang Innovation Technology Co (DJI, 大疆) has its eyes on the potentially lucrative Japanese market after regulations on drones were relaxed there three months ago, the company said yesterday after it launched its latest model, Phantom 4, in a fashionable mall in Tokyo. Shenzen-based DJI says it controls 70 percent of the world’s consumer-drone market and the niche market has great potential to grow. Japan’s first law on drones went into effect in December last year.
BRAZIL
Bank holds Selic steady
The central bank on Wednesday maintained its benchmark Selic interest rate at 14.25 percent, as the world’s seventh-largest economy struggles with rising inflation and severe recession. In January, the bank also left the rate unchanged, surprising the market. A weekly survey of 100 market analysts by the central bank’s Focus magazine has found expectations that the high rate is to be held steady through this year, with a cut to 12.5 percent next year.
CHINA
Outlook reduced on SOEs
Moody’s Investors Service cut its credit-rating outlook on 38 Chinese state-owned enterprises (SOEs) and 25 financial institutions after the agency’s decision to lower the country’s sovereign credit-rating outlook. The SOEs’ outlook was reduced to negative, Moody’s said yesterday, a day after it issued a separate release downgrading the non-insurance financial firms to negative from stable. The financial institutions include three policy banks, 12 domestic commercial banks and three distressed asset-management companies, Moody’s said.
RETAIL
Adidas forecasts boost
Adidas AG, the German sport-shoe maker, forecast an increase in earnings this year as consumers spend more, making it easier to sell higher-priced goods and offset rising costs. Net income from continuing operations is set to increase 10 to 12 percent excluding goodwill impairment, Adidas said yesterday. Operating margin excluding goodwill impairment is to be at least stable compared with last year’s 6.5 percent. Gross margin is set to narrow as much as 1 percentage point due to higher purchasing costs in Asia.
SECURITIES
Default rates rise
Energy companies are pushing up the overall default rate of US high-yield bonds, and it is expected to get worse by next year, according to Moody’s Investors Service. The default rate for high-yield bonds in the US is expected to climb to 4.7 percent in January from today’s level of 3.1 percent, according to the note. Defaults in the oil patch have been part of the fallout of a market crash that has cut crude prices by nearly 70 percent since their peak in June 2014.
RETAIL
Costco’s income dips 8.7%
Costco Wholesale Corp on Wednesday posted second-quarter earnings that trailed analysts’ estimates as higher-income shoppers show signs of curtailing spending. Net income fell 8.7 percent to US$546 million, or US$1.24 a share, the Issaquah, Washington-based company said in a statement. Same-store sales in the US, a closely watched measure by investors, increased 4 percent excluding the negative impacts from gasoline price deflation and foreign exchange, compared with an estimate of 4.9 percent.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts