ENERGY
Oil prices might pick up
International Energy Agency (IEA) chief Fatih Birol yesterday said that oil prices might have bottomed out, providing that the health of the global economy does not pose a concern. Oil prices hit this year’s highs on Friday with Brent crude reaching US$48.50 per barrel on optimism that a global oil glut will ease. A decline in non-OPEC production amounting to more than 700,000 barrels per day this year and production outages have driven the rally, Birol said. Asked if oil prices had bottomed out, he said: “It may well be the case, but it will depend on how the global economy looks like. In a normal economic environment, we will see the price direction is rather upwards than downwards. We believe under normal conditions towards the end of this year, second half of this year but latest next year, markets will rebalance.”
ECONOMY
Oil producers’ ratings cut
The credit ratings of Nigeria and Angola, Africa’s two biggest oil producers, were among four countries downgraded by Moody’s Investors Service, citing the negative impact depressed oil prices have had on the governments’ balance sheets, liquidity and creditworthiness. Nigeria and Gabon were cut to “B1” from “Ba3,” as “the prospect of lower-for-longer oil prices” raises liquidity risks and external vulnerability, according to statements released by the ratings firm on Friday. Angola was lowered to “B1” and the Republic of the Congo to “B2” from “B1” on similar concerns about the countries’ high dependence on oil, constraining their financing options, Moody’s said. The moves mark the end of a review Moody’s began on March 4 for possible downgrades of more than 10 oil producing nations, as it assessed the impact of the selloff in oil. Russia and Azerbaijan’s ratings were affirmed while Kazakhstan and Trinidad and Tobago were downgraded to “Baa3.” Decisions are pending for Abu Dhabi, Kuwait, Saudi Arabia, the United Arab Emirates, Bahrain, Qatar and Papua New Guinea.
SYRIA
Poverty rate skyrockets
The number of Syrians living below the poverty line has almost tripled after five years of conflict, according to a report published this week. About 83.4 percent of Syrians live below the poverty line compared with 28 percent in 2010, the report by the UN Economic and Social Commission for Western Asia and the University of St Andrews said. An estimated 13.5 million people in Syria needed humanitarian aid by late last year and more than 4 million of these were in Damascus and Aleppo provinces. “According to one estimate, life expectancy dropped from 70 in 2010 to 55.4 in 2014,” the report said. About half of Syria’s 493 hospitals in 2010 have been seriously damaged in the war, it added.
GERMANY
VW bonus irks minister
Minister of Finance Wolfgang Schaeuble said he did not understand how Volkswagen AG (VW) bosses could defend their bonuses after a huge emissions-rigging scandal plunged the automaker into global turmoil, according to an interview with **Die Welt** published yesterday. The criticism comes after Volkswagen revealed this week that its top executives would be paid a total of 63.2 million euros (US$72 million) for last year despite a massive loss incurred from the cheating controversy. “I can’t understand how you can steer a major DAX [German stock exchange] company into a crisis that threatens its very existence and then defend your own bonuses in a public debate," Schaeuble told the German daily. "It shows that something is not right," he added. After widespread outcry, VW’s supervisory board announced that it would freeze 30 percent of the executive board members’ annual bonuses for last year for possible payout three years later, depending on the performance of the group’s shares.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to