JAPAN
Consumer prices dip
Japan on Friday logged its first annual consumer price decline in four years. Government data showed prices dropped 0.3 percent last year from a year earlier, as weak household spending and meager wage hikes keep a lid on inflation. Last month alone, core consumer prices, which exclude volatile fresh food, declined 0.2 percent from a year ago — slightly better than expectations of a 0.3 percent fall, but it was still the 10th straight month of decline, and another blow to the government and Bank of Japan’s efforts to pump up the economy.
ECONOMY
Brexit, Trump risks: Berlin
Britain’s vote to leave the EU and the new US administration are the main risks to the global economy, the German finance ministry said yesterday, adding that domestic demand will remain the main growth driver in Germany this year. Construction, consumption and government spending have been the main pillars of growth in Europe’s largest economy recently, replacing exports. In the 2016 and 2017 fiscal years, the government set aside 28.7 billion euros (US$30.64 billion) in funding to accommodate and integrate the more than 1 million asylum seekers, the ministry said.
HOUSING
US new home sales drop
US sales of new single-family homes slowed last month, but closed out last year at the fastest pace since before the 2008 financial crisis, the Commerce Department said on Thursday. Amid rising mortgage rates and home prices, the sales decline pointed to an end-of-year slowdown in the housing market, as sales of existing homes also slowed last month despite a record year. New home sales fell 10.4 percent compared to November, to an annual rate of 536,000 units, seasonally adjusted, which was 0.4 percent below sales in December 2015.
UNITED KINGDOM
Economy shows solid growth
Britain’s economy grew solidly in the final months of last year, official data showed on Thursday, even as the country prepares to navigate a difficult departure from the EU. GDP expanded 0.6 percent between October and last month, matching the GDP growth during the previous two quarters, the Office for National Statistics said. For last year as a whole, British growth reached 2.0 percent, a decline from the previous year’s increase of 2.2 percent.
SPAIN
Unemployment at 7-year low
Spain’s unemployment rate hit its lowest level in seven years at the end of last year, official data showed on Thursday, as a booming tourism sector fueled job creation. The jobless rate fell to 18.6 percent in the final quarter of last year, its lowest level since the last three months of 2009, according to figures released by national statistics institute INE. The jobless rate remains the second highest in the 28-nation EU behind Greece.
PETROLEUM
PDO, NSSM ink deal
Petroleum Development Oman (PDO) on Thursday signed a US$1.2 billion deal with Japan’s Nippon Steel & Sumitomo Metal (NSSM) to further develop the southern port of Duqm, a statement and official media said. Under the five-year deal, PDO would obtain from Nippon Steel “piping for its drilling operations” and “a new supply yard in the Duqm Special Economic Zone,” the Omani company said in a statement.
BANKING
UBS profit more than triples
UBS Group AG said yesterday that profit more than tripled in the fourth quarter as the bank put less money aside for litigation, while rising interest rates and stocks boosted the securities unit and US wealth management. Profit before tax rose to 848 million Swiss francs (US$847 million) from SF234 million a year earlier, the Zurich-based bank said in a statement. UBS said it achieved SF1.6 billion of net cost savings at year-end and is on track to meet a savings target of SF2.1 billion by the end of this year. Higher interest rates in the US and improved investor confidence there should help offset the impact of negative central bank rates in Switzerland and the euro region, the bank said.
COFFEE SHOPS
Starbucks growth disappoints
Starbucks Corp on Thursday reported disappointing quarterly sales growth for the holiday season and cited a challenging environment for restaurant retailers. For the three months ended Jan. 1, the coffee chain said global sales rose 3 percent at established locations, including in the US. The Seattle-based company said customer visits in US stores fell 2 percent at established locations. It attributed the decline to a change in its loyalty program that stopped people from splitting orders to get more rewards. After factoring in the change, Starbucks says customer visits were flat.
LUXURY GOODS
LVMH cautiously confident
French luxury group LVMH Moet Hennessy Louis Vuitton SE said on Thursday it was cautiously confident for this year after posting “record” results last year. “Despite a climate of geopolitical and currency uncertainties, LVMH is well-equipped to continue its growth momentum across all business groups in 2017,” the group said in a statement. Last year, LVMH — whose brands include Louis Vuitton, Fendi, Givenchy, Guerlain and Sephora — said it booked “record revenue and profit.” Bottom-line net profit grew by 11 percent to 3.98 billion euros (US$4.25 billion) and revenues were up 5 percent at 37.6 billion euros.
AUTOMAKERS
VW compliance chief quits
Volkswagen AG (VW) on Thursday announced the unexpected departure of compliance chief Christine Hohmann-Dennhardt, who only came on board a year ago to help clean up the German auto giant’s image in the wake of the “dieselgate” scandal. In a statement, Volkswagen said Hohmann-Dennhardt was leaving “due to differences in their understanding of responsibilities and future operating structures within the function she leads.” The 66-year-old joined VW’s board of management in January last year. Germany’s Sueddeutsche Zeitung called her departure “a major setback” for Volkswagen as it seeks to win back customers’ trust and turn the page on the crisis.
OIL
Keppel slashes 10,600 jobs
Keppel Corp, the world’s biggest oil rig maker, said on Thursday it cut 10,600 jobs last year and mothballed two overseas shipyards as weak crude prices continued to batter the industry. The cuts were in the conglomerate’s Offshore and Marine (O&M) division, which has been hard hit by the downturn in oil and gas exploration following a prolonged slump in crude prices since 2014. Three shipyards in Singapore are also in the process of being closed, Keppel Corp chief executive Loh Chin Hua (盧振華) said at a media briefing.
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
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
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