STEEL
Jobs at risk in ILVA buy
A consortium led by global steel giant ArcelorMittal SA on Friday said the Italian authorities had cleared it to buy struggling steel producer ILVA, but thousands of jobs are threatened. The 1.8 billion euro (US$2.02 billion) deal would see ArcelorMittal join forces with Italy’s Marcegaglia to snap up the heavily indebted company, one of the most polluting industrial sites in Europe. ILVA has 14,000 employees, of whom 11,000 work at its site in Tarente. In a statement, ArcelorMittal said it would undertake “to keep at least 10,000 employees for the entire duration of the industrial plan according to the outcome of negotiations with the unions.”
SPAIN
Banks may return only 28%
The nation might only retrieve 28 percent of the multi-billion-euro aid granted to banks, the central bank said on Friday, despite past government pledges that it would not cost “one euro” to the taxpayer. In total, more than a dozen Spanish banks received 76.14 billion euros in capital injections and financial guarantees as the sector struggled under the weight of the worldwide financial crisis and property bubble burst in 2008. The capital injections were implemented via FROB, the state’s bank restructuring fund, which injected 54.35 billion euros. However, 39.5 billion euros might never be paid back, the central bank said.
CANADA
‘Bail-in’ may be extended
The Department of Finance on Friday proposed new rules limiting government support for potential bailouts of the nation’s banks, extending a so-called “bail-in regime” promised last year. The government in April last year introduced in its budget a plan to implement a bail-in regime for Canada’s “systemically important banks,” which would allow authorities to convert securities of a failing lender into common shares to recapitalize the bank and let it remain open and operating. The proposed rules set out key features of the regime, including which type of debt instruments would be subject to the regulations. The government is seeking public comment until July 17.
RUSSIA
Interest rate cut by 0.25%
The central bank on Friday cut its key interest rate by 25 basis points and pledged further cautious monetary policy easing this year against a slightly better economic outlook. It trimmed the key rate to 9 percent from 9.25 percent in its third consecutive cut this year. Presenting the decision, bank Governor Elvira Nabiullina said annual inflation had neared its long-awaited goal of 4 percent as inflationary expectations among households had fallen to an all-time low last month.
OIL
Exxon can drill in Guyana
Guyana has issued an operating license and environmental permit to ExxonMobil, which has said it made “significant” discoveries off the South American nation’s coast. Guyanese Minister of Natural Resources Raphael Trotman said Exxon and partners Hess Guyana Exploration Ltd and CNOOC Nexen can now drill an area believed to contain at least 2 billion barrels of oil. He late on Thursday said that oil extraction is expected to start in 2020 at an initial rate of 100,000 barrels per day. ExxonMobil would receive a royalty of 2 percent on gross earnings and 50 percent of profits.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been