BANKING
Four banks downgraded
Moody’s Investors Service has cut the long-term credit rating of Australia’s four biggest banks, saying surging home prices, rising household debt and sluggish wage growth pose a threat to the lenders. Australia & New Zealand Banking Group Ltd, Commonwealth Bank of Australia, National Australia Bank Ltd and Westpac Banking Corp were all downgraded to “Aa3” from “Aa2,” Moody’s said in a statement released yesterday. Residential mortgages account for more than 60 percent of the four banks’ loan books. The banks have recently tightened lending standards under pressure from regulators. The combination of soaring house prices and stagnant wage growth has pushed the ratio of household debt to disposable income to 189 percent — one of the highest levels in the world.
HOUSING
Fewer cities post increases
China’s home prices increased in fewer cities last month in the wake of cooling measures imposed by local authorities. New home prices, excluding government-subsidized housing, gained from the previous month in 56 of 70 cities tracked by the government, compared with 58 in April, the National Bureau of Statistics said yesterday. Prices fell in nine cities and were unchanged in five. In Beijing, prices of new homes were unchanged from the previous month while prices of existing homes fell 0.9 percent, the first decline since February 2015. It was the second straight month that the number of cities with price increases fell, as officials persist with curbs to take the froth out of bubbly markets. A deepening property slowdown could trim the nation’s economic growth rate, with UBS Group AG forecasting that sales would “lose more steam” in the second half of the year. In Shenzhen, the nation’s hottest market early last year, new home prices fell 0.6 percent from April, the sharpest decline in three months.
FOREX
HK to maintain peg
Hong Kong’s pegged exchange rate should stay as it has served the territory well through financial crises for more than 30 years, Hong Kong Monetary Authority Chief Executive Norman Chan (陳德霖) said yesterday. “Hong Kong is a small and open economy,” he said in a statement. “Keeping a stable exchange rate between the Hong Kong dollar and the US dollar is the most suitable arrangement. We have no need and no intention to change such an effective system.” Hong Kong linked its currency to the greenback in 1983.
INTERNET
Thailand boosting scrutiny
Thailand aims to buy software to boost the military government’s ability to track online networks and monitor online activity while planning a cyberlaw that would expand powers to pry into private communications. The beefing up of powers over the online world comes as authorities are increasingly targeting social media for violations of a law that makes it a crime to defame, insult or threaten the king, queen, heir to the throne or regent. The Ministry of Digital Economy and Society aims to spend 128.56 million baht (US$3.8 million) on software, including a “social network data analysis system” to monitor and map individuals and relationships between more than 1 million online users, a ministry document showed. New York University researchers have also found various US jurisdictions had spent more than US$5.82 million on social media monitoring software.
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