Data point to Harvey shock
Retail sales unexpectedly fell last month as Hurricane Harvey disrupted activity, suggesting the storm could dent economic growth in the third quarter. The US Department of Commerce said retail sales dropped 0.2 percent last month from the previous month, the biggest decline in six months, as motor vehicle sales tumbled 1.6 percent. Sales of building materials, electronics and appliances as well as clothing also fell. Overall retail sales increased 3.2 percent on a year-on-year basis. In a separate report on Friday, the US Federal Reserve said industrial production declined 0.9 percent last month in the biggest drop since May 2009, following six straight monthly gains.
Central bank cuts rate again
The Central Bank of the Russian Federation on Friday cut its key interest rate to 8.5 percent, the fourth reduction this year, as inflation hit a record low. The bank said it took the decision to slice 50 points off the rate after “inflation expectations resumed their decline.” In a statement, the bank said it would “continue to conduct a moderately tight monetary policy” in order to maintain inflation close to 4 percent. However, it also said that “during the next two quarters, the Bank of Russia deems it possible to cut the key rate further.” GDP is expected to grow by 1.7 percent to 2.2 percent after two years of recession, it said.
Mortgages drive credit growth
Chinese bank loans rebounded last month to hit 1.09 trillion yuan (US$166 billion), beating analysts’ expectations as demand was buoyed by home buyers. The figure was up from 825.5 billion yuan in July, the People’s Bank of China said. It exceeded forecasts from analysts surveyed by Bloomberg, although it remains far below the 1.54 trillion yuan loaned by banks in in June. However, the broad M2 measure of money supply rose 8.9 percent from a year earlier, down from 9.2 percent recorded a month ago.
Quick review of loans urged
Greece wants the next review of its European loan program to wrap up by the end of the year to pave the way for additional money to be disbursed next year, a senior member of Greek Prime Minister Alexis Tsipras’ government said. Greek Minister of Digital Policy, Telecommunications and Media Nikos Pappas, an economist who is considered a close adviser to Tsipras, said the Greek economy is rebounding, with output set to expand 2 percent this year and unemployment falling. “We hope to conclude before the end of the year. There is absolutely no reason to have any delays,” Pappas said on Friday. “If there are delays, it is not going to be because of Greece.”
KPMG S Africa head quits
KPMG LLP on Friday said the head of its South African office and seven other senior executives quit, after an internal investigation found that work done for the politically connected Gupta family fell “considerably short” of the auditing firm’s standards. It is to give the equivalent of US$3 million, the fees it made from its work with the family since 2002, to education and anti-corruption charities. KPMG South Africa chief executive officer Trevor Hoole, chairman Ahmed Jaffer and chief operating officer Steven Louw were among those to have resigned, KPMG said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a