SOUTH KOREA
GDP grew 3.1% last year
The economy last year grew at its fastest pace in three years, the central bank said yesterday, thanks to robust exports of technology products, including semiconductors, and growing consumer spending. The economy expanded 3.1 percent, up from 2.8 percent in 2016 and the fastest since 2014’s 3.3 percent, the Bank of Korea said. Production in the country’s manufacturing sector expanded 4.2 percent last year, the highest since 2011, and investment in corporate infrastructure jumped 14.6 percent, the fastest since 2010. Consumer spending also rose 2.6 percent, the fastest pace since 2011.
MALAYSIA
Policy rate raised to 3.25%
The central bank raised its benchmark interest rate for the first time in more than three years, becoming the first in Southeast Asia to tighten monetary policy after years of low rates. Bank Negara Malaysia increased the overnight policy rate to 3.25 percent from 3 percent, it said in a statement yesterday, as predicted by 16 of the 20 economists in a Bloomberg survey. The central bank signaled in November last year that it might adjust its stance given the strength of the economy. The government is forecasting growth of as much as 5.5 percent this year, buoyed by a global trade recovery and rising domestic spending.
GERMANY
Consumer confidence rising
Consumer confidence is expected to inch up next month, a closely watched survey forecast yesterday, as political gears grinding in Berlin fail to slow the tempo of Europe’s biggest economy. Market research firm GfK said its forward-looking poll of about 2,000 people climbed 0.2 points to 11 for next month, slightly higher than analysts’ expectations. Consumers “clearly see the German economy in a boom” and expect it to benefit them personally, the firm said in a statement.
AUTOMAKERS
Ford says tough times ahead
Ford Motor Co said that its full-year earnings jumped 65 percent to US$7.6 billion last year due to tax and pension changes, but added that this year would be tougher. The adjusted earnings of US$1.78 per share fell just short of analysts’ predictions of earnings of US$1.79 per share, a FactSet poll showed. The company’s automotive revenue rose slightly to US$145.7 billion, although its global sales remained flat at 6.6 million cars and trucks. That was higher than the US$144 billion analysts had forecast. The automaker has said it expects to earn between US$1.45 and US$1.70 per share this year.
FINANCE
GE insurance unit probed
General Electric Co (GE) is being investigated by US federal regulators for a US$15 billion hit it took to cover miscalculations made by an insurance unit. The company revealed last week that it would take a US$6.2 billion charge in its fourth quarter after a subsidiary, North American Life & Health, underestimated how much it would cost to pay for the care of people who lived longer than projected. During a conference call on Wednesday to discuss its fourth-quarter earnings report, GE Transportation chief executive Jamie Miller said that the company had been notified that the US Securities and Exchange Commission is investigating the process that led to the mishap at the insurance unit.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure