IMF
Lagarde examines US tax cut
IMF managing director Christine Lagarde said on Friday the US President Donald Trump administration’s US$1.5 trillion tax cut could prompt other nations to follow suit, fueling a “race to the bottom” that risks hemming in public spending. The effects of the package passed by Congress in December last year are likely to include increased consumption and “hopefully the payment of higher wages,” Lagarde said on a panel at the Munich Security Conference in Germany. It also will fuel inflation, she said.
REAL ESTATE
US housing starts up 9.7%
Groundbreakings on new US homes jumped 9.7 percent last month to the highest level since October 2016, welcome news for a housing market struggling with a shortage of homes for sale. The US Commerce Department said on Friday housing starts came in at an annual pace of 1.33 million last month, up from 1.21 million the previous month and 1.24 million a year earlier. Meanwhile, building permits, an indicator of future construction, rose 7.4 percent last month, it said.
SOVEREIGN DEBT
Fitch upgrades Greece
Fitch Ratings on Friday upgraded Greece’s sovereign debt grade, citing budget surpluses, greater political stability and the growing economy. The agency raised the debt rating one notch to “B” from “B-,” leaving the country in the “highly speculative” category, but with a positive outlook. The decision followed a similar move last month by S&P Global Ratings, which said the economy’s improving fiscal situation was coinciding with growing employment.
RETAIL
UK consumers cautious
UK retail sales barely grew last month, more evidence consumers are reluctant to splash out amid a squeeze from rising prices. Sales increased 0.1 percent from the previous month, far below the 0.5 percent gain forecast by economists in a Bloomberg survey. From a year earlier, sales rose 1.6 percent, the weakest for a January in four years, the Office for National Statistics said on Friday. One of the bright spots was sales of sporting equipment, reflecting the traditional New Year enthusiasm for workouts and a pickup in gym membership. Food sales fell 0.4 percent on the month.
JAPAN
Kuroda tapped for new term
Bank of Japan Governor Haruhiko Kuroda was nominated on Friday to serve a second five-year term as the head of the central bank. The proposal on Friday to a parliamentary committee was expected to gain approval before Kuroda’s term expires at the end of March. The challenge for Kuroda, many in Japan believe, will be in finding ways to ease out of the Bank of Japan’s current stimulus regime without disrupting markets given its outsized holdings of Japanese government bonds.
STOCKS
MSCI warns on India move
A move by Indian exchanges to stop all licensing deals with their foreign counterparts is anti-competitive and could jeopardize the country’s standing in indices tracked by global funds worth trillions of dollars, MSCI Inc said. “If the changes are put into effect, the result will be disruptive and harmful to international institutional investors in Indian equities,” MSCI said in a statement on Thursday. It said it is monitoring the situation and warned India’s market classification could change unless the “restrictive measures” are removed.
MASS MEDIA
Delrahim rejects speculation
The head of the US Justice Department’s antitrust division, who is suing to block AT&T Inc’s proposed takeover of Time Warner Inc, said on Friday he did not discuss the proposed merger with US President Donald Trump, whose criticism of the entertainment company’s CNN has sparked speculation that he influenced the decision to seek to block the deal. US antitrust chief Makan Delrahim denied further comments on the case to reporters after speaking at a conference in Paris.
FOREIGN EXCHANGE
US fines, bans trader Little
Former Barclays PLC trader Peter Little, a member of “the Cartel” chatroom where bank traders allegedly manipulated foreign-exchange rates, is being fined US$487,500 by the US Federal Reserve and permanently banned from US banking. Little, who led the Barclays FX spot desk in New York, used electronic chatrooms to manipulate currency pricing benchmarks and failed to properly supervise subordinate traders, the Fed said in a statement on Friday.
BEVERAGES
Coca-Cola swings to loss
Coca-Cola Co swung to a fourth-quarter loss after being hit with a US$3.6 billion tax charge tied to a sweeping overhaul of the US’ tax laws. The Atlanta company on Friday reported a loss of US$2.75 billion, or US$0.65 per share. Earnings, adjusted for one-time gains and costs like the tax hit, came to US$0.39 per share, which was a US$0.01 better than analysts had expected. Revenue fell 20 percent to US$7.51 billion, also topping Wall Street projections for revenue of US$7.36 billion.
ENERGY
Crude recovery boosts Eni
Italian oil and gas company Eni SpA said on Friday the recovery in global crude prices along with record production helped it swing back into profit of of 3.4 billion euros (US$4.3 billion) last year, compared with a loss of 1.46 billion euros in 2016. In the fourth quarter of last year alone, the company recorded a net profit of 2.1 billion euros, six times the level of last year and more than three times the amount expected by analysts. The rise in crude prices helped swell sales by 20 percent to 66.92 billion euros, Eni said.
TOYS
FAO Schwarz eyes China
FAO Schwarz is setting its sights on China as part of an expansion begun late last year. The toy retailer said on Thursday it will open locations in Beijing and Shanghai this year through a collaboration with China’s largest toy distributor, Kidsland Group (凱知樂). Kidsland is to also open 30 smaller FAO Schwarz stores and shops in 200 department stores across China over the next five years, in addition to launching a chain of FAO Schwarz-branded airport shops in the US and Canada.
TOURISM
Caribbean weathers storms
A record 30 million people visited the Caribbean last year, despite two devastating hurricanes that hit a region still struggling to recover, regional tourism officials said on Thursday. Visitors spent a record total of US$37 billion, up nearly 3 percent compared with the previous year, according to Ryan Skeete, acting research director for the Barbados-based Caribbean Tourism Organization. The majority of visitors came from the US, and there was a surge of travelers from Canada and Europe.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts