ECONOMY
Global debt at new high
Global debt rose to a record US$237 trillion in the fourth quarter of last year, more than US$70 trillion higher from a decade earlier, an analysis by the Institute of International Finance said. Among mature markets, household debt as a percentage of GDP hit all-time highs in Belgium, Canada, France, Luxembourg, Norway, Sweden and Switzerland. That is a worrying signal, with interest rates beginning to rise globally. Ireland and Italy are the only major countries where household debt as a percentage of GDP is below 50 percent. Still, the ratio of global debt-to-GDP fell for the fifth consecutive quarter as the world’s economic growth accelerated.
RETAIL
LVMH shares soar
Shares in France’s LVMH Moet Hennessy Louis Vuitton SE rose more than 5 percent to record highs in early trading yesterday after the Louis Vuitton owner posted better-than-expected sales growth in the first quarter, helped by thriving Chinese appetite for luxury goods. The upbeat start to the year for LVMH, the industry’s biggest company and parent to brands like Christian Dior and Moet & Chandon, sets an encouraging tone for peers at the start of their reporting season. Luxury goods firms last year benefited from a strong rebound in Asian demand, a momentum that has shown little signs of fading.
AVIATION
Air France assesses costs
Air France yesterday said that seven day-long strikes since February by workers demanding higher pay are set to cost it 170 million euros (US$210 million). “The impact on Air France’s operating profit of seven days of strikes between February 22 and April 11 is estimated at 170 million euros,” the group said. The estimate was contained in a statement on the passenger numbers of Air France-KLM, which said they had increased by 5.4 percent last month.
SAUDI ARABIA
Three-part bond sale begins
The sale of a three-part US dollar bond started yesterday, as the kingdom seeks funds to plug its budget deficit. The world’s biggest oil exporter set initial price guidance for the 2025 notes at 170 basis points area over US Treasuries, 2030 securities in the 200 basis points area and 2049 bonds in the 235 basis points area, according to a term sheet seen by Bloomberg. Global books open and the deal is today’s business. The government plans to borrow the equivalent of US$31 billion this year to bridge an expected budget deficit of US$52 billion and fund growth plans after its economy shrank last year. Last month, it increased a US$10 billion syndicated loan by US$6 billion on higher demand.
NORWAY
Inflation slows unexpectedly
Inflation unexpectedly slowed last month, casting doubt on the central bank’s plan to start tightening interest rates after the summer. Underlying consumer prices last month rose 1.2 percent from a year earlier, below the 1.4 percent estimated by analysts. Headline inflation was unchanged at 2.2 percent, missing the 2.4 percent estimate. Underlying inflation is falling deeper below the central bank’s newly minted 2 percent target. Policymakers have said they would start raising rates “after summer” in anticipation a pick up in economic growth and falling unemployment would push up price growth. The krone yesterday fell 0.16 percent to 9.6075 per euro.
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
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”