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.
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
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
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the