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.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is