Interest rate kept unchanged
The Reserve Bank of Australia yesterday left the key interest rate unchanged at a record low after the key unemployment metric edged higher. Bank Governor Philip Lowe kept the cash rate at 1.5 percent, where it has stood since 2016, as expected by all economists. The jobless rate hit 5.6 percent in April, moving further away from the bank’s estimated level of full employment. The global picture has also become more clouded amid an emerging-market rout, populism in Europe and US trade tariffs. The central bank has fashioned itself as an anchor of stability in the nation’s economy, making clear that it is unlikely to tighten policy until unemployment falls toward 5 percent and inflation is nearer the midpoint of its 2 to 3 percent target range.
Societe Generale settles probe
Societe Generale SA is to pay about US$1.3 billion to resolve a probe into the bribery of Libyan officials and settle a US investigation into interest-rate manipulation, drawing a line under two of the French bank’s biggest legal headaches. The bank is to pay US$585 million to resolve charges with US and French law enforcement agencies related to the Libya investigation and US$275 million for violations arising from helping rig benchmark interest rates. The bank will also pay about US$475 million to the US Commodity Futures Trading Commission to settle the Libor probe, the commission said in a statement on Monday. Legg Mason Inc, a Maryland-based investment management firm, on Monday was also penalized for having a role in the Libyan bribery matter, agreeing to pay US$64 million in a resolution with the US Department of Justice.
Mars to go green for profits
Mars Inc, the maker of its namesake chocolate bar and Wrigley’s chewing gum, is spending US$1 billion on sustainability with a strategy to make greener practices increase profits. The company generated US$35 billion in revenue in 2016. “There is a very concrete business case to this,” Barry Parkin, chief procurement and sustainability officer at Mars, said in a telephone interview. “We’re going to get a payback on that billion several times over.” Parkin is allocating about a third of the funds to making operations more water and energy efficient. Another third is going to simplify supply chains by buying directly from farmers. The remainder would be used to recreate recipes without artificial ingredients. Mars is working to reduce its exposure to environmental, social and governance risks, because it is next to impossible to track exactly where the huge amounts of raw materials that it uses are from, Parkin said.
Recovery stays on target
The economy has grown for a fifth consecutive quarter, keeping the nation’s recovery on target as eight years of international bailout programs are due to end in August. The economy grew 2.3 percent in the first quarter compared with the same period a year earlier, the Greek Statistical Authority said on Monday. The growth from the previous quarter was 0.8 percent. The government is negotiating the terms of its bailout exit with eurozone rescue lenders, and parliament is expected to approve a final major round of administrative and cost cutting reforms next week. The government hopes to make a full return to bond markets after August, but the head of the central bank has renewed support for a more gradual approach with a precautionary credit line from bailout lenders.
STEPPING UP: The firm has also asked employees to work in split shifts from this week and to halt all but essential overseas business travel from next month Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has implemented a remote work policy for employees not on production lines in an attempt to curb the spread of COVID-19, the world’s largest contract chipmaker said yesterday. This is the first time in the Hsinchu-based company’s history that it has launched a large-scale remote work policy, joining global technology companies, such as Apple Inc and Google, that encourage employees to work from home. The chipmaker has also asked employees to work in split shifts from this week, it said. As the number of virus infections continues to climb worldwide, TSMC has urged employees to halt unnecessary
A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside. As COVID-19 grips the world, it might just be the safest place to work right now. The teams belong to ASML Holding NV, which holds a de facto monopoly on the industry of
DBS Bank Ltd yesterday hacked its GDP growth forecast for Taiwan this year to 0.9 percent, down from its estimate of 2.3 percent two months earlier, in light of the COVID-19 pandemic and increasing financial market volatility. The bank’s latest forecast was even lower than London-based IHS Markit Ltd’s estimate of 1 percent, while other research institutes’ projections range from 1.6 percent to 2.6 percent. Taiwan’s economic momentum is being negatively affected by the pandemic, DBS said. The rapid spread of the disease from Asia to Europe and the US has dampened the bank’s previous expectation of a “V-shaped” global rebound in the
DOWNSIDE RISKS: Firms have a ‘very low’ chance of boosting investment returns in the next two years, making it hard for them to improve their capitalization, an analyst said Taiwanese life insurers wanting to improve their capital structure face strong headwinds this year, given prolonged low interest rates and economic impacts derived from trade protectionism and the COVID-19 pandemic, Taiwan Ratings Corp (中華信評) said on Friday. The local life insurance sector also still has high asset risks and such risks are susceptible to market volatility, the local arm of Standard & Poor’s Global Ratings said. Since last year, major financial holding companies — including CTBC Financial Holding Co (中信金控), Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) — have announced plans to raise fresh capital to