PROPERTY
HK plans vacancy tax
Hong Kong’s government unveiled details of a planned tax on unsold new apartments, including potential jail time for developers who defy the rules. Developers would be required to submit reports annually on the status of apartments, with false statements punishable by a fine and a year in prison, a document submitted to the Legislative Council late on Tuesday proposed. Under the plan, a tax amounting to double an apartment’s annual rental value would apply after six months of vacancy. The proposal also plugs a loophole: Developers cannot beat the tax simply by selling a new apartment to an associated company. The government plans to introduce a bill containing the measures before the end of the legislative year in July.
PROPERTY
Evergrande faces fund gap
Hui Ka Yan (許家印), China’s second-richest man, has 17 billion reasons to keep him awake at night. His property developer, China Evergrande Group (恒大集團), has debt maturing in 12 months or less that exceeds its cash by 114 billion yuan (US$17 billion), its full-year report released late on Tuesday showed. The yawning gap is partly the result of a drop in its cash buffer in the second half of last year. The giant funding gap indicates that Hui’s efforts to whittle down a US$100 billion debt pile and put the firm on a more solid financial footing still have some way to go. It might also explain why the company was willing to pay yields as high as 13.75 percent on bonds it sold in October last year — an issue Hui personally invested US$1 billion in.
INTERNET
Line, Mercari join forces
Line Corp and Mercari Inc are joining forces on mobile payments as Japan’s Internet companies race to dominate cashless transactions in the world’s third-largest economy. The operator of Japan’s most popular messaging platform and the used-goods online marketplace app would let users shop and pay for purchases at stores that accept each other’s systems, they told reporters in Tokyo yesterday. They also launched an alliance to welcome other mobile payment providers.
AIRPORTS
Group buying GMR stake
A consortium including India’s Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management, is to invest 80 billion rupees (US$1.2 billion) to buy a stake in GMR Airports Ltd. The deal would pump 10 billion rupees into GMR Airports, a unit of GMR Infrastructure Ltd and purchase 70 billion rupees of the airport unit’s equity shares from the parent, according to a statement. GMR operates Delhi International Airport Ltd, the nation’s biggest airport. The deal values GMR Airports at 180 billion rupees, the company said in a filing. After the purchase, Tata would hold 20 percent in the airport unit, while GIC would get 15 percent and SSG would own 10 percent.
MACROECONOMICS
Downside risks remain: ECB
European Central Bank (ECB) President Mario Draghi said that risks to the eurozone’s economic outlook remain tilted to the downside and a pickup in inflation is delayed, warranting a continued accommodative monetary policy that includes negative interest rates. “If necessary, we need to reflect on possible measures that can preserve the favorable implications of negative rates for the economy, while mitigating the side effects, if any,” Draghi said. “That said, low bank profitability is not an inevitable consequence of negative rates.”
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to