TRADE
Court clears trade deal
The EU-Canada free-trade agreement’s provisions to protect investors do not breach EU law, the European Court of Justice ruled yesterday in a major relief for proponents of the deal that came into force in 2017. The judges said that the mechanism to resolve disputes between investors and states in the Comprehensive Economic and Trade Agreement, which critics have said unfairly favor multinationals, is in line with EU law.
AVIATION
Lufthansa losses deepen
German airline group Lufthansa AG plunged deeper into the red in the first quarter, it said yesterday, blaming the rising price of fuel and intense competition in Europe, but sticking to annual targets. Between January and March, the Frankfurt-based group lost 342 million euros (US$382 million), almost nine times worse than in the first quarter of last year. Lufthansa had early last month warned of the looming negative bottom line, suggesting an operating, or underlying, loss of 336 million euros was in the offing — a figure confirmed yesterday. Revenues were up 3 percent year-on-year at 7.9 billion euros. “The first quarter is traditionally a difficult one for airlines,” the group said, with seasonal effects worsened by a 202 million euros rise in fuel costs compared with last year.
BANKING
Lender to buy back shares
Standard Chartered PLC yesterday announced a share buyback of up to US$1 billion as it reported a jump in first-quarter pretax profits. The lender’s first buyback in nearly two decades comes two weeks after it reached a US$1.1 billion settlement for processing transactions that contravened US sanctions on Iran and flouted anti-money laundering requirements. The London-based lender’s first-quarter pretax profits rose 10 percent to US$1.38 billion, it said, sending its shares up 5.2 percent in Hong Kong. “Our first-quarter profit supports our belief that we will generate full-year returns of at least 10 percent by 2021,” chief executive Bill Winters said in a statement. Winters said the company would aim at growing its customer base across Hong Kong, Africa and India.
ENERGY
BP hits profit estimates
BP PLC boosted cash flow and hit the target on profit estimates in the first quarter as rising oil and gas production, and strong trading results offset the effect of lower prices. The company’s performance brightens a mixed picture for Big Oil earnings. While the industry has moved beyond the worst downturn in a generation, it is still enduring volatile markets, with a sharp slump in crude prices late last year followed by a steep rebound in the first few months of this year.
AVIATION
Airbus earnings surge
Airbus SE earnings surged in the first quarter as the European planemaker churned out higher numbers of the A320 narrow-body jet that is the biggest global rival to Boeing Co’s grounded 737 MAX. The company delivered 126 A320s, a model that appears to have overcome a run of engine manufacturing faults just as the 737 faces questions about its future after two fatal crashes in five months. Adjusted earnings before interest and tax jumped almost 40-fold to 549 million euros, according to a statement yesterday, providing a solid starting point for chief executive officer Guillaume Faury, who took over from long-time head Tom Enders on April 10.
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
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
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure