Slow GDP growth in Q1
Economic growth remained sluggish at 0.6 percent in the first three months of this year, official data showed yesterday, fueling expectations of another interest rate cut before year’s end. The modest increase in GDP for the quarter was the same as the growth rate in the final three months of last year, Statistics New Zealand said. It said the figure was boosted by a 3.7 percent rise in construction and brought the country’s annual growth to 2.7 percent for the year to March 31. The Reserve Bank of New Zealand cut its base rate to a record low of 1.5 percent last month.
Interest rates raised again
The nation’s central bank yesterday delivered its third interest rate hike since September last year and signaled there is more to come, in a move that further widens the gap between it and the world’s major central banks. “Our current assessment of the outlook and balance of risks suggests that the policy rate will most likely be increased further in the course of 2019,” Norges Bank Governor Oystein Olsen said in a statement. The deposit rate was raised by a quarter point to 1.25 percent, as expected. The krone surged 1 percent against the euro, its strongest gain since March. Against the US dollar, the krone was up 1.5 percent.
Ministry mulls tax measures
The nation is considering increasing the personal income tax threshold in next month’s budget, people familiar with the matter said yesterday, as authorities seek to kick-start consumption in the economy. Minister of Finance Nirmala Sitharaman might raise the tax exemption limit for working-age individuals to 300,000 rupees (US$4,312) of their annual income, up from 250,000 rupees, the people said. The tax measures have not been finalized yet. The economy has slowed sharply this year, with growth reaching a five-year low of 5.8 percent in the first three months of the year.
Sustainability bonds surge
The nation has this year become the world’s biggest source of so-called sustainability bonds, as borrowers rush to sell notes that can fund projects to help the middle-class and smaller firms in a sluggish economy. Sales of debt globally for sustainability projects have more than doubled this year to US$16.4 billion, and South Korea makes up about 16 percent of that total, data compiled by Bloomberg show. The Ministry of Economy and Finance sold its first green and sustainability note last week, following issuance of such debt this year by five domestic firms, including KEB Hana Bank and Kookmin Bank.
Oracle beats expectations
Oracle Corp on Wednesday reported quarterly sales that topped Wall Street estimates on strong demand for applications, marking the world’s second-largest software maker’s return to growth amid a crucial transition to cloud-based computing. Revenue for the fourth quarter of its 2019 fiscal year, which ended on May 31, increased to US$11.1 billion, up 1.1 percent from a year earlier, the company said in a statement. Analysts, on average, projected US$10.9 billion, data compiled by Bloomberg showed. Profit, excluding some expenses, was US$1.16 a share, compared with estimates of US$1.07 a share.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to