CHINA
Producer price index dives
The prices firms pay factories for their goods fell last month at the fastest pace in three years, official data showed yesterday, as slackening demand and the bruising US trade dispute dragged on the economy. The producer price index — an important barometer of the industrial sector that measures the cost of goods at the factory gate — dropped 0.8 percent year-on-year last month, following a 0.3 percent drop in July. Consumer prices were also broadly subdued and only supported by a surge of almost 50 percent in the price of pork caused by African swine fever that has ravaged the nation’s pig industry since last year. The consumer price index rose 2.8 percent, stabilizing from July and beating forecasts.
OIL
Aramco readies local IPO
Saudi Arabian Oil Co (Aramco) chief executive officer Amin Nasser yesterday said that a domestic initial public offering (IPO) of the state oil giant would be the primary listing, but that it was also ready for an international offering. Nasser cited new Saudi Minister of Energy Prince Abdulaziz bin Salman as saying that an IPO would happen “very soon,” but added that the ultimate decision on timing and venue rested with the government. Saudi Arabia is planning a gradual listing of Aramco on its domestic market, sources said on Monday, as it moves ahead with the process and finalizes the roles banks will play in the listing of the world’s biggest oil company.
INDONESIA
Bank predicts 4.9% growth
The World Bank projects that the nation’s economic growth next year would slide below 5 percent and warned of the potential for “severe” capital outflows as global risks including the US-China trade dispute intensify. The forecasts were presented to President Joko Widodo, according to two people with knowledge of the matter. The presentation slides show a growth forecast of 4.9 percent for next year, which would be the slowest pace since 2015. That is lower than current projections of 5.1 percent for this year and 5.2 percent for next year in the World Bank’s June quarterly report.
E-COMMERCE
Amazon Prime reaches Brazil
Amazon.com Inc is bringing its Prime membership program to Brazil in an effort to leapfrog competitors and gain traction in a nation where it has been expanding slowly but surely. To start, Amazon Prime Brazil is to be a scaled-down version of the US subscription service, offering free unlimited shipping for about 500,000 products out of the 20 million Amazon sells in Latin America’s largest economy. Two day-shipping would be available in 90 cities, the company said. Deliveries in other urban centers would take three days or more.
AUTOMAKERS
Moody’s slashes Ford rating
Ford Motor Co’s plan to spend years and US$11 billion restructuring itself was dealt a major setback by Moody’s Investors Service, which cut the automaker’s credit rating over doubt that its initiatives would generate earnings and cash. Moody’s downgraded Ford to “Ba1,” saying its cash flow and profit margins are below expectations and are likely to remain weak over the next two years. Ford is rated “BBB” — two steps above junk — at S&P Global Ratings and Fitch Ratings, and both have negative outlooks.
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