INTEREST RATES
Fed split on rate decision
US Federal Reserve officials were sharply divided last month when they decided to cut their key policy rate for a second time this year. Minutes of the discussion at last month’s meeting released on Wednesday showed that the majority of Fed officials believed a second quarter-point cut was appropriate given increased economic uncertainty from trade tensions and a slowing global economy. However, a “couple” of participants favored a half-point reduction, saying the larger rate cut would reduce the risks of a possible recession. However, a third group of “several participants” argued that the Fed should not be cutting rates at all, as the current economic outlook had changed little since the bank’s last meeting.
CHINA
Capital flight surges: report
China’s hidden capital flight surged to a record high in the first half of this year, suggesting that residents wanting to move money abroad are using unrecorded transactions to evade tight capital controls, the Washington-based Institute of International Finance (IIF) said in a report on Thursday. Net errors and omissions in the balance of payments, a category reflecting flows that cannot be explained and widely seen as an indicator of concealed capital flight, rose to a record US$131 billion in the first six months of this year, IIF said. That was larger than the average US$80 billion recorded during the same period in 2015 and 2016, when outflow pressures intensified, it said. While recorded resident outflows of US$74 billion were the smallest in 10 years, “the true extent of capital flight seems underreported,” IIF head of China research Gene Ma (馬青) said.
RETAIL
Walmart US head quits
Walmart Inc’s US chief executive Greg Foran is leaving the company to take a top job at Air New Zealand Ltd. Foran, a native of New Zealand, has worked at the retail giant since 2011 and been CEO of the US division for the past five years, a period noted for several years of consecutive quarterly sales gains. John Furner, 45, the president and CEO of Walmart’s Sam’s Club division since 2017, is to take over the position on Nov. 1. Under Foran, Walmart cleaned up its 4,700-plus US stores, improved customer service and added employee training, as the nation’s largest retailer adapted to competition from online leader Amazon.com.
AUTOMAKERS
Nissan picks new CEO
Nissan Motor Co’s embattled board appears to have settled on a leader that will not be as autocratic as deposed automotive titan Carlos Ghosn, nor as divisive as his successor, Hiroto Saikawa. Incoming CEO Makoto Uchida, 53, is well regarded within the Japanese firm and his experience working closely with Renault SA could help ease tensions with Nissan’s top shareholder, people familiar with him said. The board particularly liked Uchida’s track record of producing results, most recently as head of the China business, said one of the people, who spoke on condition of anonymity.
SPORTS
Nike ends Oregon Project
Nike Inc yesterday said it is to shut down its Oregon Project training group after athletics coach Alberto Salazar was banned for doping. “This situation, along with ongoing unsubstantiated assertions, is a distraction for many of the athletes and is compromising their ability to focus on their training and competition needs,” Nike chairman Mark Parker said in a staff memo. “I have therefore made the decision to wind down the Oregon Project.”
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by