China eases rate regime
China’s central bank yesterday unveiled a new regime to allow banks to set a prime lending rate, in what it said was a further step towards liberalization. Nine commercial banks will submit the lending rate they charge their best quality clients each day to set the prime rate, the central bank said in a statement. A weighted average will be calculated based on the submissions by banks and announced daily by China’s interbank market, it said. The average was set at 5.71 percent yesterday, according to the official Web site for interbank rates.
Economy grew 3.3%
The economy expanded at the fastest clip in nearly two years in the latest quarter as companies increased machinery purchases and consumers spent more. The Bank of Korea yesterday said that Asia’s fourth-largest economy grew 3.3 percent in the third quarter over a year earlier, the highest rate in seven quarters, showing that a recovery is gaining traction. From the previous three months, the economy expanded 1.1 percent, the same level as the second quarter.
US Fed wants more assets
The US Federal Reserve on Thursday proposed that big banks keep enough cash, government bonds and other high-quality assets on hand to survive during a severe downturn on par with the 2008 financial crisis. The largest banks — those with more than US$250 billion in assets — would be required to hold enough cash and securities to fund their operations for 30 days during a time of market stress. Smaller banks — those with more than US$50 billion and less than US$250 billion — would have to keep enough to cover 21 days.
DuPont to spin off unit
DuPont Co says it will spin off its Performance Chemicals unit to shareholders. The company has said previously that it was looking at options for the unit. Performance Chemicals is one of DuPont’s largest businesses by revenue, but it has been struggling because of falling prices for titanium dioxide, a key industrial pigment. It says it expects the spinoff to its shareholders to happen in about a year and a half. The company also says the spinoff will give it more reliable earnings growth.
Amazon Q3 loss narrows
Amazon.com says that its fiscal third-quarter loss narrowed as revenue grew 24 percent. The Seattle-based online retailer on Thursday also said that it expects growth in its fourth-quarter revenue, indicating confidence as it enters the key holiday shopping season. Amazon posted a loss of US$41 million, or US$0.09 per share, for the quarter that ended last month. That is compared with a loss of US$274 million, or US$0.60 per share, in the same quarter last year. The prior year includes a one-time US$169 million loss related to its stake in online deals site LivingSocial. Revenue came to US$17.09 billion from US$13.81 billion.
Ford boost profit outlook
Ford Motor Co boosted its full-year global profit outlook on Thursday as its European picture brightened and stronger overseas demand sparked better-than-expected third-quarter results. The No. 2 US automaker now expects this year’s pretax profit to top last year’s US$8 billion and losses in Europe to be less than they were last year. Chief financial officer Bob Shanks said Ford sees the European unit being profitable in 2015.