The small but diverse group of classical-music lovers is in deep mourning after one of the pillars of its community died. Primephonic, a Dutch-US app that streamed a wide catalogue of classical music, went dark last month, after being acquired by Apple Inc, which aims to fold the service into Apple Music. But why would the world’s largest company be interested in a closely held start-up with a relatively small user base, a few dozen employees and no startling technological innovation to boast of? The answer: Primephonic understood the future. Apple has realized that streaming services will succeed or fail depending on whether they master the four things the tiny company, along with its classical-music peers such as Idagio, have figured out: metadata, discovery, curation and quality. That would hold true for video streaming, too, not just music. With the buyout, Apple is hoping to absorb Primephonic’s DNA. Right now Apple Music, like most music-streaming services, is laughably bad at providing metadata beyond the most basic track information. The software developer and composer Gene de Lisa regularly tweets out howlers such as Apple Music listing the composer of the Pathetique Sonata as “unknown” (poor Beethoven). Without the right metadata, the user interface breaks down; you do not know which movement is playing from which symphony. Search breaks down, too: Without metadata for conductor, orchestra, composer or movement, you cannot find the recording you want. Worst of all, effective recommendations and music discovery become virtually impossible. This is not only a problem for classical music — it matters for anything more complex than the latest Top 40 single. In India, where we listen to Hindi film music, you might remember a song based on its singers, its composer, its lyricist, which film it was from, which year it was released or even which actors lip-synced
Finding the right person for a job can seem impossible when hundreds are applying for a single position at once. Many employers have turned to software to whittle those candidates down, but there is a problem: The software can snub perfectly good workers. So-called application tracking systems, the official term for resume-filtering software, were designed to help companies cope with the growing number of job applications flooding in for each vacancy over the past two decades. Nearly all Fortune 500 companies use this kind of software for recruiting, according to a Harvard Business School study released earlier this month. The study found that millions of qualified jobseekers were being rejected at the first stage of the application process because they did not meet certain initial criteria set by the recruitment software. For example, the software might put someone in the “no” pile if it detects a one-year gap in employment, disadvantaging people who have been on long-term parental leave or are veterans. The software also sometimes uses proxies like a college degree to assign attributes like work ethic, barring people who might have gained those qualities from other kinds of life experience. This is something many in the recruitment industry have known for years. While hiring software is often useful, it can also be inflexible, miss valuable traits, such as soft skills, and inadvertently hinder the job market. Smaller companies in particular need to reconsider their growing use of algorithms for finding talent, especially in an increasingly tight job market. Today’s global labor shortage has, uniquely, coincided with high unemployment rates. In the US, for instance, job openings between the fourth quarter of 2019 and May this year rose by one-third, yet more than 9 million people remained unemployed, according to Deloitte Insights. However, although they were designed to improve hiring, algorithms can exacerbate
BUSY SCHEDULE: US shares were buffeted by mixed economic data throughout this week and investors are now focused on the results of a Fed policy meeting
US stocks ended sharply lower in a broad sell-off on Friday, ending a week buffeted by strong economic data, corporate tax hike worries, the Delta variant of SARS-CoV-2 and possible shifts in the US Federal Reserve’s timeline for tapering asset purchases. All three major US stock indices lost ground, with the NASDAQ Composite Index’s weighed down as rising US Treasury yields pressured market-leading growth stocks. They also posted weekly losses, with the S&P index suffering its biggest two-week drop since February. “The market is struggling with prospects for tighter fiscal policy due to tax increases, and tighter monetary policy due to Fed tapering,” said David Carter, chief investment officer at Lenox Wealth Advisors Inc in New York. “Equity markets are also a little softer due to today’s weak consumer sentiment data,” Carter added. “It’s triggering concerns that the Delta variant could slow economic growth.” A potential hike in corporate taxes could eat into earnings also weigh on markets, with leading Democrats seeking to raise the top tax rate on corporations to 26.5 percent from 21 percent. While consumer sentiment steadied this month, it remains depressed, according to a University of Michigan report, as Americans postpone purchases while inflation remains high. Inflation is likely to be a major issue next week, when the US Federal Open Markets Committee holds its two-day monetary policy meeting. Market participants will be watching closely for changes in nuance, which could signal a shift in the Fed’s tapering timeline. “It has been a week of mixed economic data and we are focused clearly on what will come out of the Fed meeting next week,” said Bill Northey, senior investment director at US Bank Wealth Management in Helena, Montana. The Dow Jones Industrial Average on Friday fell 166.44 points, or 0.48 percent, to 34,584.88; the S&P 500 lost 40.76 points, or 0.91 percent, at 4,432.99; and
Iron ore fell below US$100 a metric tonne for the first time in 14 months as China’s moves to clean up its heavy-polluting industrial sector spurred a swift collapse. Futures prices sunk to as low as US$99.50 a tonne on the Singapore Exchange and wavered at about US$100 a tonne through the overnight trading session, which is daytime trading hours in the US. Iron ore has plunged more than 55 percent since peaking in May as the world’s biggest steelmaker intensifies production curbs to meet a target for lower volumes this year, and a sharp downturn in China’s property sector hurts demand. The slump in the steelmaking ingredient shows how top consumer China could sway the market at a time when there is booming demand in the broader commodities market as economies reopen from the worst of the COVID-19 pandemic. “Dramatic declines in iron ore prices” are mainly built on the view that “this year’s effort will likely be strictly enforced,” ED&F Man Capital Markets analyst Ed Meir said. Iron ore futures plunged more than 20 percent this week. Past efforts by Beijing to rein in steel production due to environmental concerns had largely failed as local governments weighed regional economic growth against clean skies. Iron ore’s slump makes it one of the worst-performing major commodities and a notable outlier in a broader boom that has seen aluminum soar to a 13-year high, gas prices jump and coal futures surge to unprecedented levels. A drop back to double digits for the first time since July last year would be a relief for steel producers, but a blow to the world’s top miners, which have enjoyed bumper profits during the first-half rally. It is bad news, too, for top iron-ore producer Australia, where the key steelmaking ingredient generates about 40 percent of goods exports. It has been a stark
European stocks fell on Friday, capping their third straight week in the red, as the basic resources sector was hit by declines in Anglo American PLC, but news that the UK was mulling easing travel restrictions boosted airlines and hotel groups. Anglo American tumbled 8.1 percent after Morgan Stanley and UBS Group AG downgraded the stock. The European mining index was also hit by worries about slowing growth in China, falling nearly 8 percent for the week. The pan-European STOXX 600 fell 0.9 percent on the day, but fell 1 percent for the week. London’s miner-heavy FTSE 100 index shed 0.9 percent, while German stocks fell 1 percent. Most regional indices were pressured this week on worries about slowing global growth and tighter regulation of Chinese firms. “Although still fairly measured at present, this current sell-off has the potential to be one of the most dramatic pullbacks we have seen all year, as inflation, stagflation, slowdown and virus risks all combine to knock back European and US markets,” IG chief market analyst Chris Beauchamp said. Meanwhile, after closing up 3.4 percent on Thursday in one of the best single-day performances this year, the European travel and leisure index added 1.2 percent on Friday. The index closed 2.7 percent higher for the week, leading gains across European sectors. Wizz Air Holdings PLC, British Airways owner IAG and InterContinental Hotels Group PLC rose 2 to 5 percent after the UK said it would simplify COVID-19 rules for international travel. While European stock markets ended the week on a steady footing, next week could be pivotal in determining near-term market direction, with the US Federal Reserve and the Bank of England’s policy meetings, as well as German elections on deck. “If the caution we have seen this week does carry over into Monday and beyond, then the next Fed meeting provides another
Oil declined amid Russia’s plans to boost upcoming overseas oil sales and as the US dollar rallied. Futures in New York ended the session nearly 1 percent lower on Friday. Russia is to increase its oil exports 3 percent in the fourth quarter of this year, Interfax reported. Meanwhile, gains in the US dollar reduced investor interest in commodities priced in the currency. “There’s been demand destruction starting with higher prices across energy markets broadly and there’s Russian’s plans to raise its global oil sales,” CIBC Private Wealth Management senior energy trader Rebecca Babin said. Despite falling 0.9 percent US$71.97 a barrel on Friday, West Texas Intermediate crude for September delivery gained more than 3 percent this week due to tightening supplies. Brent crude for October delivery on Friday fell 0.4 percent to US$75.34 a barrel, but added 3.3 percent for the week. In the US, crude inventories tumbled to the lowest level since 2019 and fuel supplies also fell, government data showed this week. Investors have been tracking strong rallies in other energy commodities as well, especially natural gas, which has surged by about 45 percent so far this quarter and spurred the prospect of fuel switching. However, as prices climb there are increasing signs governments are growing uneasy with the knock-on effects. US President Joe Biden said on Thursday that his administration is looking into high gasoline prices, while China said this week that it would sell oil from its strategic reserve. Growing supply tightness has made crude markets more backwardated, bullish pattern with near-dated prices more expensive than those further out. Meanwhile, products like propane that are used in heating and rally seasonally in the winter are trading at multiyear highs as natural gas prices surge. “Fundamentals have gotten better and as long as they continue to improve, oil prices will rise,” said Peter
Asian shares steadied on Friday after losses earlier in the week, but China jitters and global growth concerns weighed on investors’ minds, while the US dollar sat near a three-week high. The MSCI Asia Pacific Index rose 0.25 percent to 203.32, but was down 1.6 percent for the week. The TAIEX on Friday fell less than 0.1 percent to 17,276.79 points, down 1.13 percent for the week. “We’re looking at a market that is nervous, though hasn’t seen sentiment turn outright bearish,” IG markets analyst Kyle Rodda said. “If you look for catalysts that could justify the next move to the upside in equities and risk assets, they are nowhere to be seen because global growth concerns are keeping investors on edge.” Hong Kong’s Hang Seng Index rose 1 percent to 24,920,76, with traders looking for oversold stocks after the benchmark posted its lowest close in 10 months the day before, as the saga around China Evergrande Group (恒大集團) lurched toward a conclusion. The index fell 4.9 percent for the week. The embattled property developer’s shares dropped a further 11.8 percent on Friday, down 35 percent this week, but there were gains elsewhere, including in technology stocks. The previously bruised Hang Seng Tech Index rose 2.8 percent on Friday. Australia’s S&P/ASX 200 fell 0.8 percent to 7,403.70, as a fall in iron ore prices hurt miners. The index was virtually unchanged for the week. Chinese blue chips edged up 0.58 percent. Japan’s Nikkei 225 gained 0.6 percent to head back toward a 31-year high hit on Monday. The benchmark index rose 0.4 percent weekly. The TOPIX on Friday added 0.5 percent and rose 0.4 percent for the week. India’s SENSEX on Friday fell 0.2 percent, tapering its weekly gain to 1.2 percent. Due next week is a policy meeting of Indonesia’s central bank, but all 25 analysts surveyed by
The US dollar climbed to three-week peaks on Friday, still benefiting from better-than-expected US retail sales data released on Thursday that backed expectations for a reduction of asset purchases by the US Federal Reserve before the end of the year. The US dollar index, a gauge of the greenback’s value against six major currencies, rose 0.3 percent to 93.25, its highest since late last month. The index rose 0.7 percent for the week. In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.021 to close at NT$27.736, down 0.2 percent for the week. The Fed holds a two-day monetary policy meeting next week and is expected to open discussions on reducing its monthly bond purchases, while tying any actual change to US job growth this month and beyond. “With tapering, there is definitely some upside in front-end and intermediate yields and should be dollar-positive upon the initial announcement,” said Simon Harvey, senior foreign exchange market analyst at Monex Europe in London. Speculation about a Fed taper this year gathered pace after US retail sales unexpectedly increased last month, data showed on Thursday, rising 0.7 percent from the previous month, despite expectations of a 0.8 percent fall. The euro on Friday slid about 0.3 percent against the greenback to US$1.1726, down 0.8 percent for the week. The University of Michigan consumer sentiment for this month inched higher to 71 versus the final reading of 70.3 for last month, but overall analysts said the rise was nowhere near the improvements seen in the Empire States and Philadelphia Fed manufacturing surveys. The US dollar held gains after the Michigan sentiment report. The US dollar on Friday rose 0.2 percent against the Swiss franc at SF0.9299, after earlier hitting a five-month high. The greenback rose 0.3 percent to ￥110.025. The yen has shown a limited reaction
MARKET VOLATILITY: The 4.9% rate rise stems from unpredictable foreign exchange rates and inflation, as the company lifts prices in other countries by the same or more
DHL Express Taiwan Corp (洋基通運) plans to raise its average freight rates by 4.9 percent next year due to inflation, volatility in currency exchange rates and administrative costs, with the price adjustment taking effect on Jan. 1, the company said in a statement yesterday. The local subsidiary of Deutsche Post DHL Group, one of the world’s leading mail and logistics service groups, has increased its freight rates by 4.9 percent each year since 2018, corporate data showed. The price adjustment was proposed by the local unit, though approved by the parent company, DHL Express Taiwan said by telephone. Price adjustments vary from country to country as different units make separate decisions, it added. The price rise in Taiwan matches that of DHL Express New Zealand & Pacific Islands, but lower than the 6.9 percent approved by DHL Express India next year, DHL Express’ Web site and foreign news reports showed. DHL Express Taiwan, which concentrates on transporting packages by air, yesterday said that its decision to hike prices did not stem from the rise in air cargo rates in the past few months, but was based on inflation, foreign exchange volatility and costs related to regulatory and safety measures. The price hike is to apply to all customers whose contracts allow the adjustment, it said. The price rise would allow the company to invest in infrastructure networks, strengthen its ability to fight crises and expand its freight capacity according to demand, it said in a statement. “We strive to deliver excellent service to our customers and will invest regularly to enhance our services. We will also ensure that our clients’ business can continue growing even in times of global crises,” DHL Express Taiwan managing director Yung C. Ooi (黃湧君) said in a statement. Meanwhile, Yang Ming Marine Transport Corp (陽明海運), the nation’s second-largest container shipper by fleet size,
Innolux Corp (群創), which makes flat panels used in TVs and computers, yesterday said it is cutting production amid weakening demand and slumping prices. The Miaoli-based flat-panel maker’s comments came as demand began losing steam last month after experiencing the industry’s longest boom of one-and-a-half years. “The flat-panel industry is cyclical by nature. After a long period of upticks, it is normal to see price adjustments,” Innolux chairman Jim Hung (洪進揚) told reporters on the sidelines of a media briefing in Taipei. Asked whether the company plans to cut its financial forecasts for the third quarter, Hung said: “We might see a slight adjustment in prices.” Innolux might cut its estimate of a low-single-digit percentage increase in prices for the current quarter, he said. The company kept unchanged its estimate of a low-single-digit percentage sequential increase in shipments of TV and PC panels this quarter. “Shipments might be adjusted in the fourth quarter,” Hung added. Innolux plans to idle certain manufacturing equipment for maintenance and might adjust its product portfolio, such as reducing TV panel shipments to align with changes in market demand, he said. Innolux has seen lower demand for Chromebooks for students, but corporate demand for notebook computers is picking up and is expected to fill the void for the second half of this year, Hung said. Innolux also attributed supply-chain disruptions, international port congestion and key component shortages to the already falling demand. The company aims to reduce its dependence on TV panels by reducing its revenue contribution to 30 percent in the long run, from a hefty 40 percent last quarter, Hung said. Flat panels used in notebook computers, monitors and mobile phones account for a third each, he added. Overall, Innolux remains optimistic about the flat-panel industry’s long term outlook, as most panel makers have given up racing for capacity and are
Taipei Times: How has Formosa International Hotels Group (FIH) fared this year with a local COVID-19 outbreak and its lingering containment measures? Steve Pan (潘思亮): Our revenue increased 40 percent in August from July, but our room revenues still tumbled 50 percent from last year, and down by 75 percent from 2019, before the COVID-19 pandemic. The government continues to ban the arrivals of foreign tourists. Other international tourist hotels fared worse with business plunging 85 percent. That is how bad things are. Our domestic resort under the Silks Places (晶英酒店), Just Sleep (捷絲旅) and Wellspring by Silks (晶泉丰旅) brands are pretty much back to normal since August. The earlier level 3 alert drove those businesses to a stop, but they quickly recovered. The international tourist hotels have been a completely different story. Their business is still down 80 percent. Our flagship property, Regent Taipei, has been a victim of border controls due to its heavy dependence on international tourists. TT: How did the group manage when the government in May raised the virus alert to level 3 and banned all dine-in services? Pan: The move took away our major income sources, so we decided to provide food takeout and delivery. We created the “Take Regent Home” Web site. Today, it is the top food takeout brand in terms of revenue among all hotels. Our revenue is double that of the second runner-up. The Web site is doing very well, even though it only generates 50 percent of the revenue we had before the level 3 alert. It is likely a record of some sort to maintain 50 percent of dinning revenue amid a soft lockdown. FIH is the only international tourist hotel group that did not lay off employees or cut staff hours, in keeping with our “no layoff” policy. Our peers have
The Fair Trade Commission (FTC, 公平會) yesterday fined Foodpanda Taiwan Co (富胖達) NT$2 million (US$72,109) for unfair trade practices. In contravention of the Fair Trade Act (公平法), the food delivery platform prohibited partner restaurants from charging different prices for dine-in and takeaway food, as well as banning them from providing their own delivery service or allowing customers to pick up their own orders, the commission said. The company has been told to cease such practices immediately, it added. “By taking away a restaurant’s ability to offer a price differential for takeout versus dine-in customers, Foodpanda infringed on the right of restaurants to control their own revenue structure,” FTC Vice Chairman Andy Chen (陳志民) said. By stopping restaurants from offering lower prices for dine-in versus takeout meals, Foodpanda is “effectively forcing all customers to shoulder the cost of their commission,” Chen said. Non-cooperating restaurants were punished by being dropped by Foodpanda or having their commission rates raised. Furthermore, Foodpanda was giving consumers a discount for picking up their meals at the restaurant rather than having food delivered. However, it still charged restaurants the same commission, forcing restaurants to essentially undercut their own dine-in services, as the same meal would have been cheaper if ordered through Foodpanda. Foodpanda’s practice of offering discounts on commissions for restaurants to cooperate with them exclusively was not judged improper, for the time being, the commission said. However, the commission is keeping an eye out for network effects as Taiwan’s increasingly valuable meal delivery market consolidates. The FTC warned market leaders Foodpanda and UberEats that it has noticed the increasing concentration of the Taiwanese meal delivery market. As the big players gain market power, they could acquire an inappropriate amount of clout when dealing with partners and keeping out other competitors, it said. “If the number of restaurants
COMPLICATED AFFAIR: Beijing will need to negotiate with incumbent members Japan, Australia and Canada, with which it has fraught diplomatic and trade ties
Beijing has applied to join an Asia-Pacific trade pact once pushed by the US as a way to isolate China and solidify AmeriFcan dominance in the region. China submitted the formal application letter to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to New Zealand, it said in a statement late on Thursday in Beijing. Chinese Minister of Commerce Wang Wentao (王文濤) had a follow-up call with his counterpart, Damien O’Connor, as New Zealand is the depositary nation for the agreement. The application is certain to spark a reaction from Washington, where a number of lawmakers have expressed concern about China’s efforts to join. However, there is no sign that the administration of US President Joe Biden is interested in rejoining the deal. The original deal was seen by the US as an economic bloc to counterbalance China’s growing power, with then-US president Barack Obama saying in 2016 that the US, not China, should write the regional rules of trade. Obama’s successor, Donald Trump, pulled out of the deal in 2017, with Japan leading the revised and renamed pact to a successful conclusion the following year. The application is the result of months of discussions after Chinese President Xi Jinping (習近平) last year said that Beijing was interested in joining. China is the second country to apply to join the 11-nation deal, after the UK asked to become a member earlier this year. “It’s a perfectly rational calculation by the Chinese leadership,” said Hosuk Lee-Makiyama, director of the European Centre for International Political Economy in Brussels. “Given how the Chinese market is driving the economic recovery, their cards will never be this strong again. Or rather, the cost of rejecting China’s application will never be this high.” The application underlines the increasingly complicated geopolitical situation in Asia, where China is the dominant economy and
BEARISH ON GROWTH: A top-ranked economic forecaster predicted a flat third quarter and less than 8 percent yearly growth, with domestic flights being a prime indicator
China’s tough virus curbs mean that economic activity in the third quarter could be close to flat compared with the previous three months, while full-year growth may fall below 8 percent, a top forecaster said. “My view is that the Chinese economy should slow sharply in the third quarter, mainly due to the virus but also controls on property,” Market Securities LLP chief economist Christophe Barraud said. Barraud was Bloomberg’s top-ranked forecaster for the Chinese economy last year. Barraud’s prediction of 0.3 percent growth in the period between July and September from the previous three months is below the median estimate of 1.1 percent in a Bloomberg survey of economists. Barraud is also bearish on China’s growth for this year compared to the market’s median estimate of 8.4 percent. “It should be close to 8 percent, but with risks tilted to the downside,” he said. “If there is another outbreak in the fourth quarter, forecasts should be adjusted below 8 percent.” The government has set a target of above 6 percent growth for the year. Barraud’s prediction came after monthly data showed China’s economy slowing sharply last month, with a slump in retail sales and property construction. China introduced tougher curbs on travel to squash an imported outbreak of the Delta variant of SARS-CoV-2 from late July. While the measures quickly brought the virus under control, a new cluster has developed in southern China this month, suggesting some restrictions will remain and consumers will continue to be cautious. “Risks are tilted to the downside because China will keep implementing a zero-tolerance policy concerning COVID-19, particularly ahead of the Winter Olympics in February,” Barraud said. The France-based economist said that one of his favorite indicators of Chinese economic activity at the moment is the daily number of domestic flights. “It’s the most reliable data to catch the impact of
US Federal Reserve Chair Jerome Powell’s review of internal rules around investments by policymakers is a move in the right direction, but will not stem pressure for more accountability at the US central bank. “It’s about time,” Roberto Perli, a partner at Cornerstone Macro LLC, said of a Fed statement on Thursday that Powell had ordered a “fresh and comprehensive” study of the ethics rules around permissible financial holdings and activities by senior Fed officials. “The impression that it gives about the institution is just poor. So yes, it should be changed,” he said. Powell’s move followed revelations last week over investments and trading by two of the central bank’s regional bank presidents. Their actions were criticized for potential conflict of interest at a time when the Fed is under fire for emergency COVID-19 pandemic policies that critics say have elevated stock prices and benefited the wealthy. Boston Fed President Eric Rosengren and Dallas’ Robert Kaplan on Thursday last week said that they would sell their individual stock holdings by Sept. 30. Both said that their transactions complied with Fed ethics rules and that they were acting to avoid even the appearance of a conflict of interest. Critics said the situation should never have arisen in the first place. “I fear that the Kaplan and Rosengren trades have undermined the Fed’s policy legitimacy, something vital to its ability to succeed at its legislative mandates,” said Peter Conti-Brown, a University of Pennsylvania Wharton School professor of legal studies. “An ethics review is a good start. It cannot be the end.” The considerable wealth of some US policymakers highlighted in their financial disclosures was also seen as an issue by Benjamin Dulchin, director of the Fed Up campaign at the Center for Popular Democracy. “The bigger problem is how asset-wealthy the majority of the Fed’s leaders are, and how that creates
UK retail sales last month fell unexpectedly for a fourth month, the longest stretch of declines in at least 25 years, raising concerns about the economic recovery as a resurgence of COVID-19 cases and supply shortages take a toll. The volume of goods sold in stores and online fell 0.9 percent after a 2.8 percent plunge in July, the Office for National Statistics said yesterday. Food sales dropped sharply, as consumers steered spending toward bars, restaurants and entertainment venues that reopened after lockdowns, it said. Doubts are growing about the outlook for consumer spending, which powers the British economy. COVID-19 cases are rising and millions of households now face a sharp squeeze on living standards after a surge in inflation. Meanwhile, Brexit and the pandemic have dried up the pool of workers retailers rely on and created supply-chain disruptions. The fall in sales last month surprised economists, who were predicting a small increase, and sales excluding auto fuel declined 1.2 percent. It was the first run of four consecutive declines since comparable records began in 1996. A separate survey showed that 6.5 percent of retail businesses were unable to get the goods, materials and services they needed from Aug. 9 to Aug. 22. The figure was highest at department stores at 18.2 percent, followed by clothing stores at 11.2 percent. “Recovery has been bumpy across the sector with many retailers dealing with supply-chain disruption and labor shortages,” said Emma-Lou Montgomery, associate director at the fund manager Fidelity International. “Rising prices across the board will also be starting to pile pressure on households and could continue to hamper buying habits down the line,” she said. The only categories that enjoyed an increase in sales were clothing and fuel, as more people returned to offices and traveled for summer holidays. The figures “should cause markets to doubt” whether the Bank
General Motors Co (GM) said it would extend downtime at its Chevy Bolt electric-vehicle plant for another three weeks due to a battery pack shortage, as the company recalls the vehicles over fire risks. The company is now to idle the plant through the week of Oct. 11 after earlier saying it would stop production through the week of Sept. 20. GM said it would continue to work with its supplier to “update manufacturing processes” and would evaluate additional production schedule adjustments. The plant in Lake Orion, Michigan, has been idled since Aug. 23. With the recall under way, GM has urged some owners of Chevy Bolt electric cars to park the vehicles at least 15m away from other cars to reduce the risk that a spontaneous fire could spread. GM added that it is cutting production at six other North American assembly plants because of an ongoing chip shortage. The Detroit automaker has recalled almost all of the approximately 142,000 Bolts sold since 2016, because the battery can catch on fire. GM has taken a US$1.8 billion charge so far for the cost of the recall and has been buying cars back from some disgruntled owners. The company expects to recoup much of the cost from battery supplier LG Corp. The new advice is likely to rankle owners who are already limiting their use of the Bolt to avoid overheating the battery and risking a fire. The parking guidance is especially difficult for owners in urban areas. GM has confirmed 10 fires. The US National Highway Traffic Safety Administration said it has found 13 fires in Bolts, but the company has not confirmed that the additional three are part of the current recall issue. The Bolt normally can be driven 417km on one charge, but that has been limited by GM’s guidance to avoid
CHINA PBOC injects US$13.9bn The People’s Bank of China (PBOC) yesterday injected short-term cash into the financial system in a sign the authorities are seeking to soothe market nerves frayed by concern over quarter-end funding needs and China Evergrande Group’s (恆大集團) debt crisis. The central bank added 90 billion yuan (US$13.9 billion) of funds on a net basis via seven-day and 14-day reverse repurchase agreements, the most since February. It was the first time this month the authorities added more than 10 billion yuan of short-term liquidity into the banking system in a single day. The funds come as the crisis facing Evergrande fuels concern over the health of the nation’s real-estate and credit markets. Adding to the stress is a seasonal spike in demand for cash as banks become less willing to lend toward quarter-end as they prepare for regulatory checks. Liquidity also tends to diminish at this time of year as the Mid-Autumn Festival approaches. TECHNOLOGY S4 Capital to buy Zemoga Martin Sorrell’s S4 Capital has struck a deal to buy Zemoga, a technology services company that provides a new route for the rapidly growing digital advertising group to win work from multinational clients. Sorrell, the founder of WPP, has turned S4 into a US$6 billion company in the three years since its launch by acquiring businesses to combine data with digital content and serve the likes of Facebook, Google, Burberry and Netflix. The move into tech services is to enable it to better compete with companies like Accenture and Globant, which can sell digital advertising services and advice to clients. Zemoga provides product design, engineering and delivery services to clients such as Bridgestone, Sony, Roku and Morningstar. SINGAPORE Fund aims to boost market Singapore is looking to set up a S$1.5 billion (US$1.1 billion) fund backed by state investment firm Temasek Holdings Pte to
GOING PUBLIC: A merger with Poema Global Holdings should double Gogoro’s value to US$2.35 billion, as it rejects local markets to compete with global vehicle brands
Gogoro Inc (睿能創意), an electric scooter maker and a battery swapping system provider, yesterday said it targets to launch an initial public offering (IPO) on Nasdaq via a merger with the special-purpose acquisition company (SPAC) Poema Global Holdings Corp in the first quarter next year. The combination would set Gogoro’s enterprise value at US$2.35 billion, more than doubling the US$1 billion value that defines a “unicorn.” The planned merger is also expected to provide proceeds of about US$550 million to Gogoro’s balance sheet, including an oversubscribed private investment in public equity (PIPE) of more than US$250 million and a trust of US$345 million held by Poema Global, Gogoro said. “Gogoro is a global company based in Taiwan ... From day one, we were looking to establish a global platform,” Gogoro founder and CEO Horace Luke (陸學森) told a media briefing in Taipei when asked why the company is seeking to list on a US exchange rather than a local market. “NASDAQ was always the target,” Luke said. “Apple [Inc], Intel [Corp], Tesla [Inc] and Amazon [.com Inc] all listed on NASDAQ. ” The PIPE is backed by strategic investors, automobile partners and existing financial investors, the company said. Gogoro’s strategic investors include two new investors: Taiwan’s Hon Hai Technology Group (鴻海科技集團) and the GoTo Group, the largest technology group in Indonesia, it said. The company’s other investors include Taiwan’s National Development Fund, former US vice president and environmentalist Al Gore’s Generation Investment Management LLP, Temasek Holdings Pte of Singapore, and founding investor, Samuel Yin (尹衍樑) of Ruentex Group (潤泰集團). Hon Hai Precision Industry Co (鴻海精密) said that it invested US$20 million in Gogoro, giving Hon Hai a 0.76 percent stake, a company filing with the Taiwan Stock Exchange showed. The investment would help the company further its expansion into the electric vehicle and new energy fields, Gogoro
RSS