PETROLEUM
Libyan output plummets
Unrest in Libya has almost wiped out production in its key oil sector, slashing output by 1.4 million barrels a day to under 300,000, the head of French oil giant Total said yesterday. “Oil production in Libya must have fallen to between 200,000 and 300,000 barrels a day maximum,” the chief executive of Total, Christophe de Margerie, told reporters in Paris. Libya was producing 1.69 million barrels per day before the unrest, with most going to Europe.
LIBYA
S&P rating ‘junked’
International ratings agency Standard & Poor’s has downgraded the country’s sovereign rating to “junk” status and suspended its ratings for the country. S&P said on Thursday that it had lowered its long and short-term sovereign credit ratings on the North African nation to BB/B from BBB+/A-2. It also removed the ratings from CreditWatch negative. However, the agency also said it decided to suspend its ratings on Libya “due to the imposition of sanctions and because of a lack of reliable economic and political information.”
ELECTRONICS
LG ordered to released PS3s
A Dutch court on Thursday ordered LG Electronics to release 300,000 Sony PlayStation 3s seized on its behalf by Dutch customs officials earlier this month as part of a patent dispute case. The summary decision by the Hague District Court was a short-term win for Sony, as it can now regain possession of the consoles and resume distributing them. However, lawyers for LG said they would appeal the ruling and move to a full patent violation suit in the Netherlands in November, the Netherlands’ largest newspaper De Telegraaf reported.
TOYS
Tomy to buy RC2 Corp
Japanese toymaker Tomy said yesterday it would acquire the US firm behind the Thomas the Tank Engine brand, as it seeks to expand its global business amid shrinking domestic demand. Tomy has agreed with RC2 Corp to launch a public tender offer late this month with the aim of wholly owning the Illinois-based toy giant. The transaction value is about US$640 million. The proposed purchase price represents a premium of about 30.9 percent compared with RC2’s average share price in the past three months.
INSURANCE
Nippon Life in purchase talks
Nippon Life Insurance Co, Japan’s biggest life insurer, is in talks to purchase a stake in India’s Reliance Life Insurance Co to boost business overseas, according to a person familiar with the matter. Nippon Life may acquire a 26 percent stake in Mumbai-based Reliance Life for ￥60 billion (US$720 million), said the person, who spoke under the condition of anonymity because the information hasn’t been made public. Japan’s Asahi Shimbun reported the deal earlier yesterday. The deal values the Indian insurer at US$2.8 billion, about the same as parent Reliance Capital.
UNITED STATES
Trade deficit grows 15.1%
The US trade deficit widened much more than expected in January as higher oil prices and surging imports of capital goods and cars overpowered record exports in a signal of strengthening domestic demand. The trade gap grew by 15.1 percent to US$46.3 billion from US$40.3 billion in December, the Department of Commerce said on Thursday. Analysts had expected a deficit of US$41.5 billion. The shortfall in trade with China, a sore point in bilateral relations, grew 12.5 percent to US$23.3 billion.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
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