CHINA
Data shows contraction
Manufacturing activity in China contracted for the second straight month this month, early HSBC data showed yesterday, but the bank said a slight pick-up suggested an economic slump was less likely. HSBC’s preliminary purchasing managers’ index rose to 49.8 this month from 49.3 last month — which was the lowest level in 28 months and the first contraction in a year — according to a statement. A reading above 50 indicates the sector is expanding, while a reading below 50 suggests contraction. This month’s reading is subject to revision when the bank publishes its final figures on Sept. 1.
AUSTRALIA
Treasurer nixes intervention
Treasurer Wayne Swan refused yesterday to intervene in the meteoric local dollar despite warnings from the manufacturing industry of a crisis which could cost thousands of jobs. However, Swan said he would examine claims that the country’s key mining sector was choosing cheaper Chinese steel and industrial products instead of Australian-made because of the stronger “Aussie.” BlueScope Steel, Australia’s largest steelmaker by output, announced on Monday it would cut 1,000 jobs and abandon its export business, warning of the worst crisis to hit manufacturing in decades.
FOODSTUFFS
Foster’s mulls buyback
Australian beer giant Foster’s said yesterday it will return more than A$500 million (US$519 million) to shareholders as it battles a hostile takeover bid from British-based SABMiller. The company, which owns Australia’s largest brewer Carlton and United Breweries, made the announcement as it posted a full-year net loss of A$89 million to June 30. Chief executive John Pollaers said Foster’s was considering a share buyback or a capital reduction, through which it could cancel shares, but which would involve seeking a ruling from the Australian Tax Office. The shareholder-friendly move helped push the stock up A$0.09 to a high of A$4.99 yesterday, a premium on SABMiller’s offer of A$4.90 a share.
HEALTHCARE
Convatec bids for Kinetic
A rival bid for Kinetic Concepts Inc, a US maker of medical devices used in wound care, by medical technology firm Convatec is worth about US$6.5 billion, Swedish daily Dagens Industri reported yesterday, citing sources. Apax Partners LLP announced a US$5 billion offer for Kinetic last month. Under a so-called go-shop period, Kinetic had 40 days to seek higher offers. Bloomberg reported on Sunday that Convatec, which is owned by private equity firms Nordic capital and Avista Capital Partners LLC, had made a bid that exceeded Apax’s offer.
BANKING
Goldman CEO hires lawyer
Goldman Sachs shares fell sharply on Monday following news that its CEO, Lloyd Blankfein, has hired a top Washington defense lawyer. Blankfein and other top executives at Goldman Sachs Group Inc are facing inquiries from the US Department of Justice and other agencies on the firm’s practices leading up to the financial crisis. In April, the Us Senate’s Permanent Subcommittee on Investigations released a report that said Goldman “misled” its clients and the US Congress. The report said the bank profited from betting billions of dollars against the subprime mortgage market and then misled Congress during testimony last year.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective