European stocks rose for a third week, their longest winning streak since April, on speculation policymakers would increase efforts to contain the debt crisis as company earnings and US retail sales beat estimates.
The STOXX Europe 600 Index advanced 2.8 percent to 238.51 this week. The gauge has still retreated 18 percent since this year’s high on Feb. 17 on concern Greece would default, pushing borrowing costs higher for other indebted eurozone countries. The gauge traded at nine times its companies’ estimated earnings on Sept. 22, the cheapest since March 2009. The STOXX 600 last increased for three consecutive weeks more than six months ago.
G20 finance ministers met in Paris on Friday and yesterday to discuss a rescue plan for Europe’s struggling economies. German Chancellor Angela Merkel and French President Nicolas Sarkozy set an end-of-this-month deadline to devise a plan to recapitalize banks and get Greece on the right track, Sarkozy said last Sunday.
“They are not going to avoid a Greek default at any cost, but they prefer to capitalize banks,” said Giuseppe Distefano, chief investment officer of Alessia Sicav, in Luxembourg. “That helps remove the uncertainty originating in the Greek situation. That has been the main driver of the market rally.”
Standard & Poor’s cut Spain’s credit rating on Thursday for the third downgrade in three years. New data showed the eight largest US money-market funds almost halved their lending to French banks last month.
“With equity markets looking to post their best weekly gains in some time, this improved sentiment is tempered somewhat by the propensity for European leaders to disappoint, when it comes to the crunch,” said Michael Hewson, a market analyst at CMC Markets in London.
EU Commissioner for Economic and Monetary Affairs Olli Rehn said in a speech in Dublin on Wednesday that the eurozone was approaching a consensus on resolving its debt crisis and had a fairly good chance of averting calamity.
RECORD BUDGET: TSMC does plan to raise its proposed capital expenditure a lot, and could benefit if Intel outsources more of its production to foundries, analysts said Intel Corp’s earnings conference call on Thursday is expected to clarify the US semiconductor giant’s outsourcing production plans, which would be crucial regarding Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) performance, analysts said. “TSMC stands to benefit if Intel outsources more of its fabrication to foundries,” SinoPac Securities Investment Service Corp (永豐投顧) analysts said in a note on Friday. Yuanta Securities Investment Consulting Co (元大投顧) was more cautious, saying that Intel’s contribution initially would be limited, but its outsourcing plans would still highlight TSMC’s leadership in technology, it added. “Intel will continue to manufacture server or high-end central processing units [CPUs], which have higher
MediaTek Inc (聯發科) yesterday announced it would give incentive bonuses totaling NT$1.7 billion (US$59.7 million) to its employees and those at the firm’s major subsidiaries, after the smartphone chip supplier’s revenue hit US$10 billion last year. This is the biggest incentive bonus the Hsinchu-based handset chip designer has ever distributed in its 23-year history. About 17,000 full-time employees of MediaTek and five of its subsidiaries, including Richtek Technology Corp (立錡科技) and Airoha Technology Corp (絡達科技), would receive a “red envelope” of NT$100,000 each, the company said. “Surpassing US$10 billion is just the beginning. We will continue to [grow] on this basis,” MediaTek
TO SPUR REVENUE: The contract chipmaker expects its profit to grow 15 percent this year, outpacing the foundry industry’s projected advance of about 10 percent Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its projected capital spending for this year by 62 percent, a new high, in an attempt to satisfy customer demand for advanced technologies in the production of central processing units, high-performance-computing (HPC) devices and 5G applications. After investing US$17.24 billion last year, TSMC this year plans to spend US$25 billion to US$28 billion on manufacturing equipment and new facilities, including a fab in the US. About 80 percent of the budget would be allocated for developing advanced technologies including 3, 5 and 7-nanometer technologies, the company said. The larger-than-expected capital spending prompted speculation
Norway’s oil and gas reserves have made it one of the world’s wealthiest countries, but its dreams for deep-sea discovery now center on something different. This time, Oslo is looking for a leading role in mining copper, zinc and other metals found on the seabed and in hot demand in green technologies. The country could license companies for deep-sea mining as early as 2023, the Norwegian Ministry of Petroleum and Energy said, potentially placing it among the first countries to harvest seabed metals for electric vehicle batteries, wind turbines and solar farms. However, that could also place it on the front line of