BANKING
UBS net profits drop 76%
Switzerland’s biggest bank, UBS AG, yesterday reported a bigger-than-expected 76 percent drop in net profits during the fourth quarter of last year, a sign of continued struggles linked to its US$2 billion rogue trading scandal and economic weakness in Europe and abroad. Profits at the Zurich-based bank fell to 393 million Swiss francs (US$425 million) in the fourth quarter, compared with the same quarter in 2010 when net profits totaled SF1.29 billion. Those quarterly profits were later increased to SF1.66 billion due to tax gains. Net profit was below the SF658 million consensus estimate by analysts, but Zuercher Kantonalbank’s analysts welcomed a strong increase in UBS’s capital reserves. The investment banking division reported a second consecutive quarterly pre-tax loss of SF256 million, compared with a pre-tax profit of SF100 million in the same quarter of 2010.
AUSTRALIA
Interest rates unchanged
The Reserve Bank of Australia unexpectedly kept interest rates unchanged as two cuts late last year help the economy weather Europe’s debt crisis, sending the nation’s currency soaring to a six-month high. “Much remains to be done to put European sovereigns and banks on a sound footing, but some progress has been made,” Reserve Bank Governor Glenn Stevens said in a statement yesterday announcing the official cash rate target will stay at 4.25 percent, the highest level among the world’s major developed economies. “Financial market sentiment, though remaining skittish, has generally improved since early December.” Stevens’ first rate decision of the year reflects confidence the US and Chinese economies will withstand a European recession and domestic unemployment will stay close to 5 percent as A$456 billion (US$492 billion) in resource projects boost hiring. He also signaled a willingness to lower borrowing costs if conditions warrant an easing of monetary policy.
AUTOMAKERS
GM’s sales in China drop
General Motors Co (GM), the world’s biggest automaker, reported its first drop in sales in China in six months as purchases slowed during the weeklong Lunar New Year holiday. Deliveries to Chinese dealers fell 8 percent to 246,654 vehicles last month, from 268,071 a year earlier, the Detroit-based company said in a statement yesterday. This year’s holiday extended from Jan. 23 to Jan. 29 and marked the start of the Year of the Dragon. “People and workers are leaving for their hometowns, families are going on holiday,” said Namrita Chow, Shanghai- based analyst at IHS Automotive. “This reduces the number of people looking to buy cars.”
ELECTRONICS
Apple No. 3 cellphone maker
An outbreak of iPhone fever made Apple the third-hottest mobile phone maker worldwide at the end of last year, according to the International Data Corp (IDC). Apple jumped into the third spot globally from fifth place in the final quarter of the year because of a record-breaking quarter for iPhone shipments, IDC said in figures available online Monday. Apple vaulted over South Korea’s LG and China-based ZTE (中興) in the mobile phone market rankings, IDC said. Nokia remained king, shipping 113.5 million mobile phones in the final quarter of the year to claim nearly 27 percent of the market. Samsung was second with 22.8 percent of the market, or 97.6 million handsets shipped. Apple sold 37.04 million iPhones in the quarter, which ended on Dec.31, giving it a market share of 8.7 percent.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such