JAPAN
Economic assessment raised
The government raised its assessment of the economy for the first time in nine months as the recovery from last year’s earthquake and tsunami disaster gains momentum. The Cabinet Office said in a report yesterday that reconstruction, rising consumer spending and exports were lifting its economy to a moderate recovery. It warned about uncertainties in the global economy, such as slowing growth in China and weak recoveries in Europe and the US. The report said corporate spending plunged after the earthquake last year, but the slide was now ending.
FINANCE
Banks must raise US$566bn
Fitch Ratings said on Thursday that the world’s 29 biggest banks together might have to raise US$566 billion by the end of 2018 to meet new international requirements for holding cushions against risk. In the report, Fitch said that having to raise that much capital could crimp the banks’ ability to increase dividends or buy back their own shares. The so-called Basel III rules for banks to increase capital reserves are designed to prevent another global financial crisis. The 29 banks, in 12 countries, were designated “global systemically important financial institutions” in November last year by the Financial Stability Board, an international regulators’ group. That means they are deemed so big and connected to other firms that a failure of one could bring down the financial system. They have a total US$47 trillion in assets, according to Fitch.
PHARMACEUTICALS
GSK persists with HGS bid
GlaxoSmithKline (GSK) said it was persisting with its hostile bid to take over US company Human Genome Sciences (HGS) despite the target’s new “poison pill” defense. In a statement issued after the market closed on Thursday, GSK said it believed its US$13 per share offer represents full value for HGS, its partner in developing new drug treatments. Rockville, Maryland-based HGS on Thursday announced its defensive move, which will dilute holdings if anyone attempts to acquire 15 percent or more of its stock without board approval. GSK’s offer closes on June 7.
FINANCE
LSE annual profits surge
London Stock Exchange Group (LSE) said yesterday that annual net profits surged, as the group was boosted by rising revenues and a string of acquisitions, despite the uncertain economic backdrop. Earnings after taxation rocketed to ￡522 million (US$823 million) in the group’s financial year to the end of March, compared with ￡151.6 million last time around, the LSE said in a results statement. Total revenues climbed 10 percent to ￡679.89 million, added the group, which operates the London Stock Exchange and Italy’s Borsa Italiana. It also hiked the annual shareholder dividend by 6 percent to ￡0.283 per share.
RETAIL
Wal-Mart beats expectations
Wal-Mart Stores Inc’s profit and sales surpassed expectations as more people shopped at its US stores and spent more, pushing shares up more than 4 percent despite probes into possible bribery. The first-quarter results, including a 10.1 percent increase in profit, showed that Wal-Mart’s US recovery was on track and efforts were progressing to cut costs and lower prices in markets such as China. Wal-Mart earned US$3.74 billion, or US$1.09 per share, up from US$3.40 billion or US$0.97 a share a year ago. Sales rose 8.6 percent to US$112.27 billion, ahead of analysts’ forecast of US$110.54 billion.
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
China has threatened severe economic retaliation against Japan if Tokyo further restricts sales and servicing of chipmaking equipment to Chinese firms, complicating US-led efforts to cut the world’s second-largest economy off from advanced technology. Senior Chinese officials have repeatedly outlined that position in recent meetings with their Japanese counterparts, people familiar with the matter said. Toyota Motor Corp privately told officials in Tokyo that one specific fear in Japan is that Beijing could react to new semiconductor controls by cutting the country’s access to critical minerals essential for automotive production, the people said, declining to be named discussing private affairs. Toyota is among
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