BANKING
Plan for Europe’s banks
European banks should be supervised by a cross-border authority providing bloc-wide deposit cover and a rescue pot funded by taxes on financial institutions, EU Commission President Jose Manuel Barroso said yesterday. The head of the EU’s executive arm told yesterday’s Financial Times newspaper that the ambitious plan could be realized by next year without the need for existing treaties to be changed.
SOUTH KOREA
IMF revises growth forecast
The IMF warned yesterday of likely slower growth for South Korea this year because of the faltering global economy, joining a series of think tanks which have slashed their predictions. The IMF, after its six-monthly meeting with Seoul authorities, said growth would likely be weaker than the 3.5 percent the fund projected in April, possibly down to 3.25 percent. The export-reliant economy, Asia’s fourth-largest, expanded 2.8 percent year-on-year in the first quarter — the weakest growth in two-and-a-half years.
INDIA
Industrial output slows
India’s industrial output grew a weaker-than-expected 0.1 percent year on year in April, official data showed yesterday, amid growing concerns about a slowdown in the economy. The manufacturing sector, which accounts for most of the industrial production index, expanded 0.1 percent, with production of capital goods, a key indicator of investment, shrinking 16.3 percent. Data published on May 31 showed the Indian economy expanded 5.3 percent in the January-to-March period, the slowest quarterly growth figure in nine years.
SWITZERLAND
Growth forecast goes up
The Swiss government raised its this year’s growth forecast yesterday, saying robust domestic demand was helping to offset the ill effects of the strong Swiss franc on exports, though a worsening of the eurozone crisis had the potential to hamper momentum. Switzerland’s State Secretariat for Economics now sees growth of 1.4 percent for this year, up from a March forecast of 0.8 percent. It sees inflation at minus-0.4 percent this year. The Swiss National Bank is also expected to lift its growth forecast from “nearly 1 percent,” as the cap it imposed on the safe-haven franc last September helps shield the economy
AUTOMAKERS
VW eyes bigger China output
Volkswagen AG said it plans to increase production capacity to four million cars by 2018 in China, the world’s biggest vehicle market. VW called China one of its most important markets and said on Jan. 6 that it would increase annual capacity to three million cars by 2016, as part of a plan to invest 14 billion euros (US$17.5 billion) to expand Chinese production and models. VW delivered 2.3 million vehicles in the Greater China region last year. The automaker trailed General Motors Co, whose sales in China rose 8.3 percent to 2.55 million last year.
INVESTMENT
Syndicated loan for Alibaba
Alibaba Group Holding Ltd (阿里巴巴) has begun signing a US$3 billion syndicated loan with a total of 19 banks today to back the privatization of its Hong Kong-listed unit and the buyback of an about 20 percent stake of itself from Yahoo Inc, two people familiar with the matter said. The loan was amended last month to allow Alibaba to eventually take on as much as US$4 billion of debt, a person familiar with the matter said on May 25.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
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