UNITED STATES
Treasury to sell off insurer
The Treasury Department said on Friday it expects to raise US$5 billion from its sale of American International Group stock, cutting the government’s stake in the bailed-out insurer to 55 percent. The sale, which would bring a profit of about US$300 million to the Treasury, comes as President Barack Obama campaigns for a second term and has been forced to defend his administration’s decision to use taxpayer money to prop up companies during the crisis. The Treasury Department priced the offering at US$30.50 a share, six percent above the US$28.72 price needed for the government to break even on its investment in the insurer. AIG intends to buy up to US$3 billion of the offering.
BANKING
Ex-banker in the spotlight
A 30-year-old former Barclays PLC swaps trader in New York, who was fired from the bank in 2010, is among those drawing scrutiny from prosecutors in the deepening scandal over the manipulation of global benchmark interest rates. US prosecutors in Washington are looking at Ryan Reich’s activities while at Barclays between August 2006 and March 2010, said several people familiar with the situation, who declined to be identified because the bid-rigging investigation is ongoing. Reich, now a portfolio manager with New York-based hedge fund WCG Management, was dismissed from Barclays for allegedly sending inappropriate e-mails seeking internal bank information, according to two sources familiar with the situation. One of those sources, who used to work for the bank, said the information Reich sought concerned how the LIBOR benchmark rate was going to be priced, information that could have been useful for his trading positions.
BANKING
UniCredit’s Q2 profits tumble
Italian bank UniCredit SpA on Friday said second-quarter profits dropped 67 percent as it reinforced its capital buffers by nearly 2 billion euros. The net profit of 169 million euros compared with 511 million euros in the same period last year and was below analyst forecasts for 269 million euros, according to a survey by Factset. The earnings were net of 477 million euros spent to buy back bonds in the first quarter. The bank, Italy’s largest by assets, raised provisions for bad loans by 60 percent to 1.9 billion euros “reflecting the deteriorating credit environment that unfortunately we see in Italy,’’ chief executive Federico Ghizzoni told analysts.
GREECE
ECB loans add to bailout
The European Central Bank (ECB) has saved Greece from bankruptcy for the time being by securing it interim financing in the form of additional emergency loans from the Bank of Greece, German newspaper Die Welt said yesterday. The ECB’s Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in yesterday’s edition. Until now the Bank of Greece could only accept T-bills up to a limit of 3 billion euros as collateral for emergency liquidity assistance (ELA), but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
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