UNITED STATES
Overseas tax rules published
The Treasury published final rules on Thursday for a new global tax enforcement regime targeting the assets of US taxpayers abroad. The announcement finishes the rule-writing process for the Foreign Account Tax Compliance Act which Congress passed in March 2010. The final rules spare certain foreign pension funds and mutual funds information-reporting requirements. The Treasury rejected a request by businesses, banks and foreign investment funds to delay a start date of January next year for big penalties imposed on individuals and financial firms that do not comply with the law.
STEELMAKERS
China steel output up 3.1%
China, which produces almost half the world’s steel, boosted production by 3.1 percent last year as economic expansion spurred demand for roads and railways. Steel output increased to 716.5 million tonnes last year, the National Bureau of Statistics said yesterday. Production climbed 7.7 percent last month from a year earlier to 57.66 million tonnes, the bureau said. It is the 31st annual increase in steel production. China will spend 650 billion yuan (US$105 billion) this year on railway construction, more than the 631 billion spent last year, the Xinhua news agency said on Thursday.
FINANCe
Amex income drops 47%
American Express (Amex) says its net income fell 47 percent in the fourth quarter last year, as the credit card issuer racked up hefty charges related to restructuring costs and other one-time expenses. The New York-based company said on Thursday that it posted net income of US$637 million, or US$0.56 per share, for the three months ended Dec. 31 last year. That compares with net income of US$1.2 billion, or US$1.01 per share, in the same period last year.
BANKING
Barclays mulls fine payment
British bank Barclays PLC is considering using its bonus pool for last year to help pay fines for its role in LIBOR interest rate rigging, the Financial Times reported. The bank might recoup part or all of the ￡290 million (US$465 million) it was fined from the bonuses it pays investment bankers, the paper said, without citing sources. Part state-owned Royal Bank of Scotland Group PLC is already preparing to slash bonuses to help pay for its LIBOR-related fines, according to a source. Barclays is currently finalizing bonuses for last year and overall compensation is expected to fall between 10 percent and 20 percent on average, two sources said earlier this week.
BANKING
Commerzbank may cut jobs
Commerzbank, Germany’s second-biggest bank, is likely to propose next month cutting as many as 6,000 jobs, about 18 percent of the workforce, the Wall Street Journal reported on Thursday, citing sources. Different sources told the business daily the cuts could range from 5,000 to 6,000 workers, but the bank declined to comment on numbers. The jobs cut proposal is likely to be made in talks with unions due to begin next month.
RETAIL
Procter & Gamble to cut jobs
Procter & Gamble is cutting about 150 jobs in Spain and Portugal following the decision to integrate hygiene company Arbora & Ausonia into its existing operations. P&G acquired 100 percent of the firm last year after food company Agrolimen sold its 50 percent stake in the firm.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
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