SINGAPORE
GDP growth forecast raised
The city-state raised its growth forecast for this year after the economy unexpectedly expanded last quarter, supporting the central bank’s decision to forgo stimulus. The economy will grow between 3.5 percent and 4 percent this year and as much as 4 percent next year, the trade ministry said in a statement yesterday. It had previously forecast growth of up to 3.5 percent for this year. GDP expanded an annualized 1.3 percent last quarter from the previous three months, compared with a 1 percent decline estimated earlier. Externally oriented sectors, such as manufacturing, wholesale trade and transportation and storage are likely to support growth, in line with a slight pickup in the global economy,” the trade ministry said yesterday.
BANKING
Allied Irish issues bond
Allied Irish Banks on Wednesday issued its first unsecured bond since the financial crisis forced Ireland to take an international bailout, following the lead of rival Bank of Ireland. Allied Irish Banks’ 500 million euros (US$671.4 million) senior unsecured bond issue was oversubscribed, attracting 3.2 billion euros of orders. The bond was priced at mid-swaps plus 235 basis points, compared with a price of plus 220 basis points achieved by Bank of Ireland in May. Earlier on Wednesday, Permanent TSB became the first Irish lender since the crisis to issue mortgage-backed securities with a 500 million euro issue. Irish Minister of Finance Michael Noonan said the two issues, which came as the country prepares to exit its EU-IMF bailout next month, were further evidence of improved international investor sentiment toward both institutions and Ireland.
UNITED KINGDOM
Budget deficit narrows
The budget deficit narrowed last month from a year earlier as accelerating economic growth boosted sales taxes and stamp duty on property purchases. Net borrowing excluding temporary support for banks was ￡8.1 billion (US$13 billion) compared with ￡8.2 billion a year earlier, the Office for National Statistics said in London. Tax receipts increased 3.2 percent, with value-added tax rising 6.4 percent and stamp duty soaring 46 percent. Spending increased 1.2 percent. The figures pave the way for Chancellor of the Exchequer George Osborne to cut his borrowing projections next month, with a resurgent economy putting Britain on course for its smallest budget deficit in five years.
AUTOMAKERS
Toyota, Chinese in deal
Toyota yesterday said it plans to develop components for hybrid vehicles with two Chinese automakers, in an unprecedented technology-sharing deal aimed at boosting green car sales in the world’s largest vehicle market. The Japanese giant is already assembling hybrids in China with First Automobile Works and Guangzhou Automobile Group, the third and sixth-ranked Chinese car manufacturers respectively. However, the plan to share key hybrid technology with an overseas partner marks a first for Toyota and a shift away from Japanese carmakers’ traditional reluctance over such deals for fear of losing their competitive edge. Previously, Toyota would make key components, such as batteries and motors, in high-cost Japan and then ship them to joint ventures overseas. However, that drove up the price of models such as its Prius hybrid, which has seen sluggish sales in China. The new arrangement is expected to cut costs and lead to hybrid cars tailored to Chinese consumers, a Toyota spokeswoman said.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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