EUROPEAN UNION
Banking union deal struck
Finance ministers on Wednesday reached a banking union accord which will hand Brussels unprecedented new powers to prevent failing banks from wrecking the bloc’s economy, official sources said. The Single Resolution Mechanism will close failing banks before they can damage the wider economy and, along with a new supervisory regime, forms the banking union. This was drawn up in response to the financial and debt crises that brought down many banks and nearly drove the eurozone to its knees as governments had to be bailed out after rescuing their lenders.
BANKING
Citigroup, AIA ink contract
Citigroup Inc has chosen AIA Group Ltd to sell life insurance through its branch network in 11 Asia-Pacific countries as the US bank slashes the number of insurers it partners with in the region. The exclusive 15-year agreement allows AIA to sell products to the US bank’s customers in countries from China to Australia, Citigroup and AIA said in separate statements yesterday. The partnerships will be set up in each territory next year, Hong Kong-based AIA said.
AUTOMAKERS
Ford stock hit by guidance
Ford Motor Co shares tumbled more than 6 percent on Wednesday after the company forecast disappointing profit for next year and said its mid-decade profit margin target was at risk. The company expects full-year pre-tax profit to come in at US$7 billion to US$8 billion next year, below the US$8.5 billion expected for this year. Most analysts were projecting profits to rise next year. Ford said earnings will be dragged down from the effects of an unusually busy schedule of new car launches next year that will cause higher startup costs and force lower prices on vehicles being phased out.
SOCIAL MEDIA
Facebook, banks face suit
A US federal judge said Facebook Inc chief executive Mark Zuckerberg and dozens of banks must face a lawsuit accusing the social media company of misleading investors about its financial condition before its US$16 billion initial public offering last year. In a decision made public on Wednesday, US District Judge Robert Sweet in Manhattan said investors could pursue claims that Facebook omitted material information from its registration statement.
FINANCE
SAC manager convicted
A portfolio manager for one of the largest US hedge funds who was accused of using insider trading to boost sagging results in 2007 has been found guilty of all charges at a New York City trial. A jury in a Manhattan federal court issued the verdict for Michael Steinberg on Wednesday. Steinberg’s case was the first to result from the US’ crackdown on insider trading at SAC Capital Advisors. The Connecticut-based firm this month agreed to pay a record US$1.8 billion to settle insider trading charges.
SOFTWARE
Oracle Q3 income dips
Oracle’s net income for the three months ending last month edged down, hurt by flat revenue from new software licenses and cloud software subscriptions, but still beat Wall Street predictions. The business software maker earned US$2.55 billion, or US$0.56 per share, compared with US$2.58 billion, or US$0.53 per share, in the same quarter a year ago. Excluding charges, the firm posted an adjusted profit of US$0.69 per share for the recent quarter. Revenue rose 2 percent to US$9.28 billion from US$9.09 billion, it said.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
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