MINING
Cost cuts lift BHP profit
BHP Billiton, the world’s biggest miner, yesterday reported a better-than-expected six-month profit of US$8.1 billion, as cost cuts offset lower commodity prices. The Anglo-Australian company’s shareholders could participate in a company share buyback in six months. Chief executive Andrew Mackenzie said that net debt could drop to US$25 billion by then, a level he has previously said could trigger a capital return. BHP’s net profit for the July-to-December period jumped 83 percent to US$8.1 billion from US$4.4 billion a year earlier. Stripping out one-time gains and losses, profit was up 31 percent to US$7.8 billion. That was well ahead of analyst forecasts of about US$7 billion. Mackenzie said he was positive about the prospects for the global economy this year and the impact on demand for iron ore and other commodities.
INVESTMENTS
Temasek to sell Shin Corp
Singapore state investor Temasek Holdings Pvt is seeking to sell its US$3.1 billion stake in Thai telecom company Shin Corp and has approached its Singapore Telecommunications Co (SingTel) unit as a possible buyer, according to people familiar with the matter. Temasek, which owns 41.6 percent of Shin Corp through a subsidiary, held talks with SingTel late last year, said the people, who declined to be identified as the information is not public. Those discussions have since stalled amid political tensions in Thailand, they said. The Temasek stake in Shin Corp, founded by former Thai prime minister Thaksin Shinawatra, has an estimated market value of US$3.1 billion. Shin Corp’s shares now trade more than 50 percent above the price paid in 2006 by a Temasek-led consortium, when it bought 96 percent of the Thai firm for US$3.8 billion.
PHARMACEUTICALS
Actavis may buy Forest
Actavis PLC is in advanced talks to acquire rival drug maker Forest Laboratories Inc in a deal that could value Forest at up to US$25 billion, the Wall Street Journal reported, citing people familiar with the matter. The deal was expected to be announced as early as yesterday, but the talks could still fall apart, the Wall Street Journal said. A combined Actavis-Forest could offer a range of generic and brand-name medicines, reaping economies of scale of its own, the report said. Actavis competes with larger drugmakers, such as Teva Pharmaceuticals Industries and Mylan Inc. Forest has a market capitalization of US$19.34 billion as of Friday’s close, compared with US$33.4 billion for Actavis, according to Thomson Reuters data.
HOTELS
IHG upbeat on this year
InterContinental Hotels Group (IHG), the world’s largest hotelier, said it was increasingly confident about prospects this year after strong demand in the US and improving conditions in Europe helped it post a 10 percent rise in profit last year. IHG, home to brands such as Crowne Plaza, Holiday Inn and InterContinental, said yesterday that annual pretax profit was US$600 million, ahead of forecasts of US$585 million, with revenue up 3.7 percent to US$1.9 billion. Global revenue per available room, a key industry measure, rose 3.8 percent for the year, led by solid trading in the US, where hoteliers are benefiting from improving demand and a lower than average number of hotel rooms being added to the system.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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