GERMANY
Bundesbank cuts forecasts
The central bank yesterday downgraded its growth forecasts for the economy for this year, next year and 2016. The Bundesbank said in a statement it is pencilling in growth of 1.4 percent for this year, 1.0 percent for next year and 1.6 percent for 2016. Previously, it had been projecting growth of 1.9 percent, 2.0 percent and 1.8 percent for the three years respectively. Nevertheless, the economy “remains in remarkably good shape, which is not only benefiting the domestic economy, but also enabling German exporters to seize opportunities on foreign markets,” Bundesbank President Jens Weidmann said in the statement.
ARGENTINA
Government in bond offer
The government on Thursday offered to buy back US$6.7 billion in bonds due next year, saying the move proved it remains solvent, despite a damaging legal battle with two creditors. “These bonds are due in October next year. The buyback “is to demonstrate that we have the capacity and the will to pay,” Minister of the Economy Axel Kicillof said in announcing the move. Kicillof said the government was offering cash for the “Boden 2015” bonds and would pay the market price of US$0.97 on the dollar. The buyback offer, good from Wednesday to Friday next week, will be financed partly through a new 2024 bond issue worth US$3 billion. Kicillof invited bondholders who want to “invest in the country” to exchange their 2015 bonds for 2024 bonds.
PHARMACEUTICALS
GlaxoSmithKline to cut jobs
Hundreds of British drugmaker GlaxoSmithKline’s 17,000 US-based employees are to lose their jobs by the end of next year under the pharmaceutical industry’s latest restructuring. GlaxoSmithKline PLC, best known for its widely used asthma inhaler Advair, is making changes worldwide that are meant to produce about US$1.6 billion in annual savings within about three years — from units including research and development, manufacturing, sales and marketing, and support functions. The restructuring plan was announced on Oct. 22, when the company reported third-quarter results that included a 13 percent drop in global sales and a 62 percent plunge in net income.
TABLETS
Nook partnership ends
US bookseller Barnes & Noble said on Thursday it had ended a partnership with Microsoft Corp for its Nook tablet computers, as the retailer prepares a spinoff of the unit. B&N said it agreed to buy back the stake from Microsoft, which in 2012 agreed to invest US$300 million in the Nook division. Nook has had a difficult time in a tablet market led by Apple Inc, Amazon.com Inc and Samsung Electronics Co, but earlier this year agreed to make a co-branded tablet with the South Korean electronics giant.
WIND POWER
Softbank investing in Altaeros
Softbank Corp is to invest US$7 million in Altaeros Energies Inc, a US company developing airborne wind turbines. Altaeros is working to commercialize technology to lift wind turbines into consistently high altitudes so they can produce more power than tower-mounted turbines, the companies said in a statement yesterday. Airborne turbines hold promise for remote islands and areas in Japan and the Asia-Pacific region, Softbank founder Masayoshi Son said in the statement. The technology also has potential to create new businesses by combining it with communication and surveillance technologies, he said.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
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