TRADE
Japan industrial output falls
Japan’s industrial output dropped more than forecast last month as production of transport equipment and cars slowed, sapping a recovery in the world’s third-largest economy. Output fell 2.2 percent from April, when it rose 1.2 percent, the Japanese Ministry of Economy, Trade and Industry said yesterday. Economists had forecast a 0.8 percent decline. Retail sales rose 1.7 percent from the previous month, more than estimated. The rebound from recession last year is showing signs of losing momentum at a time when global uncertainty is increasing with a slowdown in China and financial turmoil in Greece. “Japan’s economic growth will probably slow considerably in the second quarter, reflecting weak exports and production,” Meiji Yasuda Life Insurance Co economist Yuichi Kodama said.
MANUFACTURING
GE announces Element deal
General Electric Co (GE) agreed to sell the bulk of its vehicle fleet-management business to Canada’s Element Financial Corp for US$6.9 billion, as the US company accelerates the disposal of its finance operations. Element is to acquire GE Capital’s fleet assets in the US, Mexico, Australia and New Zealand, the maker of turbines and medical scanners said in a statement. Separately, GE signed a provisional accord with Arval, a subsidiary of BNP Paribas, to sell the European portions of the business. “We continue to demonstrate speed and execution on our strategy to sell most of the assets of GE Capital,” GE Capital chief executive officer Keith Sherin said yesterday in the statement. “We are on track to execute sales of US$100 billion by the end of 2015 and expect to be substantially done by the end of 2016.” The Fairfield, Connecticut-based company plans to shed about US$200 billion of lending assets to refocus on industrial operations after GE Capital’s struggles during the 2008 financial crisis imperiled the parent company.
MACROECONOMICS
Japan cash, deposits rise
Japan Inc is piling up record levels of cash, bucking Japanese Prime Minister Shinzo Abe’s calls to plow more resources into reviving the world’s third-biggest economy. Corporate cash and deposits rose 3.6 percent in March from a year earlier to ￥241 trillion, the highest ever and a 26th straight quarter of increase, the Bank of Japan (BOJ) said yesterday. Reluctance to shift capital from safe assets into fresh investment and higher wages is challenging Abe’s effort to sustain a recovery that is showing signs of slowing. Industrial production dropped more than forecast last month, data showed, at a time when global uncertainty is increasing. “Companies have not changed their conservative stance,” BOJ economic statistics division head Ko Nakayama said. “It would be nice if companies use their cash and deposits for business investment.”
REAL ESTATE
Australia tightens rules
Australia yesterday tightened rules on requiring overseas investors to declare holdings of agricultural land in order to strengthen oversight, amid concerns that the country is losing control over its own food security. Foreign ownership of Australian land has become a touchy issue. Official estimates put foreign ownership at 10 percent, but there are concerns that it is far higher. Australian Treasurer Joe Hockey said foreign owners should declare their interests with the nation’s tax office from tomorrow. The tax office is to collect information on the location and size of property, size of interest acquired and country of origin of the foreign investor.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
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