CHINA
Consumer inflation rebounds
The nation’s consumer inflation rebounded this month after vegetable prices jumped due to an unusually frigid winter. Prices rose 1.5 percent over a year earlier, accelerating from October’s 1.3 percent, data showed yesterday. That was driven by a 9.4 percent rise in prices of fresh vegetables. Also wholesale prices measured as goods left the factory last month fell for a 44th straight month, declining by 5.9 percent from a year earlier. Inflation in non-food consumer prices edged up to 1.1 percent from October’s 0.9 percent.
GERMANY
Exports decline 1.2%
Exports declined in October as demand for goods and services from Europe’s biggest economy slowed outside the region, official data showed yesterday. Exports fell by a seasonally adjusted 1.2 percent to 99 billion euros (US$108 billion), the German Federal Statistics Office calculated. However, imports fell even more sharply, dropping 3.4 percent to 78.3 billion euros, meaning that the trade surplus grew to 20.7 billion euros, the office said. In unadjusted terms, exports edged up by 0.4 percent, while imports grew by 0.8 percent, meaning the unadjusted trade surplus contracted slightly to 22.5 billion euros, the office said.
MERGERS
Warning on Staples’ bid
Staples Inc’s proposed takeover of Office Depot Inc would collapse if the companies are forced to delay their deal to face a government challenge in the US Federal Trade Commission’s in-house court scheduled for May, a lawyer said. The commission, which says the merger is anticompetitive, is asking a federal court judge in Washington to stop the transaction from closing pending that trial. Matt Reilly, an attorney for Office Depot, on Tuesday said during a court hearing that the company is “in limbo” and that going through a drawn-out administrative process is not an option if the judge rules against them.
BANKING
PSBC sells one-sixth stake
China’s broadest bank by branch numbers has sold a one-sixth stake to strategic investors for more than 45 billion yuan (US$7 billion) ahead of an expected flotation, Xinhua news agency reported yesterday. The 10 firms buying into the state-owned Postal Savings Bank of China (PSBC, 中國郵政儲蓄銀行) include Internet giants Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊), UBS Group AG and Singapore’s Temasek Holdings Ltd, Xinhua said. The institution has 40,000 branches and its total assets reached 6.8 trillion yuan in September. However, its bad loans ratio has been rising for the past three years, climbing to 0.64 percent by the end of last year.
ELECTRONICS
Electrolux to cut costs, jobs
Electrolux AB will cut costs and jobs and pay a breakup fee to General Electric Co after the collapse earlier this week of a US$3.3 billion deal by the Swedish manufacturer to buy the household appliance business of the US company. Electrolux will reduce costs at its small appliances division to save an expected 120 million kronor (US$14 million) annually starting at the end of next year, the Stockholm-based company said yesterday. Costs related to the program will amount to 190 million kronor with staff reductions and downsizing in the US, Sweden and China.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
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