DRONES
DJI eyes Japanese market
Major Chinese consumer-drone maker Dajiang Innovation Technology Co (DJI, 大疆) has its eyes on the potentially lucrative Japanese market after regulations on drones were relaxed there three months ago, the company said yesterday after it launched its latest model, Phantom 4, in a fashionable mall in Tokyo. Shenzen-based DJI says it controls 70 percent of the world’s consumer-drone market and the niche market has great potential to grow. Japan’s first law on drones went into effect in December last year.
BRAZIL
Bank holds Selic steady
The central bank on Wednesday maintained its benchmark Selic interest rate at 14.25 percent, as the world’s seventh-largest economy struggles with rising inflation and severe recession. In January, the bank also left the rate unchanged, surprising the market. A weekly survey of 100 market analysts by the central bank’s Focus magazine has found expectations that the high rate is to be held steady through this year, with a cut to 12.5 percent next year.
CHINA
Outlook reduced on SOEs
Moody’s Investors Service cut its credit-rating outlook on 38 Chinese state-owned enterprises (SOEs) and 25 financial institutions after the agency’s decision to lower the country’s sovereign credit-rating outlook. The SOEs’ outlook was reduced to negative, Moody’s said yesterday, a day after it issued a separate release downgrading the non-insurance financial firms to negative from stable. The financial institutions include three policy banks, 12 domestic commercial banks and three distressed asset-management companies, Moody’s said.
RETAIL
Adidas forecasts boost
Adidas AG, the German sport-shoe maker, forecast an increase in earnings this year as consumers spend more, making it easier to sell higher-priced goods and offset rising costs. Net income from continuing operations is set to increase 10 to 12 percent excluding goodwill impairment, Adidas said yesterday. Operating margin excluding goodwill impairment is to be at least stable compared with last year’s 6.5 percent. Gross margin is set to narrow as much as 1 percentage point due to higher purchasing costs in Asia.
SECURITIES
Default rates rise
Energy companies are pushing up the overall default rate of US high-yield bonds, and it is expected to get worse by next year, according to Moody’s Investors Service. The default rate for high-yield bonds in the US is expected to climb to 4.7 percent in January from today’s level of 3.1 percent, according to the note. Defaults in the oil patch have been part of the fallout of a market crash that has cut crude prices by nearly 70 percent since their peak in June 2014.
RETAIL
Costco’s income dips 8.7%
Costco Wholesale Corp on Wednesday posted second-quarter earnings that trailed analysts’ estimates as higher-income shoppers show signs of curtailing spending. Net income fell 8.7 percent to US$546 million, or US$1.24 a share, the Issaquah, Washington-based company said in a statement. Same-store sales in the US, a closely watched measure by investors, increased 4 percent excluding the negative impacts from gasoline price deflation and foreign exchange, compared with an estimate of 4.9 percent.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
STILL UNCLEAR: Several aspects of the policy still need to be clarified, such as whether the exemptions would expand to related products, PwC Taiwan warned The TAIEX surged yesterday, led by gains in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after US President Donald Trump announced a sweeping 100 percent tariff on imported semiconductors — while exempting companies operating or building plants in the US, which includes TSMC. The benchmark index jumped 556.41 points, or 2.37 percent, to close at 24,003.77, breaching the 24,000-point level and hitting its highest close this year, Taiwan Stock Exchange (TWSE) data showed. TSMC rose NT$55, or 4.89 percent, to close at a record NT$1,180, as the company is already investing heavily in a multibillion-dollar plant in Arizona that led investors to assume
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
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