ENERGY
Brexit hits crude oil price
Crude oil traded near US$48 per barrel as market volatility continued after the UK last week voted to leave the EU. Futures pared a loss of as much as 1.5 percent to trade little changed in New York after slumping 4.9 percent on Friday last week, the biggest drop in four months. Oil prices might plunge further if the shock of the UK’s vote to exit the EU is combined with a boost in output, Russian Energy Minister Alexander Novak said. Oil capped a second weekly drop on Friday last week as prices slid with industrial metals and European equities after the UK voted to quit the EU following more than four decades of membership. Nigerian output might return to about 2.2 million barrels a day next month after the repair of a pipeline as talks with militants continue, Nigerian State Minister for Petroleum Resources Emmanuel Ibe Kachikwu said.
BANKING
London to lose regulator
The EU is preparing to move its European Banking Authority from London following the UK’s vote to leave the union, EU officials said on Sunday, setting up a race led by Paris and Frankfurt to host the regulator. Coming a day after the UK’s Jonathan Hill resigned and was replaced as European commissioner for financial stability, financial services and capital markets by the Commission’s “Mr Euro,” Valdis Dombrovskis, the move underlines how the City of London can expect to be frozen out of EU financial regulation — and possibly from Europe’s capital markets — depending on the terms of the Brexit deal. While those who argued for the UK to leave the EU said the financial industry would thrive without EU shackles, some of its biggest employers, including JPMorgan, are scouring Europe to find new locations for their traders, bankers and financial licenses.
INTERNET
Line delays IPO pricing
Line Corp, Japan’s most popular messaging service, plans to delay the setting of a price range for its initial public offering (IPO) after the UK’s vote to exit the EU sent global equity markets into turmoil, according to a person familiar with the matter. The Tokyo-based company might proceed with the pricing as soon as tomorrow, said the person, asking not to be identified because the matter is private. Line said earlier this month it is seeking to raise as much as ￥113 billion (US$1.1 billion) from the sale of new and existing shares, which would make it the largest IPO by a technology company this year.
PHARMACEUTICALS
Sanofi, Boehringer ink deal
Sanofi has agreed to a 22.8 billion euros (US$25.1 billion) asset swap with Germany’s Boehringer Ingelheim GmbH to bolster the French drugmaker’s business in selling over-the-counter drugs. The companies reached a definitive agreement after announcing exclusive negotiations in December last year, they said in a statement yesterday. The terms are unchanged from the original announcement — Sanofi will trade its Merial animal-health business, valued at 11.4 billion euros, for Boehringer’s 6.7 billion euros consumer-health operation. Closely held Boehringer is also to pay Sanofi 4.7 billion euros in cash. The deal helps chief executive Olivier Brandicourt reshape Sanofi, whose pharmaceuticals division has grappled with declining sales of its best-selling insulin. It also adds to the consolidation in consumer health.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
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