EUROZONE
Economic growth picks up
The economy this month grew at its fastest pace in six years on the back of strong demand and “widespread optimism” about the outlook, a closely watched survey showed yesterday. Data monitoring company IHS Markit said this month’s composite purchasing managers index (PMI) came in at 56.7 points, the highest reading since April 2011 and up from 56.4 points last month. The PMI measures companies’ willingness to invest in their business and so gives a good idea of how well the underlying economy is performing. IHS Markit said the 19-nation eurozone economy was doing well on all fronts.
UNITED KINGDOM
Retail sales plummet
Retail sales recorded their largest decline in seven years in the first quarter of this year as consumers felt the pinch from accelerating inflation. The volume of goods sold in stores and online fell 1.4 percent from the previous three months, the most since early 2010, the Office for National Statistics said yesterday. Last month alone, sales dropped 1.8 percent, far exceeding the 0.5 percent decline forecast by economists. The drop over the quarter knocks 0.08 percentage points off growth, the office said. Compared with a year earlier sales growth slowed from 3.7 percent to 1.7 percent.
FINANCE
Deal reached over 1MDB
Malaysia and Abu Dhabi have reached agreement on a partial debt settlement for embattled government fund 1Malaysia Development Bhd (1MDB), the Straits Times reported, citing financial executives it did not identify. Under a deal that could be signed as soon yesterday, Malaysia would pay Abu Dhabi US$1.2 billion before the end of this year and negotiate on a further US$3.5 billion, the Singapore-based paper said. A proposed settlement is being handled by the 1MDB board and management, and the Malaysian prime minister’s department, Malaysian Deputy Minister of Finance Johari Abdul Ghani said in a text message without elaborating.
ELECTRONICS
Sony profit beats forecast
Sony Corp yesterday reported preliminary operating profit of ¥285 billion (US$2.6 billion) for the fiscal year through last month, 19 percent higher than its previous forecast, according to a statement. The company also said net income would be about ¥73 billion, more than twice the previous forecast. That marks the second straight year operating profit has topped US$2 billion, the longest such streak since 2001. The company cited strong performance across most businesses and cost-savings in its insurance unit. Its chips division also saw lower expenses after a faster-than-expected recovery from last year’s earthquake in western Japan.
ENERGY
Chevron loses tax battle
Energy giant Chevron Corp yesterday lost its appeal in major battle against a A$269 million (US$203 million) tax bill in a case that could have global implications for multinationals looking to cut their obligations. The Australian Federal Court ruled in favor of a 2015 decision by the same court that the US giant had minimized its payments through a loan scheme and ordered it to foot costs, estimated by local media at more than A$10 million. The ruling followed an announcement by Canberra this month that seven multinationals were facing a total of A$2.9 billion in bills after assessing their tax arrangements.
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
SPECULATION: The central bank cut the loan-to-value ratio for mortgages on second homes by 10 percent and denied grace periods to prevent a real-estate bubble The central bank’s board members in September agreed to tighten lending terms to induce a soft landing in the housing market, although some raised doubts that they would achieve the intended effect, the meeting’s minutes released yesterday showed. The central bank on Sept. 18 introduced harsher loan restrictions for mortgages across Taiwan in the hope of curbing housing speculation and hoarding that could create a bubble and threaten the financial system’s stability. Toward the aim, it cut the loan-to-value ratio by 10 percent for second and subsequent home mortgages and denied grace periods for first mortgages if applicants already owned other residential