UNITED KINGDOM
House costs, retail sales fall
UK house prices fell for a second month this month, adding to signs of consumer weakness, the Nationwide Building Society said. The 0.4 percent decline, the biggest since 2012, followed a 0.3 percent fall last month. It reduced annual growth to 2.6 percent, the weakest since June 2013, the lender said in a report yesterday. Meanwhile, UK retail sales fell the most since 2010 in the first quarter and a report from YouGov and the Centre for Economics & Business Research published yesterday said household sentiment fell this month to the lowest since July last year. A separate survey from GfK also showed a decline in optimism, though it said confidence is “surprisingly stable” given accelerating inflation and stagnating wages.
BANKING
UBS Q1 profit rises 80%
UBS Group AG fees from wealth management helped drive an 80 percent rise in first-quarter profit, with clients also adding billions of Swiss franc in new money. Net income rose to 1.27 billion Swiss franc (US$1.28 billion) from SF707 million a year earlier, the Zurich-based lender said in a statement yesterday. Analysts were expecting SF953 million, the average of eight estimates compiled by Bloomberg. The wealth management division contributed SF727 million in adjusted pretax profit. The unit saw SF18.6 billion in net inflows during the quarter, mainly from Europe, but “with positive contributions from all other regions,” unit president Juerg Zeltner said.
INSURANCE
Old Mutual to end venture
Britain’s Old Mutual PLC said it would sell its 26 percent stake in Kotak Mahindra Old Mutual Life Insurance Ltd to Kotak Mahindra Bank Ltd for about 12.93 billion rupees (US$201.4 million). The sale would end Old Mutual’s joint venture with Kotak Mahindra Bank, the company said on Thursday. The net consideration after tax is 11.7 billion rupees, Old Mutual said. The deal, which is subject to regulatory approval, is expected to be completed in the second half of the year.
DAIRY
No approval for Yili buy
Inner Mongolia Yili Industrial Group Co (伊利集團) terminated a planned 4.6 billion yuan (US$666.9 million) purchase of a stake in China Shengmu Organic Milk Ltd (聖牧有機奶業) because it did not win regulatory approval from Chinese authorities. Shengmu shares dropped by the most since 2015. The termination also cancels Yili’s offer to buy outstanding shares of Shengmu, according to a statement from the companies to the Hong Kong exchange yesterday. Hong Kong-listed Shengmu fell as much as 14 percent, its biggest intraday drop since August 2015, while Yili declined 3.4 percent in Shanghai. Yili in October last year announced it would purchase a 37 percent stake of Shengmu, China’s largest producer of hormone-free dairy.
AIRLINES
United reaches settlement
United Airlines and David Dao, the passenger who was dragged from a Chicago flight earlier this month, on Thursday announced they have reached a settlement for an undisclosed sum in the carrier’s latest step to contain damage from an incident that sparked international outrage. United earlier on Thursday said it would offer passengers who give up their seats up to US$10,000, reduce overbooking of flights and no longer call on law enforcement officers to deny ticketed passengers their seats. Southwest Airlines also said that it would end overbooking of flights.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such