UNITED KINGDOM
Consumer spending down
Inflation’s hold on the consumer is tightening and the economy is suffering as a result. Consumer spending fell an annual 0.8 percent last month, the first decline since September 2013, according to IHS Markit and Visa Inc. Separately, accountancy firm BDO said its business activity index weakened as services, the largest part of the economy, ground to a halt. Citing the impact of the weaker pound, it said services companies are seeing no growth in demand. The latest numbers highlight the economic challenge facing Prime Minister Theresa May, who reshuffled some ministers at the weekend after an election that saw her lose her Parliament majority. The vote, which forced May into an alliance to keep power, adds to uncertainty just as the government is about to begin talks on its exit from the EU. “The services sector is definitely slowing down, with many blaming this on the snap election, but the downward trend is clearly much more deeply rooted than this. Surprisingly, UK businesses remain optimistic about the future, but an immediate recovery seems unlikely,” BDO partner Peter Hemington said.
INVESTMENT
Oasis snubs Panasonic offer
Oasis Management Co’s Seth Fischer said his hedge fund will not tender its shares in Panasonic Corp’s sweetened offer for its listed subsidiary PanaHome Corp because the terms are still “unfair.” Oasis plans to seek a court appraisal of a fair price for the purchase, Oasis chief investment officer Fischer said in an interview in Hong Kong, where the fund is based. Fischer questioned the process for the tender offer, which runs until today, saying minority shareholders’ interests have not been properly considered. He said Oasis owns 9.9 percent of PanaHome. Representatives for PanaHome and Panasonic said the price offered by Panasonic is fair. “I’m not satisfied,” Fischer said. “I’m going to pursue my rights.” Oasis is PanaHome’s second-biggest shareholder after Panasonic, according to data compiled by Bloomberg based on the latest regulatory filings available. Panasonic altered the terms of its offer for the home builder in April, switching from a share exchange to a tender offer at ￥1,200 per share, after Oasis said the previously agreed deal was at a “cheap price.” Oasis received a valuation opinion that PanaHome is worth ￥1,954 per share.
ELECTRONICS
Microsoft unveils console
Microsoft Corp on Sunday unveiled Xbox One X — billing it as the most powerful video console ever made and escalating a battle with market king PlayStation of Sony Corp. The US$499 product was built with the muscle for seamless play on ultra-high-definition 4K televisions and is expected to be available worldwide on Nov. 7, Xbox team leader Phil Spencer said. He introduced the much anticipated Xbox One X, called Scorpio during development, at a Microsoft event ahead of the official opening of the major Electronic Entertainment Expo in Los Angeles. Aiming at the hearts of gamers, Microsoft also showed off 42 coming games, with 22 titles being tailored for exclusive play on Xbox One consoles. Independent publishers tend to make blockbuster titles available for play on Xbox, PlayStation and PC hardware in an effort to sell creations to as broad an audience as possible. The new console is to be compatible with older Xbox games and accessories. Microsoft and rival Sony Corp are trying to update their video-game machines more frequently to phase out the notion of upgrading once about seven years.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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