BANKING
Four banks downgraded
Moody’s Investors Service has cut the long-term credit rating of Australia’s four biggest banks, saying surging home prices, rising household debt and sluggish wage growth pose a threat to the lenders. Australia & New Zealand Banking Group Ltd, Commonwealth Bank of Australia, National Australia Bank Ltd and Westpac Banking Corp were all downgraded to “Aa3” from “Aa2,” Moody’s said in a statement released yesterday. Residential mortgages account for more than 60 percent of the four banks’ loan books. The banks have recently tightened lending standards under pressure from regulators. The combination of soaring house prices and stagnant wage growth has pushed the ratio of household debt to disposable income to 189 percent — one of the highest levels in the world.
HOUSING
Fewer cities post increases
China’s home prices increased in fewer cities last month in the wake of cooling measures imposed by local authorities. New home prices, excluding government-subsidized housing, gained from the previous month in 56 of 70 cities tracked by the government, compared with 58 in April, the National Bureau of Statistics said yesterday. Prices fell in nine cities and were unchanged in five. In Beijing, prices of new homes were unchanged from the previous month while prices of existing homes fell 0.9 percent, the first decline since February 2015. It was the second straight month that the number of cities with price increases fell, as officials persist with curbs to take the froth out of bubbly markets. A deepening property slowdown could trim the nation’s economic growth rate, with UBS Group AG forecasting that sales would “lose more steam” in the second half of the year. In Shenzhen, the nation’s hottest market early last year, new home prices fell 0.6 percent from April, the sharpest decline in three months.
FOREX
HK to maintain peg
Hong Kong’s pegged exchange rate should stay as it has served the territory well through financial crises for more than 30 years, Hong Kong Monetary Authority Chief Executive Norman Chan (陳德霖) said yesterday. “Hong Kong is a small and open economy,” he said in a statement. “Keeping a stable exchange rate between the Hong Kong dollar and the US dollar is the most suitable arrangement. We have no need and no intention to change such an effective system.” Hong Kong linked its currency to the greenback in 1983.
INTERNET
Thailand boosting scrutiny
Thailand aims to buy software to boost the military government’s ability to track online networks and monitor online activity while planning a cyberlaw that would expand powers to pry into private communications. The beefing up of powers over the online world comes as authorities are increasingly targeting social media for violations of a law that makes it a crime to defame, insult or threaten the king, queen, heir to the throne or regent. The Ministry of Digital Economy and Society aims to spend 128.56 million baht (US$3.8 million) on software, including a “social network data analysis system” to monitor and map individuals and relationships between more than 1 million online users, a ministry document showed. New York University researchers have also found various US jurisdictions had spent more than US$5.82 million on social media monitoring software.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
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