GERMANY
Industrial output up 2.6%
The German industry rebounded from a summer lull with its best month in six years, keeping Europe’s largest economy on a solid footing in the second half of the year. Output, adjusted for seasonal swings and inflation, last month rose 2.6 percent from July when it fell a revised 0.1 percent, the Ministry of Economic Affairs and Energy said yesterday. That is the biggest increase since July 2011 for the typically volatile gauge and compares with forecasts for a 0.9 percent gain. Production was up 4.7 percent from a year earlier. “The data is finally catching up with some of the very positive readings we have seen in recent business surveys,” said Jennifer McKeown, chief European economist at Capital Economics in London. “Germany’s economy is on a track for a strong third quarter and given the supportive global environment and monetary policy, I don’t see much reason for any significant slowdown in growth in the second half of the year.”
SERVICES
UberPOP to halt service
Uber yesterday said it would suspend its unlicensed service UberPOP in Oslo until Norway introduces new rules, as the US ride-hailing app adopts a more conciliatory tone with national authorities. The move follows a similar one-year suspension in Finland in July to allow a new taxi law to come into effect; however, there is no set date for when UberPOP will be reintroduced in Norway. UberPOP has already been suspended in several European capitals, including Paris and Brussels, and Uber was recently humbled when it lost its license to operate in London. UberPOP will be paused on Oct. 30, while Uber’s licensed services UberBLACK and UberXXL will continue to operate as normal.
PHARMACEUTICALS
China eases drug approvals
Beijing on Sunday announced new rules that would speed up approvals of medicines and medical devices, easing bottlenecks in introducing new treatments. The move is also a growth opportunity for international and local drugmakers in the world’s second-biggest pharmaceutical market. Under the new rules, data from overseas clinical trials can be used for drug registrations in China. That removes the need for manufacturers to conduct additional tests in China after receiving overseas approvals and will likely cut delays in the launch of new drugs by several years. Faster approvals could deliver a revenue boost in coming years to multinationals, such as Pfizer Inc, AstraZeneca PLC and GlaxoSmithKline PLC that are expanding there. China spent US$116.7 billion on medicine last year, making it the second-largest market after the US, researcher QuintilesIMS said.
BANKING
Banks pass stress tests: ECB
The European Central Bank (ECB) said that banks under its jurisdiction appear well-prepared to face unexpectedly higher interest rates. The ECB’s banking supervision division yesterday released results of a stress test that showed suddenly rising rates would increase net interest income, an important part of bank finances. Earnings at some banks have lagged due to a very low interest rate environment that squeezes margins. The central bank said that in a hypothetical interest rate shock involving an increase of 2 percentage points, net interest income would increase by 4.1 percent this year and 10.5 percent next. The stress test imagined a sudden overnight increase. That is a highly unlikely scenario, but one which helps show whether bank finances are robust.
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
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