JAPAN
Output rises for second month
Factory output rose for the second straight month last month, official data released yesterday showed, as the world’s third-biggest economy continued to pick up steam. Industrial production registered a 0.6 percent increase compared with the previous month, slightly better than market expectations of a 0.5 percent rise. Shipments of products manufactured in Japan rose 2.4 percent month-on-month, while inventories dropped 1 percent, the Ministry of Industry said.
UNITED STATES
Consumer confidence falls
Consumer confidence retreated from a 17-year high last month, as optimism about the short-term outlook fell sharply, according to a closely watched monthly survey released on Wednesday. While sentiment about current conditions was more positive than last month, consumers were more pessimistic about the situation for business and jobs six months out, the US Conference Board reported. The consumer confidence index fell to 122.1 from 128.6 last month.
ARGENTINA
Senate approves budget plan
The Senate on Wednesday gave its final approval to the government’s tax reform and budget plan for next year, part of President Mauricio Macri’s push to cut business costs and attract investment to Latin America’s No. 3 economy. Macri was elected in late 2015 with a mandate to free the markets by ditching the heavy controls put on the economy by the previous government. Next year’s budget bill foresees economic growth of 3.5 percent and average inflation of 15.7 percent.
INDONESIA
GDP to grow 5.4% next year
The country’s economy is in a stronger position as it enters a new year, bolstering President Joko Widodo as the nation gears up for elections. Having notched up growth above 5 percent in every quarter so far this year, the economy is forecast by the government to expand 5.4 percent next year, which would be the fastest pace in five years. The median estimate in a Bloomberg survey of economists is for growth of 5.3 percent.
FINANCE
Nippon Life invests in TCW
TCW Group gained a long-term partner as a Nippon Life Insurance Co investment enabled Carlyle Group LP to sell almost half of its stake in the US$200 billion asset manager. After the deal closed on Wednesday, TCW’s managers controlled a plurality — 44 percent — of the firm, as Nippon acquired 25 percent for about US$490 million. Carlyle, which bought 60 percent of the company in February 2013, reduced its stake to 31 percent, moving the remaining holding to a long-term fund. The transaction values TCW at about 150 percent more than Carlyle’s initial investment.
TAXES
Shell, Barclays warn of impact
Two major European companies, Royal Dutch Shell PLC and Barclays PLC, said that the US tax reform law would force them to take big charges in the final quarter of the year. Shell on Wednesday said it expects to book between US$2 billion and US$2.5 billion in charges in the fourth quarter as it adjusts its measurements of deferred taxes. Barclays said it expected a charge of ￡1 billion (US$1.34 billion.). The change in US tax law cuts the corporate income tax rate from 35 percent to 21 percent, but also reduces companies’ ability to offset tax bills with past losses.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
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