AUTOMAKERS
Hyundai expects slowdown
South Korea’s biggest automaking group, which last year faced a consumer backlash in China over tensions between the two countries, forecast a slowdown in sales this year, as political risks dent demand for its vehicles in the world’s major markets. Hyundai Motor Co and affiliate Kia Motors Corp yesterday said their combined sales last year dropped 7 percent to 7.25 million units, the least in five years and 1 million short of its record target. Citing stalling global economic growth, rising protectionism and dangers posed by geopolitics as threats, the companies set a goal to sell 7.55 million vehicles this year. With Ford Motor Co on its heels, Hyundai Motor group is fighting to maintain its rank as the world’s fifth-biggest automaker after underperforming rivals in the US.
ENERGY
BP to take tax hit from US
British energy major BP PLC yesterday said that it expected to take a US$1.5 billion hit from US President Donald Trump’s tax reforms. “The lowering of the US corporate income tax rate to 21 percent requires revaluation of BP’s US deferred tax assets and liabilities,” the company said in a statement. “The current estimated impact of this will be a one-off non-cash charge to the group income statement of around [US] $1.5 billion that will impact BP’s fourth quarter 2017 results.” However, the energy giant cautioned that longer-term earnings would be “positively impacted” by the US changes. The reform taxes these earnings at 15.5 percent on cash and equivalents and 8 percent on real estate and other illiquid assets.
SOCIAL MEDIA
WeChat denies storing chats
Tencent Holdings’ (騰訊) WeChat, China’s most popular messenger app, yesterday denied storing users’ chat histories, after a top businessman was quoted in media reports as saying he believed Tencent was monitoring everyone’s account. “WeChat does not store any users’ chat history. That is only stored in users’ mobiles, computers and other terminals,” WeChat said in a post on the social media platform. “WeChat will not use any content from user chats for big data analysis. Because of WeChat’s technical model that does not store or analyze user chats, the rumor that ‘we are watching your WeChat everyday’ is pure misunderstanding.” Li Shufu (李書福), chairman of Geely Holdings (吉利控股), owner of the Volvo car brand, was quoted in Chinese media on Monday as saying Tencent chairman Ma Huateng (馬化騰) “must be watching all our WeChats every day.”
SINGAPORE
Economy solid at end of year
The economy finished last year on a solid footing, allowing more room for policymakers as they consider raising taxes and tightening monetary policy this year. Growth was faster than economists predicted last quarter, resulting in the strongest full-year expansion in three years, preliminary figures released yesterday showed. The data also confirmed the recovery is broadening out, with services industries, such as finance and transport, among the main drivers of growth in the fourth quarter. GDP rose at a seasonally adjusted and annualized rate of 2.8 percent in the fourth quarter from the previous three months; median estimate of eight economists in a Bloomberg survey was for a 1.6 percent gain. GDP climbed 3.1 percent from a year earlier. Singapore, among Asia’s most export-reliant economies, has benefited from a global trade recovery that has boosted demand for its electronics goods.
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
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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