TAXATION
Resistance to Australian cut
Australian Prime Minister Malcolm Turnbull faces a fresh blow in parliament this week, with the Senate yesterday poised to reject his government’s plans for a corporate tax cut after several independent lawmakers vowed to vote against the measure. The government has proposed to cut the corporate tax rate from 30 percent to 25 percent in a bid to boost the economy less than a year away from the next election. Although the government won backing for its centerpiece A$144 billion (US$106 billion) package of income tax cuts, lawmakers are resistant to extending tax breaks after a public inquiry exposed alleged misconduct in the financial sector.
GERMANY
Confidence ebbing
Business confidence ebbed this month to its lowest in more than a year, suggesting the mood among company executives in Europe’s biggest economy is darkening as the world edges toward a full-blown trade war. Activity in all four economic sectors measured by the Munich-based Ifo institute in the survey — manufacturing, services, trade and construction — fell, adding to signs the economy is cooling after a boom last year. Ifo said its business climate index fell to 101.8, the lowest level since May last year. The reading was slightly stronger than predicted in a Reuters consensus forecast of 101.7. “The tailwind enjoyed by the German economy is [easing],” Ifo head Clemens Fuest said. However, economists ruled out a recession and predicted the economy would continue to grow, albeit at a slower pace than last year’s 2.5 percent.
TRANSPORTATION
Uber in court in London
Uber yesterday went to court in the UK to overturn a decision stripping it of its license in London after being ruled unfit to run a taxi service in its most important European market. Regulator Transport for London (TfL) shocked the Silicon Valley firm in September last year by refusing to renew its license, citing failings in its approach to reporting serious criminal offences and to background checks on drivers. The appeal is due to be heard over three days and is to hear from witnesses including Uber’s UK chairman Laurel Powers-Freeling, UK head of cities Fred Jones and TfL’s Interim Director of Licensing Helen Chapman. The company is seeking an 18-month license to prove to London authorities that it has reformed.
TRANSPORTATION
Didi Chuxing in Melbourne
Chinese ride-sharing giant Didi Chuxing (滴滴出行) has intensified its drive for global business, yesterday launching in Melbourne as it joins rivals Uber, Taxify and Ola in Australia’s taxi market. Didi Chuxing’s latest expansion is part of attempts to rival US behemoth Uber. “Didi’s entry into Australia marks a new milestone in its outreach to global communities,” it said.
BANKING
Commonwealth streamlines
Commonwealth, Australia’s biggest bank, yesterday announced plans to spin off its wealth management and mortgage-broking arms as it tries to streamline operations and focus on core businesses. It is also considering offloading its general insurance business. The demerged business, CFS Group, is to include Commonwealth’s Colonial First State, Colonial First State Global Asset Management (CFSGAM), Count Financial, Financial Wisdom and Aussie Home Loans businesses. The new entity will list on the nation’s stock exchange next year.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
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