BEVERAGES
InBev picks underwriters
Anheuser-Busch InBev NV has selected JPMorgan Chase & Co and Morgan Stanley for a possible initial public offering of its Asian operations in what could be one of the region’s biggest listings this year, people with knowledge of the matter said. The world’s largest brewer is weighing Hong Kong as a listing venue, though it has not made a final decision, the people said. The Belgium-based company is considering adding more arrangers to the deal later, one of the people said. An IPO of AB InBev’s Asia business could raise more than US$5 billion, people familiar with the matter said last month.
GERMANY
Budget shortfall looms
Germany faces a 25 billion euro (US$29 billion) budget shortfall by 2023, unless it tightens spending, as tax revenues are set to fall and public sector wages are on the rise, Bild newspaper reported, citing an internal government document. The prospect of budget deficits would represent a dramatic deterioration in the finances of Europe’s biggest economy, which reported a 11.2 billion euro budget surplus last year. The warning came in a report prepared by Finance Minister Olaf Scholz to his ministerial colleagues as they prepare for a regular budget planning discussion.
SERVICES
Foreign sales buoy China
China’s sprawling services sector maintained a solid pace of expansion last month even though growth moderated slightly, a private survey showed on Sunday. The Caixin/Markit services purchasing managers’ index (PMI) fell slightly to 53.6 last month from 53.9 in December last year, but was well above the 50 mark separating growth from contraction. Overseas sales continued to support the sector, with new export business rising at the fastest clip in more than a year, thanks to efforts among Chinese services firms to attract foreign clients. Overall new orders also ticked higher, to 52.6 from 52.3 in December.
AUSTRALIA
Building approvals slump
Australian building approvals suffered the biggest annual back-to-back drop in almost a decade as a housing slump deepens. Building permits fell 22.5 percent in December last year from a year earlier after plunging 33.5 percent in November, Australian Bureau of Statistics data showed yesterday. That is the worst two-month result since January-February 2009, during the depths of the global financial crisis. A separate private report from Australia & New Zealand Banking Group Ltd showed job advertisements slid 3.7 percent last month from a year earlier, the first annual decline since April 2015.
BREXIT
Irish farmers to get aid
The European Commission has agreed to compensate Irish farmers for a collapse in beef and dairy prices in the event of a no-deal Brexit, the Irish edition of the Sunday Times newspaper said, quoting Irish government and EU sources. Farmers would be in line for hundreds of millions of euros in emergency aid to offset a market collapse and the loss of British customers, the newspaper reported. Agriculture Minister Michael Creed said last month Dublin would seek that amount for its farming and fishing industry. The details of the scheme were finalized between Creed and the commission’s agriculture chief Phil Hogan, the report said.
INTERNET
Tonga sabotage considered
A director at Tonga’s undersea Internet cable operator said he cannot rule out sabotage as the reason the cable broke and plunged the Pacific nation into virtual darkness for almost two weeks. Repair crews found two breaks along the optic fiber cable that connects Tonga with the rest of the world, Tonga Cable Ltd director Piveni Piukala said yesterday. Several kilometers away, they found two more breaks and rope entangled on the separate domestic cable that connects the main island with some of Tonga’s outer islands.
DELIVERIES
Gig workers get holiday pay
Self-employed workers at Hermes Parcelnet Ltd, a UK-based delivery company, have won the option to get holiday pay and guaranteed earnings, as part of a deal with the GMB trade union that could have implications for Britain’s growing gig economy. The collective bargaining agreement is the first to recognize the rights of self-employed workers, the union said. A group of Hermes couriers won a legal battle in June to be classed as workers rather than self-employed.
TURKEY
Inflation hits 20.4% on food
A run-up in food costs halted a broader deceleration in price growth after two months. Inflation picked up slightly last month to 20.4 percent from a year earlier after a gain of 20.3 percent in the previous month, Turkstat said yesterday. Food and non-alcoholic beverage costs surged an annual 31 percent, the most since at least 2004. Shortages caused by floods in farming hub Antalya are making matters worse after the depreciation of the lira in August raised the cost of food imports and transportation.
BANKING
FAB may raise foreigner limit
First Abu Dhabi Bank PJSC (FAB) will follow regional peers and raise the foreign-ownership limit on its stock. The UAE’s biggest lender aims to raise the cap for foreign ownership to 40 percent from 25 percent, it said last week. Shareholders still need to approve the change at a meeting on Feb. 25. Investors from abroad held about 12 percent of FAB shares as of the end of last month, according to the stock exchange’s Web site. Qatar National Bank last year raised the ceiling for foreigners to 49 percent from 25 percent, while Emirates NBD PJSC plans to quadruple the limit for foreigners to 20 percent.
COMMUNICATIONS
Reliance to file for insolvency
Billionaire Anil Ambani’s Reliance Communications Ltd said it will file for insolvency following failed attempts to sell assets and repay about US$6.3 billion of debt. The company agreed to approach the National Company Law Tribunal after failing to pay lenders for the past 18 months, the company said. It blamed its decision to approach the court on a lack of consensus among its more than 40 lenders, as well as numerous issues pending before various agencies.
FEDERAL RESERVE
Powell ‘coming around’
US Federal Reserve Bank of Minneapolis President Neel Kashkari said Fed Chairman Jerome Powell is “coming around” to the view to wait until wages and inflation rise before raising interest rates again, and that the Fed’s latest pause will help keep a “fundamentally healthy” economy on track. “There are more people out there who want to work; let’s let the economy continue to strengthen and if we see signs then, wages pick up, inflation picks up, we can always tap the brakes,” Kashkari said on Sunday. “Let’s just not tap the brakes prematurely,” he said.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective