RUSSIA
Growth beats expectations
Russia’s economy expanded 2.3 percent last year, growing more quickly than the government and the IMF had predicted, according to state statistics published on Monday. Russia’s growth rate accelerated from 1.6 percent in 2017 and exceeded the economy ministry’s prediction of 1.8 percent as well as the IMF’s forecast of 1.7 percent. The country’s economy only returned to growth in 2017 after two years of recession in 2015 and 2016. Russia’s Rosstat statistics agency said that GDP last year was 103.6 trillion rubles (US$1.578 trillion, 1.38 trillion euros), with growth in sectors such as hotels and restaurants boosted by hosting the World Cup.
UNITED KINGDOM
Consumer spending recovers
Consumer spending recovered slightly last month after a dismal holiday season, though British households are still wary because of Brexit. KPMG said that retail sales grew 2.2 percent last month, up from the slowest growth in a decade in December last year. Figures from Barclaycard also showed consumer spending grew 2.9 percent after a previous decline. It had dipped in December as shoppers brought forward gift purchases to November to take advantage of heavy discounts. Price cuts were a driving force behind the uptick last month, KPMG said, but overhanging the outlook is Britain’s divorce from the EU.
FINLAND
Prepare for trouble: ministry
Trade-reliant Finland is unprepared to weather a coming global economic downturn and its next government stepping into office later this year should boost buffers while it still can, the Finance Ministry warned. At least 2 billion euros (US$2.3 billion) of budget cuts will be needed to generate a surplus of about 0.5 percent for public finances over the next four years, civil servants at the ministry said in a report published on Monday. Actions are needed to quickly fill up government coffers and improve fiscal strength, especially as a recession could again hit the Nordic country over the next four years, they said.
VENEZUELA
JPMorgan reviews indices
Venezuelan government debt may be entirely removed from JPMorgan Chase & Co’s flagship emerging-market bond indices after US sanctions effectively wiped out trading in the securities, according to two people familiar with the matter. The bank’s index team, which previously said it was reviewing the status of bonds from Petroleos de Venezuela SA in its gauges, is now also considering whether to drop the sovereign notes from its EMBI+, EMBI Global and EMBI Global Diversified benchmarks because of low liquidity, the people said.
ENERGY
Rising oil boosts BP profit
BP PLC almost trebled its annual net profit to US$9.4 billion (8.2 billion euros) last year as oil prices soared in 2018, the British energy giant announced yesterday. Profit after tax rocketed from US$3.4 billion in 2017, “primarily affected by higher oil prices and favorable foreign exchange” rate changes, BP said in a statement. Fourth-quarter net profit stood at US$766 million, up from US$27 million in the final three months of 2017. The company said full-year production of oil and gas grew 2.4 percent to 3.7 million barrels per day last year. This year’s output is expected to be higher thanks to major production projects, it said.
GERMANY
Budget shortfall likely: report
Germany’s government is grappling with the prospect of tighter public finances over the coming years as economic growth slows. It is insisting it will stick to its policy of running up no new debt. News agency DPA reported on Monday that the government faces a budget shortfall of 24.7 billion euros (US$28.3 billion) through 2023, compared with previous predictions. The finance ministry would not confirm the figure, but said maintaining a balanced budget remains “the clear proviso” in government planning.
EGPYT
IMF clears US$2bn loan
The IMF board on Monday approved a US$2 billion loan payment to Egypt, the latest in the country’s three-year aid program. The latest installment brings the total paid to Cairo to about US$10 billion since the loan deal was signed in November 2016. The previous loan tranche was approved in July of last year, but this fourth review of Egypt’s program had been awaiting board approval since October, when IMF staff and government officials had finalized it.
BANKING
Deutsche may cut bonuses
Deutsche Bank AG may cut bonuses if its revenue fails to grow, chief financial officer James von Moltke said on Monday. Variable compensation is one of several areas the lender has earmarked for further possible savings if necessary to achieve its profitability target, Von Moltke said on a conference call with fixed-income investors. The reductions could be made if a challenging market environment makes it impossible for the bank to grow its top line, he indicated. The company has seen eight consecutive quarters of falling revenue.
TECHNOLOGY
Tesla buying Maxwell
Tesla Inc is buying the battery company Maxwell Technologies Inc for about US$218 million in stock. The deal gives Tesla a boost in battery technology as it tries to cut costs and mass-produce electric cars. Those improvements involve improving battery capacity and cutting down on recharging time. David Lyle, the chief financial officer at Maxwell, told analysts last month that because of recent technological developments, the San Diego company expected to form new partnerships within six months.
MINING
First Quantum eyes Zambia
First Quantum Minerals Ltd has offered to buy the Zambian government’s 20 percent stake in Africa’s biggest copper mine for as much as US$700 million, according to two people familiar with the transaction. Vancouver-based First Quantum already owns 80 percent of the Kansanshi mine in Zambia’s North-Western Province. State-owned ZCCM Investments Holdings PLC holds the rest. The proposal includes US$300 million to US$400 million in cash, and an equal amount in special royalties, over more than 10 years, the people said.
DAIRY
Clover receives buyout bid
Clover Industries Ltd received a buyout offer from a group of investors led by Israel’s Central Bottling Co, which has plans to expand the dairy business across sub-Saharan Africa and values the company at 4.8 billion rand (US$359 million). The group offered 25 rand a share for the Johannesburg-based producer, compared with a Friday closing price of 20 rand, Clover said in a statement on Monday. The potential acquirer is 60 percent owned by CBC, with other investors including Brimstone Investment Corp, a South African investment firm.
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
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