FINLAND
Basic income trial fails
The government yesterday announced the first findings from a two-year basic income trial that ended a month ago, with researchers saying it failed to spur the unemployed to work more and earn more as was hoped. During the trial, 2,000 unemployed Finns became the first Europeans to enjoy a guaranteed basic income, a monthly pay check from the state, regardless of whether they found work or sat at home on the couch. The trial was the nation’s test of one alternative to renewing its social security model, a vast task expected to be tackled after parliamentary elections in April.
AUSTRALIA
RBA cuts growth forecasts
The Reserve Bank of Australia (RBA) yesterday cut growth and inflation forecasts in response to weaker consumption as it assesses how slumping property prices could reverberate across the economy. Economic growth in the year ending June was lowered to 2.5 percent from 3.25 percent and by half a percentage point in the following 12 months, according to the Statement on Monetary Policy released in Sydney. Headline inflation is predicted to slump to 1.25 percent in the year through June due to lower oil prices. The RBA estimated that a sustained 15 percent fall in oil prices would cut about half a point from the consumer price index and could “cumulatively” lower core inflation by a quarter point through indirect effects over two to three years.
ENERGY
Total finds ‘significant’ gas
French energy giant Total SA on Thursday announced that it had found “significant” gas in the Outeniqua Basin, 175km off the southern coast of South Africa. Total chief executive officer Patrick Pouyanne said in a statement that the potential quantities “could be around one billion barrels of global resources, gas and condensate light oil.” South African Minister of Mineral Resources Gwede Mantashe welcomed the news of the discovery as “potentially a major boost” for the economy, which grew less than 1 percent last year.
FASHION
Gucci pulls sweater
Gucci on Thursday pulled a black polo neck sweater from its shops after it sparked comparisons with racially offensive golliwog and “blackface” imagery. The “balaclava jumper” can be pulled up to the eyes with the mouth visible through large red lips. “Happy Black History Month y’all,” one black American fashionista tweeted ironically, with others pointing out the resemblance to a golliwog. It is the third Italian brand to be hit in recent months by race rows, after Prada and Dolce & Gabbana. Gucci was quick to pull the jumper, issuing a statement of apology within hours of the first posts questioning it.
BANKING
SG lowers profit target
Societe Generale SA (SG) boosted its bottom line last year, but trimmed its profit target and announced plans to cut back its investment bank as the outlook for global finance remains topsy-turvy. The 3.9 billion euros (US$4.4 billion) in net profits were up 38 percent from 2017, but that was a year when Societe Generale booked considerable restructuring costs and legal settlements. The result beat the expectations of analysts, who were expecting an average of 3.6 billion euros, according to a survey by data firm Factset. Net banking income, the equivalent to revenue for a bank, rose 5.2 percent to 25.2 billion euros, in line with expectations.
AUTOMAKERS
Fiat pays US$77m penalty
Fiat Chrysler Automobiles NV on Thursday said it paid US$77 million in US civil penalties late last year for failing to meet 2016 model year fuel economy requirements, the first significant sign the industry is facing hurdles meeting rising emissions rules. The Italian-American automaker has been lobbying US President Donald Trump’s administration to revise fuel economy requirements and last year, regulators proposed freezing requirements at next year’s levels through 2026. Shane Karr, head of external affairs for Fiat Chrysler in North America, said in a statement that the fuel economy program should be reformed rather than “requiring companies to make large compliance payments because assumptions made in 2011 turned out to be wrong.”
TELECOMS
No outright ban on Huawei
German Chancellor Angela Merkel’s government has ruled out an outright ban targeting Chinese equipment supplier Huawei Technologies Co (華為) as the country moves toward building its 5G networks, a government official said. Cabinet members met on Wednesday in Berlin to discuss the prospect of restricting Huawei equipment from the new 5G network. While they continue to work toward a final decision, the ministers concluded that singling out Huawei from a list of suppliers was not legally viable, the official said on Thursday on condition of anonymity. German Minister for Economic Affairs and Energy Peter Altmaier has signaled that any restrictions tied to the nation’s shift to the crucial next-generation technology would not involve targeting specific companies, but rather subjecting all potential service providers to stringent security standards. Huawei has come under scrutiny by US allies concerned its equipment could be used by Chinese intelligence.
GERMANY
Foreign trade hits record
Foreign trade hit a record last year, the Federal Statistics Office said. The nation exported 1.3 trillion euros (US$1.47 trillion) in goods and imported 1.1 trillion euros last year, surpassing the records set in 2017. The trade surplus for the year narrowed slightly. Germany, the continent’s economic motor, has boomed for a decade thanks to its role as a supplier of equipment to the world’s industrial nations. That makes it vulnerable to a possible trade war between China and the US. However, the latest monthly figures, showing unexpected month-on-month growth in exports and imports, appeared to snap a long run of gloomy economic indicators, possibly indicating that the economy’s long-expected slowdown might yet be postponed.
RETAIL
Dia to cut 2,100 jobs
Financially troubled Spanish supermarket group Dia yesterday said that it planned to cut up to 2,100 jobs as it reported a massive loss. Dia, the target of a public buyout offer by the Russian oligarch who is already its top shareholder, reported a net loss of 352.5 million euros for last year. The discount supermarket chain, which has had to reduce prices due to competition from Lidl and Mercadona, saw net sales fall nearly 11 percent to 7.3 billion euros. The results were much worse than the 4 million euro loss expected by analysts surveyed by data provider Factset. Dia said the job cuts would be negotiated with trade unions. Russian billionaire Mikhail Fridman’s LetterOne investment fund, which became Dia’s top shareholder in 2017 with a 29 percent stake, on Tuesday launched a public share offer to take over the firm given its “serious financial difficulties.”
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
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