PROPERTY
HK plans vacancy tax
Hong Kong’s government unveiled details of a planned tax on unsold new apartments, including potential jail time for developers who defy the rules. Developers would be required to submit reports annually on the status of apartments, with false statements punishable by a fine and a year in prison, a document submitted to the Legislative Council late on Tuesday proposed. Under the plan, a tax amounting to double an apartment’s annual rental value would apply after six months of vacancy. The proposal also plugs a loophole: Developers cannot beat the tax simply by selling a new apartment to an associated company. The government plans to introduce a bill containing the measures before the end of the legislative year in July.
PROPERTY
Evergrande faces fund gap
Hui Ka Yan (許家印), China’s second-richest man, has 17 billion reasons to keep him awake at night. His property developer, China Evergrande Group (恒大集團), has debt maturing in 12 months or less that exceeds its cash by 114 billion yuan (US$17 billion), its full-year report released late on Tuesday showed. The yawning gap is partly the result of a drop in its cash buffer in the second half of last year. The giant funding gap indicates that Hui’s efforts to whittle down a US$100 billion debt pile and put the firm on a more solid financial footing still have some way to go. It might also explain why the company was willing to pay yields as high as 13.75 percent on bonds it sold in October last year — an issue Hui personally invested US$1 billion in.
INTERNET
Line, Mercari join forces
Line Corp and Mercari Inc are joining forces on mobile payments as Japan’s Internet companies race to dominate cashless transactions in the world’s third-largest economy. The operator of Japan’s most popular messaging platform and the used-goods online marketplace app would let users shop and pay for purchases at stores that accept each other’s systems, they told reporters in Tokyo yesterday. They also launched an alliance to welcome other mobile payment providers.
AIRPORTS
Group buying GMR stake
A consortium including India’s Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management, is to invest 80 billion rupees (US$1.2 billion) to buy a stake in GMR Airports Ltd. The deal would pump 10 billion rupees into GMR Airports, a unit of GMR Infrastructure Ltd and purchase 70 billion rupees of the airport unit’s equity shares from the parent, according to a statement. GMR operates Delhi International Airport Ltd, the nation’s biggest airport. The deal values GMR Airports at 180 billion rupees, the company said in a filing. After the purchase, Tata would hold 20 percent in the airport unit, while GIC would get 15 percent and SSG would own 10 percent.
MACROECONOMICS
Downside risks remain: ECB
European Central Bank (ECB) President Mario Draghi said that risks to the eurozone’s economic outlook remain tilted to the downside and a pickup in inflation is delayed, warranting a continued accommodative monetary policy that includes negative interest rates. “If necessary, we need to reflect on possible measures that can preserve the favorable implications of negative rates for the economy, while mitigating the side effects, if any,” Draghi said. “That said, low bank profitability is not an inevitable consequence of negative rates.”
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
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