BANKING
Credit Suisse suffers loss
Credit Suisse Group AG’s trading business might have evaded some of the issues that hurt earnings at its Wall Street peers, but there was no such escape for the advisory unit. The Zurich-based firm’s Investment Banking and Capital Markets business posted a wider-than-expected first-quarter pretax loss of US$91 million, exceeding estimates of a loss of about US$10 million. Net revenue dropped by more than a third, with the bank blaming the decline on a slump in activity. The business, which focuses on services including mergers and acquisitions, debt and equity offerings, and derivative transactions, saw large declines in both advisory and underwriting fees. Earnings from equity underwriting plummeted by almost half after offerings slowed due to the US government shutdown last year. Debt underwriting earnings declined by more than a third because of lower leveraged-finance activity.
PROPERTY
AT&T to sell office space
AT&T Inc’s WarnerMedia has agreed to sell space in a Manhattan tower for US$2.2 billion to real estate giant Related Cos, helping the telecom repay some debt. WarnerMedia is to lease back the offices — located in the new Hudson Yards neighborhood — until early 2034, AT&T said on Tuesday. The transaction is expected to close late in the second quarter. AT&T is on a crusade to reduce debt since last year’s acquisition of Time Warner Inc for US$85 billion. The company had a US$176.5 billion debt burden in its most recently reported quarter. The space in Tuesday’s agreement is in 30 Hudson Yards, the third-tallest building in New York. Related is building the US$25 billion Hudson Yards project with Oxford Properties Group Inc, betting that the neighborhood can become a new nexus of shopping, offices and apartment buildings. Time Warner previously sold its headquarters at Time Warner Center in Columbus Circle for US$1.3 billion to a group led by Related.
AUTOMAKERS
Hyundai profit surges
Hyundai Motor Co has increased its operating profit for the first time in six quarters, helped by strong demand for new sport utility vehicles (SUV) such as the Palisade and decreasing incentive spending in the US. First-quarter operating profit climbed to 824.9 billion won (US$718 million), compared with the average analyst estimate of 777.3 billion won. After defeating activist Elliott Management Corp in a proxy fight last month, Hyundai chairman-in-waiting Euisun Chung is trying to convince investors that his planned push into new models, including electric vehicles, would translate into long-term earnings growth. The large Palisade SUV has met strong demand in South Korea and is to go on sale in the US in the third quarter, taking on Ford Motor Co’s Explorer and Toyota Motor Corp’s Highlander.
ENERGY
EPH buys two power plants
Czech Republic-based coal mining and energy group EPH, known for bucking Europe’s green trend, on Tuesday said that it would buy two power plants in Northern Ireland. The plants, a gas-fired facility in Ballylumford and a coal-fired one in Kilroot, have a total installed output of 1.4 gigawatts and are currently owned by US-based AES Corp. “The acquisition includes a combined cycle gas turbine, a battery storage facility, open cycle turbines and a coal-fired power station,” EPH said. “The transaction is subject to EU merger clearance and is expected to close during the summer of 2019,” it said, without disclosing the price.
NEW MARKET: The partnership opens up India to the Dutch company, which already has a strong hold in the semiconductor market of South Korea, Taiwan and China ASML Holding NV entered into a partnership agreement with Tata Electronics Pvt Ltd aimed at ramping up India’s goal to develop domestic chip-manufacturing capabilities. The Dutch company’s technology would help power Tata Electronics’ planned 300 millimeter (mm) semiconductor foundry in Gujarat, according to a joint statement from the two companies on Saturday. The signing of a memorandum of understanding coincides with a visit by Indian Prime Minister Narendra Modi to the Netherlands, which is looking to deepen bilateral relations with New Delhi. ASML, whose top customers include Taiwan Semiconductor Manufacturing Co (台積電) and Samsung Electronics Co, makes lithography machines that can print
ROUGH RECORDS: Bonds in Japan, as well is in New Zealand, Australia and the US, are seeing the effects of a nervy market as stock exchanges across Asia edge down A deepening slump in Japanese government bonds added fuel to the selloff in global debt markets as rising oil prices stoked inflation fears and pushed yields to multi-decade highs. Japan’s 30-year yield yesterday surged as much as 20 basis points to the highest level since the tenor’s debut in 1999, before paring some of the move. Shorter-maturity Japanese debt was also under pressure, underscored by weak demand at a sale of five-year notes that offered a record-high coupon of 2 percent. Concerns over inflation and government spending rippling through markets including the US, Australia and New Zealand are being amplified in Japan,
The US has cleared about 10 Chinese firms to buy Nvidia Corp’s second-most powerful artificial intelligence (AI) chip, the H200, but not a single delivery has been made so far, three people familiar with the matter said, leaving a major technology deal in limbo as chief executive officer Jensen Huang (黃仁勳) seeks a breakthrough in China this week. Huang, who was not initially listed in a White House delegation to Beijing, joined the trip after an invitation from US President Donald Trump, a source said. Trump picked him up in Alaska en route to a summit with Chinese President Xi Jinping
Wall Street is licking its chops over an unprecedented slate of massive initial public offerings (IPOs) set to arrive in the coming months, beginning with Elon Musk’s Space Exploration Technologies Corp (SpaceX) next month. That is expected to be followed by artificial intelligence (AI) rivals OpenAI and Anthropic PBC. The trio of mega listings, each eyeing valuations around US$1 trillion or more, constitutes a heady period of elevated risk and reward. SpaceX is targeting an IPO that would raise up to US$80 billion — about double the funds generated from all IPOs last year. OpenAI and Anthropic are eyeing IPOs raising US$60 billion. “We’re
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