BANKING
Draghi hints at stimulus
European Central Bank (ECB) President Mario Draghi said at the institution’s annual forum in Sintra, Portugal, yesterday that if the outlook does not improve and inflation does not strengthen, “additional stimulus will be required.” He said the ECB can amend its forward guidance, that rate cuts remain “part of our tools” and asset purchases are also an option. Draghi added that risks from geopolitical factors, protectionism and vulnerabilities in emerging markets have not dissipated and are weighing in particular on manufacturing. The Governing Council will in the coming weeks review how their tools can be used to tackle risks to price stability, he said.
CHINA
New home prices up 0.71%
New home price growth in China quickened last month after government measures to spur demand in smaller cities took effect. The average value of new homes in 70 major cities in Asia’s biggest economy — excluding government-subsidized housing — rose 0.71 percent, according to data released by the statistics bureau yesterday. That was faster than an increase of 0.62 percent in April and a lift of 0.61 percent in March. Last month, 12 cities saw price gains of more than 1 percent, versus six in April.
FINANCIALS
China cuts Treasury holdings
China cut its US Treasury holdings to the lowest in almost two years as the months-long trade conflict dragged on between the world’s two largest economies. The nation’s holdings of notes, bills and bonds declined by US$7.5 billion in April to US$1.11 trillion, according to US Department of Treasury data released on Monday in Washington. The latest numbers were collected before tensions between Washington and Beijing escalated to a new level last month.
VEHICLES
Germany drives EU growth
European car registrations ended a nine-month losing streak to rise marginally last month, helped by a jump in deliveries in Germany. Deliveries rose 0.04 percent to 1.44 million cars compared with a year ago, the European Automobile Manufacturers’ Association said yesterday. Sales in Germany, the biggest European auto market, surged 9.1 percent to counteract an ongoing pullback in the UK, where uncertainty over Brexit continues to put off consumers from purchasing new vehicles. Spain also declined.
FOOD
Beyond Meat continues rally
Beyond Meat Inc shares yesterday closed at their highest price yet as short sellers felt the burn to the tune of half a billion US dollars. The shares rose 12 percent to US$169.96, extending a rally that has added almost 600 percent to the stock price since its initial public offering (IPO) last month. That has cost short sellers US$560 million in mark-to-market losses since the IPO, including US$97.5 million in Monday’s session alone, said Ihor Dusaniwsky, managing director of predictive analytics at financial analytics firm S3 Partners.
UNITED KINGDOM
GDP forecast to be flat: poll
The UK economy is likely to flatline in the second quarter and the Bank of England would not raise interest rates until well into next year, a Bloomberg survey showed yesterday. Analysts do not expect the economy to grow at all in the second quarter. They also pushed back expectations for a rate hike to the third quarter of next year from the first quarter.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
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