CHINA
Producer price index dives
The prices firms pay factories for their goods fell last month at the fastest pace in three years, official data showed yesterday, as slackening demand and the bruising US trade dispute dragged on the economy. The producer price index — an important barometer of the industrial sector that measures the cost of goods at the factory gate — dropped 0.8 percent year-on-year last month, following a 0.3 percent drop in July. Consumer prices were also broadly subdued and only supported by a surge of almost 50 percent in the price of pork caused by African swine fever that has ravaged the nation’s pig industry since last year. The consumer price index rose 2.8 percent, stabilizing from July and beating forecasts.
OIL
Aramco readies local IPO
Saudi Arabian Oil Co (Aramco) chief executive officer Amin Nasser yesterday said that a domestic initial public offering (IPO) of the state oil giant would be the primary listing, but that it was also ready for an international offering. Nasser cited new Saudi Minister of Energy Prince Abdulaziz bin Salman as saying that an IPO would happen “very soon,” but added that the ultimate decision on timing and venue rested with the government. Saudi Arabia is planning a gradual listing of Aramco on its domestic market, sources said on Monday, as it moves ahead with the process and finalizes the roles banks will play in the listing of the world’s biggest oil company.
INDONESIA
Bank predicts 4.9% growth
The World Bank projects that the nation’s economic growth next year would slide below 5 percent and warned of the potential for “severe” capital outflows as global risks including the US-China trade dispute intensify. The forecasts were presented to President Joko Widodo, according to two people with knowledge of the matter. The presentation slides show a growth forecast of 4.9 percent for next year, which would be the slowest pace since 2015. That is lower than current projections of 5.1 percent for this year and 5.2 percent for next year in the World Bank’s June quarterly report.
E-COMMERCE
Amazon Prime reaches Brazil
Amazon.com Inc is bringing its Prime membership program to Brazil in an effort to leapfrog competitors and gain traction in a nation where it has been expanding slowly but surely. To start, Amazon Prime Brazil is to be a scaled-down version of the US subscription service, offering free unlimited shipping for about 500,000 products out of the 20 million Amazon sells in Latin America’s largest economy. Two day-shipping would be available in 90 cities, the company said. Deliveries in other urban centers would take three days or more.
AUTOMAKERS
Moody’s slashes Ford rating
Ford Motor Co’s plan to spend years and US$11 billion restructuring itself was dealt a major setback by Moody’s Investors Service, which cut the automaker’s credit rating over doubt that its initiatives would generate earnings and cash. Moody’s downgraded Ford to “Ba1,” saying its cash flow and profit margins are below expectations and are likely to remain weak over the next two years. Ford is rated “BBB” — two steps above junk — at S&P Global Ratings and Fitch Ratings, and both have negative outlooks.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list