CHINA
Central bank cuts ratio
The People’s Bank of China yesterday said that it was cutting the amount of cash that all banks must hold as reserves, releasing about 800 billion yuan (US$114.91 billion) in liquidity to shore up the slowing economy. The bank said on its Web site that it would cut banks’ reserve requirement ratio by 50 basis points, effective on Monday next week. Many analysts had expected such a move was imminent. The bank has cut the ratio eight times since early 2018 to spur more bank lending as economic growth slows to the weakest pace in nearly 30 years.
TURKEY
FX requirement scrapped
The government has scrapped a requirement that exporters convert foreign exchange revenue into lira, according to an amended decree published on Official Gazette. The decree, requiring exporters to convert at least 80 percent of their overseas revenue into lira was published on Sept. 4, 2018, during the height of a currency crisis, which wiped out about 30 percent off the value of the currency. Local companies are still required to bring revenue from export transactions into the country within 180 days of actual date of export, according to the amended decree, which was published late on Tuesday.
UNITED STATES
Exxon defeats Russia fine
Exxon Mobil Corp has won a lawsuit challenging a US$2 million fine levied against it by Secretary of the Treasury Steven Mnuchin after it allegedly violated Ukraine-related sanctions with a series oil and gas deals in Russia. Exxon was not given sufficient notice that the contracts with a powerful ally of Russian President Vladimir Putin would violate sanctions put in place after Russia annexed the Crimea region of Ukraine, District Judge Jane Boyle said in a ruling in Dallas, Texas. The dispute over the 2017 fine stemmed from Exxon’s deals with Moscow-based Rosneft PJSC while its chief executive officer Igor Sechin was on the Department of the Treasury’s list of sanctioned Russians.
AVIATION
Turkish, Boeing reach deal
Turkish Airlines AO on Tuesday said that it has reached a partial agreement with Boeing Co over compensation for damages caused by the grounding of the airline’s 737 MAX jets. The airline did not disclose financial terms of the agreement. Between 2013 and 2015, Turkish Airlines ordered 75 MAX jets. It received only 12 before Boeing halted deliveries in March last year after regulators around the world grounded the airplane following two crashes that killed 346 people. In a regulatory filing, the airline said that the agreement covered “certain portion of the losses” related to the MAX. It was not clear what was covered and whether the airline is seeking additional compensation.
UNITED STATES
Firms prepare debt sales
Companies are lining up debt sales to the tune of US$120 billion this month, a 9 percent increase from last year, according to an informal survey of dealers. Several leftovers from last month — such as JD.com Inc (京東) and Reinsurance Group of America Inc — could sell debt soon after markets reopen today following investor meetings early last month. Last year, just more than US$1.1 trillion of investment-grade corporate debt was sold in the country. Wall Street research groups think that the total this year would fall by as much as 5 to 8 percent.
Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday said it has signed a memorandum of understanding (MOU) with Polar Semiconductor LLC to collaborate on the production of 8-inch wafers in the US. The collaboration aims to strengthen 8-inch wafer manufacturing in the US amid Washington’s efforts to increase onshore manufacturing of semiconductors, contribute to supply chain resilience against shifting geopolitical dynamics, and ensure a secure domestic supply of power semiconductors critical to automotive, electric grids, robotic manufacturing and data centers, the companies said in a joint statement. Under the MOU, Polar and UMC will identify devices for Polar to manufacture at
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
TARIFF TALKS: The US secretary of commerce is eyeing more than US$300 billion in investments and said Taiwan would train US workers, but Taipei has denied the latter US Secretary of Commerce Howard Lutnick said the US is expecting a large investment pledge from Taiwan in trade talks, while President William Lai (賴清德) listed areas that need improvement in order for projects to be completed. “We’re in the midst of discussions,” Lutnick said on Wednesday. “But the fact is, this administration’s goal is to bring semiconductor manufacturing to America.” Lai on Wednesday said Taiwan is supportive of US President Donald Trump’s goal of reindustrializing the US, including efforts to ramp up semiconductor production. Such a goal would require the US to reduce its reliance on Taiwan as a key source
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