MALAYSIA
New stimulus tops US$57bn
The government yesterday announced a stimulus package worth 250 billion ringgit (US$57.54 billion), its second in a month, to help cushion the economic blow from the COVID-19 pandemic. The package largely includes one-off payments and discounts on utilities for people whose livelihoods have been affected by the pandemic, and to help small and medium-sized enterprises stay afloat and retain their staff. The plan includes a 50 billion ringgit loan scheme for larger companies, which would offer guarantees of up to 80 percent of the sum borrowed to shore up working capital in the corporate sector. About 128 billion ringgit would be spent on public welfare measures, with 100 billion used to support businesses. The package is in addition to a 20 billion ringgit stimulus plan announced last month.
EUROPEAN UNION
‘Corona bonds’ opposed
Germany remains opposed to the idea of so-called “corona bonds” that would pool the debt of 19 eurozone countries in response to the coronavirus crisis, German Chancellor Angela Merkel said on Thursday. Speaking after a video conference with other EU leaders, Merkel rejected the proposal backed by countries including France and Italy. “From the German side and from other sides, we said that this was not the view of all member states,” Merkel said, adding that the existing European Stability Mechanism (ESM) was her “preferred instrument.” She admitted that EU leaders had discussed “whether the ESM contains enough possibilities, and how strong and quick our answer must be.” The existing ESM bailout fund is unpopular in southern European countries such as Italy, as it effectively makes financial aid conditional on economic restructuring.
UNITED STATES
Fed’s balance sheet rising
The Federal Reserve’s balance sheet reached US$5.3 trillion in assets for the first time this week as it scooped up bonds and extended loans to banks, mutual funds and other central banks in its unprecedented effort to backstop the economy in the face of the COVID-19 pandemic. The Fed’s total balance sheet size rose by more than half a trillion dollars in a single week, roughly twice the pace of the next-largest weekly expansion in the financial crisis in October 2008. The Fed bought US$355 billion of Treasuries and mortgage-backed bonds in the last week in what is now an open-ended commitment to stabilize financial markets rocked by the outbreak and the halt in economic activity that has come in its wake.
AIRLINES
Singapore secures funding
Singapore Airlines Ltd said it had secured up to S$19 billion (US$13.24 billion) of funding to help see it through the coronavirus crisis and expand afterward, in a sign of confidence travel demand would eventually return. The airline’s majority shareholder, state-fund Temasek Holdings, said it would underwrite the sale of shares and convertible bonds for up to S$15 billion. Singapore’s biggest bank DBS Group Holdings Ltd provided a S$4 billion loan. “This transaction will not only tide [Singapore Airlines] over a short term financial liquidity challenge, but will position it for growth beyond the pandemic,” Temasek International chief executive Dilhan Pillay Sandrasegara said. The airline, a major customer for Airbus SE and Boeing Co, has cut capacity by 96 percent and grounded almost its entire fleet after the Singaporean government banned foreign transit passengers.
Apple Inc has closed in on an agreement with OpenAI to use the start-up’s technology on the iPhone, part of a broader push to bring artificial intelligence (AI) features to its devices, people familiar with the matter said. The two sides have been finalizing terms for a pact to use ChatGPT features in Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the situation is private. Apple also has held talks with Alphabet Inc’s Google about licensing its Gemini chatbot. Those discussions have not led to an agreement, but are ongoing. An OpenAI
INSATIABLE: Almost all AI innovators are working with the chipmaker to address the rapidly growing AI-related demand for energy-efficient computing power, the CEO said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported about 60 percent annual growth in revenue for last month, benefiting from rapidly growing demand for artificial intelligence (AI) and high-performance computing applications. Revenue last month expanded to NT$236.02 billion (US$7.28 billion), compared with NT$147.9 billion in April last year, the second-highest level in company history, TSMC said in a statement. On a monthly basis, revenue surged 20.9 percent, from NT$195.21 billion in March. As AI-related applications continue to show strong growth, TSMC expects revenue to expand about 27.6 percent year-on-year during the current quarter to between US$19.6 billion and US$20.4 billion. That would
‘FULL SUPPORT’: Kumamoto Governor Takashi Kimura said he hopes more companies would settle in the prefecture to create an area similar to Taiwan’s Hsinchu Science Park The newly elected governor of Japan’s Kumamoto Prefecture said he is ready to ensure wide-ranging support to woo Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to build its third Japanese chip factory there. Concerns of groundwater shortages when TSMC’s two plants begin operations in the prefecture’s Kikuyo have spurred discussions about the possibility of tapping unused dam water, Kumamoto Governor Takashi Kimura said in an interview on Saturday. While Kimura said talks about a third plant have yet to occur, Bloomberg had reported TSMC is already considering its third Japanese fab — also in Kumamoto — which would make more advanced chips. “We are
KEY TECHNOLOGY: South Korea’s semiconductor exports reached US$11.7 billion in March, and the chip sector accounts for one-fifth of the nation’s total exports South Korea would set up an aid package worth more than US$7 billion to support its chip industry, the South Korean Ministry of Economy and Finance said yesterday. This initiative follows its pledge last year to build the world’s largest chip center using US$240 billion of private investment, primarily from Samsung Electronics Co, the world’s largest memorychip maker, as it seeks an edge in the global industry. Seoul “is preparing an assistance package of more than 10 trillion won (US$7.3 billion) to support fabless, chips materials and manufacturing equipment in all areas of chips industry,” South Korean Minister of Economy and Finance