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.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort