AIRLINES
Cathay expects more lows
Cathay Pacific Airways Ltd (國泰航空) expects passenger numbers to stay below 1,000 per day this month compared with the usual 100,000 as it operates at just 3 percent of normal capacity. The Hong Kong-based airline said that it is impossible to predict when demand would improve amid the economic impact of the COVID-19 pandemic. The company’s outlook came as it released figures for last month that showed “drastic decreases” in passengers. The airline and Cathay Dragon (國泰港龍) carried a combined total of 311,128 passengers last month, down 90 percent from a year earlier.
CHINA
House prices rise
Residential home prices rose last month as pent-up demand after a period of lockdown during the pandemic supported sales. New home prices in 70 major cities, excluding subsidized housing, gained 0.13 percent last month from February, data from the National Bureau of Statistics released yesterday showed. “Pent-up housing demand is being released gradually as the economy and life start to get back on track,” the bureau said in a statement along with the data.
PHILIPPINES
Central bank cuts rate
The central bank cut its benchmark interest rate by 50 basis points in an off-cycle move yesterday to support an economy facing what the bank’s governor has called a once-in-a-lifetime crisis over the COVID-19 pandemic. The cut, the year’s third such move, took the rate on the overnight reverse repurchase facility to a record low of 2.75 percent. The central bank cut the policy rate by 25 basis points in February and by 50 basis points last month. Its next meeting is scheduled for May 21.
CANADA
Lending rate stays at low
The Bank of Canada on Wednesday held its key lending rate at a record low of 0.25 percent as the economy tanked due to travel restrictions and temporary business closures amid the COVID-19 pandemic. The decision came after three cuts totaling 150 basis points over the past three weeks to boost growth. The central bank said that economic activity decreased by 1 to 3 percent in the first three months of the year and was forecast to drop 15 to 30 percent in the second quarter.
AUTOMAKERS
German firms to restart
German automakers including Volkswagen AG and Daimler AG’s Mercedes-Benz are to restart production at some German factories next week after the country eased restrictions designed to contain the COVID-19 outbreak. Volkswagen said that it would start producing vehicles for its core brand in Zwickau, Germany, and in Bratislava, Slovakia, from Monday next week. Mercedes-Benz said that its plants in Hamburg, Berlin and Untertuerkheim would resume production next week.
E-COMMERCE
Amazon to pause in France
Amazon.com Inc on Wednesday said that it would “temporarily” suspend all activity in France, one day after a French court ruled that it was not doing enough to protect its workers in the country amid the COVID-19 pandemic. The online giant, which has six warehouses in France, said it would evaluate the impact of the court decision and its French logistic network. Amazon France also said that it is appealing Tuesday’s emergency ruling, which requires the company to stop selling non-essential goods for a month.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
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