EUROZONE
Factories rebound
Factories across the eurozone last month saw an even stronger return to growth than initially reported, marking the region’s first manufacturing expansion in one-and-a-half years. With consumer goods performing particularly well, IHS Markit’s manufacturing purchasing managers’ index came in at 51.8, beating a flash estimate and higher than June’s 47.4. Companies in the sector continued to see backlogs of work decline and cut jobs for the 15th successive month — a potential warning sign for future activity. The headline reading in Germany was also higher than initially estimated, but the report also showed “deep cuts” to employment.
JAPAN
Tourism scheme under fire
A US$16 billion campaign to revive domestic tourism is ill-timed and not the best use of taxpayer money, said Yutaka Harada, a former central bank board member and vocal advocate of Prime Minister Shinzo Abe’s “Abenomics” policies. Harada said that the central bank had taken sufficient steps to cushion the pandemic’s immediate blow to the economy, and that fiscal policy must now take a lead role in supporting growth. “I’m not sure whether fiscal policy is doing the job right,” he said yesterday, criticizing Abe’s campaign to promote travel across the country.
SINGAPORE
MAS revises banking rules
The Monetary Authority of Singapore (MAS) yesterday said it plans to revise rules governing foreign banks with a substantial local presence that might allow them to open digital-only banking subsidiaries. Under the enhanced framework, the MAS would consider granting an additional full banking license to foreign lenders which substantially exceed its Significantly Rooted Foreign Bank criteria, the central bank said in a statement. “This will enable them to have the same flexibility as Singapore-incorporated banking groups to establish subsidiaries, including with joint-venture partners, to operate new or alternative business models such as a digital-only bank,” the statement said.
BANKING
SocGen reports losses
Societe Generale SA (SocGen) yesterday said the COVID-19 pandemic pushed it into a second-quarter loss of 1.26 billion euros (US$1.5 billion) as it was forced to increase loss provisions sharply. It posted a loss of 326 million euros in the first quarter, while in the second quarter last year it reported a profit of more than 1 billion euros. Net banking income tumbled 13.5 percent, with all business areas affected except for private banking, asset management and financial and consultation services. It said it had put aside 653 million euros to cover losses during the three months.
AUSTRALIA
Housing prices tumble
House prices last month fell for a third month and risks are “skewed to the downside” with government wage support and mortgage holidays set to taper off in coming months. Property values in major cities fell 0.8 percent last month, CoreLogic data released yesterday showed. The slide was led by Sydney and Melbourne, which is at the center of a surge in COVID-19 cases. While home prices have so far remained resilient during the pandemic — falling just 1.6 percent from the most recent peak in April — the market has been propped up by record-low interest rates, government incentives for first-time buyers and loan relief for distressed borrowers, CoreLogic research head Tim Lawless said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six