CHINA
PBOC injects US$13.9bn
The People’s Bank of China (PBOC) yesterday injected short-term cash into the financial system in a sign the authorities are seeking to soothe market nerves frayed by concern over quarter-end funding needs and China Evergrande Group’s (恆大集團) debt crisis. The central bank added 90 billion yuan (US$13.9 billion) of funds on a net basis via seven-day and 14-day reverse repurchase agreements, the most since February. It was the first time this month the authorities added more than 10 billion yuan of short-term liquidity into the banking system in a single day. The funds come as the crisis facing Evergrande fuels concern over the health of the nation’s real-estate and credit markets. Adding to the stress is a seasonal spike in demand for cash as banks become less willing to lend toward quarter-end as they prepare for regulatory checks. Liquidity also tends to diminish at this time of year as the Mid-Autumn Festival approaches.
TECHNOLOGY
S4 Capital to buy Zemoga
Martin Sorrell’s S4 Capital has struck a deal to buy Zemoga, a technology services company that provides a new route for the rapidly growing digital advertising group to win work from multinational clients. Sorrell, the founder of WPP, has turned S4 into a US$6 billion company in the three years since its launch by acquiring businesses to combine data with digital content and serve the likes of Facebook, Google, Burberry and Netflix. The move into tech services is to enable it to better compete with companies like Accenture and Globant, which can sell digital advertising services and advice to clients. Zemoga provides product design, engineering and delivery services to clients such as Bridgestone, Sony, Roku and Morningstar.
SINGAPORE
Fund aims to boost market
Singapore is looking to set up a S$1.5 billion (US$1.1 billion) fund backed by state investment firm Temasek Holdings Pte to bolster its stock market, which has struggled with tepid listings and poor trading volumes. The fund is to invest in high-growth companies and initial public offerings. Separately, the investment arm of the Economic Development Board, a government agency promoting foreign investment, is to invest up to S$500 million into a fund aimed at companies looking to list in two to five years. The plan aims to increase Singapore’s attractiveness as a location for raising capital for local and regional companies, the government said.
STEEL
US Steel to build mini-mill
US Steel Corp is to spend about US$3 billion to build a new mill, the latest sign that steelmakers are growing more comfortable that higher prices will last. The so-called mini-mill is to combine two electric arc furnaces, which primarily use steel scrap and are far more energy-efficient than traditional integrated plants that are fed by coal. The company expects to begin construction in the first half of next year and start producing in 2024. US Steel’s announcement comes as domestic futures prices have more than tripled in the past year. While this has produced a windfall for domestic suppliers, it is driving up the cost of everything from automobiles to wind turbines to kitchen appliances as the world recovers from the COVID-19 pandemic. The company forecast that it would report record earnings for the third quarter on the back of the strong prices, which would allow it to reduce debt.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Macronix International Co (旺宏), the world’s biggest NOR flash memory supplier, yesterday said it would spend NT$22 billion (US$699.1 million) on capacity expansion this year to increase its production of mid-to-low-density memory chips as the world’s major memorychip suppliers are phasing out the market. The company said its planned capital expenditures are about 11 times higher than the NT$1.8 billion it spent on new facilities and equipment last year. A majority of this year’s outlay would be allocated to step up capacity of multi-level cell (MLC) NAND flash memory chips, which are used in embedded multimedia cards (eMMC), a managed
In the wake of strong global demand for AI applications, Taiwan’s export-oriented economy accelerated with the composite index of economic indicators flashing the first “red” light in December for one year, indicating the economy is in booming mode, the National Development Council (NDC) said yesterday. Moreover, the index of leading indicators, which gauges the potential state of the economy over the next six months, also moved higher in December amid growing optimism over the outlook, the NDC said. In December, the index of economic indicators rose one point from a month earlier to 38, at the lower end of the “red” light.
The global server market is expected to grow 12.8 percent annually this year, with artificial intelligence (AI) servers projected to account for 16.5 percent, driven by continued investment in AI infrastructure by major cloud service providers (CSPs), market researcher TrendForce Corp (集邦科技) said yesterday. Global AI server shipments this year are expected to increase 28 percent year-on-year to more than 2.7 million units, driven by sustained demand from CSPs and government sovereign cloud projects, TrendForce analyst Frank Kung (龔明德) told the Taipei Times. Demand for GPU-based AI servers, including Nvidia Corp’s GB and Vera Rubin rack systems, is expected to remain high,
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