INDONESIA
Rate increases 50 points
Indonesia’s central bank increased borrowing costs by 50 basis points for a second straight meeting, as authorities sought to front-load their actions to arrest a slump in the rupiah and check inflation. The bank raised its seven-day reverse repurchase rate to 4.75 percent yesterday. “It’s a front-loaded, pre-emptive and forward-looking step to lower inflation expectations that are too high or overshooting,” Bank Indonesia Governor Perry Warjiyo said. The decision is aimed at returning core inflation — the bank’s preferred gauge — to the 2 to 4 percent target corridor in the first half of next year, compared with the third quarter time line seen earlier.
UNITED STATES
Economy causing pessimism
Economic prospects are becoming “more pessimistic” in the US on growing worries of weaker demand, the US Federal Reserve said in a report on Wednesday, citing heightened inflation and rising interest rates. The Fed’s latest “beige book” survey of economic conditions said that economic activity has been sluggish in many areas in the US, with “slowing or weak demand” due to higher interest rates, inflation and supply disruptions. The central bank has raised the benchmark lending rate five times this year for a total of 3 percentage points. “Recession fears” have also spread in several districts, the report said. “Looking ahead, expectations were for price increases to generally moderate,” it said.
LATIN AMERICA
Economy to peak this year
Economic growth in Latin America and the Caribbean is expected to reach 3.2 percent this year, higher than expected, but drop by more than half next year, a UN body said on Wednesday. This year’s figure was better than the 2.7 percent forecast by the UN Economic Commission for Latin America and the Caribbean in August, and up from 1.8 percent predicted in April. However, next year’s growth is to slow to 1.4 percent in “an unfavorable international context,” with “forecasts for a deceleration in both global growth and trade, higher interest rates, and less global liquidity,” it said in a statement.
TECHNOLOGY
Demand boosts IBM sales
International Business Machines Corp (IBM) reported better-than-expected sales and affirmed its cash flow forecast in a sign that demand for software, mainframe computers and hybrid cloud services remains steady. Sales rose 6.5 percent to US$14.1 billion in the third quarter, the New York-based company said in a statement on Wednesday. IBM expects full-year revenue growth to exceed the company’s previous mid-single digit guidance, while free cash flow would hit its estimate of US$10 billion. Software sales jumped 7.5 percent to US$5.8 billion, while consulting gained 5.4 percent to US$4.7 billion.
LUXURY GOODS
Hermes China sales surge
Hermes International sales surged as luxury shoppers in China returned to stores after COVID-19 restrictions eased to snap up its Birkin and Kelly handbags. Revenue rose 24 percent to 3.1 billion euros (US$3.03 billion) in the third quarter, excluding currency swings, topping analysts’ estimates, Hermes said yesterday. The report offers more evidence that producers of luxury goods remain largely immune to a spending squeeze that has hurt other retailers and consumer-goods companies as a result of a crisis in the cost of living. “We have no signs of slowdown in any of our markets,” chief financial officer Eric du Halgouet said.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
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