Benchmark rate unchanged
The Bank of Thailand yesterday left its benchmark interest rate unchanged after an emergency cut last week, while projecting a sharp contraction in the economy this year because of the COVID-19 outbreak. The policy rate was maintained at 0.75 percent following a 25 basis-point reduction to a record low at an unscheduled meeting on Friday. The bank slashed its growth projection for this year to a contraction of 5.3 percent from an earlier expectation of 2.8 percent expansion.
PBOC could cut rate: report
The People’s Bank of China could announce a reduction in its benchmark deposit rate in the coming days, the Financial Times reported yesterday, citing two people familiar with the matter. The bank is in discussion with commercial lenders on the possible move, the newspaper reported. If it happens, the cut would be the first since late 2015, intended to help improve banks’ profitability and encourage them to lend cheaper funding to businesses and households.
US companies pessimistic
US firms in the country are increasingly pessimistic about how quickly they can rebound from the COVID-19 pandemic. Half the 119 US companies surveyed by the American Chamber of Commerce in China said they have had “significant revenue declines,” and more than half said they expect revenue to fall this year if they cannot get back to normal work levels by the end of next month. Only 22 percent of the companies said they are back to normal, while one-quarter expect to be there by the end of next month. Another 22 percent said they expect further delays through the summer.
BlackRock to advise Fed
BlackRock Inc, the world’s largest asset manager, would serve as an investment adviser and manage assets for three separate programs in the US Federal Reserve’s debt-buying programs to revive an economy reeling from the spread of coronavirus, the US central bank said on Tuesday. Those include Fed’s plans to buy newly issued credit from large corporations, as well as existing investment-grade bonds and credit exchange-traded funds.
Ex-CEO gets 15% pay cut
Credit Suisse Group AG cut former chief executive officer Tidjane Thiam’s pay by about 15 percent in his last year in charge, after the Swiss bank became embroiled in a spying scandal that led to his ouster. His total compensation declined to 10.7 million Swiss francs (US$10.9 million), Credit Suisse said in a compensation report published yesterday. Credit Suisse’s overall bonus pool was reduced by 1 percent from a year earlier to SF3.17 billion.
Detroit eyes long shutdown
Detroit’s Big Three automakers plan to extend a shutdown of vehicle production in North America into next month as the pandemic continues, people briefed on the matter said on Tuesday. The firms had said on Wednesday last week that they would halt production until at least Monday next week. Two people briefed on the matter said that Ford Motor Co does not plan to restart production until at least April 6, but said that it could be delayed into next month. General Motors Co and Fiat Chrysler Automobiles NV also do not plan to resume production on Monday next week, the people said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a