Bond sales lifted to record
The country is to sell a record amount of government debt this year as it battles the economic fallout from COVID-19, testing the level of market demand for its bonds. The Debt Management Office announced plans to sell another ￡50 billion (US$61.7 billion) of gilts, bringing its issuance this fiscal year through August to ￡275 billion. A survey of primary dealers forecast ￡412 billion of issuance for the year. While the Bank of England is helping to keep bond yields in check through its asset-purchase program, the latest figures are likely to add to concern over borrowing levels.
Retail sales drop 12.3%
Retail sales last month fell 12.3 percent year-on-year as the COVID-19 pandemic and lockdown measures delivered a heavy blow to consumer confidence and economic recovery prospects, Ministry of Economy, Trade and Industry data showed yesterday. The decline followed a 13.9 percent drop in April, which was the biggest fall since March 1998, and was worse than an 11.6 percent fall forecast by economists in a Reuters poll. Compared with a month earlier, retail sales last month saw their first rise in three months, increasing a seasonally adjusted 2.1 percent following a 9.9 percent drop in April.
Industrial firms’ profits rise
Profits at industrial firms last month increased for the first time in six months, suggesting that the country’s economic recovery is gaining traction and brightening the outlook for manufacturing investment and jobs. Profits at industrial firms rose 6 percent year-on-year to 582.3 billion yuan (US$82.27 billion) last month, the National Bureau of Statistics said in a statement on Sunday. The rebound followed a 4.3 percent fall in April, and is its sharpest monthly gain since March last year. For the first five months of this year, industrial firms’ profits fell 19.3 percent from the same period last year to 1.84 trillion yuan.
Foreign reserves inch up
Foreign reserves rose slightly last month after record declines in the previous two months when the kingdom had used tens of billions of dollars to back investments of its sovereign wealth fund. Net foreign assets of the Saudi Arabian Monetary Authority increased to US$444.82 billion last month from US$444.1 billion in April, data from the central bank showed on Sunday. Saudi Arabia had transferred US$40 billion in reserves to the Public Investment Fund between March and April to back acquisitions of stakes in overseas companies.
Commerzbank may cut jobs
Commerzbank AG chief executive officer Martin Zielke might eliminate more than 7,000 jobs and close about 400 branches as he tries to respond to frustration among shareholders, including the German government and Cerberus Capital Management, over the pace of cost-cutting efforts, people familiar with the matter said. Zielke and Commerzbank chief financial officer Bettina Orlopp could present the cost-reduction targets as the cornerstone of a broader restructuring plan at a meeting of the supervisory board tomorrow, the people said. The final goals have not been decided yet, partly because several executives are skeptical about whether cuts of this scale are feasible. The leadership is also considering less extreme reductions, the people said, asking not to be identified because the discussions are private.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,
Swancor Renewable Energy Co (上緯新能源) yesterday announced plans for a 4.4 gigawatt (GW) offshore wind project off Miaoli County as part of its commitment toward Taiwan’s energy transformation, the company said in a statement. The “Formosa 4” project includes three deep-water wind farms 18km to 20km off the coast, Swancor Renewable CEO Lucas Lin (林雍堯) said, adding that planning for the project began last year. A proposal for Formosa 4 was this week submitted to the Environmental Protection Agency (EPA), the company said. Swancor Renewable jointly developed the Formosa 1 project, a 128 megawatt (MW) wind farm about 4km off Miaoli and the