GERMANY
Lockdowns cut into GDP
Leading research institutes cut their joint GDP growth forecast for Europe’s biggest economy for next year as prolonged lockdowns hold back its recovery. The downgrade to GDP growth of 3.7 percent, from 4.7 percent previously, reflects a sluggish vaccination campaign, which has forced the government to extend COVID-19 restrictions. The outlook for next year was upgraded to 3.9 percent from 2.7 percent. The economy likely shrank by 1.8 percent in the first quarter of this year, RWI Leibniz Institute for Economic Research economic director Torsten Schmidt said in a report.
BANKING
No Toshiba buy: Norinchukin
Japan’s Norinchukin Bank denied a report that it and state-backed Japan Investment Corp (JIC) are considering a possible buyout of Toshiba Corp. Nikkan Kogyo reported earlier that the two institutions and possibly other bidders could make an offer for the Japanese conglomerate. The plan would have aimed to relist the company in two years, the report said, without specifying its sources. “There is no such fact,” a Norinchukin Bank spokesman said. JIC representatives declined to comment. Toshiba shares yesterday were up about 1.6 percent in Tokyo trading, extending a week-long rally that had added 14 percent to its value.
PHILIPPINES
Banks must ‘know staff’
The central bank has approved rules that would tighten banks’ know-your-employee procedures, as financial frauds surge during the COVID-19 pandemic. Banks and financial institutions must adopt risk-focused screening that takes into account the sensitivities of positions that might require more stringent procedures, the Bangko Sentral ng Pilipinas said in a statement. There must be an adequate understanding of a candidate’s background and character, conflicts of interest and “a propensity to commit fraud or irregularity,” it said, adding that central bank records should be used in the screening process.
AUTOMAKERS
SsangYong goes bankrupt
South Korea’s SsangYong Motor Co has been put under court receivership, the Seoul Bankruptcy Court said yesterday, in an attempt to rehabilitate the automaker after majority owner Mahindra & Mahindra Ltd failed to secure a buyer. SsangYong applied to the court in December last year for receivership after it defaulted on a loan repayment. The South Korean automaker is expected to submit a rehabilitation plan to the court by June. SsangYong has said its sales last year fell more than 20 percent from a year earlier to 107,416 vehicles. Operating loss widened to 449 billion won (US$402.62 million) from 282 billion won a year earlier. Revenue fell 19 percent to 3 trillion won.
MANUFACTURING
Toilet paper to use bamboo
Canada’s biggest toilet paper manufacturer aims to make some of its tissue from bamboo as an environmentally sustainable option for consumers. Kruger Products LP, the maker of brands such as Cashmere and Purex toilet papers, is researching ways to turn bamboo into quality tissue, with the goal of adding it to its EnviroCare line, likely by 2023, chief executive officer Dino Bianco said. Bamboo is considered a renewable natural resource because it is a perennial that grows quickly. It accounts for just 1 percent of North American toilet paper, Bianco said. The Mississauga, Ontario-based company would likely buy the raw material from Asia, Bianco said.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San