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.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure