BANKING
Central banks cut Fed swaps
From Monday next week, the world’s top central banks will reduce the frequency of their US dollar operations with the US Federal Reserve after volatility in financial markets receded, the banks said in a joint statement yesterday. The European Central Bank (ECB) the Bank of Japan, the Bank of England and the Swiss National Bank have been conducting daily US dollar swaps with the Fed for the past month, but will revert to weekly tenders, given improvements in US dollar funding conditions, they said. The daily tenders were made available after the failure of Silicon Valley Bank and the sale of Credit Suisse sent jitters across financial markets, raising the risk of liquidity shortages in case confidence falls further. However, the facility was barely used and the takeup was at or near zero on most days since the facility was announced on March 19. “These central banks stand ready to re-adjust the provision of US dollar liquidity as warranted by market conditions,” the ECB said in a statement.
FOOD
Price hikes lift Nestle sales
Nestle SA’s sales growth unexpectedly accelerated, bolstered by Purina and Friskies petfood and as the maker of Nescafe coffee raised prices further. Sales rose 9.3 percent on an organic basis in the first quarter, Nestle said yesterday. Demand was more resilient than expected, as the maker of KitKat bars kept boosting prices near the highest rate in decades. Nestle said pet owners helped drive an increase of 16 percent in petcare revenue. The next biggest gains were in confectionery and coffee, it said. Despite very strong headline numbers, individual units betrayed some weaknesses: Sales declined at Nespresso and Nestle’s vitamins, supplements and minerals business. Capacity constrains also weighed on the water brand Perrier, the company said.
PHARMACEUTICALS
Novartis raises profit outlook
Parmaceutical giant Novartis AG yesterday said it was increasing its full-year sales and profits outlook after strong earnings in the first quarter on the back of a handful of new drugs. The Swiss drugmaker said that its medicines for heart disease, cancer and multiple sclerosis had buoyed earnings in the quarter. The group reported a 3 percent increase in net profit in the first quarter to nearly US$2.3 billion, while sales also rose 3 percent compared with the previous three months to almost US$13 billion. Novartis said that its operating profit would likely increase in the high single-digits this year on the back of strong momentum at the start of the year, while group sales are expected to grow in mid-single digits.
INDUSTRIALS
ABB raises sales forecast
ABB Ltd yesterday raised its guidance for the year after a surge of new orders added to its backlog and higher prices drove better-than-expected results. The Swiss industrial manufacturer now expects comparable revenue to increase more than 10 percent this year, after estimating about 5 percent in February, it said in a statement. New customer orders reached US$9.5 billion in the first quarter, an increase of 1 percent from a year earlier and exceeding an average analyst estimate of US$8.3 billion, it said. ABB added that it plans to delist its American depositary receipts from the New York Stock Exchange, saying it is no longer necessary that investors can trade digitally on multiple platforms. The delisting is expected to take effect on or around May 23.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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