FRANCE
Slight pickup expected
The French economy is to exit a six-month stagnation with slight growth at the start of this year, according to the Bank of France’s monthly business survey. Activity levels advanced in services last month, but were little changed in industry. For this month, business leaders in the central bank survey expect a pickup in industry and a smaller expansion in services. Based on those results and other indicators, the institution estimates the economy will expand between 0.1 percent and 0.2 percent in the first quarter. “There is a slow economic situation, but we will escape the bleak scenario that some feared,” Bank of France Governor Francois Villeroy de Galhau said in an interview with regional newspaper Ouest-France published on Thursday. The Bank of France survey indicated better news on inflation as fewer companies raised prices last month than at the same time in the previous two years.
UNITED STATES
CEOs turn positive
An index of sentiment among chief executive officers of US companies has turned positive for the first time in two years, according to the Conference Board. The group’s Measure of CEO Confidence rose to 53 in the first quarter, up from 46 in the final three months of last year, the Conference Board said on Thursday. Readings above 50 indicate more optimistic than pessimistic responses. About a third of company bosses surveyed considered current economic conditions to be better than they were six months ago — up from only 18 percent in the final quarter of last year — while fewer said conditions were worse. Meanwhile, 36 percent said they expect economic conditions to improve over the next six months — up from 19 percent in the fourth quarter — and only 27 percent said they expect conditions to worsen, down from 47 percent in the last poll.
BANKING
Barclays to buy Tesco Bank
British bank Barclays PLC on Friday said it had agreed to buy the retail banking operations of Tesco PLC, as the supermarket giant concentrates on its core food business. Barclays is to pay up to US$884 million for Tesco Bank — handing it a portfolio of credit cards, other loans and deposits, according to statements from the two companies. Barclays added that it would retain Tesco Bank’s 2,800 staff, including senior management, as well as the brand representing Britain’s largest retailer. Tesco said it would return the majority of cash proceeds from the sale to its shareholders. The deal is due to complete in the second half of this year, subject to regulatory approvals.
TELECOMS
India to auction airwaves
India’s federal Cabinet on Thursday approved a plan for selling airwaves in an auction to improve quality and coverage of networks in the world’s second-biggest telecom market. The government is to sell airwaves valued at 963.2 billion rupees (US$11.6 billion) at reserve price, according to a statement from India’s Ministry of Communications. A total 10,523.15 megahertz airwaves in eight bands — 800, 900, 1800, 2100, 2300, 2500, 3300MHz and 26GHz — will be up for sale. The airwaves auction is to bolster government finances and help narrow budget deficit in the South Asian nation. The auction is to also help major Indian wireless carriers Reliance Jio Infocomm Ltd, Bharti Airtel Ltd and Vodafone Idea Ltd to boost services.
REAL ESTATE
Goldman releases HK space
Goldman Sachs Group Inc has given up some office space in Hong Kong, according to people familiar with the matter. The US investment bank is relinquishing a floor in Lee Garden Three in the Causeway Bay area, the people said. Goldman Sachs leased five floors in the building for its back office in 2018. Banks including Goldman Sachs and Citigroup Inc have been cutting staff in Asia in the past couple of years after revenue from stock sales and mergers fell. That is adding to pressure on the office market in Hong Kong, which is among cities worldwide facing a commercial real estate slump stemming from the pandemic and rising interest rates. Hong Kong’s vacancy rate increased to an unprecedented 16.4 percent at the end of last year, CBRE data showed. Grade A office rents could fall as much as 10 percent this year after slipping 6 percent last year, it estimated.
CREDIT
China growth hits record
China’s credit growth surged to a record high last month as demand for financing showed signs of improvement in the wake of government measures to support the economy. Aggregate financing was 6.5 trillion yuan (US$903 billion), the People’s Bank of China said yesterday. That compared with 1.94 trillion yuan in December and 6 trillion yuan in the same month last year. Financial institutions offered 4.92 trillion yuan of new loans in the month, versus a projected 4.5 trillion yuan. The spike in loans reflected seasonal factors as banks tend to boost lending at the start of the year, when they have abundant loan quotas to tap. They were likely also helped by stimulus measures as Beijing seeks to shore up the economy and halt a US$7 trillion stock-market rout.
THAILAND
Rate cut mulled
A top Thai monetary policymaker said the central bank is willing to lower borrowing costs if it is convinced that the weakness in the economy is persistent and not transitory. Southeast Asia’s second-largest economy is currently witnessing softness due to a mixture of cyclical factors as well as structural ones, Bank of Thailand’s Assistant Governor Piti Disyatat said yesterday. The rate panel is trying to disentangle the two effects, he added. The central bank this week kept its benchmark interest rate unchanged for a second straight time. A rate cut is “conditional on how the economy progresses going forward and how we disentangle the softness that we see — if it’s a temporary thing or something more persistent,” he said in an interview with Bloomberg Television.
COSMETICS
Shiseido China sales recover
Japanese cosmetics maker Shiseido Co said yesterday its sales in China are recovering as shoppers move past concerns about the release of treated radioactive water at Fukushima. The company expects a 5 percent increase in sales in China this year, with demand to fully recover from the second quarter, according to an earnings briefing. Sales in the country are forecast to reach ￥253 billion (US$1.7 billion) this year, about a quarter of its total expected revenue of ￥1 trillion, it said. The company’s core operating profit dropped 22 percent to ￥39.8 billion in the year ended on Dec. 31, it said. The firm forecast full-year core operating profit this year to rise 38 percent to ￥55 billion on a sales rebound and as it cuts costs.
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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