Saturday, March 17th, 2018


Merkel defends German trade surplus, says trying to boost domestic demand

BERLIN, March 17 — Germany is trying to stimulate domestic demand to offset strong exports, but wants a keen appetite for German products to continue, Chancellor Angela Merkel said in a video podcast today. Merkel said Germany’s trade…

G-20 sees global tension, end to cheap money as risk to growth

BRASILIA, March 17 — Global finance chiefs are set to warn that the broadest and strongest economic expansion since the turn of the decade would be thrown into jeopardy if governments turn inward. In the draft of a statement that finance…

Google Cloud boss eyeing ‘major acquisition’ to get ahead

SAN FRANCISCO, March 17 — When Diane Greene first joined Google in late 2015, her first task was to assemble the company’s disparate and often-wayward cloud projects and whip them into a real business. Sales, marketing and engineering…

Tariffs and tech to tax G20 ministers in Argentina

BUENOS AIRES: Tariffs, tech and taxes will strain finance ministers from G20 countries at a meeting in Argentina next week overshadowed by the gathering clouds of a trade war.

The two-day meeting in Buenos Aires, which starts Monday, comes at a particularly tense moment just two days before the United States is set to begin imposing tariffs on steel and aluminium imports.

US President Donald Trump has pledged to impose 25% duties on imported steel and 10% on aluminium. Only neighbours Canada and Mexico were exempted.

“Up to now, finance ministers were reticent to tackle the subject of trade, considering that it was not their area of competence,” a source close to the negotiations said.

“But the situation is such today that they will not be able to not speak about it. The question is how far we can go.”

Meanwhile, the US Treasury wants to use the meeting to win consensus on how to combat China's trade practices, particularly its cheap steel exports.

Except that Trump, far from being reserved when it comes to Beijing, also regularly attacks Europe.

“It's a funny strategy which consists of targeting China by threatening US allies,” said a European source.

The meeting in Buenos Aires, which also involve G20 central bank chiefs, will be a test of European cohesion ahead of a meeting next week between the US and EU officials on steel and aluminium taxes.

“The important thing is that the European position is coordinated and united,” France's finance ministry said in the run-up to the talks, arguing that Europe “should be exempted” from US tariffs.

The G20 discussed the question of Chinese overcapacity during its 2016 meeting and asked the Organization for Economic Cooperation and Development (OECD) to monitor efforts to curb supply but to little avail.

No progress on GAFA

The OECD, which often serves as the operational arm of the G20, is struggling on another thorny issue — the taxation of the world's tech giants, the so-called GAFA.

The acronym refers to the four behemoths of the digital industry: Google, Amazon, Facebook and Apple, whose tax optimization practices are regularly a source of friction between the US and its allies.

The United States said Friday it “firmly opposes” any new tax on big tech, and the Paris-based OECD warned there were “divergent views about how the issue should be approached.”

Britain, France, Germany, Italy and Spain — the EU's five G20 members — are pushing first for a European solution that can set an example for the rest of the world.

The European Union wants “big tech” to be taxed on overall revenue in the EU and not just on profits, somewhere between two percent and five percent according to a draft proposal obtained by AFP.

In Buenos Aires, ministers and central bank chiefs will also discuss the question of imposing greater oversight on cryptocurrencies.

The draft of the final communique mentions the usual pledge on devaluations and exchange rates: “We will refrain from competitive devaluations, and will not target our exchange rates for competitive purposes.”

But the word protectionism is conspicuous by its absence from the text, replaced by a warning to countries not to “retreat to inward-looking policies”. — AFP

Japan Tobacco buys Russia’s fourth-largest cigarette maker

TOKYO: Japan Tobacco has agreed to buy Donskoy Tabak, Russia's fourth-largest cigarette maker, for $1.6 billion (RM 6.7 billion ringgit) in a bid to reinforce its leading position in the country.

One of the world's biggest tobacco companies, whose global brands include Winston and Camel, Japan Tobacco (JT) has set its sights on international markets to counter slowing sales at home and intensifying competition in the e-cigarette market.

JT on Friday said the deal would boost its Russian market share to about 40% from the current 33%, which was already the largest in the country.

The acquisition of Donskoy Tabak, whose brands include Donskoy Tabak, Kiss and Play, will be completed later this year, it said.

“This acquisition demonstrates our commitment to reinforce our number one position in Russia,” JT executive vice president Mutsuo Iwai said in a statement.

The deal will also include JT's purchase of Greek cigarette maker SEKAP, it said, adding that it has no plan to revise its earnings forecast following the announcement.

Last year JT spent some $2 billion (RM 7,818,000,000.00) on acquiring major tobacco manufacturers in Asia, including Mighty of the Philippines. — AFP

Qualcomm says former chairman exploring buyout effort

SAN FRANCISCO: Qualcomm said Friday that Paul Jacobs, its chairman until a week ago, was considering a buyout effort for the California chipmaking giant just days after it fended off a hostile bid from Singapore rival Broadcom.

Jacobs, who had been chief executive at Qualcomm for nearly a decade and executive chairman until March 9, will not be renominated to its board at its annual meeting next Friday, the company said in a statement.

The board made a decision not to renominate Jacobs “following his notification to the board that he has decided to explore the possibility of making a proposal to acquire Qualcomm.”

As a result, the number of board members will be reduced from 11 to 10 as of the holding of the annual meeting.

The statement said that if Jacobs does make a bid, “the board will, of course, evaluate it consistent with its fiduciary duties to shareholders.”

The announcement comes after reports that Jacobs has sought to raise capital for a Qualcomm bid, and had approached Japanese tech giant SoftBank, which is in the midst of a major investment spree in the sector.

Jacobs is the son of Qualcomm co-founder Irwin Jacobs and was CEO at the San Diego firm from 2005 to 2014.

Last week, he was replaced as chairman by Jeffrey Henderson, who will be non-executive chairman at Qualcomm, the leading maker of chips for smartphones.

The news comes days after US President Donald Trump blocked a $117 billion (RM 457,353,000,000.00) hostile bid from Broadcom, citing national security reasons.

US officials had maintained that Broadcom would have curbed innovation at the US chip giant and opened the door to Chinese firms to dominate the process for 5G, or fifth-generation wireless networks.

Qualcomm's market value is around $90 billion (RM 351,810,000,000.00) and is seen as an important player in the 5G race, but it has been hampered by antitrust actions around the world and litigation with Apple over claims that the chipmaker abused its dominance in the sector.

Qualcomm is also in the process of trying to close a takeover of Dutch chip rival NXP.

The board statement said that Qualcomm is now “focused on executing its business plan and maximizing value for shareholders as an independent company.”

It added that Jacobs “has been a valued employee and director of Qualcomm since 1990” and that “he has been one of the great innovators in our industry.” — AFP

Ringgit to trade higher against greenback next week

KUALA LUMPUR: The weakening sentiment for the US dollar will likely help to boost the demand for the ringgit next week, to trade between 3.88-3.92 against the greenback, a dealer said.

He said mounting concerns over the political turmoil in the US, including President Donald Trump's decision to replace the National Security Advisor, H.R. McMaster and to fire the Secretary of State, Rex Tillerson, had negatively weighed on interest for the safe-haven currency.

“This will help boost sentiment for other currencies, especially the emerging market currencies.

“Nevertheless, fears of a potential trade war would likely reduce the appetite globally,” he told Bernama.

Earlier this week, Trump had announced that the country would impose tariff on up to US$60 billion (US$1 = RM3.92) of Chinese imports, specifically targeting the technology and telecommunications sectors.

The White House said the move was to pressure China into cutting its trade surplus with the US by US$100 billion.

On a Friday-to-Friday basis, the local note finished firmer against the greenback at 3.9070/9120 from 3.9100/9140 the previous week.

The ringgit had started the week higher, spurred by upbeat local economic reports and weaker performance of the greenback.

Worries over increased protectionism under the Trump administration had muted risk appetite globally, including for the ringgit, thus pushing the currency to retreat.

However, the local unit rebounded following the emergence of fresh political concerns at the White House.

Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.

It fell against the Singapore dollar to 2.9761/9810 from 2.9653/9694 last Friday and declined against the yen to 3.6953/6010 from 3.6610/6662 last week.

The ringgit depreciated against the euro to 4.8138/8215 from 4.8093/8158 last Friday and weakened vis-a-vis the British pound to 5.4565/4643 from 5.3997/3060 previously. — Bernama

Ten years after JPMorgan-Bear Stearns deal banks may have already seen biggest gains

NEW YORK, March 17 ― Ten years after JPMorgan bought failing investment bank Bear Stearns, one of the first big harbingers of the financial crisis, investor views on US banks are significantly brighter, although the sector may have already put…

Wall Street advances on strong industrial data but posts weekly losses

NEW YORK, March 17 ― The S&P 500 and the Dow Industrials rose yesterday, boosted by strong industrial output numbers, though all three of Wall Street’s major indexes posted losses for the week. February industrial production jumped 1.1 per…

Product exclusions from US tariffs may take 90 days, says document

WASHINGTON, March 17 ― Steel and aluminum users that depend on imported products not available from US producers may have to wait up to 90 days for an exclusion from the Trump administration’s new metals tariffs, according to a Commerce…