21/05/2025

BIZ & FINANCE WEDNESDAY | MAY 21, 2025

17

China’s central bank cuts two key rates to historic lows

Intel said to be exploring networking and edge unit sale TAIPEI/SAN FRANCISCO/NEW YORK: Intel has considered divesting its network and edge businesses as the chipmaker looks to shave off parts of the company its new chief executive does not see as crucial, three sources familiar with the matter said. Talks about the potential sale of the group, once called NEX in Intel’s financial results, are a part of CEO Lip-Bu Tan’s strategy to focus its tens of thousands of employees on areas in which it has historically thrived: PC and data center chips. “That’s something we’re going to expand and build on,” Tan told executives in Taipei on Monday at a celebration of Intel’s 40th year, adding that the firm had a share of about 68% of the PC chip market and 55% of that for data centers. Intel has considered when and how to exit its NEX group and engaged third parties who may be interested in a deal, one of the sources familiar with the matter said. But it has not yet launched a formal deal process for the NEX unit, or solicited bidders, said two of the sources. All three spoke on condition of anonymity as they were not authorised to discuss confidential matters with the media. The company interviewed investment bankers to select an adviser for the sales process in recent weeks, one of the sources said. But Intel has not yet hired a banker, another of the sources said. Intel declined to comment. Intel is exploring the idea of a sale because the businesses in its former NEX group no longer appear as relevant to the focus Tan has adopted for the company, said two of the sources. The unit which makes chips for telecom equipment will no longer help Intel’s core strategy, one source said. – Reuters TOKYO: Honda Motor said yesterday that it was scaling back its investment in electric vehicles given slowing demand and would be focusing on capturing growing demand for hybrids with new models. CEO Toshihiro Mibe told a press conference the automaker has lowered its planned investment in electrification and software through the 2030 business year to ¥7 trillion (RM207 billion) from ¥10 trillion previously. “Based on the current market slowdown, we expect EV sales in 2030 to fall below the 30% that we previously targeted,” Mibe said, adding battery powered cars might make up only around 20% of the company’s sales by then. Honda said it expects to sell 2.2 million to 2.3 million hybrid vehicles by 2030. It has not released a total sales target for that year. – Reuters APPLE SUPPLIER FOXCONN TO INVEST US$1.5B IN INDIA UNIT BENGALURU: Apple supplier Foxconn will invest US$1.5 billion (RM6.42 billion) in its India unit, the company said in a filing, as the iPhone maker shifts more manufacturing out of tariff-hit China. Foxconn’s Singapore-based subsidiary will buy 12.77 billion shares worth 10 rupees (RM0.50) apiece, amounting to 127.74 billion rupees (US$1.50 billion) in Yuzhan Technology India, according to the London Stock Exchange filing. Yuzhan Technology India, Foxconn’s unit in Tamil Nadu, manufactures electronic components and also assembles Apple’s iPhones. Apple is positioning India as an alternative manufacturing base amid US President Donald Trump’s tariffs on China, which have raised supply chain concerns and fears of higher iPhone prices, Reuters reported last month. – Reuters HONDA TO SCALE BACK ON EVS, FOCUS ON HYBRIDS

were then record lows. “The rate cuts will reduce interest payments on existing loans, taking some pressure off indebted firms. It will also reduce the price of new loans,” Zichun Huang, China economist at Capital Economics, said in a note. “But modest rate cuts alone are unlikely to meaningfully boost loan demand or wider economic activity,” she said. “Today’s reductions ... probably won’t be the last this year,” Huang said. The lending rate cut was announced just after five of China’s biggest state-owned banks said they had trimmed their deposit interest rates. Industrial and Commercial Bank of China, Agricultural Bank of China, China Cons truction Bank and Bank of China reduced deposit rates by 5-25 basis points for some tenors, according to rates shown on the banks’ mobile apps. The deposit rate reductions should guide smaller lenders in making similar cuts. Marco Sun, chief financial market analyst at MUFG Bank (China), said the rate cuts were aimed at boosting credit lending and stimulating consumption. “The central bank is likely to switch to a wait-and-see approach in coming months

unless external geopolitical risks deteriorate enough to extinguish hopes that the economy can stabilise,” Sun said. China has set an annual gross domestic product growth target of around 5% for 2025, an aim that analysts say is ambitious given the economic challenges it faces. However, data for the first quarter was unexpectedly strong, with authorities announcing a 5.4% year-on-year expansion according to preliminary estimates. Official data on Monday showed China’s factory output grew at a faster rate than expected last month, weathering the trade war with Washington. Industrial production grew 6.1% year-on-year in April, according to figures published by the National Bureau of Statistics (NBS). The reading was higher than the 5.7% forecast in a Bloomberg survey, but still lower than the 7.7% jump recorded for March. The NBS said the economy “withstood pressure and grew steadily in April”, but acknowledged a “complex situation of increasing external shocks and layered internal difficulties and challenges”. Other data showed retail sales – a key gauge of domestic demand – grew 5.1% year-on-year last month, short of the 5.8% growth forecast by Bloomberg. The reading also marked a slowdown from March’s 5.9% growth. – AFP, Reuters

BEIJING: China’s central bank yesterday cut two key interest rates to historic lows, as Beijing battles to stimulate its economy amid seesaw trade tensions with the United States. Beijing and Washington have been locked in a bruising trade war but last week agreed to slash sweeping tariffs on each other’s goods for 90 days. The deterioration in trade ties has come as China’s economy already faces persistent headwinds from a long-term domestic spending slump, a protracted debt crisis in the property sector and high youth unemployment. The People’s Bank of China said yesterday that the one-year Loan Prime Rate (LPR), the benchmark for the most advantageous rates lenders can offer to businesses and house holds, would be cut from 3.1% to 3.0%. The five-year LPR, the benchmark for mortgage loans, was cut from 3.6% to 3.5%, it said. Both rates were last cut in October to what o Five biggest state lenders lower deposit benchmarks by 5-25 basis points

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Zeng (centre) leading the toast at CATL’s trading debut on the Hong Kong stock exchange yesterday. – AFPPIC

Chinese battery giant CATL soars over 18% on HK debut

HONG KONG: Shares in Chinese battery giant CATL soared more than 18% on its Hong Kong debut yesterday after raising US$4.6 billion (RM19.7 billion) in the world’s biggest initial public offering this year. A global leader in the sector, CATL produces more than a third of all electric vehicle (EV) batteries sold worldwide. The firm has been buoyed by a rapid growth in China’s domestic electric vehicle sector and it now works with major brands including Tesla, Mercedes-Benz, BMW and Volkswagen. The firm is already traded in the southern Chinese city of Shenzhen, and its plan for a secondary listing in Hong Kong was announced in December. In morning trading its Hong Kong shares hit a high of HK$311.40 (RM170.50), up 18.4% from its listing price of HK$263.

“This listing signifies our deeper integration into the global capital markets and marks a new milestone in our mission to drive the global zero-carbon economy,” CATL’s founder and chairman Robin Zeng said at the firm’s listing ceremony yesterday. The company said most of the funds would be used for construction of a factory in Hungary, part of its plan to make batteries in Europe for automakers such as BMW, Stellantis and Volkswagen. The institutional tranche of the Hong Kong deal was oversubscribed 15.2 times, according to CATL’s filings, while the retail portion was 151 times oversubscribed. The demand for CATL shares was driven by an increasingly positive sentiment towards China from global investors that had started to emerge since the start of the year despite the

tariff war, according to sources. The company has been extending its lead in the electric vehicle battery market with a 38% share globally in 2024. That increased from 36% a year ago, according to data from SNE Research. Yesterday’s blockbuster listing is also a boon for Hong Kong’s stock exchange, which is eager for the return of big-name Chinese listings as it looks to regain its crown as the world’s top venue for IPOs. CATL’s deal means US$7.73 billion has been raised in Hong Kong through initial public offerings and second listings so far in 2025, compared to US$1.05 billion at the same time last year, according to LSEG data. Bonnie Chan, CEO of bourse operator Hong Kong Exchanges and Clearing, said more than 40 firms listed in mainland China, known as A share companies, were actively exploring Hong Kong listings. – AFP, Reuters