03/10/2025

FRIDAY | OCT 3, 2025

17

BIZ & FINANCE

Stocks jump on US rate cut hopes, chip deal

TAIPEI: Taiwan is considering forming a high-tech strategic partnership with the US, which wants increased Taiwanese investment, the island’s top tariff negotiator said yesterday, giving an update on talks with Washington. Taiwan, home to the world’s biggest contract chipmaker TSMC , runs a large trade surplus with the United States. The island’s exports to the US are currently subject to a 20% tariff, a figure Taipei’s government is seeking to cut. Taiwan Vice Premier Cheng Li-chiun, who is leading the tariff talks with Washington, told reporters in Taipei she was hopeful both sides could reach a consensus on expanding investment in the US through a “Taiwan model”. This would not involve relocating supply chains but rather extending and expanding US production capacity, said Cheng, who returned this week from the latest round of talks. The government views the model for investing in the country as “industrial investment planning” coupled with government support measures such as export credit guarantees and joint Taiwan-US development of industrial clusters, she added. “The current negotiation focus is that the United States expects us to expand investments and engage in supply chain cooperation,” Cheng said. TSMC is investing US$165 billion to build chip factories in the US state of Arizona. – Reuters Taiwan considers high-tech strategic partnership with US “You may wish to consider using an alternative product until the TGA completes its review,”the agency warned. Australia classifies suncreams under therapeutic goods – health-related products for human use rather than cosmetics – and are therefore regulated to ensure their safety and efficacy. – AFP SYDNEY: The makers of over a dozen suncreams have halted sales in Australia after a consumer advocacy group analysis found many of them did not provide the sun protection factor their makers claimed. Long, hot days in the sun are a fixture of daily life in Australia, famous for its good weather and outdoors-loving lifestyle. But the country also has the highest rate of skin cancer in the world – almost 19,000 Australians were estimated to be diagnosed with melanoma in 2024, official data shows. And an investigation in June by consumer group CHOICE found that of 20 popular brands of suncream tested, only four accurately matched their Sun Protection Factor (SPF) claims. A follow-up investigation by the Therapeutic Goods Administration released on Tuesday identified 21 suncreams that may fall short of their protection claims. In some cases, products that claimed to have sun protection factors of 50+ “were unlikely to have an SPF greater than 21”, the authority said. Of the flagged suncreams, eight have been voluntarily recalled, 10 have suspended sales, two are being reviewed and one is not sold nationally, according to the authority. Over a dozen Aussie suncreams pulled on safety concerns

The Korean firms said they had signed preliminary deals with the US company to provide chips and other equipment for its Stargate project, during a visit to Seoul by OpenAI chief executive Sam Altman. SK hynix soared around 12% at one point and Samsung around 5% – before paring some gains later – helping the Kospi index to add 2.7% to a record high. Taipei’s TAIEX index jumped 1.5% as chip titan and market heavyweight TSMC piled on 3%. Other regional technology firms also enjoyed a run-up, with Hong Kong-listed Alibaba, Tencent and JD.com all up between 2% and 4%. Tech companies have been at the forefront of a surge across markets this year as investors pile into all things linked to artificial intelligence, with hundreds of billions being pumped into the sector. London dipped in the morning but Paris and Frankfurt enjoyed gains. – AFP

downside risks remain on the horizon for labour demand. Goods producing sectors have been shedding jobs since May, in part due to tariff uncertainty. “Also, we expect to see continued layoffs in the professional and business services sector, where AI adoption is presumably relatively faster.” They added that recent government layoffs by Donald Trump’s administration would also weigh. After all three main indexes on Wall Street rose, with the S&P 500 and Nasdaq hitting records, Asia was happy to take up the baton. Tokyo, Sydney, Singapore, Wellington, Bangkok, Manila and Jakarta were all up, with Hong Kong piling on more than one percent as traders returned from a midweek break. Shanghai is closed for a week-long holiday. But Seoul and Taipei led the rally thanks to a boost in chip firms following news of the deal between OpenAI and Samsung and SK hynix.

o Investor optimism overshadows partial shutdown of American govt

HONG KONG: Equities jumped yesterday after data showing job losses in the US private sector fanned optimism for more interest rate cuts and overshadowed a partial shutdown of the country’s government. Tech firms led the way higher as a deal between South Korea’s biggest chip firms and OpenAI added fuel to the AI-led rally that has helped push markets to record highs. While debate rages over the impact of the closure of some US departments owing to a standoff between lawmakers in Washington, investors continue to focus on the outlook for more Federal Reserve rate cuts. And hopes were given a boost Wednesday by figures from payrolls firm ADP showing companies shed 32,000 posts last month, confounding forecasts for a gain of more than 50,000.

The data was the latest in a string of below-par reports indicating the labour market in the world’s top economy continues to slow and will give more impetus for the Fed to cut rates twice more before the end of the year. Observers said the reading had a little more significance owing to expectations that crucial non-farm payrolls statistics will not be released as usual today owing to the shutdown. “The market is going to have to focus on independent private sources to get a sense of what’s going on,” Wellington Management’s Brij Khurana said. “If the administration does go forward with cutting headcount, there is potential for this to have an economic impact and probably more so than what we’re used to.” Economists at Bank of America wrote before the release: “Some

SK Group chairman Chey Tae-won (second from left) and Samsung Electronics chairman Lee Jae-yong (third from left) joining a meeting between Altman and South Korean President Lee Jae Myung (right) at the Presidential Office in Seoul. – AFPPIC/ YONHAP

Private markets brace for cycle test

SINGAPORE: The boom in private credit and private equity is poised for a reality check as an untested credit cycle collides with fragile exit routes in Asia’s public markets, two senior investment executives said at a conference in Singapore. Private markets have expanded in Asia Pacific over the past decade, with buyout activity reaching US$138 billion in 2024, the second-best year in a decade, Deloitte data shows. Private credit assets under management in the region have surged more than six-fold since

Jeffrey Jaensubhakij, an adviser to Singapore’s sovereign wealth fund GIC, said private equity in Asia still struggles to exit investments because public markets, except India, have not offered reliable valuation and liquidity windows. “Japan has been very successful and it’s got a value-added corporate governance push. Korea is pushing very hard. I think this, amongst other things, will also help those public markets perform well, allow for exits, and then private equity can then follow,” he said. – Reuters

“We haven’t been down through a true cycle. There’s been a lot of money chasing the returns that are promised in these private equity, private credit types of products.” Abundant private funding had “pulled capital away from the public markets” and riskier issuers have migrated to private balance sheets, he added. “Those are the companies that wind up having problems when the economy is turned,” he said. Speaking at a panel session at the same conference yesterday,

2014 to about US$93 billion as of September 2023, according to Preqin. Michael Goosay, chief investment officer and global head of fixed income at Principal Asset Management, said the influx of capital into private assets had shifted risk away from public markets without testing how those borrowers would fare in a downturn. “I do worry about the private markets,” Goosay said at a panel session at the Milken Institute Asia Summit in Singapore on Wednesday.