The US Commerce Department said on Friday that foreign companies that use US chipmaking technology will be required to obtain a US license before supplying certain chips to Huawei, a maker of smartphones and telecoms equipment. The rules specifically target chips designed by Huawei and its affiliates, including chip-design unit HiSilicon and manufactured using US technology.
FTSE 100 LIVE: Asia shares fell on Monday morning
Mr Trump signed an executive order that gave a US overseas investment agency new powers to help manufacturers in America
Hynix, and cross-town rival Samsung Electronics , the world’s biggest memory chip maker, use US technology in their chipmaking, but design the semiconductors themselves, so won’t be directly impacted by the U.S. restrictions, analysts said.
But they said that an escalating US-China trade war would hurt demand for mobile phones from the likes of Huawei and Apple Inc and for components used in the phones.
“For the longer term, this is not a good news, because this will lead to reduced demand from Huawei,” said Park Sung-soon, an analyst at Cape Investment & Securities.
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Norwegian Air is set to live on after share sale and refinancing are completed
2.01pm update: Wall St set to jump on stimulus, vaccine hopes
US stock indexes were set to open sharply higher on Monday on optimism fuelled by encouraging data from a potential COVID-19 vaccine trial, with investors also counting on more stimulus to rescue the economy from a deep economic slump.
Investors have kept a close eye on the vaccine programs of several drugmakers, cheering any positive development amid fears of a second wave of infections as governments start easing restrictions.
Drugmaker Moderna Inc said its experimental vaccine for COVID-19 showed promising results in an early stage study.
The stock jumped 26 percent in premarket trade.
Markets were also encouraged by Federal Reserve Chairman Jerome Powell’s remarks over the weekend on a gradual economic recovery, and his affirmation that more monetary stimulus was on the way if required.
1.00pm update: Norwegian Air to live on after share sale, refinancing completed
Budget airline Norwegian Air looks likely to live on in a very slimmed-down form after completing a cut-price share sale and winning bondholders’ backing for a refinancing, after the coronavirus crisis compounded the carrier’s financial problems.
Existing shareholders will see their stakes massively diluted by the rescue as it will increase the number of shares in the company to about 3.5 billion from just 163.6 million.
The airline’s shares initially plunged 51 percent to 2.51 crowns on Monday before recovering to trade at 4.0 crowns at 1046 GMT, still down 22 percent on the day.
The debt conversion and share sale will allow Norwegian Air to tap government guarantees of up to 2.7 billion crowns, which hinge on a reduction in leverage, in addition to 300 million crowns it has already received.
US President Donald Trump speaks to reporters at the White House
12.54pm update: Should taxes be hiked for households near parks?
A report which says Britons living close to park should pay higher taxes has split opinion, with some opponents branding the suggestion “ridiculous”.
Do you think it sounds like a good idea? Vote in our Express.co.uk poll here.
12.41pm update: Despite COVID-19, Spanish rental prices rise sharply in April
Spanish rental prices shot up by 10.9 percent year-on-year in April, one of the largest property portals, Fotocasa, said on Monday as the country slowly reopens after flattening the curve on one of Europe’s severest coronavirus outbreaks.
The highest rises were in Navarra region at 25 percent, Andalucia at 12.9 percent and Valencia at 12.2 percent, with the capital Madrid seeing only a 4 percent increase and the Catalonia region, including Barcelona, 6 percent.
Fotocasa communications director Anais Lopez said: “The current situation with coronavirus isn’t making landlords lower their prices.
“It’s possible the direct consequence of coronavirus on rent will lag a few months.”
Monday’s data was the highest of five consecutive increases in Spanish rent since December 2019, despite the country being hit by one of Europe’s worst coronavirus outbreaks, with 231,350 confirmed cases and 27,650 deaths so far.
11.31am update: Polish central banker does not rule out rate cut in second half 2020
Poland’s central bank may cut interest rates further in the second half of this year as the damage caused by the coronavirus pandemic to the economy could be much worse than the government predicts, rate-setter Grazyna Ancyparowicz said.
The central bank cut rates both in March and April to support the economy, which is only just beginning to reopen after being in lockdown since mid-March.
The benchmark rate is now at a record low of 0.5 percent.
Ms Ancyparowicz said: “I do not rule out that rates may fall this year, but they will not be negative.
“I think that this will not happen at the next meeting. If so, in the second half of the year.
“It may turn out necessary, as in my opinion, the worst is ahead of us.
“For Poland, a crisis year will be mainly 2021.”
The next Monetary Policy Council (MPC) meeting is due to be held on May 28.
11.09am update: Australia welcomes growing support for COVID-19 inquiry at WHO meeting
A resolution pushed by the European Union and Australia calling for a review into the origins and spread of the novel coronavirus has the support of 116 countries at the World Health Assembly, almost enough for it to pass, a document showed.
The resolution on the coronavirus will be put forward on Tuesday if it gains backing from two-thirds of the 194 members of the assembly, the governing body of the World Health Organization.
China has strongly opposed calls for an international investigation into the pandemic but appeared more amenable to the resolution on Monday.
Australia’s Trade Minister Simon Birmingham said his request for trade talks with China has been ignored
9.55am update: European shares gain on oil boost as economies reopen
European shares bounced on Monday after their worst week in two months, as investors hoped for a gradual economic recovery with many countries easing their strict lockdowns.
Energy majors Total SA, BP Plc and Royal Dutch Shell Plc rose nearly percent, leading market gains as oil prices climbed by more than $1 a barrel, supported by output cuts and signs of gradual demand recovery.
France’s Total was also boosted by news that it called off plans to acquire Occidental Petroleum Corp’s assets in Ghana, and agreed to buy up assets from Energias de Portugal.
The pan-European STOXX 600 rose 2 percent, with bourses in Frankfurt, Paris and London also rising more than 2 percent.
8.57am update: China accuses Australia of playing ‘petty tricks’
China’s foreign ministry said on Monday that Australian Trade Minister Simon Birmingham should use the appropriate channels if he wishes to speak with his Chinese counterpart.
Mr Birmingham said during a television interview with Australian Broadcasting Corp (ABC) on Sunday that his request for discussions with Zhong Shan, China’s commerce minister, have not been met yet.
China, accusing Australia of playing “petty tricks” following Canberra’s call for an international investigation into the origins of the novel coronavirus, has recently suspended beef imports from four of Australia’s largest meat processors and is considering imposing hefty tariffs on imports of barley.
7.31am update: US mulls paying companies, tax breaks to pull supply chains from China
American lawmakers and officials are crafting proposals to push American companies to move operations or key suppliers out of China that include tax breaks, new rules, and carefully structured subsidies.
Interviews with a dozen current and former government officials, industry executives and members of Congress show widespread discussions underway.
The idea of a “reshoring fund” originally stocked with $25 billion is being considered.
This will aim to encourage US companies to drastically revamp their relationship with China.
President Donald Trump has long pledged to bring manufacturing back from overseas.
But the recent spread of the coronavirus and related concerns about US medical and food supply chains’ dependency on China are “turbocharging” new enthusiasm for the idea in the White House.
On Thursday, Mr Trump signed an executive order that gave a US overseas investment agency new powers to help manufacturers in America.
The goal, President Trump said, is to “produce everything America needs for ourselves and then export to the world, and that includes medicines.”
China has accused Australia of playing ‘petty tricks’
7.15am update: Thailand plans to go to bankruptcy court with Thai Airways rehab plan – official
Thailand plans to go to bankruptcy court to submit a rehabilitation plan for its national carrier, Thai Airways International Pcl, rather than go ahead with a previously planned rescue, a senior official said on Monday.
Government spokeswoman Narumon Pinyosinwat said: “The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court… the procedure will be submitted to cabinet tomorrow.”
The procedure replaces a previous rescue plan, which involves the airline seeking a 58.1 billion baht loan guaranteed by the government.
She added: “It is similar to filing Chapter 11 in the United States.”
She said the details of the rehabilitation plan have not been discussed.
6.17am update: Japan slips into recession, with slump set to worsen amid pandemic
Monday’s first-quarter GDP data underlined the broadening impact of the outbreak, with exports plunging the most since the devastating March 2011 earthquake as global lockdowns and supply chain disruptions hit shipments of Japanese goods.
Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close, intensifying the challenge for policymakers battling a once-in-a-century pandemic.
“It’s near certainty the economy suffered an even deeper decline in the current quarter,” said Yuichi Kodama, chief economist at Meiji Yasuda Research Institute. “Japan has entered a full-blown recession.”
The world’s third-largest economy contracted an annualised 3.4 percent in the first quarter, preliminary official gross domestic product (GDP) data showed, less than a median market forecast for a 4.6 percent drop.