Market rebounds ahead of GDP release

STOCKS rebounded Tuesday ahead of the release of first-quarter gross domestic product growth later this week.

The PSE index, the 30-company benchmark of the Philippine Stock Exchange, gained 21 points, or 0.33 percent, to close at 6,622.61, as four of the six subsectors advances, with property leading the way.

The index representing all shares also picked up 6 points, or 0.19 percent, to settle at 3,532.33 on a value turnover of P4.18 billion. Losers outnumbered gainers, 86 to 73, while 71 issues were unchanged.

Six of the 10 most active stocks ended in the green, led by SM Prime Hold-

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ings Inc. which climed 2.10 percent to P34.00 and Universal Robina Corp. which rose 2.06 percent to P153.90.

Meanwhile, the peso retreated to 55.76 against the US dollar Tuesday from 55.25 following reports that the country’s trade deficit widened to $14.57 billion in the first quarter amid sluggish exports. Asian markets struggled Tuesday as investors eyed the release of US inflation data later in the week, while mixed Chinese trade data suggested that re-

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WASHINGTON, USA—Fed financial stability report details US banks tightened lending standards in the first few months this year, and expect this to continue over the rest of 2023, said a Federal Reserve survey released on Monday.

The report, which is closely watched on Wall Street, comes as the financial sector contends with deposit outflow worries on the back of turmoil after the high-profile collapse of Silicon Valley Bank and Signature Bank in March.

In recent weeks, shares of midsized banks suffered brutal trading days while investors remained on edge for a repeat of earlier episodes in which deposit runs precipitated or played a significant role in bank failures.

Asked about their outlook for lending standards over the rest of 2023, “banks reported expecting to tighten standards across all loan categories,” the Fed said on Monday.

Among the most frequently cited reasons included an expected deterioration in credit quality of loan portfolios and in customers’ collateral values, alongside reduced risk tolerance, found the senior loan officer opinion survey on bank lending practices.

Other reasons included “concerns about bank funding costs, bank liquidity position, and deposit outflows,” the survey added. AFP covery in the world’s number two economy was still taking time. While the region enjoyed a healthy start to the week, there remains plenty of nervousness on trading floors after last week’s upheaval in the US banking sector, which hammered financial stocks. The turmoil saw the sale of the embattled First Republic Bank to JPMorgan Chase and came just two months after the collapse of three other regional banks and the takeover of Swiss giant Credit Suisse by rival UBS.

Still, while a much-anticipated Federal Reserve survey of banks showed tighter lending standards in the first few months of the year, which they see lasting through 2023, analysts said the reading was not as bad as feared.

Asked about their outlook for lending standards over the rest of 2023, “banks reported expecting to tighten standards across all loan categories”, the central bank reported.

National Australia Bank’s Rodrigo Catril said: “The survey revealed a modest deterioration in lending standards to business at a rate that was slightly higher than in January.

“But, after concerns over the health of US regional banks, the good news is that the survey did not [yet] reveal evidence of a major credit crunch.”

Focus is now on Wednesday’s consumer price index report for April and

iPhone maker Foxconn buys huge site in India tech hub

BENGALURU,

India—Taiwanese

electronics giant Foxconn has bought a huge tract of land on the outskirts of Indian tech hub Bengaluru, the key Apple supplier said in a filing Tuesday as it looks to diversify production away from China.

Also known by its official name, Hon Hai Precision Industry, Foxconn is the world’s biggest contract electronics manufacturer and a principal assembler of Apple iPhones.

Both companies are seeking to diversify away from China, where much of their manufacturing is based, after strict Covid policies in recent years and ongoing diplomatic tensions with the United States hurt production.

The 1.2 million-square-meter (13 million-square-foot) acquisition in Devanahalli, near the airport for Indian tech hub Bengaluru, was announced in a statement to the London Stock Exchange.

Its subsidiary Foxconn Hon Hai Tech- nology India Mega Development was paying three billion rupees ($37 million) for the site, it said. Another Foxconn unit was acquiring land use rights to a 480,000-square-metre site in Vietnam’s Nghe An province, it added.

Karnataka state chief minister Basavaraj S. Bommai said in March that Apple would “soon” manufacture iPhones at a new plant in the state, creating “about 100,000 jobs.”

Bloomberg News reported that month that Foxconn was planning to invest $700 million in a new factory in Karnataka the same month, citing unnamed sources.

Foxconn chairman Young Liu visited the state then to “deepen partnerships... and seek cooperation in new areas such as semiconductor development and electric vehicles”, he said in a statement.

He also met with Prime Minister Narendra Modi, who said the pair’s “discussions covered various topics aimed at enhancing India’s tech and innovation eco-system”.

Foxconn has manufactured Apple handsets in India since 2019 at its plant in the southern state of Tamil Nadu.

Two other Taiwanese suppliers, Wistron and Pegatron, also manufacture and assemble Apple devices in India.

Apple has been making its own push into India and chief executive Tim Cook last month opened its first two retail stores in the world’s most populous country.

The California-based firm is betting big on the nation of 1.4 billion people —home to the second-highest number of smartphone users in the world, after China.

The world’s biggest company in terms of market value is also expanding its manufacturing footprint in India.

Apple said last September it would manufacture its latest iPhone 14 in India, just weeks after launching the flagship model. AFP the following day’s wholesale prices data.

A drop in the inflation reading in recent months has fanned hopes that the Fed will soon pause its tightening campaign and even begin cutting by the end of the year, with the banking crisis reinforcing that view.

After lifting borrowing costs last week, officials hinted at a possible hold at their June meeting.

After a largely flat Monday on Wall Street, Asia was mostly in the red. Hong Kong and Shanghai sank as Chinese data showed April exports rising more than expected but slowing from March, while imports plunged far more than expected. With AFP

China exports rise at slower pace on weakened demand

BEIJIING—China’s exports grew at a slower pace in April compared to the previous month, according to official data released Tuesday, as the world’s second-largest economy endures a patchy recovery from tough Covid curbs.

Rising global inflation, the threat of recession elsewhere and geopolitical tensions with the United States, have weakened demand for Chinese products.

Exports growth cooled to 8.5 percent in April in US dollar terms, after a surprise jump of 14.8 percent in March, customs data showed.

Beijing’s exports to Russia leapt 67.2 percent in April, year-on-year, but demand from markets elsewhere shrank.

China’s exports have grown for two months, snapping a run of five straight declines, when production was disrupted by sweeping lockdowns and delays at ports when China enforced its zero-Covid policy.

The stifling health restrictions were scrapped in December but domestic consumption remains subdued.

Imports fell much more sharply than expected in April, sliding 7.9 percent year-on-year, compared with a 1.4 percent decline in March. Analysts polled by Bloomberg had expected imports to decline by 0.2 percent.

“The contraction of imports may be partly driven by the slowdown of global demand, which in turn affects China’s imports of parts and components,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

China’s trade surplus grew to $90.21 billion in April, up from $88.2 billion in March.

Its economy grew 4.5 percent in the first three months of the year.

But manufacturing activity contracted in April due to tapering global demand and a slow domestic recovery.

The official manufacturing purchasing managers’ index (PMI)—a key gauge of Chinese factory output—fell unexpectedly to 49.2 in April from 51.9 in March, and below the 50-point mark that separates expansion and contraction in activity, data from the National Bureau of Statistics showed. AFP