Important Infrastructure 14 Industries
May 18, 2021 (Tuesday) Cloudy with a temporary shower
・The government will establish common regulations to avoid security risks for 14 critical infrastructures such as private information and communications and power.
It will be explicitly stated in the law that procurement of IT (information technology) equipment and the use of cloud services will “take security concerns into account.”
・For the 14 critical infrastructure sectors cited by the government, permissions can be canceled or business operations can be halted if problems arise.
Information and communications, railways, aviation, airports, power, water, gas, finance, credit, government and administrative services, medical care, logistics, chemicals, oil.
・In 2020, global market capitalization reached 101 trillion dollars, up 20% year on year, surpassing the world’s nominal GDP (gross domestic product) of 84.5 trillion dollars, down 3%.
If you overlay the rising market capitalization on the recovery of nominal GDP, it forms a K-shaped trend. The financial markets are overheating.
Nevertheless, the Federal Reserve Board (FRB) will continue its ultra-loose monetary policy in order to curb the Biden administration’s massive fiscal spending aimed at reducing wealth inequality.
The Achilles heel for the FRB is rising inflation concerns accompanying the economic recovery.
・Tokyo Stock Exchange is considering extending trading hours.
The target is spot stock trading, with adjustments coordinated with securities firms focusing on afternoon and evening trading.
・On the 17th, US telecommunications giant AT&T announced that it would split off its media business “WarnerMedia,” merge with media giant Discovery, and form a new company.
The new company's enterprise value is about 150 billion dollars (about 16 trillion yen).
Aiming to become the third pole after Netflix and Walt Disney in the United States.
・The Ministry of Health, Labour and Welfare is revising for the first time in eight years a guideline that consolidates issues and directions for strengthening the competitiveness of Japan’s pharmaceutical industry.
Facing the reality of delays in domestic vaccine development, it emphasizes boosting development capabilities in the biopharmaceutical field where domestic companies struggle.
It plans to push government-led measures such as tax and fiscal support, but many challenges remain.
・To promote digitalization by reducing paper documents and stamping, a national initiative to standardize digital government processes will begin within the year.
Secom <9735> [closing price 8,599 yen], Seiko HD <8050> [closing price 2,101 yen], a related company, Keio University will establish a common platform,
to enable mutual use of services individually provided by each company.
Secom Trust Systems (Shibuya, Tokyo) and others announced this on the 18th.
Under the Cabinet Office program, Hitachi <6501> [closing price 5,384 yen] and Keio University have built a common platform to be used.
NEC <6701> [closing price 5,150 yen] and Fujitsu <6702> [closing price 16,825 yen] will participate in the “Digital Trust Council” with financial institutions,
and expand participation in the common platform.
・Bank of Japan <8301> [closing price 33,650 yen] on the 17th noted that April’s corporate goods price index rose 3.6% year on year, the highest since September 2014.
Recoveries in global crude oil and non-ferrous metal markets are impacting corporate prices as well.
The key focus going forward will be whether this leads to a rise in the consumer price index (CPI), which the BOJ emphasizes.
・The Ministry of Economy, Trade and Industry has established a task force to consider countermeasures with 14 domestic automakers in response to a shortage of semiconductors for automobiles.
Aiming to standardize the manufacturing process for semiconductors used in cars as much as possible.
・For the five major banking groups, consolidated net profit for the fiscal year ending March 2021 rose for the first time in three years since the fiscal year ending March 2018.
Despite higher costs to prepare for worsening client finances due to the COVID-19 crisis, corporate financing demand grew, and total profit rose 2.1 trillion yen year on year as deposits expanded.
Rising funds due to liquidity support outpaced deposit growth, deteriorating “profit-making power.”
The gap in profitability between U.S. and Japanese banks is widening, highlighting structural issues surrounding Japanese banks.
・A segment of Asian stocks and currencies remained weak last week as well.
In particular, Taiwan and Japan saw notable stock price declines, linked to the ongoing spread of the novel coronavirus.
Both Japan and Taiwan have low vaccination rates, and there is growing concern that preventative measures could hinder the economic recovery.
・On the Osaka Exchange, the yen-denominated gold futures price on the 17th rose to 6,527 yen per gram intraday, up 1% from the previous weekend close. The highest in about half a year.
・China’s employment recovery is delayed.
From January to April 2021, urban areas added 4.37 million jobs, down 220 thousand from January–April 2019 before the pandemic.
Benefits from strong exports and infrastructure investment have not yet spread to households.
・China’s National Bureau of Statistics on the 17th reported that in April 2021, among 70 major cities, the number of cities where new home prices rose from March was 62.
This is the same as March, accounting for nearly 90% of all, with surplus money pushing up real estate prices.
・In England on the 17th, coronavirus restrictions were further eased, allowing dining in at restaurants and household-to-household indoor interactions.
Theaters, museums, and theaters resumed, and outdoor gatherings of up to 30 people were allowed.
・As of 4:00 p.m. on May 17, the number of global coronavirus cases (and deaths) as compiled by Johns Hopkins University: 163.08 million cases worldwide (9,757 deaths)
United States 32,940,851 (262) India 24,965,463 (4,106) Brazil 15,627,243 (1,036) France 5,939,019 (81) Turkey 5,117,374 (223) Russia 4,883,734 (386)
United Kingdom 4,466,589 (4) Italy 4,159,122 (93) Spain 3,604,799 (0) Germany 3,602,939 (66) Argentina 3,307,285 (269) Colombia 3,116,426 (520)
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