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Morgan trims forecast
Investment banker JP Morgan Chase & Co said yesterday it has trimmed its economic growth forecast for Taiwan this year to 3.2 percent from from an earlier projection 3.5 percent, due to the outbreak of severe acute respiratory syndrome, or SARS, in the region.

JP Morgan said in a report that the economic fallout of SARS would keep the country's second quarter GDP flat on year. Growth projections for later quarters have been kept unchanged.

"Given Taiwan's geographical proximity and economic ties with China and Hong Kong, the SARS impact is likely to ripple onto Taiwan through travel cutbacks as well as dampen consumer confidence," the report said.
JP Morgan, however, said the outbreak in Taiwan was "nowhere near as harsh as that in Hong Kong or Singapore."

Chipmakers post sales
Taiwan Semiconductor Manufact-uring Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), the world's largest suppliers of made-to-order chips, said first-quarter sales rose on demand for their advanced technology.

TSMC said its first-quarter sales rose by 9.9 percent from a year ago to NT$39.3 billion (US$1.1 billion). UMC said its sales in the same period rose by 47.2 percent to NT$17.9 billion.

TSMC, which will post first-quarter net income on April 29, continues to expect second-quarter sales to rise from the first three months of this year, it said in a statement.

UMC, which will post quarterly results on April 30, didn't give second-quarter expectations.

China Steel's profit jumps

China Steel Corp (中鋼) said pretax profit surged almost sevenfold after the nation's biggest steelmaker raised prices on a recovery in demand and economic expansion in China pushed up international prices.

Profit before taxes in the first quarter jumped to NT$10.8 billion (US$310 million) from NT$1.57 billion a year earlier. Sales rose to NT$30.4 billion from NT$21.1 billion.

The company is projecting pretax profit of NT$36.5 billion on sales of NT$113.4 billion for 2003.

Agency supports 2:5:8 Plan

Fitch Ratings, an international rating agency, has assessed the progress of plans to restore the health of the nation's troubled banking sector and has concluded that what the country calls a "2:5:8 Plan" is achievable, but only if implemented without further delay and without further shocks to the economy.

Under the proposed plan, domestic banks are to reduce their bad loan ratios to 5 percent or below total loans and raise their capital ratios to a minimum 8 percent by June 2005.

As part of the plan, the government has offered a bank rescue package including public funds totalling NT$908 billion, or around 10 percent of the gross domestic product.

Fitch said it expects domestic banks to sell around NT$1 trillion of bad loans in order to meet the 2:5:8 Plan targets.

China may lift tariffs on steel

China may remove tariffs on 18 types of steel products imported from Taiwan from May 23, a local newspaper reported, citing unidentified officials from the steel industry and the Ministry of Economic Affairs.

The tariffs range between 3 percent and 23.3 percent, the paper said.

China will also increase its import quota for Taiwan's hot-rolled steel to an annual 350,000 tons from 170,000 tons, it said.

NT Dollar rises

The New Taiwan dollar yesterday traded higher against its US counterpart, rising NT$0.006 to close at NT$34.812 on the Taipei foreign exchange market.

Turnover was US$254 million.
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