Rating stable says Fitch
Fitch Ratings yesterday affirmed Taiwan's sovereign ratings' stable outlook, saying the passage of revised banking sector legislation would help contain the quasi-fiscal costs and systemic vulnerabilities the country is facing.
"Taiwan's ratings are sustained by pronounced external strengths but remain constrained by vulnerabilities in the banking sector and diminishing fiscal flexibility," Fitch said in a statement.
The rating agency said the outbreak of SARS is hurting the country's economy, though its impact could be restricted to 1 percent of GDP if the duration of the health crisis is limited to the second quarter, it added.
However, the problem of deteriorated public finance poses a concern, Fitch continued, as the government's budget deficit averages 3 percent of GDP and the figure is likely to climb to over 4 percent next year, given the employment generation programs, SARS compensation, and the possibility of substantial infrastructure investment the government has pledged itself to.
Hope for pork exports
The World Organization for Animal Health (OIE), a Paris-based agency that sets standards for animal hygiene in world trade, has partially declared Taiwan free of foot-and-mouth disease (FMD), paving the way for Taiwan to resume pork exports, an official said yesterday.
"OIE has declared that Taiwan is free of FMD with vaccination because we have not had infection for two years since the last FMD case," said Sung Hua-tsung (宋華聰), deputy director of the Bureau for Animal and Plant Health Quarantine.
But this means that Taiwan is only partially free of FMD. To be totally free, Taiwan must wait until the OIE declares Taiwan free of FMD without vaccination.
"To be declared free of FMD without vaccination, Taiwan must wait until it has stopped vaccinating cloven-footed animals for one year," Sung said.
After an absence of half a century, FMD broke out in Taiwan in 1997, prompting the killing of 4 million pigs.
AU forecasts profit fall
AU Optronics Corp (友達光電), the world's fourth-largest maker of flat-panel displays, said it expects second-quarter profit to fall about three-quarters from a year ago to NT$1 billion (US$28.8 million).
"That was our internal forecast earlier this year," said Chief Financial Officer Max Cheng (鄭煒順). "We're in line with that prediction."
The company had net income of NT$3.9 billion in the three months to June last year.
The company said profitability has improved since the first quarter, when it posted a 91 percent slump in net income to NT$179 million.
"The company's products and prices are changing, which is helping to improve profit in the second quarter from the first quarter," company President Chen Hsuen-bin (陳炫彬) said.
Bond trading to get boost
Taiwan plans to set up a corporate bond trading system on Aug. 4 that will allow individual investors to trade, a local newspaper reported.
The bond investors allowed to trade, now limited to institutional investors and fund managers, will be enlarged to include people who have at least NT$100,000 ($2,880), the paper said.
The trading system will be open between 9am and 1:30pm, the paper said. Trading fees will be capped at 0.1425 percent, the paper said.
NT dollar falls
The New Taiwan dollar yesterday remained weak against its US counterpart, declining NT$0.042 to close at NT$34.772 on the Taipei foreign exchange market.