The Nan Ya group of companies raised US$432 million selling shares and bonds convertible into shares, the latest to tap investor optimism an improving US economy will bolster demand for shares in the nation's exporters.
Nan Ya Plastics Corp (南亞塑膠), the country's No. 1 maker of plastics chemicals, raised US$200 million selling bonds that can be swapped for shares in its unit Nanya Technology Corp (南亞科技), the nation's biggest computer memory-chip maker. The chipmaker itself sold US$232 million of shares overseas.
"There's a lot of talk about a firm recovery in the US in six months time which will be great for Asia," said David Chapman, who helps manage the equivalent of US$650 million in global equities as associate director at Towry Law Asia Ltd.
"Investors want to position themselves to participate in that trend by buying equity," he said.
Quanta Computer Inc (廣達電腦), the world's biggest notebook computer maker, and Chi Mei Corp (奇美), the nation's second-biggest maker of flat-panel displays, were among companies that raised money as the country recorded its busiest week for convertible bond sales to overseas investors last month. Optimism over a US recovery has helped spur a 30 percent rise in the NASDAQ Composite Index, seen as a global bellwether for technology stocks, while the TAIEX is up 18 percent this year.
The US economy may quicken to a 3.7 percent annual growth rate in the fourth quarter, from 1.4 percent in the first three months of the year, according to economists.
US retail sales growth may have accelerated last month as consumers, more confident about the economy, took advantage of discounts and incentives, economists said in advance of a US government report this week.
Consumer spending accounts for more than two-thirds of US GDP. An acceleration in growth would help bolster manufacturing and create jobs, which in turn puts more money in their hands to buy Taiwan-made goods.
Nan Ya Plastics owns half of Nanya Technology. The bonds can be converted into Nanya Technology shares at NT$32.551 apiece. The bonds won't pay interest and mature in five years. The company may sell a further US$40 million of the bonds, depending on demand.
That's a 20.6 percent premium to Nanya Technology's close Friday of NT$27 a share.
Nan Ya Plastics said last month it may use the proceeds to buy raw materials. Nanya Technology, the world's fifth-largest maker of computer-memory chips, said it will use the proceeds to finance a chip plant it's building with Germany's Infineon Technologies AG.
Nanya Technology and its domestic rivals are reviving fund-raising plans on expectations the memory-chip market will rebound from a more than two-year slump. The spot price for Nanya's main product, the 256-megabit double data rate memory chip, has risen to US$4 from a 12-month low of US$2.86 on Feb. 26.
Nan Ya Plastics is up 30 percent this year while Nanya Technology is up 34 percent.