Asian stocks fell this week, with the MSCI Asia-Pacific Index having its biggest drop in 10 weeks. \nExporters such as Toyota Motor Corp and Hyundai Motor Corp slid after the Federal Reserve hinted it may raise interest rates sooner than expected, sparking concern US demand will slow. \nThe MSCI Asia-Pacific Index, which tracks 855 companies in the region, fell 2.6 percent this week, its steepest decline since the week ended Nov. 21. \nThe Fed on Jan. 28 unexpectedly dropped its commitment to hold interest rates low "for a considerable period," saying instead that it will be "patient" in keeping down borrowing costs. \n"The chance of the Fed raising rates has gone up, and whenever they tighten it's bad for Asian markets," said Hou Wey Fook, who oversees about US$2 billion as chief investment officer at OCBC Asset Management Ltd in Singapore. \nBenchmarks in Hong Kong and Thailand slid on concern the spread of the bird flu virus in the region will damp travel demand and curb consumer spending. \nThe Hang Seng Index had its biggest weekly slide in 10 months, while Thailand's SET Index was the week's biggest percentage decliner in Asia, down 7.4 percent. \nThe SET also had its first monthly decline in 11 months. \nThe Federal Open Market Committee voted unanimously to leave the overnight bank-lending rate at 1 percent, the lowest since 1958. The next FOMC meeting is scheduled for March 16. \nOnly two of the 23 firms that trade securities directly with the central bank had expected it to drop the "considerable period" wording, which had been in each statement since August. \nIn the US, the Standard & Poor's 500 Index lost 0.9 percent for the week, while the Dow Jones Industrial Average shed 0.8 percent and the NASDAQ Composite Index dropped 2.7 percent. \nYesterday, a government report showed the economy grew at a slower-than-expected pace in the fourth quarter. \nThe MSCI Asia-Pacific Consumer Discretionary Index, which tracks the performance of exporters including Toyota Motor, Hyundai Motor and Matsushita Electric Industrial Co, fell 3.8 percent for the week, the biggest percentage decliner among the 10 industry groups. \nIn Japan, companies that rely on US sales paced the Topix index's 2.7 percent decline. The index fell for a fifth consecutive day on Friday, its longest losing streak in nine months. The Nikkei 225 Stock Average slid 2.6 percent for the week. \nToyota, the world's second-largest automaker, dropped 5.7 percent, its worst weekly performance since September. It gets about 80 percent of its operating profit from North America. \nMatsushita, the world's largest maker of consumer electronics, fell 4.1 percent. It exports 35 percent of its products. \nSouth Korea's Hyundai Motor, which gets more than half its sales from exports, lost 7.1 percent, its steepest slide since the five days ended Sept. 28. \nJapan's UFJ Holdings Inc paced a drop among the nation's banks. UFJ, the country's fourth-largest bank, plunged 14 percent and was the second-biggest loser on the Nikkei. Mizuho Financial Group Inc, Japan's largest bank, shed 3.7 percent. \nRegulators will inspect UFJ Bank Ltd, a unit of UFJ, after finding internal documents showing UFJ's borrowers' financial conditions were worse than in official documents shown to the agency, the Nihon Keizai Shimbun said last weekend. UFJ said it wasn't aware of the inspection. \nHong Kong's Hang Seng fell 3.4 percent, its biggest weekly drop since March. Cathay Pacific Airways Ltd, Asia's sixth- biggest carrier, paced declines among travel-related stocks, dropping 5.3 percent. \nAt least eight people in Asia have died after catching bird flu, the World Health Organization said. \n"In the short term, it's a concern," said Norman Ho, who helps manage US$2 billion at Value Partners Ltd in Hong Kong. An outbreak "may destroy economic value." \nIn Thailand, the SET Index slid 7.4 percent this week. For the month, it slumped 9.5 percent, the first drop since February 2003. Thai Airways International Pcl, the nation's biggest airline, plunged 11 percent, its biggest one-week slide since June 2002. \nBefore the spread of the bird flu, Thailand was the world's fourth-largest exporter of chicken meat. Those exports accounted for less than 1 percent of the Thai economy. \nThe central bank said this week the outbreak may reduce economic growth this year by 0.2 percentage point. It expects the economy to expand 7.3 percent this year. \n"People are scared and they are looking at what happened last year" with SARS, said Alex Muromcew, who helps manage US$600 million at Loomis Sayles & Co in San Francisco. "If it's anything like last year, you don't want to own airlines or anything toward travel." \nChina, the origin of the SARS epidemic that killed 774 people worldwide last year, became the 10th nation to report an outbreak of bird flu this week. The Shanghai Composite Index fell 0.6 percent this week after a one and a half week holiday for the Lunar New Year.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees