Merrill Lynch & Co, the biggest US securities firm, recommends investors buy and hold the currencies of Thailand, South Korea and Taiwan on reduced expectations for rising borrowing costs in the US and China.
Quickening growth in the three Asian economies will also help raise their currencies as crude-oil prices recede from record-high levels, Vincent Low, Merrill's head foreign-exchange strategist for emerging Asia, wrote in a report.
"They will stand to benefit most from the improving environment" because of their "stronger econo-mies," Low said.
Bank of Korea Governor Park Seung last week said that his country's economy will likely improve in the second half.
Thai Prime Minister Thaksin Shinawatra said his country's second-quarter economic growth will exceed the previous three months.
Last month, the government raised its growth forecast for this year to 5.41 percent from 4.7 percent after record exports helped the economy expand at its fastest pace in three and a half years in the first quarter.
Expectations that China's government will engineer a gradual economic slowdown, reducing con-cerns that a sudden drop in growth would lead to declining demand for Asian exports, may help strengthen the three currencies, Low wrote.
China's National Bureau of Statistics on Wednesday said in a report that prices are under control and the country is capable of avoiding "severe" inflation.
China's central bank won't consider raising rates until it studies inflation reports for this month, next month and August, the China Securities Journal, a paper affiliated with the official Xinhua news agency, reported on Wednesday.
"Absent of a big inflation surprise, China's policy makers will likely wait a few months and examine data releases before deciding to pull on the interest-rate trigger," Low said. "Fears of a hard landing in China have receded. The storm clouds over Asian currencies appear to be slowing lifting."
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by