Hotel and airline stocks, among the nation's best performers this quarter, may offer a bellwether for the broader market as improved ties with China boost investor confidence.
Gains for companies including Formosa International Hotels Corp (
China Airlines (華航) and Eva Airways Corp (長榮航空), the two largest local carriers, also surpassed the TAIEX's 3.1 percent advance for the quarter. The index's move compares with a 1.4 percent loss for Morgan Stanley Capital International's Asia Pacific Index.
Optimism that China and Taiwan will ease restrictions on tourism to Taiwan may help the TAIEX maintain a lead on the regional index after trailing for the past three years.
"The rally in tourism-related stocks reflects the anticipation of fundamental changes in cross-strait relations," said George Hou, who oversees the equivalent of US$3.7 billion as president of JF Asset Management Ltd in Taipei.
This shift is "vital in restoring investor confidence and will have a positive impact on the performance of Taiwan stocks," he said.
Formosa International Hotels has risen 27 percent this quarter and Leofoo Development has climbed 42 percent. China Airlines, the nation's biggest airline, has added 5.5 percent. EVA Airways, the No.2 carrier, has gained 11 percent.
The government said last month that it may allow Chinese tourists to visit in supervised groups. Current rules permit only businessmen and people with family members in Taiwan to travel here.
"Better ties with the mainland will mean more tourists coming and leaving more money behind," said Isaho Nakasho, a fund manager who oversees US$40 million in Asian equities at Fuji Investment Management Co in Tokyo.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to