■ TAIEX falls on LCD concerns
Shares ended lower yesterday, dragged down by liquid-crystal-display panel makers amid concern that Chi Mei Optoelectronics Corp (奇美) would report disappointing earnings. The TAIEX closed down 63.66 points, or 1 percent, to 6,311.98. Chi Mei stock fell 3.7 percent to NT$46.85, while AU Optronics Corp (友達) dropped 2.1 percent to NT$49.75. The world's two largest contract chipmakers, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), also fell as dealers believed there may be a lack of further catalysts to boost the shares after both companies gave their second-half outlook earlier this week. TSMC shed 1.3 percent to NT$53.20. UMC dropped 0.9 percent to NT$22.55.
■ US delegation to visit
A 78-member trade delegation will visit Taiwan beginning tomorrow for three-days, the American Institute in Taiwan (AIT) said in a statement released yesterday. The delegation is on a whirlwind tour of Asia in an effort to attract investment, and will be headed by Indiana Governor Mitch Daniels, the statement said. Daniels is expected to meet with President Chen Shui-bian (陳水扁), Minister of Economic Affairs Ho Mei-yueh (何美玥), and business leaders. Taiwan is the first stop on the delegation's nine-day trip, the AIT statement said. Indiana and Taiwan have a robust trade relationship, and Taiwan bought US$99.4 million worth of exports from Indiana last year, according to AIT
■ Uni-President counts on China
Uni-President Enterprises Corp (統一企業), the nation's biggest food company, said China will become its largest market this year, boosted by demand for bottled tea and juice. Sales in China are projected at NT$42 billion (US$1.3 billion) this year, surpassing for the first time those at home, which are expected at NT$41 billion, Uni-President spokesman Simon Hung (洪士民) said. "China's massive population and growing spending power has created a big opportunity for food companies," Hung said. "There are a lot of mouths to feed." Uni-President started selling bottled tea in China this year and plans to start selling drinks mixed with milk or other dairy byproducts there later this year or next, Hung said.
■ THSRC fundraising fails
Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) said it's failed for a third time since March to find investors for its preferred shares, delaying a fund raising plan. The company, which had been selling NT$5.5 billion (US$172 million) of preferred shares, said it could not complete the sale by the end of this month, as scheduled. "Some investors haven't been able to complete the necessary procedures such as gaining approval from their boards," Ted Chia (賈先德), THSRC assistant vice president, said yesterday. The stake sale is vital in providing funds for the company to finish its NT$462.1 billion project. The 345km project was scheduled to begin service on Oct. 31. The company will discuss with lenders before setting a new sale schedule, Chia said. THSRC signed a syndicated loan of NT$323.3 billion with 25 banks in 2000.
■ NT dollar weakens
The New Taiwan dollar turned weak against its US counterpart Friday, declining NT$0.043 to close at NT$31.996 on the Taipei foreign exchange market. Turnover was US$693 million, down from US$711 million the previous day.
UNDERESTIMATED: The agency said that as its previous forecast was guided by the SARS crisis, it did not adequately account for disruptions caused by the pandemic The nation’s economy might grow just 1.67 percent this year squarely on the back of government expenditure and private investment, as exports and consumer spending have stalled, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The forecast is a sizeable retreat from an estimate of 2.37 percent growth made in February before the COVID-19 outbreaks became a pandemic. “The previous forecast was guided by the SARS crisis in 2003 and therefore underestimated the ongoing pandemic, which is hitting economic activity hard at home and abroad,” DGBAS Minister Chu Tzer-ming (朱澤民) told a media briefing in Taipei. The agency now expects exports
‘SUSCEPTIBLE’: The timing of an intervention, rather than the amount of money injected to the market, is more important, the deputy minister of finance said The National Stabilization Fund would remain on stand-by to shore up the local bourse until the COVID-19 pandemic has subsided worldwide, Deputy Minister of Finance Frank Juan (阮清華) said yesterday. Although Taiwan has stopped the virus’ spread, the fund would remain active in light of fragile financial markets across the world, said Juan, the state-run fund’s executive secretary. The government activated the fund on March 20 after the TAIEX slumped from 12,000 points to 8,600 in a short period amid a panic selloff. The main board has since recovered, yesterday closing at 10,997.21 points on turnover of NT$180.767 billion (US$6.03 billion), Taiwan
Domestic banks saw first-quarter net profits from their Hong Kong branches shrink 25 percent on an annual basis to NT$4.8 billion (US$159.83 million), the first drop in the past four years, due to higher loan-loss provisions and lower interest income, Financial Supervisory Commission data showed. Local banks’ branches in the financial hub saw interest income fall after the Hong Kong Monetary Authority in March lowered its base interest rate to 0.86 percent, compared with 2.75 percent a year earlier, the data showed. Those branches set more loan-loss provisions out of concerns that some loans might turn sour due to the COVID-19 pandemic
‘EXTERNAL VULNERABILITY’: The city-state’s economy in the first quarter shrank 4.7 percent quarterly due to worsening external demand outlook amid the pandemic Singapore’s embattled economy could shrink by as much as 7 percent this year, which would be the worst reading since independence in 1965, with the government saying yesterday that the COVID-19 pandemic had throttled the key export sector. The Singaporean Ministry of Trade and Industry’s forecast — which was a downgrade from the 4 percent contraction predicted in March — came as official data showed that the economy shrank 0.7 percent year-on-year in the first three months of the year, while it contracted 4.7 percent from the previous quarter. The ministry said the new estimate was made “in view of the deterioration