Shares of transportation and travel-related stocks plunged more than 5 percent yesterday on the local bourse on concerns that a wider swine flu outbreak could discourage travel.
But a Standard Chartered Bank report released yesterday showed that Asia and the Middle East could be the regions best able to weather the latest health shocks.
Yesterday’s decline on the local bourse was across the board, with foodstuff shares falling 4.8 percent and construction issues dropping 4.2 percent, while financial shares dipped 1.5 percent and tech-related stocks shed 1.3 percent.
The only beneficiaries were hygiene and medical-related companies on expectations that demand for their products may surge to deal with any outbreak of the disease.
The benchmark TAIEX ended 108.32 points, or 0.9 percent, lower at 5,596.73. Turnover was NT$126.94 billion (US$3.76 billion), with foreign investors buying a net NT$5.55 billion in local stocks.
“The correction may last for a month before the dust of the swine flu settles,” said Mars Hsu of Grand Cathay Securities (大華證券).
The Standard Chartered report, co-authored by analysts Gerard Lyons, Mike Moran and Alex Sienaet, said based on lessons from previous outbreaks, tourism and related industries would face the first round of impact, followed by discretionary spending.
The analysts said they believed the flu was still in its early stages and its economic impact would vary greatly depending on its severity and duration, although the economic impact may be seen as V-shaped.
“The downward leg of the V is when discretionary spending is hit and confidence suffers, deterring travel and hitting tourism. Then, after the scare is addressed there is a rebound,” they wrote in the report.
Standard Chartered said the health scare was hitting the world economy at a bad time and would surely hit confidence, one of the factors that will heavily influence the timing of the end of this global recession.
Asia may face a test in coming weeks as there is a general feeling that the authorities here learned well from both SARS in 2003 and the avian flu in terms of their ability to prevent, monitor and react to such a health scare if the present outbreak hits Asia, the report said.
But the bank warned that the latest incident also posed a greater concern in terms of the fiscal fragility of governments that will roll out relief packages to prevent and contain the health problem.
In 2003, for instance, Malaysia spent an additional 2 percent of its GDP to address the disease while Hong Kong and Taiwan spent roughly 1 percent and 0.5 percent of GDP respectively on similar measures.
“The risks are naturally greater for economies where budget deficits are already high,” the report said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”