Macquarie bearish on property
Macquarie Group Ltd cut its price estimate for Taiwanese real-estate stocks by 20 percent on concern government tightening and equity declines will slow property sales in the second half of the year.
“After a strong selling pace in the high season in March-April, we saw the selling pace started to come off in May,” analyst Corinne Jian (簡秋萍) said in a report dated Friday but distributed yesterday. “It will become more difficult for housing prices to increase in the remainder of the year.”
Rising property prices have spurred the central bank to pledge to prevent asset bubbles, while some state-owned lenders raised mortgage rates and reduced loans for luxury homes. The TAIEX has plunged 10 percent this year, Asia’s second worst-performer, on concern tightening in China and Europe’s debt crisis will derail global economic growth.
Taiwan’s property sector has outperformed its Chinese peers by 23 percent in the past 12 months and the net asset value premium is “far more expensive” than other Asian real-estate shares, Macquarie said.
The brokerage expects developers to “catch up with the underperformance in the region,” Jian said.
The brokerage reduced its 12-month share-price estimate for Cathay Real Estate Development Co (國泰建設), the second-largest construction company in Taiwan, while lowering its recommendation to “neutral” from “outperform.”
Green Energy to seek loans
The board of Green Energy Technology Inc (綠能科技) approved a plan to raise as much as NT$2.8 billion (US$86.21 million) in loans from a group of banks, led by Taipei Fubon Bank (台北富邦銀行), the Taipei-based company said in an exchange filing yesterday.
The funds will be used to expand production capacity and repay debts, the statement said.
Separately, Taiwan Top Power Holdings Co (台灣桃電投資), owned by Japan’s Marubeni Corp, received loans worth NT$6.8 billion due in 2020, data compiled by Bloomberg showed.
The biggest of the three loans, for NT$5.56 billion, will be used for acquisition purposes and was arranged by Cathay United Bank Co (國泰世華銀) and First Commercial Bank Co (一銀), the data show.
Tanker joint venture formed
The board of Chinese Maritime Transport Ltd (中國航運) approved a plan to form a oil tanker freight venture with CPC Corp (中油) and U-Ming Marine Transport Corp (裕民), the Taipei-based company said in an exchange filing yesterday.
Chinese Maritime will take a 26 percent stake in the NT$10 billion venture, the statement said.
Largan GM named chairman
The board of Largan Precision Co (大立光), the nation’s leading maker of handset lenses, yesterday promoted its general manager Tony Chen (陳世卿) to chairman, replacing founder and chairman Scott Lin (林耀英).
Lin will remain as chairman of Largan’s parent company, while one of his son will become Largan vice chairman and and the other will become CEO.
NT dollar gains
The New Taiwan dollar rose to its highest level in more than a week on optimism the nation will sign a trade pact with China this month, helping spur exports to the world’s fastest-growing major economy.
Overseas funds bought US$292 million more of Taiwanese equities than they sold yesterday, a third day of net purchases, data compiled by Bloomberg showed.
“At this stage, the trade deal is helping attract overseas funds,” Lucas Lee, an economist at Mega Securities Co (兆豐證券).
The NT dollar rose 0.3 percent to close at NT$32.351 against its US counterpart on tureover of US$584 million.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
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RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The