Fund managers and analysts generally believe the local stock market will not be influenced negatively by Japan’s massive earthquake, as stocks of electronic component, digital camera and solar power manufacturers will benefit most from orders shifting from Japan.
Eric Li (李俊毅), a fund manager at Allianz Global Investors Taiwan Ltd (德盛安聯證券投信), said in a press release issued on Friday that the quake would not have a negative impact on the performance of the Taiwan Stock Exchange because history showed little relationship between the Japanese stock market and Taiwan’s.
Stock analyst Lai Sian-jheng (賴憲政) also said the local bourse would not decline because of the quake.
“For Taiwan’s stock market, the quake brought more upsides, instead of downsides,” Lai said by telephone yesterday.
The biggest-ever quake in Japan led to a temporary shutdown of many Japan-based corporations in the semiconductor, electronic component and petrochemical -industries, including Elpida Memory Inc, Fujitsu Ltd, Sony Corp and Toshiba Corp.
“That will benefit local electronics stocks as orders move from Japan to Taiwan, with passive component, digital camera and solar power makers benefitting most,” Lai said.
Wang Tsung-chieh (王宗傑), a fund manager at HSBC Global Asset Management, said local stocks of high-end components would benefit more from short-term or rush orders, because the production of most low-end components was already oursourced to Taiwan and China.
However, the quake could have limited gains in short-term orders for Taiwan’s DRAM chipmakers, because South Korean DRAM companies might take most orders shifting from Japan, Lai said.
“DRAM prices will pick up owing to the decreasing output in Japan after the quake, which is good news for local DRAM stocks,” he said.
Local electronic corporations with plants in Japan, such as Advanced Semiconductor Engineering Inc (日月光半導體), United Microelectronics Corp (聯電) and AU Optronics Corp (友達光電), might face short-term impact by the plant’s short-term shutdown, but the impact would be limited because their capacity in Japan is at a low level, Lai said.
Domestic downstream manufacturers that rely on Japan for the supply of key parts might be influenced by supply shortages, Lai added.
Lai said petrochemical stocks would get the biggest benefit from possible orders transferring from Japan, after a fire following the massive quake broke out in the refinery of Cosmo Oil Co, the fourth-largest oil company in Japan.
Steel, cement and glass firms could also be helped by post-quake reconstruction, but the help would be slight, while related industries in Japan would recover at a faster-than-expected pace, Lai said.
“But these shares are still expected to shore up the stock market in the coming days, driving up the potential upside,” he said.
The benchmark TAIEX dropped 2.47 percent from a week earlier to close at 8,567.82 last week, with share prices for computers and peripheral equipment tumbling 5.62 percent, Taiwan Stock Exchange Corp data showed.
Foreign investors sold a net NT$13.77 billion (US$465.22 million) of stocks on Friday, with net selling reaching NT$18.72 billion this month, stock exchange data showed.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure