High-tech rally buoys bourse
A rally by the bellwether high-tech sector lifted the local bourse yesterday, with share prices rebounding strongly on institutional buying, dealers said.
Government-run funds were believed to be lending support to select large cap stocks in mid-morning trade, while private investors followed suit to chase prices on expectations that the US will adopt further quantitative easing measures to boost its economy, dealers said.
The TAIEX closed up 237.64 points, or 3.25 percent, at 7,550.23, after moving between 7,349.57 and 7,564.64, on turnover of NT$128.57 billion (US$4.43 billion).
The foodstuff sector scored the highest gains, finishing up 3.9 percent. Textiles rose 3.6 percent, construction stocks added 3.4 percent, while the machinery, electronics and financial sectors climbed 3.2 percent.
Cement shares gained 2.9 percent, plastics and chemicals rose 2.8 percent, while the paper and pulp sector closed up 2.4 percent.
Tingyi profits disappoint
The gross profit margin for Tingyi (Cayman Islands) Holding Corp (康師傅控股), maker of Master Kong noodles and ready-to-drink tea, was close to its lowest level in at least a decade, according to Tingyi’s earnings statement released yesterday and data compiled by Bloomberg.
Foodmakers in China, including rival Want Want China Holdings Ltd (中國旺旺控股), are contending with higher costs of raw materials, such as sugar and plastic packaging.
“It may take a longer period of time for prices to return to lower levels,” Tingyi said as it announced first-half earnings.
“There are various factors leading to the increase in prices of raw materials and a general increasing trend is anticipated in the future,” it said.
Tingyi’s first-half gross profit margin was 26.1 percent, which was the second-lowest level for a six-month period since at least 2001.
Net income rose 16 percent to US$229 million in the first six months, while sales climbed to US$4.1 billion.
Want Want’s profit rose 3.6 percent to US$167 million, with sales up 28 percent to US$1.3 billion.
Sunny Bank’s rating upgraded
Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s, yesterday upgraded its long-term credit rating on Sunny Bank (陽信商銀) to “twBBB+” from “twBBB” on the lender’s recovering profitability, the ratings agency said in a statement.
The rating means Sunny Bank’s long-term outlook is stable now that the lender has improved its profitability to a level last seen before the global financial crisis of 2008 and 2009.
It is likely to maintain its current funding profile and asset quality over the next one to two years, the statement said.
The bank showed progress in cost controls and it has cleaned up some of its non-performing and substandard loans, lifting its bottom line, the statement said.
FamilyMart unveils new service
Taiwan FamilyMart Co (全家便利超商) yesterday introduced a new service — helping Taiwanese to renew their single-entry Taiwan Compatriot Entry Permit to China.
The convenience store operator is working with a courier company and a travel agency to launch the service, in which Taiwanese planning to visit China pay a fee of NT$499 to get their entry permit renewed.
FamilyMart said it expects to handle 20,000 applications a month.
NT dollar follows won higher
The New Taiwan dollar continued gaining ground against its US counterpart yesterday, adding NT$0.03 to close at NT$28.990 amid hopes that the US Federal Reserve would soon come up with further liquidity-easing measures to boost the US economy, dealers said.