Elpida TDRs tank on loan report
The Taiwan depositary receipts (TDR) of Japanese memorychip maker Elpida Memory Inc took a beating yesterday after Japanese media reported on Thursday that the company might seek a delay of its loan repayment to the government, dealers said.
Fears that the financial difficulties of the world’s third-largest DRAM chip firm would get worse also affected Powerchip Technology Corp (力晶科技) shares, a Taiwanese partner of Elpida, dealers said.
Memorychip testing and packaging service providers, such as Powertech Technology Inc (力成科技), also came under pressure as Elpida is one of their major clients.
Elpida’s TDRs fell 5.9 percent to close at NT$6.86 and Powertech shares fell 3.17 percent to NT$64.10, while Powerchip shares plunged by 6.52 percent to NT$0.86.
Japanese media reported that Elpida was likely to seek a delay in repaying a loan of about ￥30 billion (US$387 million) from the government.
Elpida issued its TDRs in February.
Bonds snap three-day advance
Taiwan government bonds snapped a three-day advance on optimism the country would sustain economic growth next year after the central bank kept borrowing costs unchanged on Thursday.
Governor Perng Fai-nan (彭淮南) said on Thursday that the central bank was concerned about inflation, even as property prices have stabilized and currency appreciation has helped ease the inflationary impact on import prices.
The yield on the 1 percent notes maturing in January 2017 climbed two basis points to 0.989 percent, according to GRETAI Securities Market data.
The rate dropped to 0.972 on Thursday, its lowest level for a benchmark five-year bond since Sept. 26, and it is down 16 basis points this year.
Taiwan government bonds returned 3.8 percent this year, the worst performance among 10 Asian countries, an HSBC Holdings PLC index showed.
Hon Hai to buy Fitipower stake
Four investment units of Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, announced yesterday that they were subscribing for NT$585 million (US$19.3 million) of new shares in integrated-circuit maker Fitipower Integrated Technology Inc (天鈺科技), according to various stock exchange filings by Hon Hai.
The four subsidiaries — Pao Shin International Investment Co (寶鑫國際投資), Hyield Venture Capital Co (鴻揚創投), Hon Chi International Investment Co (鴻棋國際投資) and Hon Yuan International Investment Co (鴻元國際投資) — have decided to subscribe for 45 million Fitipower common shares at NT$13 each through a private placement, according to the filings.
The share purchase is part of the companies’ long-term investment plans, the filings said.
However, the filings did not disclose how big a stake Hon Hai will have in Fitipower after the deal.
Cathay inks cross-strait deal
Cathay United Bank (國泰世華銀行) signed a cooperation agreement with China Development Bank (國家開發銀行) yesterday which aims to forge substantial ties with its Chinese peer and allow the Taiwanese lender to tap the Chinese market, the company said in a statement.
The latest pact with China Development Bank marked the fourth of its kind Cathay United has signed with Chinese lenders this year. The Taiwanese bank has inked similar deals with Agricultural Bank of China (中國農業銀行), Bank of Communications (交通銀行) and Bank of China (中國銀行).
Cathay United, the banking unit of Cathay Financial Holding Co (國泰金控), opened its Shanghai branch at the end of last year.