TAIEX falls under pressure
The nation’s benchmark index came under pressure yesterday amid technical resistance at the 8,000-point level, with some investors retreating from the trading floor, dealers said.
Large-cap high-tech stocks weakened, led by Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics supplier, while profit-taking also emerged to drag down financial heavyweights, they said.
Select old-economy stocks attracted bargain hunting, however, lending some support to the broader market and keeping it above the 7,900-point level before the close, they added.
The TAIEX closed down 33.32 points, or 0.42 percent, at 7,921.50, after moving between 7,870.26 and 7,973.47 on turnover of NT$111.56 billion (US$3.77 billion).
Wage hike won’t hurt Foxconn
UBS Securities Co expects Foxconn Technology Group’s (富士康科技集團) wage hike of 16 to 25 percent in China to have only a limited effect on the earnings and share price of its parent company.
In a report issued yesterday, UBS estimated that the operating profits of Taiwan-based Hon Hai Precision Industry Co (鴻海精密), which operates in China under the Foxconn name, would drop by 5 percent because of the wage hikes.
As a result, the securities firm maintained its “buy” rating for Hon Hai shares and set its target price for the stock at NT$120.
Hon Hai shares closed down NT$2.9 in Taipei trading at NT$96.8.
UBS said its estimate was based on two assumptions — that 40 percent of Foxconn’s employees in China were in Shenzhen and that the company’s automation program would not generate any benefits this year.
PChome launches English site
Online shopping portal PChome Online Inc (網絡家庭) yesterday announced the launch of its English-language Web site, PChome Global, in a move to expand its reach to overseas markets.
The site offers more than 247,885 products to 105 countries and it said in a statement that its global deliveries could be completed within three to seven days.
PChome Online has operated since 2000 and is one of the few e-commerce companies in Taiwan that have their own logistics centers. The portal raked in revenue of NT$12.3 billion last year, the statement said.
CHT projects profit drop
Chunghwa Telecom Co (CHT, 中華電信), the nation’s biggest telecoms operator, yesterday projected that net profits would decrease 16.82 percent to NT$ 39.18 billion this year, compared with last year’s NT$47.1 billion.
Revenues would slip 1.86 percent annually to NT$188.88 billion this year from NT$192.46 billion last year, it said, blaming price cuts requested by the telecoms regulator.
Chunghwa Telecom planned to spend NT$33.05 billion on mobile network expansion and developing cloud-computing technology services, up 25 percent from last year’s NT$264.4 billion.
NT dollar drops
The New Taiwan dollar fell against the US dollar yesterday, declining NT$0.014 to close at NT$29.568 in reflection of a pullback on the local bourse that lowered demand for the local currency, dealers said.
However, a rebound staged by the euro lent some support to the NT dollar after finance ministers in Europe reached an agreement on a new round of bailout funds for Greece, a move expected to prevent a default by the European country, the dealers said.
The NT dollar opened at NT$29.555 and moved between NT$29.515 and NT$29.585 before the close. Turnover totaled US$696 million during the trading session.