Bucking the main bourse’s bearish sentiment, financial stocks moved up yesterday after the legislature on Wednesday approved a measure to reinstate a capital gains tax on securities investments that helped resolve a four-month cloud hanging over the sector, a foreign brokerage said yesterday.
Credit Suisse said in a note that the financial sector had been hit hardest by the uncertainty over the capital gains tax and therefore it is now most likely to be relieved by the passage of a less drastic scheme.
However, the overall market sentiment will remain weighed down by possible revisions of major corporate earnings in the near term under the sluggish macroeconomic conditions, Credit Suisse said.
The financial and insurance sub-index on the main bourse, which reflects the general share performance in the financial sector, rose 0.56 percent yesterday, compared with a decline of 0.12 percent on the benchmark TAIEX, Taiwan Stock Exchange data showed.
“We maintain our tactical overweight on the financial sector as we head into cross-strait talks in the next one-two months while we wait for the tech sector to digest earnings revisions and reset growth expectation in the next few weeks,” Credit Suisse analysts Chung Hsu (許忠維) and Michelle Chou (周盈秀) wrote in the note.
The eighth round of economy-centric cross-strait talks — between Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤) and Association for Relations Across the Taiwan Straits (ARATS) Chairman Chen Yunlin (陳雲林) — is expected to take place on Aug. 9 in Taipei, local media reported.
However, the Mainland Affairs Council yesterday did not confirm the reports at a regular briefing, saying the exact date and place are still under discussions between the SEF and ARATS, Radio Taiwan International reported, citing the council’s Deputy Minister Liu Te-shun (劉德勳).
Still, the financial sector has attracted renewed buying in past sessions on expectations that Taiwan and China would conclude negotiations and sign an agreement to set up a currency settlement mechanism as well as an investment protection agreement.
Meanwhile, domestic financial institutions have shown stable asset and credit quality. Based on the latest data compiled by the Financial Supervisory Commission, the bad-loan ratio of 38 domestic lenders dropped to 0.58 percent at the end of May, from 0.62 percent at the end of April, while the overall coverage ratio gained 7.67 percentage points to reach 185.36 percent, from 177.69 percent the month earlier.
Credit Suisse's top picks among local financial stocks include China Life Insurance Co (中國人壽), SinoPac Financial Holdings Co (永豐金控), E. Sun Financial Holding Co (玉山金控) and Mega Financial Holding Co (兆豐金控).
Shares in China Life rose 2.15 percent yesterday, SinoPac Financial moved up 2.13 percent, while E.Sun Financial remained unchanged and Mega Financial fell 1.07 percent.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”