The majority of the nation’s chief financial officers (CFOs) expect growth in revenues and profits this year from last year on the back of an improving business environment, the Bank of America Merrill Lynch said in a report released yesterday.
The annual Bank of America Merrill Lynch CFO Outlook Asia showed 64 percent of CFOs in Taiwan forecast revenue growth this year, while 60 percent anticipate higher net profits.
“We expect Taiwan-based corporations to be more upbeat in the second half, reflecting potential demand spikes in the technology and electronics sectors driven by a more stable global economy,” said Eric Liu (劉昭明), country executive of the US financial services provider.
As credit access remains strong and affordable, 84 percent of CFOs in Taiwan intend to maintain or increase borrowing, the report said.
About 20 percent intend to use the extra funds for refinancing, while 16 percent plan to recapitalize and another 16 percent look for turnaround financing, the report showed.
Despite the vast range of financing options available, Taiwanese CFOs favor traditional sources of finance, the report said.
About 33 percent of companies in Taiwan still rely on traditional bank loans and 11 percent tap into internal sources, the report showed.
While companies use a variety of financing methods, syndicated loans and commercial paper issuance figure strongly at 9 percent and 7 percent respectively, compared to alternative options.
CFOs in Taiwan favor organic growth over mergers and acquisitions (M&A) and 84 percent do not plan to participate in any M&A activity this year, the report said.
Furthermore, 43 percent of Taiwan’s CFOs will focus on improving operational efficiencies in their companies and 20 percent will commit resources to enhance working capital to drive profits, the report said.
On the flipside, 44 percent of respondents in Taiwan identified counterparty risk and currency volatility as risks to earnings this year, the report said.
The conclusions are based on over 600 interviews conducted with financial executives in Taiwan, Hong Kong, India, Indonesia and other markets in the Asia-Pacific region, the report said. Over 50 percent of respondents came from corporations with annualized revenues of US$500 million or above, representing a broad range of multinational, regional and local companies.
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