European stocks posted their first weekly drop since January amid disappointing corporate earnings and as Russia and the US faced off over the crisis in Ukraine.
Getinge AB plunged the most ever after forecasting first-quarter profit that were lower than analysts’ estimates. Balfour Beatty PLC fell 7.9 percent after reporting a 32 percent drop in annual earnings. Orange SA rose 13 percent after predicting that a key measure of profit would not fall this year for the first time in at least five years. Aviva advanced 7.4 percent after posting an increase in operating income for last year.
The STOXX Europe 600 Index declined 1.5 percent to 333.06 this week amid investor concern the Crimea region may secede from Ukraine. The benchmark gauge rallied for four successive weeks as US Federal Reserve Chair Janet Yellen pledged to follow her predecessor’s policies to support the US economy.
“The reporting season has generally been poor, with companies being fairly cautious in their outlook for the first quarter,” said Andrea Williams, head of European equities at Royal London Asset Management in London. “The fear about Ukraine is also causing some uncertainty. The vote for independence could still influence the market and it depends if trouble widens to other parts.”
National benchmark indices dropped in 13 of the 18 markets in Western Europe. Germany’s DAX lost 3.5 percent, the UK’s FTSE 100 fell 1.4 percent and France’s CAC 40 slid 1 percent.
Russia signaled it may stop supplying gas to Ukraine unless it pays US$2 billion owed for natural gas, putting pressure on its cash-strapped neighbor as the two nations quarrel over the future of Crimea. The predominantly Russian-speaking region plans a referendum on March 16 on whether to remain part of Ukraine or join Russia.
US President Barack Obama said this week leaders were preparing sanctions against Russia to make it costly for its Cold War adversary to interfere in Ukrainian affairs. Russian President Vladimir Putin said he saw no immediate need to invade Ukraine or annex Crimea.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s