The Financial Supervisory Commission (FSC) is to take a tougher stand on the publication of client notes written by securities houses about the stock prices of listed companies in a bid to curb price speculation, the regulator said yesterday.
The idea to impose the restrictions is a response to the practice by some brokerages of frequently leaking such notes to the media with the apparent aim of manipulating stock prices, in violation of securities transactions regulations, the commission said.
“We plan to require securities houses — domestic and foreign — to issue stock filings to clarify media reports on the earnings forecasts for listed companies,” said Wu Yui-chun (吳裕群), director-general of the commission’s Securities and Futures Bureau.
“The commission will take legal action against violators if necessary, as irresponsible circulations of earnings forecasts or comments may cause irreparable damage to the investors and companies involved,” Wu said.
After local media reported the news that the commission would tighten regulations on brokerages’ equity reports, the TAIEX dropped 1.34 percent, or 131.17 points, to close at 9315.85, Taiwan Stock Exchange data showed.
Foreign institutional players cut their local share holdings by a net NT$1.04 billion (US$34.6 million) yesterday, compared with a net increase of NT$8.3 billion a day earlier, stock exchange statistics indicated.
FSC Chairman William Tseng (曾銘宗) said in a press conference that he respected all brokerages’ investment strategies, shrugging off rumors that the sell-off on the bourse had anything to do with the announcement of the planned regulatory tightening.
“All we want is to make securities houses take full responsibility for their reports, which are intended for their clients, but repeatedly end up in the hands of the media,” Tseng said, refusing to name any of the offenders.
Under the planned restrictions, which would likely take effect by the middle of the month, brokerages should assert their intellectual property rights over the reports and issue clarifications if media outlets run stories based on their reports that are out of context, Tseng said.
Stock analysts make earnings forecasts on the condition that the company in question meets certain criteria, but media outlets on reporting these predictions frequently leave out those conditions and relevant time sensitivity, which can mislead investors, Tseng said.
The commission said it expects the move to correct the longstanding impression that it is soft on foreign securities houses and hopes the tightening does not encroach on the freedom of the press.
However, Wu said that share price, profit and revenue figures fall outside the protection of free speech, while stock ratings and comments on the industry’s outlook are harmless.
There is little the commission can do to offshore brokerages if they disseminate client notes on the share prices of Taiwanese companies through foreign media outlets, Wu said, as Taiwan has no authority over them.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San