Fri, Aug 14, 2015 - Page 14 News List

Taiwan Business Quick Take

Staff writer, with CNA

MACROECONOMICS

GDP forecast update

The Directorate-General of Budget, Accounting and Statistics (DGBAS) is likely to cut Taiwan’s GDP growth forecast for this year to around 2.68 percent, following a disappointing 0.64 percent annual growth for the second quarter, sources said yesterday. The expected downgrade will reflect weakening global demand at a time when several major economies, including China, show signs of a slowdown, the sources said. Under such unfavorable circumstances, the DGBAS could cut its forecast from an estimate of a 3.28 percent increase the agency made in May. The agency is scheduled to update its GDP growth forecast today.

STOCK MARKET

UBS cuts year-end target

UBS Securities Ltd has lowered its year-end TAIEX target forecast to 8,550 points from 9,200, its fourth cut in over two months. The benchmark index closed up 28.36 points, or 0.34 percent, at 8,311.74 yesterday.

“We believe one of the key drags on the market is a lack of fundamental support. In particular, weakness in end-demand from emerging markets, including China, continues to serve as a major headwind for Taiwan tech,” William Dong (董成康), equities and research head of UBS Securities’ Taipei branch, wrote in a client note.

“For non-tech sectors, including bicycles, tires and materials, slow conditions in China continue to be a challenge,” he said.

COMPUTERS

Wistron drops Q2 margin

Contract notebook computer maker Wistron Corp (緯創) yesterday reported a worse-than-expected operating margin of 0.013 percent for the second quarter, down from 0.54 percent in the first quarter, citing a scale back of operations capacity utilization. “The decreased margin was primarily due to continued model transition in smart devices, a cutback in operations and capacity utilization, weak PC momentum and a one-time employee bonus expense of NT$350 million (US$10.8 million) that was booked in the second quarter,” Wistron said in a statement. In the second quarter, the company’s operating income was NT$19 million, down from NT$817 million in the previous quarter.

REAL ESTATE

Taipei price comparison

Housing prices in Taipei have increased more than fivefold over the past 27 years, according to a report released by the Chinese-language MyHousing magazine. To purchase a 150m2 apartment, a double-income family would have to spend the entire salary of both partners for 45 years, the report said. According to the report, the average monthly salary in Taiwan in May this year was NT$37,489, an increase of 18.3 percent over the average NT$31,690 in 1988. However, housing prices in Taipei today are more than five times higher than those of 1988, it said.

TEXTILES

Makalot sets income record

Makalot Industrial Co (聚陽), a textile supplier for global apparel retailers such as Zara, yesterday said pretax income for the first seven months of the year rose 29.97 percent year-on-year to NT$1.55 billion, or NT$7.8 per share, the highest in the company’s history. Jih Sun Securities Investment Consulting Co (日盛投顧) forecast that Makalot would see an even stronger second half boost to its annual net income, growing 27.98 percent to NT$2.18 billion from last year, with revenue rising 13.57 percent to NT$23.72 billion, thanks to expanded capacity and increasing orders.

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