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.
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.
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.
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.
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.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees