Thu, Jan 07, 2016 - Page 14 News List

Taiwan Business Quick Take

Agencies

FOREIGN EXCHANGE

Devaluation supported

Domestic business leaders yesterday sounded their support for the continuation of “defensive currency devaluation” to boost the nation’s lagging exports as the New Taiwan dollar plunged to NT$33.453 against the US dollar, the weakest in about six-and-a-half years. Chinese National Federation of Industries (全國工業總會) secretary-general Tsai Lien-sheng (蔡練生) said that the drop was appropriate and applauded the central bank’s decision, while urging regulators to further weaken the currency to NT$33.5 against the greenback. Taiwan Association of Machinery Industry (台灣機械工業同業公會) chairman Alex Ko (柯拔希) also proposed that the local currency be devalued to a range between NT$34 and NT$36 against the dollar.

REAL ESTATE

DTZ forecasts downturn

Taipei properties may be at the beginning of an eight-year downturn, said Billy Yen (顏炳立), Taipei-based general manager of DTZ, a global real-estate service provider yesterday. He said that the real-estate market is expected to remain tepid this year, with luxury home prices in prime areas anticipated to fall by 10 percent, while homes in less desirable districts may fall 15 percent. Sellers may have to offer a steeper discount of up to 30 percent before prospective buyers return to the market, he said.

GARMENTS

Makalot sales rise 11.8%

Makalot Industrial Co (聚陽), a garment manufacturer for global clothing brands, yesterday reported that sales throughout last year rose 11.8 percent to NT$23.36 billion, a new record high. Looking ahead, the company said that its production will be running at near-capacity in the first quarter, and 40 percent of capacity for the second quarter has been filled. In addition, the company is to benefit from additional growth momentum as major US brands, such as Gap and Old Navy, launch their respective sports apparel lines.

BANKING

Banks face TRF exposure

The Financial Supervisory Commission yesterday said that domestic banks are facing increasing exposure to yuan-denominated target redemption forwards (TRF) amid a sharp tumble in the strength of the Chinese currency. With contract prices of most TRFs set at a range between 6.3 yuan to 6.5 yuan against the US dollar, domestic banks selling the derivative instrument are facing NT$200 billion in total refundable deposit exposure this month, the commission said. A second TRF crisis since August last year may be on the horizon, the commission said. Banks are required to raise their refundable deposits against possible defaults of TRFs held by their clients. The yuan yesterday fell as low as 6.5 against the greenback.

HOSPITALITY

Occupancy rates fall 2.7%

In the January-to-November period of last year, Taipei’s hotel and lodging occupancy rate declined for the first time in five years, CBRE Taiwan said yesterday. The figure dropped 2.7 percent year-on-year to 74.9 percent, the local branch of the US property consultancy said. Despite the decline, the company found that lodging capacity and room prices had risen 3.3 percent to 110,000 rooms and 0.7 percent to NT$4,532 per night respectively. The company advised hotel operators to differentiate themselves by offering distinctive dining experiences to attract more consumers.

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