Taiwanese companies with high European sales contributions or earnings that are linked to the movement of the yen are expected to be most affected by the fallout from Britain’s vote to leave the EU, Yuanta Securities Investment Consulting Co (元大投顧) said.
“Brexit” has unleashed a new wave of uncertainty for global markets, leading to expectations of heightened foreign-exchange volatility as global funds take shelter in defensive options such as the yen and the US dollar, the brokerage said in a report on Friday.
A stronger yen is expected to bring increased cost constraints for Taiwanese dealers of, and suppliers to, Japanese brands, and local companies including Nissan Motor Co (裕隆日產) and Toyota and Lexus distributor Hotai Motor Co (和泰車) might be compelled to increase prices, which could hamper their sales, the report said.
However, local companies that compete against Japanese rivals are set to benefit from a pricing advantage, including makers of industrial machinery, printed circuit boards, and passive electronic components, as well as mobile phone camera supplier Largan Precision Co (大立光) and contact lens manufacturer St Shine Optical Co Ltd (精華光學).
As economic growth prospects turn gloomy, consumers in the EU might become cautious about spending, which could weaken the sales of Taiwanese companies heavily reliant on the European markets, the report said.
Britain’s economy is set to grow by 0.5 percent annually this year, decelerating from last year’s 2.2 percent expansion, Hong Kong-based JPMorgan Asset Management forecast.
Hota Industrial Manufacturing Co (和大工業), which makes gears and shafts for automakers, has a significant 65 percent sales contribution from the EU, Yuanta data showed.
Bicycle maker Merida Industry Co (美利達) has a 40 percent sales dependency on the EU, compared to its peer Giant Manufacturing Co Ltd’s (巨大機械) 27 percent.
haLocal PC makers Asustek Computer Inc (華碩) and Acer Inc (宏碁) generate 35 percent and 37 percent of their sales from the continent respectively, the data showed.
While a risk averse investment environment does not bode well for emerging markets or perceived higher risk assets such as Asian equities, the majority of Asian holdings have a domestic focus — with most companies earning about 60 percent of revenue and profits from their local regions — Fidelity International Asia Pacific ex Japan investment chief Tim Orchard said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last