King Yuan’s profit surges
Taiwanese chip packager and tester King Yuan Electronics Co (京元電子) on Friday posted NT$2.98 billion (US$96.07 million) in net profit for last year, a 30 percent jump from 2015’s NT$2.28 billion. Earnings per share last year rose to NT$2.56 from NT$1.93 over the period, the company said in a filing with the Taiwan Stock Exchange. Buoyed by the strong results, the company’s board approved a cash dividend distribution of NT$1.4 per common share, representing 5.07 percent of dividend yield based on the stock’s closing price of NT$27.6 on Friday. The board also agreed to distribute a stock dividend of 4 percent.
Mexico takes aim at NAFTA
Mexico is prepared to negotiate changes to the North American Free Trade Agreement (NAFTA), Mexican Secretary of the Economy Ildefonso Guajardo said on Friday. He said Mexico is prepared to discuss revisions to “modernize” the agreement such as including labor and environmental standards. However, Guajardo said Mexico would not accept the tariffs called for by US President Donald Trump. “It makes no sense to introduce an agreement with border restrictions or tariffs,” he said.
Nissan misconduct alleged
The United Auto Workers (UAW) union said that Nissan Motor Co broke US federal labor law less than two days before a Mississippi rally where US Senator Bernie Sanders was to speak for unionization. The UAW said that on Thursday, a company security guard wrongfully stopped workers from distributing literature and asking fellow employees to authorize a union vote outside a gate of the Canton plant. Nissan spokesman Brian Brockman said the company is investigating, but is not sure yet what happened. Nissan management opposes a union. The choice ultimately belongs to workers, Brockman said.
PMI suggests UK slowing
Britain’s unexpectedly strong economic growth since June last year’s Brexit vote might be starting to fade as inflation picks up, according to a major business survey. Slowing consumer spending started to hurt services companies last month, an unpromising signal for the economy ahead of the departure, the Markit/CIPS UK Services Purchasing Managers’ Index (PMI) showed on Friday. The services PMI fell to a five-month low of 53.3 from January’s 54.5, suggesting the economy is now expanding at a quarterly pace of about 0.4 percent — much slower than the 0.7 percent expansion during the fourth quarter of last year.
UCF eyes Hong Kong Life
A consortium including China UCF Group Co (中國先鋒金融集團) is vying with Yue Xiu Group (越秀集團) to acquire Hong Kong Life Insurance Ltd (香港人壽), according to people familiar with the matter. UCF is in late-stage discussions with Hong Kong Life’s owners, who wish to reach an agreement by the end of the month, the people said. The Beijing-based financial group is bidding together with Hong Kong-listed Credit China FinTech Holdings Ltd (中國信貸科技控股), the people said. Hong Kong Life’s owners are discussing a valuation of more than US$700 million, one of the people said. Yue Xiu, an investment arm of Guangzhou, also remains in talks, the people said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable