FIC to reduce capitalization
FIC Global Inc (大眾投控), a holding company engaged mainly in the manufacture of electronic devices, yesterday said its board has approved a plan to reduce its capitalization with the aim of offsetting accumulated losses. The Taipei-headquartered company is to cut its paid-in capital by 50 percent from NT$3.87 billion to NT$1.93 billion (US$132.5 million to US$66 million), it said in a filing with the Taiwan Stock Exchange. At the end of last year, the company had accumulated net losses of NT$1.92 billion and 380.68 million issued shares. FIC shares shed 2.28 percent to close at NT$7.3 in Taipei trading yesterday before the announcement, underperforming the broader market.
Earnings decline 90 percent
Securities companies reported a month-on-month decline of more than 90 percent in earnings for last month as a result of the six-day Lunar New Year holiday, Taiwan Stock Exchange data showed. The exchange said the sharp drop in earnings also reflected caution among investors, who were concerned about volatility on Wall Street amid rising fears over more interest rate increases in the US. Securities firms reported NT$427.63 million in net profit last month, down 91.76 percent from January, when their earnings stood at NT$5.19 billion, the data showed. Due to the six-day holiday, there were only 15 trading sessions on the stock market last month, which lowered turnover by 39.75 percent from a month earlier, the data showed. In the first two months of the year, securities houses reported NT$5.84 billion in net profit, up 21.7 percent from the previous year largely on a 25 percent increase in turnover in January, when their earnings rose 45.44 percent year-on-year. Last year’s Lunar New Year holiday was in January.
Record dividend announced
Taiwan Sakura Corp (台灣櫻花), which makes cooking appliances and water heaters, yesterday said its board has agreed to distribute a cash dividend of NT$2.6, a company filing with the stock exchange said. The proposed payout, if approved by shareholders on June 13 at the annual meeting in Taichung, would be the highest dividend in the company’s history, data showed. The company reported a net profit of NT$720.19 million for the whole of last year, a 2.7 percent year-on-year increase from NT$701.01 million, with sales edging up 0.7 percent to NT$5.64 billion from NT$5.6 billion. Earnings per share were NT$3.29 over the period, compared with NT$2.75 the previous year. Based on the company’s closing price of NT$37.7 yesterday, the dividend yield would be about 6.9 percent.
Flexium to issue bonds
Flexible printed circuit board supplier Flexium Interconnect Inc (台郡科技) yesterday submitted a new fundraising program to the Securities and Futures Bureau. It plans to issue US$1.2 billion of corporate bonds for overseas investors, following in the steps of local rival Career Technology Co (嘉聯益). Flexium said it plans to invest NT$9.4 billion on new products. Career raised NT$2.92 billion by issuing 76.84 million new shares last week. Metal casing supplier Catcher Technology Co (可成科技) announced that it would invest NT$1.12 billion to acquire a 7.42 percent stake in Career as part of its vertical integration strategy. Flexium shares edged up 0.46 percent yesterday to close at NT$109.5 in Taipei trading.
‘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