Low industry orders surprise
Industrial orders in March unexpectedly dropped for the third consecutive month due to weak foreign demand, data showed yesterday, suggesting that factories are facing headwinds from rising protectionism. Contracts for goods fell 0.9 percent after a revised drop of 0.2 percent the previous month, Federal Statistics Office data showed. Analysts had on average predicted a 0.5 percent rise in orders. “A decline of 0.9 percent is a setback that really hurts,” VP Bank Group analyst Thomas Gitzel said. “The economy is slowing down, that’s the sure takeaway from today’s industrial orders data.” Some growth forecasts would soon have to be revised down, he added.
ECB blasts protectionism
The European Central Bank (ECB) reiterated its belief that a rise in trade protectionism would undermine the global economy, and said that the US would bear the brunt of the damage. “In the event of a significant increase in protectionism, the impact on global trade and output could be material,” ECB researcher Lucia Quaglietti wrote in an Economic Bulletin article yesterday. “The impact could be particularly severe in the US.” Global risks such as tariffs are a concern for the ECB, which is witnessing the euro-area economy slow after the strongest growth in a decade last year. ECB President Mario Draghi has said that while the effects of already-adopted protectionist measures is limited, the prospect of a trade war between the US and China could damage confidence and reduce consumption and investment. Escalating trade tensions would harm the economy via higher import prices, increased volatility in financial markets, reduced credit supply and eventually crippled productivity growth, the article said.
Joint venture to build plant
The state-run Bangladesh Power Development Board (BPDB) and China Huadian Hong Kong Company Limited (CHDHK, 中國華電香港) have signed an agreement to form a joint venture company to set up a coal-based power plant with a capacity of 1.32 gigawatts, a senior BPDB official said yesterday. “These two firms signed the deal on Sunday to set up the plant at Moheshkhali Island in Cox’s Bazar District,” BPDB director Mohammad Saiful Islam said. The venture, equally owned by both firms, would take four years to begin, the official said. Another official, who is directly involved with the project, said that as per the initial plan, it might cost about US$2 billion to implement the project. The nation plans to provide electricity to all of its citizens by 2021.
Good Doctor IPO crashes
Investors could not get enough of Ping An Healthcare & Technology Co’s (平安健康醫療科技) initial public offering (IPO). Now they cannot get out fast enough. The company, also known as Good Doctor (平安好醫生), fell as much as 11 percent to trade below the low end of the range offered to investors in the sale, before paring losses to 3.3 percent at 10:33am in Hong Kong. The stock, which drew US$47.5 billion of retail money for a US$1.1 billion IPO, on Friday last week closed unchanged in the worst first-day performance by a tech firm on the territory’s main board in almost four years. Investors are dumping their shares after the firm struggled to live up to the hype, despite the retail portion being 653 times oversubscribed. The share sale valued the firm at about six times projected 2020 sales, compared with 5.1 times for Tencent Holdings Ltd (騰訊), according to Bloomberg Intelligence.
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Shin Kong Financial Holding Co (新光金控) yesterday said that its insurance unit would adjust its investment portfolio after being banned from buying new stocks a day earlier by the Financial Supervisory Commission (FSC). “We will research what we can do based on the commission’s specific instructions after we receive the regulator’s formal documents,” Shin Kong Financial spokesman Sunny Hsu (徐順鋆) told the Taipei Times by telephone. The commission on Tuesday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$941,722) for reckless investment, and demanded that the insurer reduce its overseas investment ratio from 43 percent to 39 percent. The fine would affect
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms