There is broad consensus in major investment firms’ outlooks for next year that Asian companies would see a significant improvement in earnings growth next year.
For Societe Generale SA, the most likely source of that growth would be from technology and financial shares.
“The earnings cycle is now showing signs of picking up,” Societe Generale strategists Roland Kaloyan and Frank Benzimra wrote in a report on Friday last week. “A lower base, improving earnings momentum, turnaround in the tech cycle and easing monetary conditions should help the market achieve 10 percent EPS [earnings per share] growth in 2020.”
Third-quarter earnings for Asian shares outside Japan showed visible signs of rotation, with once high-flying consumer companies disappointing, while the reverse was true for technology firms, the strategists said.
Semiconductor sales are increasing sequentially, just as memorychip prices stabilize and inventories fall, they wrote.
Taiwanese technology shares are best positioned to take advantage of the trend as they are more “quality” oriented, with lower earnings volatility and less impact from memorychip price fluctuations, while South Korean firms are more cyclically oriented, the report said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has narrowly outperformed Samsung Electronics Co this year, with a 40 percent gain as both chipmakers raced well ahead of the MSCI Asia ex-Japan Index.
TSMC shares yesterday rose 0.96 percent to close at NT$316 in Taipei trading, while Samsung shares rose 1.59 percent to close at 51,200 won in Seoul.
The outlook for financial services companies is also brightening, as asset quality has shown signs of stabilizing, central banks have little room for more monetary easing and growth is normalizing, the report said.
“The case for a recovery in China banks looks convincing, with NPL [non-performing loan] ratios stabilizing and limited room left for margin contraction,” it 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