As the number of daily new infections of COVID-19 continued to dip last week, investor sentiment has started to improve, with net selling of local equities by foreign investors narrowing to NT$2.26 billion (US$75.21 million) so far this month, compared with NT$42.63 billion at the end of last month.
Foreign investors last week bought a net NT$4.67 billion of shares on the main bourse after selling a net NT$42.23 billion in the previous two weeks, Taiwan Stock Exchange statistics showed.
The TAIEX was up 1.7 percent for the entire week, ending at 11,815.70 on Friday.
“There are some issues that deserve further observation in the next two weeks, such as whether the outbreak is under control after a large number of Chinese workers return to work and if there are any downward revisions about factories’ capacity production and market demand,” Allianz Global Investors Taiwan Ltd (安聯投信) said in a note on Saturday.
On a positive note, local equities would gain support from abundant funds and sound fundamentals, such as 5G growth in the long run, unless the coronavirus outbreak is seriously out of control and the decline in consumption power drags the economy down, it said.
Uni-President Assets Management Corp (統一投信) said in a note on Friday that a fresh wave of panic selling of local equities is unlikely in the short term.
“The worst is over. As long as the outbreak no longer spreads and the supply chain returns to normal, it is estimated that there may be a demand by companies for replenishing inventories in late February, and even the business in the second quarter is expected to be off-season,” Uni-President Assets said.
However, investors must pay attention to the risk of shortages in raw materials and components within supply chains after the resumption of work in China, Allianz said.
“Even more worthy of attention is industries with low inventory levels or those with factories in Wuhan, such as passive components and printed circuit boards industries,” it said.
Wuhan is the city in China where COVID-19 originated.
Allianz said that several manufacturers have started to shift their production bases from China due to the US-China trade dispute, and the COVID-19 outbreak presents an opportunity to “accelerate the shift of production out of China and benefit companies whose products are not made in China.”
Separately, 103 firms and 129 individuals have applied to repatriate NT$56.4 billion since a repatriation bill took effect on Aug. 15 last year, data released by the Ministry of Finance showed.
As of Friday, about NT$53.5 billion had been approved, while NT$47.2 billion had been repatriated, the ministry said.
The bill provides for a preferential tax rate of 4 percent in the first year and 5 percent in the second year if the pledged investment materializes within a certain time.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts