Although retaining a stable outlook and an A+ sovereign rating for Taiwan, Fitch Ratings, an international rating agency, yesterday expressed concern over the nation's post-election political dispute.
"We're incorporating political and cross-strait risks into our sovereign rating for Taiwan," Brian Coulton, senior director and head of Asia sovereign ratings at Fitch Ratings, said yesterday at a seminar in Taipei while presenting an overview of local conditions.
Coulton said that the lingering dispute over Saturday's presidential election result is expected to extend the period of political uncertainty and undermine the legitimacy of President Chen Shui-bian (陳水扁).
The political stand-off may also entail the risk of reduced policy effectiveness, diminishing prospects for the nation's future banking reforms and fiscal policy adjustments, he added.
However, only if protracted political tensions negatively impact the nation's upcoming economic recovery would Fitch Ratings consider revising its sovereign rating for Taiwan, Coulton said.
Previously, Chen's call for a referendum worried rating agencies about the possibility it would rile Beijing into detoriating the cross-strait relationship. But as the votes failed, Coulton said that the "no show" result greatly reduced the likelihood of military confrontation between Taiwan and China while easing concerns about the president's future moves toward a sovereign vote.
While some Taiwanese businessmen worry that Chen's narrow election victory would slow the development of cross-strait links, Coulton said he believed the incumbent president would adopt a "pragmatic approach" when dealing with cross-strait issues in his next four-year tenure.
Chen yesterday vowed to begin mending the relationship with China during his second term, saying he had no pressure to get re-elected.
Coulton further predicted the nation's economic growth rate (GDP) would hit 4.7 percent this year, saying several positive signs, including growing exports, bank credit and private consumption, indicate a healthy economic recovery.
On Monday, another international ratings agency, Standard & Poor's, also said that it would not change its view on Taiwan's credit ratings for the moment, since it expects the current political impasse to be resolved soon.
But S&P yesterday warned that the nation's banking sector still faced a lot of challenges ahead, although it had become healthier after the aggressive write-off of non-performing loans in the past three years.
The ratings agency estimated that the nation's bad-loan ratio may decline to between 5 and 7 percent by the year's end from its high of 15 percent at the end of 2001.
Most industrialized countries have bad-loan ratios of less than 2 percent, so there was still room for improvement with Taiwan's bad-loan problem and financial transparency, S&P said.
"The local banking sector should continue to reinforce its risk management before the arrival of the next economic recession," the ratings agency said in a statement.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.
MAJOR CONTRIBUTOR: Revenue from AI servers made up more than 50 percent of Wistron’s total server revenue in the second quarter, the company said Wistron Corp (緯創) on Tuesday reported a 135.6 percent year-on-year surge in revenue for last month, driven by strong demand for artificial intelligence (AI) servers, with the momentum expected to extend into the third quarter. Revenue last month reached NT$209.18 billion (US$7.2 billion), a record high for June, bringing second-quarter revenue to NT$551.29 billion, a 129.47 percent annual increase, the company said. Revenue in the first half of the year totaled NT$897.77 billion, up 87.36 percent from a year earlier and also a record high for the period, it said. The company remains cautiously optimistic about AI server shipments in the third quarter,
Hypermarket chain Carrefour Taiwan and upscale supermarket chain Mia C’bon on Saturday announced the suspension of their partnership with Jkopay Co (街口支付), one of Taiwan’s largest digital payment providers, amid a lawsuit involving its parent company. Carrefour and Mia C’bon said they would notify customers once Jkopay services are reinstated. The two retailers joined an array of other firms in suspending their partnerships with Jkopay. On Friday night, popular beverage chain TP Tea (茶湯會) also suspended its use of the platform, urging customers to opt for alternative payment methods. Another drinks brand, Guiji (龜記), on Friday said that it is up to individual
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