International ratings agency Standard and Poor's yesterday said that political uncertainties across the Taiwan Strait would continue to weigh on local stocks in the near term, making the local bourse one of the poorest performers among stock markets in Asia.
S&P gave an "underweight" rating on Taiwanese stocks. Early last month it rated the Hong Kong stock market as "overweight." South Korean and Chinese stock markets were given a "market weight" rating, during the latest review.
Unstable
"We won't be too optimistic about the Taiwan stock market in the next few months as the renewed political uncertainty remains unsettled," S&P analyst Robert Lin (
Lin made the remarks on the sidelines of a press conference to announce the S&P fund awards this year.
More than 1,000 funds participated in this year's competition.
"The Taiwanese government's shifting position on cross-strait relations increases the political risk," Lin said.
President Chen Shui-bian's (
Foreign purchases
"Foreign investors have made heavy purchases of local stocks over the past few months, but this failed to buoy weak sentiment," Lin said.
As of yesterday, the benchmark TAIEX has risen by 0.4 percent to 6,486.47 points since the beginning of the year, while overseas fund managers bought a net NT$121.91 billion (US$3.75 billion) worth of local shares during the same period, according to the Taiwan Stock Exchange Corp's figures.
Foreign investors, which own about one-third of Taiwanese shares, bought a net NT$719.4 billion in local stocks last year.
In addition to the lack of stability in relations with China, Lin said that prolonged restrictions on Taiwanese companies' investments in China have led to an exodus of local firms in search of alternative markets to raise funds.
Looking elsewhere
"Hong Kong has the potential to replace Taiwan [as the top choice of local firms for initial public offerings] because of a lower threshold and greater exposure to foreign investors," Lin said.
The government caps companies' investments in their Chinese operations at 40 percent of their net value.
"Foxconn International Holdings Ltd's (富士康控股) success sets a model for Taiwanese companies," he said.
Foxconn, which makes phones for Nokia Oyj, is a handset manufacturing arm of Taiwan's top electronics component maker Hon Hai Precision Industry Co (
Hon Hai is planning to list another electronics component-making subsidiary, Foxconn Advanced Technology Inc (
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
RSS