Taiwanese businesspeople need to pay attention to rising interest rates and fluctuating currency exchange rates while investing in Vietnam, Citibank officials said yesterday.
"Amid strong foreign direct investment inflows, Vietnam has been forced to face the challenge of developing its supportive infrastructure," said Gautam Hazarika, Citibank's director of fixed income, currencies and commodities in the Asia-Pacific region.
"However, Taiwanese companies should be alert to the risks of a volatile Vietnamese dong currency and interest rates in the future," Hazarika said.
As Vietnam's inflation rate hit a 12-year high last month, surging 15.7 percent year-on-year, Hazarika said he expected the Vietnamese government to reduce the money supply in the economy by raising its interest rates.
Nonetheless, as it is equally important for the Vietnamese government to manage its inflation and economic growth, Faisal Ameen, Citibank's head of Vietnam for the network relationship banking team and the global transaction services teams, said he expected the inflation rate in Vietnam to remain as high as 10 percent this year.
Hanoi has been trying to broaden its foreign currency trade band ever since Vietnam joined the WTO in November 2006 and Citibank said the massive capital inflow into the country will result in increased foreign exchange liberalization and a more volatile foreign exchange rate environment.
Citibank said export-oriented foreign investors in Vietnam should hedge on a basket of currencies to avoid the risk of receiving less dong for every US dollar when the dong appreciates.
Citibank said Taiwanese companies should also be aware that the trading in Vietnam is restricted to those between the dong and other foreign currencies. That means dong-NT dollar transactions have been done in two parts.
"Since the Vietnam dong and the NT dollar are both restricted currencies, [trading between] the Vietnam dong and the US dollar has to be done in Vietnam, while the NT dollar and the US dollar has to be done in Taiwan," Hazarika said.
Citibank said Taiwan is one of the biggest investors in Vietnam, with more than 1,500 investment projects and US$7,935 million registered capital.
Many of the projects are from Taiwan's small and medium-sized enterprises, it said.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
RSS