TAIEX makes slight rebound
Taiwanese shares closed 1.22 percent higher yesterday as investors hunted for bargains after losses in the previous session, dealers said.
The weighted index closed up 105.39 points at the day’s high of 8,724.47, off a low of 8,631.46, on turnover of NT$97.27 billion (US$3.21 billion).
“Despite a rebound after a quite disappointing week, investors could not bring themselves to help push the upside much further,” Taiwan International Securities (金鼎證券) analyst Arch Shih (施博元) said.
The contraction in turnover yesterday was a clear indication of this, he said, adding that the best-case scenario for the local bourse would be rangebound consolidation in the near term.
After having locked in profits accumulated in previous months on an anticipated rapprochement with China, people are now increasingly watchful of fundamental factors, he said.
“The big picture is that the world is faced with slower economic growth compounded by rising inflation,” Shih said.
Investors kept their eyes on local high-tech stocks on expectations of new contracts being consigned to companies at the Computex trade show in Taipei that begins today, dealers said.
Minister skeptical on tax idea
Minister of Finance Lee Sush-der (李述德) yesterday voiced reservations about the idea of axing tax credit for high-income industries as proposed by a chip tycoon last week to encourage the nation’s rich to pay more taxes.
Lee told the legislature’s Finance Committee he did not agree with Taiwan Semiconductor Manufacturing Co (台積電) chairman Morris Chang (張忠謀) completely, arguing that tax incentives are necessary to help local industries prevent brain drain.
Chang said on Friday that the government should not seek in any manner to keep alive the law aimed at promoting industrial development by providing various tax benefits. The law is due to expire at the end of next year.
Several legislators had lauded Chang’s courage in making the remarks, but argued that any hike of the top 40 percent tax rate for the nation’s individual income earners would scare away foreign investors and end up hurting the nation’s economic competitiveness.
Hon Hai forecasts sales growth
Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer, forecast annual sales of US$50 billion to US$60 billion, said an analyst who attended the company’s annual shareholder meeting in Taipei.
Chairman Terry Gou (郭台銘) urged investors to “look at the longer term,” said Calvin Huang, a Taipei-based analyst at Daiwa Institute of Research Ltd, who rates the stock “sell.”
Hon Hai makes iPods for Apple Inc, game consoles for Sony Corp and computers for Dell Inc. The company posted parent-level sales of NT$1.2 trillion (US$39.6 billion) and consolidated sales of NT$1.7 trillion last year.
Hon Hai spokesman Edmund Ding (丁祈安) said he couldn’t immediately confirm if the forecast given by Gou was for consolidated or parent-level sales.
NT dollar hits six-week high
The NT dollar yesterday advanced to the highest level in six weeks on optimism that closer ties with China will boost the economy.
“The planned opening to mainland money will boost demand for the Taiwan dollar, boding well for the currency,” said Dariusz Kowalczyk, chief investment officer at CFC Seymour Ltd in Hong Kong.
The NT dollar advanced 0.6 percent to close at NT$30.219 yesterday on turnover of US$1.532 billion, according to Taipei Forex Inc. The currency may “test NT$30,” Kowalczyk said.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
FAULTs BELOW: Asia is particularly susceptible to anything unfortunate happening to the AI industry, with tech companies hugely responsible for its market strength The sudden slump in Asia’s technology shares last week has jolted investors, serving as a stark reminder that the world-beating rally in artificial intelligence (AI) and semiconductor stocks might be nearing a short-term crest. The region’s sharpest decline since April — triggered by a tech-led sell-off on Wall Street — has refocused attention on cracks beneath the surface: the rally’s narrow breadth, heavy reliance on retail traders, and growing uncertainty around the timing of US Federal Reserve interest-rate cuts. Last week’s “sell-off is a reminder that Asia’s market structure is just more vulnerable,” Saxo Markets chief investment strategist Charu Chanana said in
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