AVIATION
UTC to buy Goodrich Corp
United Technologies Corp (UTC) has reached a US$16.5 billion cash deal to acquire aircraft components maker Goodrich Corp in the diversified US manufacturer’s biggest deal in a decade. United Tech said on Wednesday it would pay US$127.50 a share for Goodrich, a 47 percent premium over the stock’s closing price on Thursday last week. The deal, if completed, would be the diversified US manufacturer’s largest takeover in a decade and boost United Tech’s presence in the commercial aviation business. It also includes US$1.9 billion in assumed debt.
AUTOMAKERS
Nissan expands OEM deal
Nissan and Mitsubishi are strengthening their cooperation by expanding the number of models they make for each other in Japan. Nissan and Mitsubishi have had an original equipment manufacturer (OEM) deal since December last year. They manufacture specific vehicle models for each other and sell them under their own brands. Nissan yesterday said it would provide the Fuga luxury sedan to Mitsubishi, starting from next summer. They have also started talks on Mitsubishi providing the Minicab-MiEV electric car to Nissan in the fiscal year that begins next April.
SOUTH KOREA
Alleged LCD cartel probed
The Fair Trade Commission yesterday said it was investigating 10 LCD makers in Taiwan, South Korea and Japan for allegedly operating a cartel. A commission spokesman confirmed the disclosure made by its chief, Kim Dong-soo, in an interview with the JoongAng Daily. “We plan to complete our probe by the end of this year,” Kim told the paper. He said a similar probe was underway into five TV tube glassmakers from South Korea and Japan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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