MACROECONOMICS
GDP forecast update
The Directorate-General of Budget, Accounting and Statistics (DGBAS) is likely to cut Taiwan’s GDP growth forecast for this year to around 2.68 percent, following a disappointing 0.64 percent annual growth for the second quarter, sources said yesterday. The expected downgrade will reflect weakening global demand at a time when several major economies, including China, show signs of a slowdown, the sources said. Under such unfavorable circumstances, the DGBAS could cut its forecast from an estimate of a 3.28 percent increase the agency made in May. The agency is scheduled to update its GDP growth forecast today.
STOCK MARKET
UBS cuts year-end target
UBS Securities Ltd has lowered its year-end TAIEX target forecast to 8,550 points from 9,200, its fourth cut in over two months. The benchmark index closed up 28.36 points, or 0.34 percent, at 8,311.74 yesterday.
“We believe one of the key drags on the market is a lack of fundamental support. In particular, weakness in end-demand from emerging markets, including China, continues to serve as a major headwind for Taiwan tech,” William Dong (董成康), equities and research head of UBS Securities’ Taipei branch, wrote in a client note.
“For non-tech sectors, including bicycles, tires and materials, slow conditions in China continue to be a challenge,” he said.
COMPUTERS
Wistron drops Q2 margin
Contract notebook computer maker Wistron Corp (緯創) yesterday reported a worse-than-expected operating margin of 0.013 percent for the second quarter, down from 0.54 percent in the first quarter, citing a scale back of operations capacity utilization. “The decreased margin was primarily due to continued model transition in smart devices, a cutback in operations and capacity utilization, weak PC momentum and a one-time employee bonus expense of NT$350 million (US$10.8 million) that was booked in the second quarter,” Wistron said in a statement. In the second quarter, the company’s operating income was NT$19 million, down from NT$817 million in the previous quarter.
REAL ESTATE
Taipei price comparison
Housing prices in Taipei have increased more than fivefold over the past 27 years, according to a report released by the Chinese-language MyHousing magazine. To purchase a 150m2 apartment, a double-income family would have to spend the entire salary of both partners for 45 years, the report said. According to the report, the average monthly salary in Taiwan in May this year was NT$37,489, an increase of 18.3 percent over the average NT$31,690 in 1988. However, housing prices in Taipei today are more than five times higher than those of 1988, it said.
TEXTILES
Makalot sets income record
Makalot Industrial Co (聚陽), a textile supplier for global apparel retailers such as Zara, yesterday said pretax income for the first seven months of the year rose 29.97 percent year-on-year to NT$1.55 billion, or NT$7.8 per share, the highest in the company’s history. Jih Sun Securities Investment Consulting Co (日盛投顧) forecast that Makalot would see an even stronger second half boost to its annual net income, growing 27.98 percent to NT$2.18 billion from last year, with revenue rising 13.57 percent to NT$23.72 billion, thanks to expanded capacity and increasing orders.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
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