STOCK MARKET
TAIEX at lowest since 2013
The TAIEX slumped to its lowest level since August 2013 amid concern the nation’s slowing economy and China’s currency devaluation will hurt corporate earnings. The TAIEX fell 1.9 percent to close at 8,021.84 points. At one point, the benchmark gauge briefly entered a bear market after tumbling 20 percent from a 15-year high on April 27 before paring losses. “The wave of declines is rooted in the problems in Taiwan’s economy,” Capital Investment Management Corp (群益投顧) vice president Alan Tseng (曾炎裕) said yesterday. Last week, the government halved its GDP growth forecast to 1.56 percent for this year from 3.28 percent after exports slumped for a sixth month. “The electronics industry is facing the toughest competition in 10 years because of China. The index will fall below 8,000,” Tseng said.
RETAIL
Convenience stores grow
The number of convenience stores in Taiwan rose 1.4 percent last year from the previous year to 10,154 and was 25.53 percent higher than the 8,089 that existed at the end of 2004, the Fair Trade Commission (FTC) said in a statement yesterday. In the past decade, the number of convenience store outlets has grown an average of 2.3 percent a year, the commission said. The stores served 2.91 billion customers last year, up about 30 million from a year earlier, according to the commission, with average spending of NT$71 (US$2.18) by consumers, up from NT$65 in 2009. The nation’s five major convenience store chains are President Chain Store Corp (PCSC, 統一超商), which operates 7-Eleven stores, Taiwan FamilyMart Co (全家便利商店), Hi-Life International Co (萊爾富), Circle K and Million, which is run by state-owned Taiwan Sugar Corp (台糖).
STOCKS
Cheng Shin shares drop
Tire maker Cheng Shin Rubber Industry Co (正新橡膠) yesterday saw its shares drop to close 2.52 percent lower at NT$54.1, their lowest level since 2009, after several foreign brokerages lowered their earnings growth forecasts for the company. The company on Tuesday held an investors’ conference at its Changhwa headquarters, saying it remained confident in its second-half growth outlook. However, the company might face market headwinds amid a slowdown in new car sales in China, which would affect demand for passenger car radial tires, and the prolonged transition time of the truck and bus radial tires, analysts said. “We expect the company to deliver downward earnings growth, given the shipment decrease and average selling price drop,” JPMorgan Securities Ltd said yesterday in a note. The brokerage forecast Cheng Shin’s sales to drop 4 percent year-on-year on lower average selling price and shipments.
SMARTPHONES
HTC mulls factory sale
HTC Corp (宏達電) yesterday did not confirm if it is in talks to sell its smartphone manufacturing factory in Shanghai to an unidentified Chinese company to address its mounting financial woes. The latest edition of the Chinese-language Next Magazine yesterday reported the company has planned to shut down two production lines in the Shanghai factory and discussed the sale of the facility with a Chinese firm. HTC set up the 146,667m2 factory in the Pudong New Area of Shanghai in 2009 with an initial investment of NT$1.05 billion, the magazine reported.
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
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
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
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
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