EQUITIES
TAIEX higher, TSMC falls
Local shares yesterday closed marginally higher, but the TAIEX returned to the 10,500-point mark as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure amid concerns over a cut in orders by Apple Inc, dealers said. The TAIEX closed up 15.08 points, or 0.14 percent, at 10,506.52, after moving between 10,472.39 and 10,526.41 on turnover of NT$94.14 billion (US$3.14 billion). TSMC, the most heavily weighted stock on the local market, fell 1.30 percent to close at NT$227 with 14.54 million shares changing hands after local media reported that the chipmaker has become the victim of weaker-than-expected demand for the premium iPhone X, as Apple has cut its orders with the firm by 30 percent for the first quarter of next year.
STEELMAKERS
Tung Ho to issue bonds
Tung Ho Steel Enterprise Corp (東和鋼鐵) yesterday said its board has approved a plan to raise nearly NT$2.51 billion from the issuance of convertible bonds to repay bank loans, a company filing with the Taiwan Stock Exchange said. The bonds would have a maturity of five years with a face value of NT$100,000, the statement said. In a separate filing, Tung Ho said it would inject new capital of US$40 million into its Vietnamese unit to add production lines as part of the company’s long-term strategy to cement its position in the Vietnamese market.
TELECOMS
Campaign adds subscribers
Taiwan Star Telecom Co (台灣之星) yesterday said a promotion campaign last month helped increase its number of mobile subscribers to 1.92 million. Last month alone, the company added 80,000 new subscribers after it launched a new service package that carries a minimal monthly charge of NT$188 for an all-you-can-use Internet connection on its 4G network. The one-year contract can be renewed without any increase in the monthly charge. The growth in subscribers also helped double revenue last month from a year ago, Taiwan Star said. As a newcomer, Taiwan Star has been undercutting its rivals to solicit mobile subscribers.
TIRE MAKERS
Cheng Shin downgraded
Taiwan Ratings Co (中華信評) yesterday revised down its outlook on local tire maker Cheng Shin Rubber Co (正新橡膠) to “negative” from “stable,” while keeping its credit rating unchanged. The outlook revision reflects the view that Cheng Shin’s debt leverage could elevate over the next one to two years amid slowing demand in China and intense competition. The tire maker’s profitability has weakened, with its margin falling to 15 percent in the third quarter of this year, down from 24.2 percent a year earlier, due to weak product pricing. A decline in the sales of passenger car tires, depreciation of the yuan and volatile raw material costs also weighed on Cheng Shin’s profit, Taiwan Ratings said.
FINANCIAL SERVICES
CTBC ratings unchanged
Fitch Ratings yesterday said penalties imposed by the Financial Supervisory Commission on CTBC Financial Holding Co (中信金控) are unlikely to affect the ratings of the conglomerate or its subsidiaries. Fitch said it does not expect the penalties to change the group’s financial profile, particularly that of its flagship subsidiary, CTBC Bank (中國信託銀行). The bank’s rating reflects its sound capitalization, solid asset quality and diverse earnings mix, Fitch said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure
RSS