The Ministry of Finance yesterday said it would ask state-run banks to offer loans totaling NT$1 trillion (US$33.67 billion) to help local firms upgrade and transform in the post-pandemic era.
The ministry would act as an integrator in facilitating the loans that might be available for a year after the COVID-19 outbreak has stabilized, Minister of Finance Su Jain-rong (蘇建榮) told a media briefing.
The government is mobilizing resources to help local firms recover from the virus shock and grow stronger on the world stage, Su said.
Photo: Wu Chi-lun, Taipei Times
State-run lenders would be asked to offer loans totaling NT$1 trillion at preferential interest rates, capped at 2 percent on top of benchmark policy rates, he said.
That means borrowing costs would stand at 2.81 percent, much lower than an average of 4 percent for loans to small and medium-sized enterprises, Su said.
The funds are intended to support companies that plan to innovate, transform, upgrade and deploy in overseas markets.
Furthermore, venture capital units of state-run financial institutions are encouraged to take the initiative and join forces with private partners in funding promising ventures, he said.
“State-run financial institutions are to take up the role of a locomotive and supply fuel for corporate investment in the post-pandemic era,” Su said.
The six state-run venture capital companies can together come up with NT$10 billion for such moves, he said.
The ministry would lend support to the campaign by providing tax credits, lower tax refund thresholds, friendly tariffs and other incentives, Su said.
The virus outbreak and US-China trade tensions make global supply chain realignment necessary and local firms are weighing upgrade and transformation options to stay in business, he said.
The ministry would continue to assist Taiwanese firms returning from overseas markets and provide incentives for capital repatriation, he added.
The pace of capital repatriation has so far lagged behind government expectations, with only NT$10.55 billion repatriated over the past 10 months, compared with an estimate of NT$133.3 billion annually under a conservative scenario, Su said.
“The figures suggest much room for improvement,” he said.
Su said that the National Stabilization Fund’s steering committee would meet on July 15 to discuss whether to exit the local bourse now that the TAIEX has recovered almost all of the losses it suffered due to the pandemic.
Su declined to speculate on the fund’s movements, saying that the committee would have the final say following a consensus ruling.
Foreign institutional players have mostly rejoined the local market as evidenced by the rallies in the TAIEX and a stronger local currency, he said.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS