EQUITIES
Shares drop on US concerns
Local shares moved lower yesterday as turnover shrank ahead of the conclusion of a two-day policymaking meeting of the US Federal Reserve due later yesterday. Investors remained cautious throughout the session, with many wary of financial woes in the US banking sector, which pushed down shares on US markets overnight. The TAIEX closed down 83.07 points, or 0.53 percent, at 15,553.41, Taiwan Stock Exchange data showed. Turnover totaled NT$201.379 billion (US$6.55 billion), down from NT$224.355 billion on Tuesday, with foreign institutional investors selling a net NT$9.12 billion of shares on the main board, the exchange said.
ELECTRONICS
HTC posts reduced loss
HTC Corp (宏達電) yesterday reported yet another quarterly loss in the first quarter of this year, although it was its lowest loss in seven quarters. The company reported a net loss of NT$680 million in the January-to-March period, down from a net loss of NT$930 million a quarter earlier. Losses per share were NT$0.82, compared with NT$1.12 three months earlier. Dragged by its struggling smartphone business, HTC has reported a net loss nearly every quarter since the second quarter of 2015, except for the first quarter of 2018, when an asset sale helped it post a quarterly net profit. Gross margin continued to climb in the first quarter to 40.8 percent from 40.5 percent in the previous quarter, while revenue fell from NT$1.22 billion to NT$980 million over the period.
SHIPPING
TNC plans NT$2.2 payout
Taiwan Navigation Co’s (TNC, 台灣航業) board of directors yesterday proposed a cash dividend distribution of NT$2.2 per share, its highest payout since 2010. The planned dividend represents a payout ratio of 45.5 percent based on earning per share (EPS) of NT$4.83 last year. However, the bulk shipper saw net profit fall in the first quarter due to hikes in interest expenses and foreign exchange losses. Net profit declined 43 percent from a year earlier to NT$140 million, with EPS of NT$0.34. The shipper said it is cautious about its business outlook, citing a patchy economic recovery in China, ongoing trade tensions between China and the US, and global economic uncertainty, which might cause a sharp decline in the demand for bulk goods and negatively affect the rebound of freight rates for shippers.
INSURANCE
COVID-19 claims drop 70%
Non-life insurance companies’ COVID-19 insurance claims fell 70 percent last month from a month earlier to NT$3.33 billion, the lowest they have been this year, Financial Supervisory Commission data showed on Tuesday. The decrease in COVID-19 insurance claims came as the Central Epidemic Command Center in late March tightened its definition for confirmed COVID-19 cases to people with severe symptoms or those who need oxygen therapy. As of last month, total COVID-19 insurance claims had reached NT$268.3 billion since January last year, the commission’s data showed. The considerable payouts have added pressure to insurers’ bottom lines, with their combined net losses amounting to NT$167.7 billion last year, the commission said. To boost their capital adequacy, several insurers have raised NT$112.5 billion in fresh funds and three insurers are expected to inject another NT$30 billion by next month, it said.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
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