The earnings momentum of Taiwanese securities companies is expected to remain strong this year after posting a solid recovery last year, Fitch Ratings said in a report yesterday.
The sector’s aggregate net profit increased 77.41 percent year-on-year to NT$68.71 billion (US$2.12 billion) last year, following a 63.27 percent decline the previous year, while return on equity rose to 10.9 percent last year from 6.1 percent in 2022, Taiwan Stock Exchange data showed.
Fitch attributed the sector’s stellar performance last year to improved capital market sentiment, supported by the slowdown in US interest rate hikes and buoyant investor interest in technology stocks, especially in artificial intelligence-related equities.
Photo: CNA
Higher brokerage and investment banking income, as well as an improvement in underwriting activities also contributed to the sector’s earnings recovery last year, the agency said.
The sector’s low use of leverage and increasing risk control would help domestic securities firms navigate high market volatility this year, Fitch added.
“Fitch expects the sector’s earnings strength to persist in 2024, supported by strong corporate financing demand, consistent trading performance based on positive domestic equity market sentiment, and potential further revaluation gains in fixed income securities on the back of tapering US dollar interest rates,” the agency said.
While global economic and geopolitical uncertainties could still weigh on investor sentiment and brokerage revenues, the domestic equity market has been robust this year, with average daily turnover increasing 20 percent from the previous year, Fitch said.
The TAIEX rose 148.87 points, or 0.72 percent, at 20,857.71 yesterday, the highest closing level, exchange data showed. The benchmark index has advanced 15.49 percent so far this year, the best in Asia.
Fitch said the sector would continue to gain support from robust investment banking demand, and underwriting services would benefit from continued supply chain relocation and a rise in capital expenditure due to the need for production improvements to comply with environmental, social and governance regulations.
As securities companies are expanding wealth management services with a special focus on overseas equity and fixed income product sales, revenue generated from this line of business is expected to see marked growth this year, Fitch said.
The improvement would be more pronounced among larger brokerages that are equipped with better information technology platforms and resources, the agency added.
Taiwan’s top 10 securities brokerages maintained their dominance in the sector, accounting for 70 percent of the overall profit last year, thanks also to their low leverage and robust risk-management infrastructure that help manage market volatility, Fitch said.
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
RSS