TRADE
Brexit to have limited impact
The Bureau of Foreign Trade yesterday said that Brexit would have a limited effect on Taiwan’s exports, as Britain represents only 1 percent of the nation’s overall trade. Meanwhile, the Financial Supervisory Commission said that Brexit-related exposure faced by Taiwanese financial companies totaled about NT$1.31 trillion (US$41.47 billion), of which insurers have the highest exposure at NT$989.6 billion, 4.87 percent of insurers’ capital. Banks have the second-highest exposure at NT$169.5 billion, 0.38 percent of their assets, of which NT$114.4 billion are investments and NT$55.1 billion are loans, the commission said. Equities and futures brokerages have a combined exposure of NT$17.51 billion, 3.63 percent of the two industries’ net value, it added.
ENERGY
FTC approves CPC purchase
The Fair Trade Commission (FTC) yesterday approved CPC Corp, Taiwan’s (CPC, 台灣中油) NT$2.28 billion bid to acquire Tung Ting Gas Corp (東鼎液化瓦斯). The two companies are to merge upon the deal’s completion, with CPC designated as the surviving entity. Approval was granted as the competitive landscape of the nation’s liquefied natural gas market would not be affected, the commission said, adding that it has classified the deal as a vertical merger between different industry segments.
SHIPPING
Supply glut expected to ease
A supply glut that has tormented the global container shipping industry is expected to diminish this year, Yang Ming Marine Transport Corp (陽明海運) said yesterday. Globally, total cargo shipping capacity growth is expected to reach 3.4 percent this year, down from a previous estimate of 4.8 percent, Yang Ming chairman Bronson Hsieh (謝志堅) said. With demand growth holding steady at 1.6 percent, shippers are anticipating freight rates to recover throughout this year, he said, adding that freight rates for some routes between Asia and Europe have surged by 100 percent, while capacity has grown by only 1.6 percent.
CHIPMAKERS
Nanya sells overseas bonds
DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday said it has raised US$500 million through sales of overseas corporate bonds. The bonds are to mature on Jan. 24, 2022, and were issued as zero-coupon and with a 1.75 percent yield per annum, Nanya said, adding that investors have a one-time option to put the bonds at a yield-to-put of 1.75 percent per annum on Jan. 24, 2020. The bonds can be converted into newly issued common shares of Nanya at an initial conversion price of NT$52.47 per common share, the firm said, adding that the transaction is expected to settle and close on Tuesday next week. The chipmaker plans to use the net proceeds to fund a technology upgrade to a 20-nanometer process, it said.
GARMENTS
Makalot sales fall 5.27%
Makalot Industrial Co (聚陽), a garment manufacturer for global clothing brands, yesterday said in a filing with the Taiwan Stock Exchange that sales for last year would decline 5.27 percent to NT$22.13 billion. Pre-tax profit for last year plunged 29.08 percent to NT$1.91 billion, from NT$2.69 billion in 2015, due to lower product prices and weakening demand from its major global brand customers, Makalot said. Makalot shares yesterday fell 0.82 percent to NT$121 in Taipei trading.
ASE Technology Holding Co (ASE, 日月光投控) yesterday launched its second testing facility in San Jose, California, to expand advanced chip testing capacity such as burn-in testing to satisfy customers’ rising engineering needs for emerging semiconductor applications, such as artificial intelligence (AI) and high-performance computing (HPC). ISE Labs Inc, a fully owned subsidiary of ASE, would operate the advanced testing facility. When added to its first facility in nearby Fremont, ISE would double its available research-and-development lab and business space to 150,000m2 in hopes of boosting the US semiconductor supply chain, the company said in a statement. “As the semiconductor manufacturing supply chain reshoring
VALUE: TSMC’s market capitalization far exceeds the combined size of all the Latin American companies on MSCI Inc’s benchmark for emerging markets Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$420 billion equity rally this year would get a valuation test this week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts. The world’s biggest contract chipmaker would probably report a 29 percent increase in second-quarter net income on Thursday, according to the median estimate of analysts surveyed by Bloomberg. More importantly, analysts from JPMorgan Chase & Co to Morgan Stanley expect it to also raise its full-year sales guidance, justifying another round of valuation expansion. Just like Nvidia Corp, TSMC has become a favorite artificial intelligence (AI)-bet for investors with
ASSASSINATION ATTEMPT: The previous shooting targeting a US president or major party candidate was the 1981 incident targeting then-US president Ronald Reagan Saturday’s shooting at former US president Donald Trump’s election rally raises his odds of winning back the White House, and trades betting on his victory would increase this coming week, investors said yesterday. Trump was shot in the ear during the rally in Pennsylvania on Saturday in what the authorities were treating as an assassination attempt. Trump, his face spattered with blood, pumped his fist moments after the attack, and his campaign said he was fine after the incident. Before the shooting, markets had reacted to the prospect of a Trump presidency by pushing the US dollar higher and positioning for a
President William Lai (賴清德) yesterday thanked memory chipmaker Micron Technology CEO Sanjay Mehrotra for his trust and continued investment in Taiwan, in a rare public meeting with a senior foreign tech executive. It is very unusual for Taiwan’s president to have publicized meetings with senior foreign tech executives, despite the nation being home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), whose chips help to power the surge in artificial intelligence (AI) applications. Lai thanked Mehrotra for “showing trust and support for Taiwan” in a video released by the Presidential Office. “I want to thank Micron for its long-term