Cathay Financial Holding Co’s (國泰金控) shareholders on Friday approved the company’s proposal to raise up to NT$50 billion (US$1.78 billion) in new capital to fund future mergers and acquisitions (M&As). The financial conglomerate plans to issue fewer than 1 billion new shares to raise funds at an appropriate time, it told shareholders at an annual general meeting in Taipei. Cathay Financial aims to build a comprehensive financial platform in the Greater China and Southeast Asia markets, president Lee Chang-ken (李長庚) told the meeting. The company’s banking arm, Cathay United Bank (國泰世華銀行), has opened units in nine countries in Southeast Asia, while its insurance subsidiaries have branches in Vietnam, Lee said. “There is still tremendous room for expansion,” he said. Cathay Life Insurance Co (國泰人壽) last year posted a loss of NT$8.8 billion from an investment in Indonesia’s PT Bank Mayapada Internasional Tbk, but Lee said that it “was only an isolated case” and would not restrict the company’s investment in Southeast Asia. However, the spread of COVID-19 infections has limited cross-border movement, as well as slowed the company’s onsite review and due diligence regarding target companies, Lee said. The pandemic has had different repercussions on various industries and countries, but it has also revealed some favorable M&A opportunities for the firm, he added. Cathay United Bank has had a decline in lending and wealth management demand due to COVID-19, but the pandemic’s impact on the Taiwanese economy is likely to diminish as the vaccination rate rises and stricter anti-virus measures are lifted, Lee said. Sales in Cathay Life Insurance are expected to improve in the second half of the year as the government plans to lower a level 3 COVID-19 alert to level 2, which would allow the company’s sales agents to visit clients in person, he added. “As the COVID-19 pandemic has been predicted to become a seasonal illness
DOMESTIC BOOST: The central bank said that retail investors accounted for 73.7 percent of daily turnover on the Taiwan Stock Exchange, the highest since 2010
Taiwan’s money supply, measured by movements in the M1B and M2 gauges, logged annual gains of 17.36 percent and 9.02 percent respectively last month, as local individual investors increased investments in the local bourse, the central bank said on Friday. The pace of the increases represented a minor slowdown from May, when the narrower M1B money supply gauge, measuring cash and cash equivalents, rose 17.74 percent and the broader M2 gauge, which includes M1B, time deposits, time savings deposits, foreign currency deposits and mutual funds, rose 9.21 percent. The M1B gauge is often used to access stock investment interest. Investors are said to prefer to hold on to cash to guard against market volatility when M2 growth outpaces M1B growth. Securities accounts, a main M1B growth driver this year, climbed to a record NT$3.05 trillion (US$108.82 billion), while margin lending rose to NT$347.5 billion, the highest since June 2011, the bank said. Retail investors accounted for 73.7 percent of daily turnover on the Taiwan Stock Exchange (TWSE), the highest since January 2010, the central bank said. An easing of odd-lot regulations and day-trading rules seemed to have attracted younger and less affluent investors to trade on the local bourse, the central bank added. However, overseas and foreign players only accounted for 19.2 percent, the lowest since April 2012, the central bank said. Foreign portfolio managers have this year trimmed holdings in local shares, wiring US$1.91 billion abroad last month in the hope of pursuing better returns in other markets, the bank said.
The winning number for the NT$10 million (US$356,786) special prize in the May-to-June uniform invoice lottery is 51118051, the Ministry of Finance said yesterday. The winning number for the NT$2 million grand prize is 37385202, while the winning numbers for the NT$200,000 first prize are 27461411, 99831976 and 10229515. Invoice numbers that match the last seven digits of the first-prize numbers win NT$40,000, while those that match the last six digits win NT$10,000. A prize of NT$4,000 is given for invoices that match that last five digits of the first-prize numbers, while NT$1,000 is given for matching the last four digits and NT$200 for matching the last three. An additional prize of NT$200 goes to numbers ending in 747. The May-to-June lottery prizes can be claimed from Friday next week to Nov. 5, the ministry said. Prizes of NT$1,000 or below can be redeemed at 7-Eleven, Hi-Life International Co (萊爾富), Family Mart Co (全家) and OK Mart Co (來來超商) convenience stores, as well as Pxmart Co Ltd (全聯實業) and Simple Mart (美廉社) supermarkets. The invoices for prizes up to NT$40,000 can be redeemed at credit cooperatives, while First Commercial Bank (第一銀行), Chang Hwa Bank (彰化銀行) and the Agricultural Bank of Taiwan (農業金庫) branches redeem invoices for all prizes, including those larger than NT$200,000. The ministry also released the winning numbers of the electronic uniform invoices, including the 1 million invoices that won NT$500, the 16,000 invoices that won NT$2,000 and the 30 invoices that won NT$1 million. Unlike the paper invoice draw, the winning electronic invoice numbers are drawn from the numbers stored in the cloud. Electronic winners can redeem prizes on an app that stores and checks receipts, and enables winners to claim their prizes electronically and remit prize money directly to a bank account.
The nation’s publicly listed firms raised NT$468.9 billion (US$16.73 billion) in fresh capital in the first half of the year, up 9.53 percent from last year, as companies moved to expand production capability, the Financial Supervisory Commission (FSC) said on Tuesday. Forty-two percent, or NT$196 billion, was raised by electronic component makers, 16 percent by infrastructure-related firms such as Taiwan Power Co (台電) and 13 percent by shipping firms such as Yang Ming Marine Transport Corp (陽明海運), the commission said. Firms are to use half of the capital, or NT$199.3 billion, to pay down debts, down 12 percent from last year, Securities and Futures Bureau Deputy Director Kuo Chia-chun (郭佳君) told a videoconference. Firms plan to spend about 37 percent, or NT$148.1 billion, to improve production lines, up 21 percent from NT$121.6 billion last year and a new record, Kuo said. “Most firms planning to use the raised capital to expand capacity are in the electronic component sector,” Kuo said. Eighty-four percent, or NT$397.4 billion, was raised domestically, up 4 percent from last year, while 15 percent came from overseas, up 54 percent, FSC data showed. In the first six months, firms raised NT$22.91 billion through private placement, up 35 percent from last year, while BankTaiwan Life Insurance Co Ltd (臺銀人壽) raised NT$11 billion in March, Kuo said.
Evergreen Marine Corp (長榮海運) and Yang Ming Marine Transport Corp (陽明海運) last week denied US accusations of colluding with other shipping companies to fix prices, pledging to help in an investigation into such complaints amid a global shortage in marine cargo shipping services. The allegations came as the US is experiencing high inflation, partly driven by the expensive cost of shipping since its economy began reopening after disruptions related to COVID-19. Evergreen and Yang Ming said that cargo service prices are set based on US regulations, and their pricing had been reported to US marine authorities. The two shippers said they would work with the US Federal Maritime Commission (FMC) in its probe into complaints regarding fees charged by shipping companies and terminal operators. Earlier last week, the commission announced an audit program and a dedicated team to assess compliance with its rule on detention and demurrage — a charge paid to the owner of a chartered ship for failure to load or discharge the ship within the agreed time — as cargo vessels are stuck in major US ports. The move aims to provide more information that benefits the market by regularly monitoring cargo services, the commission said. The audit program would analyze the top nine carriers by market share for compliance with detention and demurrage rules in the US, it said. The commission’s probe targets Evergreen and Yang Ming, as well as Denmark’s A.P. Moller-Maersk A/S, Switzerland-headquartered Mediterranean Shipping Co, China-based COSCO Shipping Holdings Ltd (中遠海運控股), France’s Le Groupe CMA CGM, Germany’s Hapag-Lloyd AG, South Korea’s Hyundai Merchant Marine Co and Japan’s Ocean Network Express. Evergreen and Yang Ming said that if the commission needs more information, they would provide it to facilitate the investigation. There has been no collusion in pricing among the world’s major shippers, Yang Ming president Patrick Tu (杜書勤) said. Tu quoted US
CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) yesterday announced that they would cut gasoline prices by NT$0.2 per liter this week after raising prices by NT$0.1 per liter last week. Diesel prices are to increase by NT$0.1 per liter today, after rising by the same amount last week, the two companies said. Based on CPC’s floating oil price formula, diesel prices should have risen by NT$0.6 per liter, but to ease the financial burden on consumers amid a COVID-19 outbreak, it decided to absorb part of the cost increase, CPC said. After the adjustment, gasoline prices at CPC stations are to fall to NT$28.4, NT$29.9 and NT$31.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while the price of premium diesel is to increase to NT$25.8 per liter, the company said in a statement. In a separate statement, Formosa said that prices at its stations are to increase to NT$28.4, NT$29.8 and NT$31.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while the price of premium diesel is to increase to NT$25.6 per liter.
As unprecedented downpours in Europe, China and India have shown, climate change is a challenge that all humanity must face in the 21st century. Last year, Citibank Taiwan Ltd (花旗台灣) and the Taiwan Youth Climate Coalition (TWYCC) jointly launched a series of initiatives called Citi Empowers Taiwan Youth to Tackle Climate Change. One part, titled “Taiwan Conference of Youth,” has attracted more than 360,000 views. To increase awareness of climate change, Citibank Taiwan and the TWYCC have published the Citi Empowers Taiwan Youth to Tackle Climate Change guide, which assembles information on climate change; international trends in environmental, social and corporate governance (ESG) goals and climate issues; and insights from experts in Taiwan and overseas. The guide is available on the Citi Youth Climate Power Initiative’s Facebook page. “A recent Citi Asia Pacific report shows that more than half of companies have incorporated ESG strategies and practices into their overall corporate strategy,” said April Pan (潘玲嬌), head of Citibank Taiwan’s country corporate affairs and government affairs department. “Citibank Taiwan understands the importance of ESG sustainability issues — and not only released its first certified ESG report last year, but has also worked with its employees, customers, non-profits and other stakeholders to implement the UN Sustainable Development Goals on sustainable cities and communities, climate action, life below water and partnerships for the goals.” In addition to pursuing sustainable development for businesses and the environment, Citi is committed to promoting youth empowerment. “In Taiwan, a group of young people have stepped forward to address climate change and promote climate diplomacy through the far-reaching influence of the Internet,” Pan added. “We hope that through their creativity and energy, we can inject much-needed positive energy into raising more awareness on climate issues among the younger generation and the general public.” “As a result, in 2020, Citibank Taiwan started working
EDUCATION AS WELFARE: New regulations threaten to upend the lucrative private education sector that teaches the public school curriculum to paying families
China unveiled a sweeping overhaul of its US$100 billion education tech sector, banning companies that teach the school curriculum from earning profit, raising capital or going public. Beijing on Saturday published an array of regulations that together threaten to overturn the sector and jeopardize billions of dollars in foreign investment. Companies that teach school subjects can no longer accept overseas investment, which could include capital from the offshore registered entities of Chinese firms, according to a notice released by the Chinese State Council. Those in violation of that rule must take steps to rectify the situation, the country’s most powerful administrative authority said, without elaborating. Additionally, listed firms will no longer be allowed to raise capital via stock markets to invest in businesses that teach classroom subjects. Outright acquisitions are forbidden, and all vacation and weekend tutoring related to the school syllabus is now banned. The regulations threaten to obliterate the outsized growth that made stock market darlings of TAL Education Group (好未來教育集團), New Oriental Education & Technology Group (新東方教育科技集團) and Gaotu Techedu Inc (高途在線). The new rules could also put the market largely out of reach of global investors. Education technology had emerged as one of the hottest investment plays in China in recent years, attracting billions from the likes of Tiger Global Management, Temasek Holdings Pte and Softbank Group Corp. In a series of statements over the weekend, all the major education companies said that they would comply with the rules and support the decisions of the Chinese Communist Party. In a post on its official Sina Weibo (新浪微博) account, TAL said it would “fully implement the party’s education policy” and “strive to cultivate people’s talents with all-around development of morality, intelligence and physical health.” The regulatory assault mirrors Beijing’s broader campaign against the growing heft of Chinese Internet companies from Didi Global Inc
Robinhood Markets Inc reshaped how small-time traders buy and sell stocks. Now it is trying to entice them to invest in companies going public — including its own shares. The company that popularized free trading made its case to investors of all kinds in a live-streamed presentation on Saturday. Although this type of event, called a roadshow, is typically limited to hedge funds and other institutions ahead of an initial public offering, Robinhood took the unusual step of making its presentation available for anyone to watch. It is the latest way in which Robinhood is defying conventions as it advances toward a public debut unlike any other. The company is reserving as much as 35 percent of its shares for traders from its own app, who would ordinarily need to wait until they start trading on an exchange to buy them — potentially at a higher price than the current target range of US$38 to US$42. The company is expected to start trading on the NASDAQ stock market on Thursday, according to people with knowledge of the matter. “We anticipate this will be one of the largest retail allocations ever,” Robinhood CEO Vlad Tenev said, seated together on a white sofa with the company’s leadership team as they responded to customer questions on its business model and how it plans to grow. “This is a very special moment and we’re humbled,” Tenev said Tenev added that Robinhood was open to the idea of offering retirement accounts like IRAs and Roth IRAs. “We want to make first-time investors into long-term investors,” he said. Robinhood chief financial officer Jason Warnick addressed payment for order flow — a practice in which brokerages send customer orders to trading firms like Citadel Securities to be carried out, and receive payments in return. Robinhood earns the majority of its revenue from
An index launched a year ago to give investors greater exposure to China’s Internet giants is now the world’s worst-performing major technology gauge. The Hang Seng Tech Index has been on a roller-coaster ride in the past 12 months. The gauge, which marks its first anniversary on Tuesday, was up 59 percent at its February peak, but has since seen more than US$551 billion in market value wiped out amid Beijing’s clampdown on the sector. That has reduced its gain to nearly 6 percent, compared with more than 40 percent for the MSCI World Information Technology Index and the NASDAQ-100 Index. The measure also lags onshore peers — the ChiNext Index is up 35 percent for the period. The underperformance highlights regulatory risks for one of the fastest-growing sectors of China’s economy. Beijing’s bold moves to rein in the nation’s powerful tech firms, such as Jack Ma’s (馬雲) Ant Group Co (螞蟻集團) and Didi Global Inc (滴滴), have sent global investors fleeing on concerns over China’s tighter grips on data. “The ongoing concern that medium-term earnings power may be dented by their data becoming more of a public good, and privacy becoming more of an issue, remains a headwind,” Robeco Hong Kong Ltd portfolio manager Joshua Crabb said. Bank of America Corp strategists wrote in a note last week that the regulatory overhang is unlikely to dissipate any time soon, instead recommending investors to rotate into tech firms outside of China. Launched last year, the gauge tracks the 30 largest Hong Kong-listed tech firms, including giants such as Tencent Holdings Ltd (騰訊), Alibaba Group Holding Ltd (阿里巴巴) and Meituan (美團). It was set in motion at a time when Chinese tech companies were looking to list closer to home as growing tensions between Washington and Beijing threatened to curtail access to US capital markets. The index
The next target for China’s cybersecurity crackdown is to be the pools of data collected by the latest generation of vehicles. This approach risks Beijing shooting itself in the foot, and jeopardizing its ambitious plans to lead the global race for electric and autonomous vehicles. China wants to have control over the information vehicles have about their drivers, the roads they traverse, and the faces and voices they pass, according to a draft law on data-security management for the automotive industry issued in May. It seeks to ensure manufacturers across the auto supply chain keep data in the country and pass a government security evaluation if it is sent overseas. Operators that process personal information of more than 100,000 individuals, or what preliminary rules have broadly defined as “important data,” are required to report it to regulators, provincial governments and a host of other official bodies. The rules apply to almost every situation in which people find themselves in or near a car, creating a host of ambiguities. China’s move to protect privacy and put boundaries around data makes sense. However, in the current form, the rules do more to restrict innovation, creating an enormous burden on companies for the sake of regulation, and undermining the progress Beijing — and global firms operating in the world’s largest auto market — have made within the industry. State planners have been aggressive in pushing electric vehicles (EVs) and other future-forward technology. After eliminating restrictions on foreign ownership in its EV market a few years ago, China made significant headway on road rules for autonomous driving and put in place policies that were bolder than almost anywhere else in the world. Subsidies have been strategically allocated, pruned and targeted toward charging infrastructure and better batteries — both key to getting ahead. For global automakers and their suppliers,
This month marks the one-year anniversary of the former US president Donald Trump administration’s initial threat to ban ByteDance Ltd (字節跳動)-owned TikTok, entangling the social media platform into the unpredictable Web of geopolitics. Despite the existential distraction, the short-video app has thrived over the past year. Now, with its popularity surging, TikTok might be poised to achieve the goal that is the dream of every major US technology company: a super-app for the Western world. TikTok’s growth and the level of its user engagement have been remarkable. According to Sensor Tower, the app was the most downloaded and highest-grossing non-game during the first half of this year, surpassing 3 billion total installs. Analysts expect TikTok to keep growing faster than its competitors, and industry tracker eMarketer projects that the app’s user base in the US would rise 18 percent this year, compared with a 1 percent increase for Facebook Inc and a 4 percent gain for Facebook’s Instagram. Most impressive of all, TikTok users are growing more addicted to the short-video service. Research firm App Annie has said that the app has surpassed Google’s YouTube for average time spent per user in the US and the UK. Competitors are noticing the app’s rise and taking action. Last month, Facebook executive Adam Mosseri said Instagram plans to move beyond its central photo-sharing feature and embrace full-screen mobile video entertainment, citing TikTok’s success. Similarly, YouTube and Snap Inc have launched short-video services and are also paying creators directly for their content. However, TikTok might be in the best position to win. Because it has the largest audience for short video and an unrivaled ability to add innovative features to the medium, there is little reason for creators to go elsewhere — and this is just the beginning. TikTok is expanding its ambitions. Already, the app
After the COVID-19 pandemic shut offices and put Mumbai’s renowned lunchbox deliverymen out of work, the 130-year-old dabbawala network has tied up with a trendy restaurant chain to take on India’s billion-dollar start-ups. For two decades, neither terror attacks nor monsoon deluges could stop Kailash Shinde from delivering hot lunches to Mumbai office workers, until lockdowns put the father-of-two on a forced hiatus for a whole year. “It’s been very difficult,” the 42-year-old said. “I had to sell what I could and work odd jobs to get by.” Instantly recognizable in his traditional Gandhi cap and white Indian attire, Shinde is one of 5,000 dabbawalas — or “lunchbox men” in Hindi — who have gained global recognition for delivering home-cooked food with clockwork precision. An intricate system of alphanumeric codes helps the largely semi-literate or illiterate workforce collect, sort and distribute 200,000 meals across Mumbai each day via bicycles, hand carts and a sprawling local train network. Their work has been studied as a “model of service excellence” at Harvard Business School, and inspired personal visits from Richard Branson, Prince Charles and executives from global delivery giants FedEx Corp and Amazon.com Inc, among others. However, with extended lockdowns forcing millions of Mumbai’s white-collar professionals to work from home, many dabbawalas have been struggling to feed their own families since April last year. “Our members have had to work as security guards and laborers, in addition to seeking jobs as deliverymen for restaurants,” said Ulhas Muke of the Nutan Mumbai Tiffin Box Suppliers Charity Trust, which represents the workforce. However, delivery jobs are harder to come by in a space now increasingly dominated by mobile apps, especially for people like 39-year-old Pandurang Jadhav, who cannot read or write. Unemployed for the first time since becoming a dabbawala aged 17, Jadhav moved to his ancestral village and spent the past year
‘PUSH AND PULL’: Investors are caught between strong corporate earnings and rising numbers of COVID-19 cases, leading to a difference of opinion on market prospects
Wall Street gained ground for the fourth straight session on Friday, extending a rally that pushed all three major US stock indices to record closing highs as upbeat earnings and signs of economic revival fueled investor risk appetite. The Dow Jones Industrial Average closed above 35,000 for the first time ever. “We see a continuation of the last couple days. It’s roller coaster in reverse. We did the drop first, and we’ve been climbing back to the top ever since,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. Growth and value stocks seesawed for much of the week as market participants weighed spiking infections of the Delta variant of SARS-CoV-2 against strong corporate results and signs of economic revival. “There’s push and pull, there’s clearly conflict in the market,” Zaccarelli added. “There’s a strong difference of opinion as to whether the future’s bright or whether there are clouds on the horizon.” Market participants now look toward next week, with the US Federal Reserve’s two-day monetary policy meeting and a series of high-profile earnings. The Fed’s statement would be parsed for clues regarding the timeframe for tightening its accommodative policies, although Fed Chairman Jerome Powell has repeatedly said the US economy still needs the central bank’s full support. The Dow Jones Industrial Average on Friday rose 238.2 points, or 0.68 percent, to 35,061.55, the S&P 500 gained 44.31 points, or 1.01 percent, to 4,411.79 and the NASDAQ Composite added 152.39 points, or 1.04 percent, to 14,836.99. Of the 11 major sectors in the S&P 500, all but energy closed green, with communications services enjoying the largest gain, rising 2.7 percent. For the week, the Dow added 1.08 percent, the S&P 500 climbed 1.96 percent and the NASDAQ surged 2.84 percent. Second-quarter reporting season is in full swing, with 120 of the companies in the S&P
European stocks closed the week higher on Friday as optimism about the earnings season and the European Central Bank’s (ECB) pledge of continued monetary support outweighed risks of a resurgence in COVID-19 cases. The pan-European STOXX 600 rose 1.09 percent and gained 1.49 percent for the week. Automakers were the top gainers in morning trade. Mercedes-Benz maker Daimler AG gained 3.1 percent after Kepler Cheuvreux upgraded its stock to “buy,” saying its growth is not properly reflected in the share price. French auto parts maker Valeo SA jumped 8 percent after it posted higher first-half sales and profit, and said it expected the shortage of key technology chips to ease. Peers Faurecia SE and Continental AG rose more than 4 percent each. A bout of selling hit financial markets on Monday as investors grew nervous about the fast-spreading Delta variant of SARS-CoV-2 hampering a global economic recovery. However, strong earnings reports and the ECB’s commitment keep interest rates at record lows for even longer helped push the benchmark STOXX 600 to less than 0.5 percent below its all-time highs. “For now, markets seem unconcerned about either with Delta or inflation, keeping the buy-everything music playing,” Oanda Corp senior market analyst Jeffrey Halley wrote in a morning note. Rafale jets maker Dassault Aviation SA climbed 5.5 percent on reporting higher sales and profits in the first half of the year, while UK mobile operator Vodafone Group PLC rose 2.3 percent after reporting a better-than-expected 3.3 percent rise in first-quarter service revenue. Chip equipment maker ASML Holding NV hit a fresh record high as strong earnings forecast earlier this week prompted brokerages to hike their price target. Eurozone business activity this month expanded at its fastest monthly pace in more than two decades, IHS Markit’s flash survey showed, but fears of another wave of infections hit business confidence. German purchasing managers’ index (PMI) hit
Oil squeezed out its first weekly gain in three on signs that global demand is holding up despite concerns that the renewed spread of COVID-19 could stall the recovery. Futures in New York rose 0.3 percent this week, completely recouping a sell-off on Monday that was stoked by the rapidly spreading delta variant of SARS-CoV-2. Fuel demand and road traffic from the US to Asia and Europe remains resilient, underscoring expectations that the recovery has not been derailed and global inventories will continue to shrink. “The fact of the matter is that we’re not going to see, at least in the US and in Europe, a massive return to strict lockdown,” Oanda Corp senior market analyst Ed Moya said. Crude has rallied nearly 50 percent this year as ongoing vaccination campaigns have propelled reopenings. Data this week showed gasoline demand is essentially back to normal in many of the biggest consuming countries. West Texas Intermediate crude for September delivery on Friday rose US$0.16 to US$72.07 a barrel, up 0.3 percent for the week. Brent crude oil for September delivery on Friday rose US$0.31 to US$74.10 a barrel, up 0.7 percent weekly. The 7.5 percent price slump on Monday came just a day after OPEC and its allies led by Saudi Arabia and Russia finalized an agreement to gradually restore production they halted during the COVID-19 pandemic. OPEC+’s modest increase eased fears around concerns of oversupply. “Everybody thinks they are going to flood the market, and then they take a step back and realize that, hey, they’re adding because the supply is being burned off,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago. The recent dip in prices is a buying opportunity and Brent prices should hit US$100 per barrel next year, a group of analysts at Bank of America Corp
Asian markets were mixed on Friday after major indices edged higher on Wall Street, preserving their gains for the week. Hong Kong and Shanghai fell, while Taipei, Sydney and Seoul advanced. Tokyo was closed for a holiday. The MSCI Asia-Pacific Index fell 0.94 percent to 200.92 points, down 1.9 percent for the week. Surges in COVID-19 cases around the region are prompting governments to tighten COVID-19 pandemic restrictions that are expected to slow business activity and keep travel to a minimum. Thailand reported a daily record of 14,575 cases, with 114 deaths, as a stricter set of limits went into effect in many areas. The country’s central bank has said the latest, worst outbreak could cause the economy to contract by 2 percent this year, instead of the recovery it had earlier forecast. The SET in Bangkok fell 0.4 percent on Friday, down 1.8 percent for the week. The TAIEX in Taipei on Friday inched up less than 0.1 percent to 17,572.92 points, but lost 1.58 percent weekly. In Seoul, the KOSPI on Friday rose 0.1 percent, losing 0.7 percent weekly, while Sydney’s S&P/ASX 200 gained 0.11 percent, adding 0.6 percent for the week. Hong Kong stocks fell on Friday, dragged down by technology, education and property shares, as deepening concerns over Beijing’s tighter regulations weighed on sentiment. The Hang Seng Index fell 1.5 percent, down 2.44 percent weekly, while the China Enterprises Index lost 1.7 percent, bringing its weekly loss to 3 percent. Morgan Stanley said in a note that investors should monitor actual earnings results from Chinese companies within the next few weeks to reconcile positive corporate alerts and declining consensus expectations. “We suggest more patience ... for better calibration of market expectations among other near-term market overhangs including regulatory uncertainties, policy direction debate, and geopolitical tension,” Morgan Stanley said. China is to crack down on after-school tutoring businesses and
Traders holding coffee beans in exchange warehouses are suddenly sitting on a jackpot. Brazil’s arabica coffee crop losses are estimated at about twice the amount sitting in warehouses monitored by ICE Futures US, the main futures exchange for trading the beans. Prices surged to a more than six-year high on Friday after the worst frost in two decades damaged crops and destroyed some trees in the South American nation, the world’s top grower. Coffee prices surged 17 percent this week, topping US$2 a pound for the first time since 2014. “The ICE inventory will become in high demand, and whoever owns it, is sitting on a gold mine,” J. Ganes Consulting president Judy Ganes said. Brazil started increasing deliveries to ICE after a record crop last year. There were 2.18 million bags of coffee at the depots as of Thursday, with the bulk held at facilities in Antwerp, Belgium. Crop losses for next year’s harvest in Brazil might range from 4.05 million to 5.2 million bags, according to an Ecom Research report seen by Bloomberg. While prices eased on Friday after updated weather forecasts showed a lower chance of frost next week in Brazil, there is high risk for more frost through the middle of next month, and there have been freeze events after that date. Also, the intensity of the chill this week damaged young trees, which is expected to affect crops for years, as those younger specimens might die and many will have to be replanted. It takes about three years for plants to become commercially productive, dimming production prospects for years, Rabobank International has said. Furthermore, Honduras, the top supplier in Central America, is struggling to recover from COVID-19 and hurricane effects. CROPS TURNED TO FEED Drought is withering crops on both sides of the US-Canadian border, prompting farmers to take the rare measure of
The US dollar on Friday posted a second week of gains after a turbulent few days when currencies were buffeted by shifting risk appetite, with the market’s focus on next week’s US Federal Reserve meeting. However, some analysts wondered whether the US dollar’s recent rally might be losing momentum. The US dollar index, which measures the greenback against a basket of six major currencies, rose slightly for the day to 92.91. For the week, added 0.2 percent, after rising 0.6 percent previously. However, that was off a three-and-a-half-month high of 93.194 hit on Wednesday, after strong Wall Street earnings helped investors regain some confidence amid earlier worries that the Delta variant of SARS-CoV-2 could derail the global recovery. In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.010 to close at NT$28.028, little changed from last week’s NT$28.005. Risk appetite among investors remained high on Friday, with US stocks rising, US Treasuries selling off, most commodity currencies well-bid on the day and the greenback off its peaks. “The dollar looks tired especially after the rally of the last few weeks,” said Erik Nelson, macro strategist at Wells Fargo Securities in New York. “It seems to be running out of steam both from a fundamental and technical perspective.” So far this month, the US dollar has gained 0.6 percent, after rising 2.8 percent last month. However, Nelson was not convinced that the dollar could hold its gains in the coming weeks given the decline in US Treasury yields. Since the beginning of this month, US benchmark 10-year Treasury yields have lost 16 basis points, on track for their largest monthly fall since March last year. Against the safe-harbor yen, the US dollar rose 0.3 percent to ￥110.53. The Australian dollar — viewed as a proxy for risk appetite — slid
DIVERGENCE: While retail sales slumped, manufacturing output rose 20.2% last month, bolstered by the stay-at-home economy amid the COVID-19 pandemic
Retail sales last month plunged at the steepest pace on record at 13.3 percent annually to NT$266.4 billion (US$9.5 billion), as consumers cut spending amid a nationwide level 3 COVID-19 alert, with restaurant and beverage sales posting an annual decline of 39.9 percent, Ministry of Economic Affairs statistics showed yesterday. With COVID-19 restrictions remaining in place this month, the ministry expects retail sales to contract at an even faster rate of 19 to 22 percent annually, while restaurant and beverage sales are forecast to dip by 43 to 49 percent. “As the whole month of June was spent under the level 3 alert, people avoided going out to shop,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said. “This inevitably led to a substantial drop in shoppers.” Clothing store sales dropped 53.9 percent year-on-year last month, and department store sales plunged 64.7 percent, ministry data showed. Sales at convenience stores slid 7.4 percent, but online shopping benefited, advancing 33.7 percent, the data showed. Supermarket sales also rose 33.2 percent as people consolidated their shopping to minimize time spent outside. “The only business that bucked the trend is certain Western-style eateries that came out with promotional offers,” Huang said. For the first half of the year, retail sales increased 5.8 percent annually to NT$1.92 trillion, supported by annual sales growth of 25.7 percent from virtual stores. Restaurant sales fell 1.4 percent annually to NT$361.5 billion during the same period. Meanwhile, wholesale revenue grew 18.2 percent year-on-year to NT$987.3 billion last month, marking the best June figure on record. Machinery equipment sales expanded 23.1 percent to a record NT$428.6 billion, while construction material sales grew at the fastest pace in the wholesale segment at 45.6 percent to NT$122.3 billion, a June record. For the first six months of the year, wholesale revenue increased 18.4 percent year-on-year to NT$5.83