Business and Finance

Taiwan’s ETF market has global reach

Focus Taiwan
Date: 2016/05/14
By: Tien Yu-pin and Frances Huang

Taipei, May 14 (CNA) Taiwan’s exchange traded fund (ETF) market has already achieved a

Tokyo Stock Exchange. (CNA file photo)

Tokyo Stock Exchange. (CNA file photo)

global reach by trading products which track indexes in the major equity markets of the world, according to the Taiwan Stock Exchange (TWSE).

The TWSE said that after Cathay Securities Investment Trust Co. (國泰投信), a subsidiary of Cathay Financial Holding Co. (國泰金控), issued three ETFs on May 9 linked to the equity market in Tokyo, Taiwan’s ETF market has a wider range of products tracking foreign markets, including Taiwan, Hong Kong, China, the United States, India and Japan.

Cathay Securities Investment Trust issued the three ETFs tracking the Tokyo market, including the Nikkei 225 Index, the FTSE Japan 2X Daily Leveraged Index and the FTSE Japan Daily Short Index to provide investors here more options to park their money.

The three ETFs issued by Cathay Securities Investment Trust have raised funds totaling almost NT$1.8 billion (US$552 million) in the local market.     [FULL  STORY]

Asian stocks sink, Taiwan tumbles on MSCI cuts

Taipei Times
Date: May 15, 2016
By: Bloomberg and staff writer, with CNA

Asian stocks fell, with the regional benchmark index dipping to a one-month low, as a drop in oil dragged down commodity shares and earnings from Inpex Corp to Mitsubishi Materials Corp disappointed investors.

The MSCI Asia Pacific Index slid 1.4 percent to 125.74 in Hong Kong, falling 1.1 percent from last week and posting its third week of losses.

Bullish momentum in equities from a February low faltered over the past month, as signs of weakness in the global economy and disappointing corporate earnings heightened concerns over whether central bank officials would be able to effectively boost growth.

“After the rally in March and April, things are still looking a little bit uncertain,” said Oliver Lee (李健生), investment director at Old Mutual Global Investors (Asia Pacific) Ltd. “There’s not much conviction in the market. The market is still being driven by central bank sentiment and currency movements. The earnings season in Japan hasn’t been great.”     [FULL  STORY]

Hon Hai confirms letter to Sharp employees warning of layoffs

Focus Taiwan
Date: 2016/05/13
By: Jalen Chung and Frances Huang

Taipei, May 13 (CNA) Hon Hai Precision Industry Co. (鴻海), the world’s largest contract 201605130022t0001electronics maker, confirmed Friday that it has informed Sharp Corp.’s employees that layoffs will be necessary to help the struggling Japanese firm restructure its finances.

Hon Hai, also known as Foxconn outside Taiwan, confirmed the news after Bloomberg reported earlier Friday that Hon Hai Chairman Terry Gou warned in a letter to Sharp employees of the need for layoffs after the Japanese manufacturer reported massive losses for the year ending in March.

Hon Hai signed an agreement on April 2 to acquire a 66 percent stake in Sharp for 388.8 billion Japanese yen (US$3.5 billion).

Gou stressed it was an “investment” rather than an “acquisition,” but Hon Hai Vice Chairman Tai Cheng-wu (戴正吳) was named on Thursday by Sharp’s board of directors as the company’s new president, and the layoff warning further confirmed that Hon Hai is taking charge.     [FULL  STORY]

Shares in Paiho outperforming TAIEX this year

STRONG DEMAND:In the first four months of this year, Paiho reported an annual increase of 44.1 percent in its net income to NT$532.69 million

Taipei Times
Date: May 14, 2016
By: Aileen Chuang / Staff reporter

Taiwan Paiho Ltd (台灣百和) shares have outperformed the local main bourse by nearly 28 percent so far this year, reflecting investor optimism about robust contributions from the company’s new products.

It also indicates positive market sentiment toward the company’s growth potential this year, driven by the strong revenue growth for elastic tapes, molded hooks and shoelaces.

Established in 1985, Taiwan Paiho’s products are auxiliary materials used in ready-to-wear apparel and footwear like webbing, touch fasteners, elastic tapes, molded hooks and shoelaces. The company’s clients are well-known brands such as Nike, Adidas, New Balance, Nautica and Columbia.

In the first four months of the year, the sports goods and apparel accessories maker reported an annual increase of 44.1 percent in net income to NT$532.69 million (US$16.51 million), with earnings per share rising to NT$1.72 from NT$1.24 a year ago.     [FULL  STORY]

TSMC ranks 6th for innovation in semiconductor study

Taiwan Today
Date: May 13, 2016

Taiwan Semiconductor Manufacturing Co. Ltd. of Hsinchu City in northern Taiwan ranks sixth in

Hsinchu City-headquartered TSMC is the world’s largest dedicated semiconductor foundry with a more than 50 percent share of the global market. (Courtesy of TSMC)

Hsinchu City-headquartered TSMC is the world’s largest dedicated semiconductor foundry with a more than 50 percent share of the global market. (Courtesy of TSMC)

the latest Top 10 Global Innovators-Semiconductor study released May 11 by international media outlet Thomson Reuters.

The world leader in contract integrated circuit manufacturing services earned the recognition on the back of its 1,424 patent registrations in 2015. This high-tech patent portfolio reflects TSMC’s commitment to R&D and position as a growth leader in the local semiconductor industry.

TSMC accounted for 53.7 percent of the global output for the contract IC manufacturing services sector in 2014, according to U.S.-headquartered technology research firm Gartner Inc. The company also ranked No. 1 for patent power last year by IEEE Spectrum—the flagship magazine of U.S.-based Institute of Electrical and Electronics Engineers.

The Thomson Reuters report, which analyzes global patent and scientific literature data, outlining the top companies, research institutes and technology areas producing the highest volume of new innovation, said Asia is the clear frontrunner in semiconductor innovation activity. “Given the volume generated from that continent, it’s evident that the region will be a force to reckon with and the companies on this list are paving the way.”     [FULL  STORY]

Ubiquitous Mobile Phones Do Not a Modern Nation Make

Eye On Taiwan
Op Ed
Date: May 13, 
2016
By: David Wang

Depending on one’s age, length of residency in Taiwan, upbringing, location of one’s formative years and extent of immersion in cultures abroad, professional experiences, range of friendships, and exposure to media, one’s perception of the island and its progress since the 1950s inevitably varies. Specifically has the Taiwanese mindset and culture, which were partly symbolized by ubiquitous pedicabs in Taipei during the 1950-1960s and water buffalos trudging occasionally even in Taipei in the late 1960s, evolved in step to catch up with the Information Age that is often represented by the iPhone, ever rising Internet and mobile phone penetration island-wide?

Perhaps the answer to this question lies enigmatically in the photo (taken May 12, 2016 in Taipei) shown?

If one actually bases one’s judgment of Taiwanese cultural progress on the prevalence of mobile phone usage, Internet penetration, the extent of IT or information technology-related news aired in Taiwan, the number of Japanese-branded department stores and globally-branded fashion outlets as Zara, Uniqlo, as well as the endless offering of name-brand goods from Adidas to Under Armor, then one would be self-delusional.

Underneath all the IT gadgets, western fashions, fancy imported BMWs, Ferraris, Porsches and world-class condo towers in the major cities from north to south remains the sheepish worship of antiquated religion, deities, customs and family-centric (read generally patriarchal, nepotistic and male-dominated) traditions that have not changed an iota since the days of ego-inflated Chinese emperors who buried alive with himself servants, concubines, wives upon death in glorified rituals and sometimes epic-sized tombs.

Many real-world examples in Taiwan prove that the traditional culture of keeping corporate reins within the family has not changed.

The now struggling Taiwanese mobile phone maker HTC is headed by Cher Wang, an heiress of the Formosa Plastics Group, who has no background in IT but is privileged to be in her position simply due to being born in the right family.

One of the richest clans in Taiwan, the Tsais of the original Cathay Life empire, is another example where nepotism thrives to keep the glass ceiling securely in place and corporate upward mobility a mere textbook term.

Ditto for the Koos of the China Trust banking empire and EVA Air- Evergreen Marine of the Chang clan.

The same applies to the countless small and medium-sized enterprises in Taiwan.

While many Taiwanese corporate movers and shakers copy western counterparts to try to further develop to global standards, they fail to emulate the essential aspect of running a business, which is to step aside to allow adults to handle it when founding families have only given birth to silver-spoon-fed babies.

After all, have Marissa Myer, Carlos Ghosn, Jamie Dimon, Doug McMillon, Martin Winterkorn, Masamichi Kogai, CEOs of major global businesses, been promoted to their positions due to blood relations to the founders?

Besides the complex issues of proper corporate governance that typically follows global standards worldwide in major firms, Taiwanese corporate trains, due to being guided by dusty traditions, often derails melodramatically after the passing of patriarchs as has been seen in the cases of Formosa Plastic’s Wang Yung-ching and Chang Rong-fa of EVA Air.

Adhering to antiquated traditions mindlessly also implies the “Emperor Syndrome” whereby patriarchs and whoever happens to be handed captainship is no longer obliged to act responsibly, rationally and logically, with many instances of Taiwanese corporate bigwigs straying beyond the law to wreak havoc on even on family members.

I’ve worked for a small Taiwanese exporter where the founder or patriarch ruled over his son like a king over his serf. The son did all the work over the years and yet was deprived of profit-sharing, hence forever locked in the family business without independence, self-esteem and wherewithal to venture out on his own.

Such outdated culture and resulting pecking order in business and family life also takes a toll on free will of grown children. A female Taiwanese nurse in her early 40s, despite being single, is regularly ordered by mother, long divorced from her father, to pick up the pieces after her uncle. He, with a Taiwanese wife who has given him children, went to China to set up business but, like many others, has found a new love who has also given birth to a child. The man has also suffered heart attacks in China as well as gone into debt, all of which puts the onus on the nurse to help out as she has no choice but to obey mom.

A Taiwanese young man who is an engineering grad is obliged, due to the same family tradition that automatically relieves him of free will, to work as an air conditioner technician or installer for another firm as apprentice only to learn the trade to prepare to take over the family business.

The same honoring among Taiwanese of religious traditions, generally taught and passed down through the generations without justification, helps to perpetuate sheepishness among Taiwanese minds, which has been often criticized as without independent discretion.

Incidentally scammers, hundreds of the Taiwanese variety have been caught over the years, typically cannot succeed by praying on people able to think on their own.

The fathers or creators of religions, sects, superstitions and cults also must have sheepish minds to sway decisions of all kinds and preferably choice to open wallets.

And it is obvious that the temple in Taipei, renowned among patrons praying to excel in school and exams, as shown knows the formula well.

Taiwan shares end down on reduced turnover

Taiwan News
Date: 2016-05-12
By: By Frances Huang, Central News Agency

Taipei, May 12 (CNA) Shares in Taiwan closed lower Thursday on a shrinkage in turnover as many investors stayed on the sidelines, but the weighted index remained above the 8,100-point mark despite a plunge on Wall Street overnight, dealers said.

Select large-cap stocks in both the electronics and non-high-tech sectors remained resilient, such as PC brand Asustek Computer Inc. and food maker Uni-President Enterprises Corp., which prevented the broader market from falling further, they said.

The weighted index on the Taiwan Stock Exchange ended down 27.51 points, or 0.34 percent, at 8,108.05, after moving between 8,105.49 and 8,162.44, on turnover of NT$67.88 billion (US$2.09 billion).

The market opened down 0.16 percent and fell further in a knee-jerk reaction to the dive on Wall Street, where the Dow Jones Industrial Average closed down 1.21 percent overnight on disappointing earnings results, the dealers said.     [FULL  STORY]

Cruise tourism expected to boom in Taiwan: Princess Cruises executive

Focus Taiwan
Date: 2016/05/12
By: Lee Hsin-Yin

Taipei, May 12 (CNA) Taiwan has great potential in cruise tourism thanks to growing travel

Trey Hickey, senior vice president of international sales for Princess Cruises,

Trey Hickey, senior vice president of international sales for Princess Cruises,

interest in this part of the world, a senior executive from Princess Cruises said Thursday in announcing that Keelung Port in northern Taiwan will serve as one of the home ports for the cruise liner next year.

Trey Hickey, senior vice president of international sales for Princess Cruises, said the market has been growing rapidly in Taiwan because of its ideal geographic location which makes it easy to travel to other Asian countries.

People from the West or the Middle East, who are familiar with cruise travel, have been getting easier access to Taiwan in recent years, which has made it a savvy choice for them to fly to and then take cruise trips in Asia, said Hickey.

“Geographically, Taiwan has a position and an ideal location in the cruise business,” Hickey said in a news conference in Taipei.     [FULL  STORY]

Lite-On reports better-than-expected Q1 profit

BRIGHT OUTLOOK:Lite-On chief executive officer Warren Chen said last quarter was the bottom of the year, adding that business is expected to pick up from this quarter

Taipei Times
Date: May 13, 2016
By: Lauly Li / Staff reporter

Lite-On Technology Corp (光寶科技) yesterday reported a better-than-expected profit for last quarter.

Net profit grew 4 percent year-on-year to NT$1.7 billion (US$52.24 million), or earnings per share of NT$0.74, outperforming the market’s consensus estimate of NT$1.57 billion, or NT$0.67 per share.

However, last quarter’s figure plunged 32 percent from the prior quarter’s NT$2.5 billion, because of seasonal factors.

Due to a better product portfolio and operating efficiency, gross margin and operating margin were 13.2 percent and 4.1 percent in the first quarter respectively, an increase of 0.66 percentage points and 0.78 percentage points from a year earlier, Lite-On said.     [FULL  STORY]

CPC still in talks to sell naphtha cracker to Indonesia

Taiwan News
Date: 2016-05-11
By: By Lin Meng-ju and Frances Huang, Central News Agency

Taipei, May 11 (CNA) State-owned CPC Corp., Taiwan said Wednesday that it is still in negotiations to sell a naphtha cracking plant located in Kaohsiung to Indonesia.

Chang Jui-tsung, a spokesman for CPC, told reporters that the state-run firm is still studying the possibility of allowing the potential Indonesia buyers to relocate the entire facility to a remote island in the Southeast Asian country.

CPC closed the oil refinery plant, called the fifth naphtha cracking plant, in 2015, amid rising awareness of environmental protection in Taiwan, and has been seeking to sell it.

According to local media, CPC had previously planned to relocate the plant to China. However, it turns out that CPC now plans to sell the plant to Indonesia, which has an ambition to build its own petrochemical industry. Chang said that Indonesia has a population of about 300 million and has a huge domestic market for petrochemical products.     [FULL  STORY]