| Prime News | | ![]() | ![]() | Insurance Firms Retrieving Funds Back to Taiwan
Taipei, Nov. 14, 2007 (CENS)--Due to weakening of the U.S. dollar, domestic insurance firms appear to be retrieving their funds back to Taiwan from abroad, as market insiders estimate that insurance funds absorbed at least NT$20 billion of the NT$30 billion 20-year government bonds sold via opening bidding yesterday (Nov. 13).
The participation of insurance funds was a major factor for selling out of the government bonds at 3.003% annual interest rate, at odds with original market expectation of insufficient subscription as what happened to the last public bidding for 20-year governments bonds in August. Interest rate for the batch of government bonds sold yesterday hits a three-year high and is much higher than 2.64% for the August batch, reflecting market expectation of rising interest rate trend amid mounting inflation.
Market insiders attributed interest of insurance firms in the government bonds to weakening U.S. dollar and narrowing interest differential between the U.S. dollar and the NT dollar, plus an increase of interest rate offered by the National Treasury for the bonds. They noted that with actuarial assumption interest rate of domestic insurance firms' insurance policies ranging from 2.25% to 3%, it's impossible for insurance firms to purchase bonds with annual yield rate of below 3%. "The 3% yield rate for government bonds is still low but acceptable," remarked chief investment officer of a local insurance firm.
Market insiders noted that local insurance firms subscribed to the government bonds yesterday via the agency of securities firms, in order to conceal their investment policy, which may jack up interest rate, harming their long-term fund utilization.
Seventy percent of the bonds were subscribed by securities firms yesterday.
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| | ![]() | | | Chinese Realty Magnate Shows Interest in the Taiwanese Realty Market
Taipei, Nov. 14, 2007 (CENS)--Despite Taiwan's high realty prices, Chinese realty firms would not miss opportunities to invest in the island's realty market, should visits of Chinese tourists to Taiwan be materialized, remarked Feng Lun, chairman of Wantong Group, a leading realty developer in China, yesterday (Nov. 13).
As a member of a 28-member Chinese realty-industry delegation visiting Taiwan, Feng said that his group is interested in not only the Taiwanese housing market but also commercial properties. Feng is upbeat about the business opportunities to be brought about by opening of visits of Chinese tourists to Taiwan, citing the Hong Kong experience. He predicted that should the Taiwanese government relax its regulation for mainland Chinese investments in the local realty market, there would appear a cross-Taiwan Strait cooperation project between Taiwanese realty developers and their mainland Chinese counterparts soon. In fact, Feng already visited Taiwan three times before the current trip, fully reflecting his interest in the local market.
Feng admitted that due to difficulty in obtaining building plot, construction projects in Taiwan have to follow the route of sophistication, different from standardized and industrialized styles in China.
He believed that Taiwan's realty prices have reached comparatively high levels, while houses prices in Beijing, although also having climbed to high level, still have room for further increase, due to continuing influx of immigrating population.
Lai Cheng-yi, chairman of Shilin Group, Lai Cheng-yi, chairman of Shining Group, a leading developer in Taiwan, predicted NT$200 billion of hot money would flow into the Taiwanese realty market annually, should the government liberalize investments by mainland Chinese in the market, citing experience of Hong Kong, whose realty market is attracting NT$300-400 billion of mainland Chinese capital annually.
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| | ![]() | | | Taiwanese Firms Set Sights on GCC Nations for Investments
Taipei, Nov. 14, 2007 (CENS)--Once a huge magnet that attracted cheap products, the Middle East is presenting massive business opportunities in the wake of the sharp increase in oil prices as its people have seen high growth in purchasing power.
Taiwan Institute of Economic Research (TIER) believes Taiwanese firms will have good opportunities to invest in trading, tourism and travel, transportation, and construction in the Middle East region as the six nations there have formed the Gulf Cooperation Council (GCC) to promote cross-border collaboration in construction.
F.C. Wu, director of TIER's Department of International Affairs, estimated the GCC member nations will promote construction projects with a total investments of US$1.2 trillion in the foreseeable future.
Commissioned by the Cabinet, the TIER has done a research report on the present development of the GCC six-member nations, which include Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, and the Sultanate of Oman. The report will soon be submitted to the Cabinet as reference for mapping out administrative policy.
Wu said GCC has become the world's sixth largest economic entity with economic scale valued at US$730 billion. It is expected the GCC member nations will implement a unified monetary system in 2010, making way for achieving the goal of forming a unified economic community.
He said major economic entities worldwide are very active to sign free trade agreements with the GCC. Seeing the high development potential of the GCC member nations, he calls for Taiwanese firms to deploy in that lucrative market as early as possible.
Thanks to the skyrocketing crude oil prices, over the past five years the oil-rich GCC member nations have cashed in US$1.5 trillion. According to a projection made by the International Monetary Fund, the GCC, with a population of 35 million, have become one of the world's most affluent regions as it has an economic scale of US$750 billion.
To take advantage of the prospective business opportunities generated by the GCC, the government-backed Taiwan External Trade Development Council (TAITRA) will form a trade exploratory group to visit four of the GCC's six member nations in the middle of November. So far, close to 30 domestic firms have registered with the TAITRA to take part in the trade exploration.
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| | ![]() | | | Foxconn to Step Up Procurements of Supplies From Hon Hai Subsidiaries in 2008
Taipei, Nov. 14, 2007 (CENS)--Foxconn International Holdings of the Hon Hai Group will procure US$190 million worth of products from the group's subsidiaries in 2008, up 80% from this year's anticipated US$106 million. The procurement amount will reach as high as US$394 million in 2010.
Foxconn said it would hold an interim shareholders conference in Shenzhen on Nov. 28 to discuss such topics as providing brand-new cellphone repair and maintenance services to customers, in addition to the increased procurements of supplies from Hon Hai subsidiaries.
An institutional investor noted the strengthened cellphone supply chain within the Hon Hai Group will squeeze out the supply chain outside the group as the brand owners have decisive rights on the procurement of parts and components.
Tung Wen-hsin, spokesperson for Foxconn, said the increased procurements would help Hon Hai Group vertically integrate the cellphone supply chain within the group.
At present, Hon Hai Group has a 72.15% shareholding on Foxconn which is listed on the Hong Kong Stock Exchange. Foxconn saw procurements of supplies from group subsidiaries account for 10.2%% of total sales in 2006, and the ratio reached 8.28% in the first half of this year.
Foxconn and Flextronics are currently the world's top-two cellphone contract manufacturers. Recently, Foxconn just received OEM orders from such big brands as Nokia and Motorola.
Focusing on the production of 3C (computers, communications, consumer electronics) products, Hon Hai Group is capable of providing full-package manufacturing and services to customers as it has integrated the supply chain for cellphone components inside the group.
As Foxconn has stepped up procurements of cellphone components from its subsidiaries, domestic suppliers fear losing global competitiveness.
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| | ![]() | | | VIA Leads MediaTek to Become Nokia's Low-Price Chip Source
Taipei, Nov. 14, 2007 (CENS)--VIA Telecom, an affiliate of fabless house VIA Technologies, has recently received Nokia approval to sell its chips for its low-price handsets, leading archrival MediaTek in the competition.
VIA Telecom will begin to ship its cdma2000 1xRTT chips in the first quarter next year for Nokia mobile phones built by contract manufacturer BYD of mainland China.
Industry watchers pointed out that brisk demands for low-priced handsets in emerging markets like mainland China have brought international first-tier handset suppliers and Taiwanese chip suppliers huge business. MediaTek, for instance, has projected to ship 180 million cellphone chips throughout this year, with 20% planned for the mainland and India.
VIA Telecom has entered into alliance with Indian telecom carrier Reliance and Taiwanese handset manufacturer Cal-Comp Electronics & Communications Co., Ltd. to co-introduce low-priced CDMA mobile phones in India. The phones have peaked Nokia's interest at a time when its phones face much competition in India from phones from mainland Chinese suppliers.
Currently, Qualcomm and VIA Telecom are the two major suppliers of CDMA-phone chips in the world, with Qualcomm dedicated to high-end market whereas VIA aiming at low-end market.
Since LG began using VIA's chips in 2004, Nokia has become another big-name handset player to use the Taiwanese chip vendor's chips.
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| | ![]() | | | Far EasTone Zeros In On NFC Market
Taipei, Nov. 14, 2007 (CENS)--Far EasTone Telecom Co., Ltd. will have a good chance to access near field communication (NFC) wireless market as it was recently invited along with another 11 foreign telecom carriers by the GSM Association (GSMA) to participate in an NFC forum in Macau.
The association, which represents over 700 GSM mobile-phone operators across 218 countries, will hold a meeting addressing cooperation on cross-border NFC tests during November 11-15 in Macau.
NFC is a new, short-range wireless connectivity technology that evolved from a combination of existing contactless identification and interconnection technologies. Handheld devices embedded with the technology will dramatically simplify the way the devices interact with one another, helping people speed connections, receive and share information and even make fast and secure purchase payments.
GSMA pointed out that 66% of the 2,574 consumers in 17 countries it recently surveyed on making purchase payment on mobile phones responded they hope the service to be available in two years. The association added that 35 telecom carriers across the world had signed up a total number of 1.4 billion NFC subscribers by offering them the service based on the Single Wire Protocol (SWP) technology integrated into SM card and UICC card.
GSMA announced it will work with 12 telecom carriers including Far EasTone, KTF of South Korea, Maxis of Malaysia, and those in Australia, the United States, France and Singapore as well as mobile-phone makers LG and Samsung to push NFC-based purchase payment service across borders.
KTF is pushing NFC purchase payment mechanism based on mobile phones in South Korea, Taiwan and the United States. Far EasTone's president, Jan Nilsson, pointed out Taiwan's NFC-related industries can connect with global market throughout NFC standard.
In a separate case, the Conexux Mobile Alliance, in which Far EasTone is a member, recently announced it will introduce a daily-based, single-rate global roaming service next year. Currently, original alliance members include Hutchison Telecom of Hong Kong, PT Indosat of Indonesia, KT Freetel of South Korea, NTT DoCoMo of Japan, SMART of the Philippines, and StarHub of Singapore in addition to Far EasTone. Totally, they have over 160 million customers worldwide. Recently, BSNL and MTNL of India have joined the alliance.
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| | ![]() | | | Taiwan's FHCs See Considerable Profits in First 10 Months
Taipei, Nov. 14, 2007 (CENS)--Thanks to bullish stock market, most of Taiwan's financial holding companies (FHCs) achieved good profitability in the first 10 months of this year.
Those enjoying sizable profits during the period included Chinatrust Financial Holding Co., Hua Nan Financial Holding Co., E. Sun Financial Holding Co., China Development Financial Holding Co., and Waterland Financial Holding Co., which boasted earnings per share (EPS) of NT$1.66 (US$0.05 at US$1 = NT$33), NT$1.41 (US$0.043), NT$0.95 (US$0.029), NT$0.9 (US$0.027), and NT$0.65 (US$0.02), respectively.
Chinatrust scored pretax profits of NT$3.09 billion (US$93.64 million) in October, and appropriated NT$1.204 billion (US$36.48 million) from the profits as provision against non-performing loans (NPLs). As a result, the company's profits dropped to NT$1.886 billion (US$57.15 million) for the month, up NT$156 million (US$4.73 million) from a month earlier. In the same month, its after-tax profits stood at NT$1.634 billion (US$49.52 million), which expanded to NT$14.486 billion (US$438.97 million) in the first 10 months with earnings per share (EPS) of NT$1.66 (US$0.05).
Hua Nan Financial, with stable operations in securities and non-life insurance firms, witnessed an upward trend in earnings. In October, the company scored after-tax profits of NT$906 million (US$27.45 million) and the figure grew to NT$8.427 billion (US$255.36 million) in the first 10 months with EPS of NT$1.41 (US$0.043).
Saddled by bad loan burden, E. Sun Financial saw relatively smaller after-tax profits of NT$257 million (US$7.79 million) in October, and its profits in the first 10 months posted at NT$3.143 billion (US$95.24 million) for EPS of NT$0.95 (US$0.029).
In the same month, China Development Financial suffered a loss of NT$2.943 billion (US$89.18 million) resulting from its purchase of Cosmos Bank. Nevertheless, it still witnessed considerable after-tax profits of NT$10.245 billion (US$310.45 million) in the first 10 months.
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| | ![]() | | | Number of 7-11 Stores Exceeds Annual Goal to Hit 4,651 in September
Taipei, Nov. 14, 2007 (CENS)--The number of President Chain (7-11), the largest convenience chain store in Taiwan and also an affiliate of Uni-President Group, reached 4,651 at the end of September of this year, exceeding its full-year goal of 4,635.
President Chain emphasized that the company sees no market saturation for convenience stores on the island and has therefore set no limit on the expansion of its 7-11 stores so long as there are suitable places for store set-up.
In recent years, President Chain has witnessed a net increase of more than 300 stores per year. Last year the company boasted a net increase of 348 stores, exceeding the goal of 280 stores by 24%. This year the total number of 7-Eleven stores is estimated to expand to 4,700.
Following a merger with Nikomart, Family Mart has started to take over Nikomart stores and is expected to fully take over the latter's 180 stores by the end of the year. If every thing goes smoothly, Family Mart may see net increase of 250 stores this year, outstripping that of President Chain for the first time.
Unlike the rapid expansion of President Chain and Family Mart, Hi-Life International Co. and OK Convenience Store have taken a more conservative attitude toward expansion. Nevertheless, the former has focused on enhancing the revenues of its convenience stores by establishing bakeries inside the stores; while the latter has laid more emphasis on developing Q-Shop, a kind of staff-free shop.
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| | ![]() | | | Hiwin to Challenge THK as World's No. 1 Supplier of Ball Screws in 2 Years
Taipei, Nov. 14, 2007 (CENS)—With continuous expansion of its operating scale, the Taiwan-based Hiwin Technologies Corp., a world-level supplier of ball screws, is to challenge Japan's THK Co., Ltd. as the largest supplier of the key mechanical component, in two years, according to company sources.
In the meantime, THK, to retain its leading position in the world and counter Hiwin, has announced a plan to invest JPY4 billion in building a new manufacturing plant, attempting to boost its capacity by 30% in 2010.
In a similar move, Eric Chuo, chairman of Hiwin, also announced a plan to build a factory and a delivery center in Taichung City, central Taiwan, at a cost of NT$7.1 billion. The first-phase facility of the new factory will be completed for production in the first quarter of 2008, and the second-phase construction will be finished by the end of next year, when the entire plant will become fully operational.
Hiwin is the third-largest supplier of ball screws in the world, next to Japan's MSK Technology Corp. and THK, which both generate sales revenue of more than NT$7 billion a year.
Over the past few years, Hiwin has been active expanding its production capacity, and has projected its combined annual revenue to break the NT$10 billion mark in two years, aiming for the world's No. 1 supplier of ball screws. At the moment, Hiwin specializes in making ball screws and linear guides sold under its own brand HI-WIN worldwide, and operates branches or R&D centers in the U.S., Japan, Germany and Russia.
Hiwin last year scored combined revenue of NT$6 billion including NT$3.22 billion coming from its Taiwan plant, up 17% from 2005, and recorded net profits of around NT$600 million, or NT$3 per share. Thanks to continuous influx of sizeable orders, the firm's Taiwan plant has scored aggregate revenue of NT$3.777 billion in the first 10 months, rising by 45.39% from NT$2.598 billion posted a year earlier.
On another front, THK has reportedly resolved to reinforce production capacity of its major manufacturing plant in Yamaguchi County, eastern Honshu Island, planning to funnel JPY4 billion into constructing a new factory and re-building its existing office building for production there. After 2010, THK is expected to see its annual shipment grow to JPY40 billion (NT$11.7 billion at NT$1: JPY0.2926), up above 30% from now.
At the moment, over 90% of THK's output is generated domestically, with the Yamaguchi plant contributing the largest proportion of 40%. Some analyzed that THK's move to expand production capacity is designed to meet prospective booming demand for machine tools in Europe and Asia.
THK commands a 60% share of the global market for ball screws, staying dominant against Germany's Bosch Rexroth and Taiwan's Hiwin. The company forecasts that as competitors in Asia have emerged, there will be an increasingly fierce competition in the market], forcing the company to boost its market shares via capacity expansion.
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| | ![]() | | | NEC to Set Up R&D Center for WiMAX in Taiwan
Taipei, Nov. 14, 2007 (CENS)--NEC Corp., Japan's biggest supplier of communications equipment, is to set up an R&D center for worldwide interoperability for microwave access (WiMAX) technology in Taiwan as its support center for the world, according to Makoto Kubota, general manager of NEC Taiwan.
Besides, NEC will cooperate with numerous Taiwanese suppliers, including Quanta Computer Inc., MiTAC International Corp. and Micro-Star International Co., to develop more than 200 technologies for personal computers (PCs), severs and digital home devices. This will hopefully increase NEC's procurements from Taiwanese suppliers.
Hajime Sasaki, chairman of NEC, recently noted in Taiwan that NEC will spend around US$3 billion on buying notebook PCs this year from its contract suppliers Quanta and Compal Electronics Inc., and one million units of PCs from Micro-star and MiTAC, with the annual procurements from Taiwan second only to that of Sony.
Kubota, president of NEC Taiwan, said that NEC will concentrate its operations on both hardware sales and system integration services in the future. At present, NEC provides system integration services to Taiwan's government units, banks and logistic companies, and plans to add clients in communication and manufacture sectors.
He emphasized that NEC has a workforce of 500 workers each in Taiwan and Hong Kong, and will reinforce integration of its resources to provide system integration services for Taiwanese companies operating in Great China. Also, NEC can offer value-added, differentiated services for Taiwanese companies who want to move to Vietnam.
NEC has set up its R&D center in Taiwan for three year, and sent more than 1,000 engineers to jointly develop technologies with local suppliers of PCs, servers and digital home devices on the island.
Kubota noted that this October, NEC and Tatung Telecom Corp. have jointly carried out a test on WiMAX technology applied onto medical management in Hualian City, eastern Taiwan. Through a WiMAX-based network, the data of a patient's heartbeat and blood pressure can be directly transmitted from an ambulance to hospitals, and this also helps doctors to effectively conduct emergent treatment.
Kubota added that Taiwan is one of the world's leaders in the development of WiMAX technology, attracting NEC Taiwan to set up an R&D center on the island. The center will be engaged in developing hardware for station bases and customer premises equipment (CPE) and related software.
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