Day: December 13, 2021

South Korea says it will formally apply to join a regional free trade agreement in an effort to boost trade and expand its presence in the global economy.

Finance Minister Hong Nam-ki said Monday that Seoul has begun the process to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It was formed in 2018 as a successor to the Trans-Pacific Partnership negotiated during the administration of former U.S. President Barack Obama in an effort to blunt China’s growing economic clout in the region. His successor, Donald Trump, withdrew the U.S. from the TPP shortly after taking office in 2017.

Signatories to the CPTPP include Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore.

South Korea’s change of heart comes three months after Beijing applied to join the 11-nation regional trade pact, with Taiwan following suit just days later. Seoul is also planning to join the 15-nation Regional Comprehensive Economic Partnership (RECEP), a Beijing-led free trade agreement that includes Australia, Japan, New Zealand and the Philippines.

South Korea has been reluctant to join multi-nation free trade agreements because of opposition by the country’s agricultural sector due to fear of foreign competition.

Source: Voice of America

Shares in Taiwan closed lower Monday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, gave up its early gains, dealers said.

Concerns over policymaking meetings being held by several major central banks, including the U.S. Federal Reserve, later this week, and uncertainty over national referendums on Dec. 18 led investors in Taiwan to lock in gains built early in the session, they said.

The Taiex, the Taiwan Stock Exchange’s weighted index, ended down 58.66 points, or 0.33 percent, at the day’s low of 17,767.60 after coming off a high of 17,919.35. Turnover totaled NT$282.60 billion (US$10.20 billion).

“Investors were in limbo as they wait for the outcome of the Fed’s policymaking meeting and its comments on the economy to get a better feel for when the Fed might start raising interest rates,” equity analyst Andy Hsu said.

The Fed’s two-day policymaking meeting opens Tuesday, and Taiwan’s central bank will hold its quarterly policymaking meeting on Thursday.

“Also, the referendums are coming closer, and many investors preferred to slow down and take advantage of the initial upturn,” Hsu said, pointing to stiff technical resistance ahead of 17,900 points.

The four referendum initiatives ask voters if they want to open the mothballed Fourth Nuclear Power Plant; kill an LNG terminal project to protect an algal reef; ban imports of pork containing traces of a controversial feed additive; and allow referendums to be held in conjunction with national elections.

The electronics sector lost 0.36 percent to close at 848.73, coming off a high of 856.96, with the semiconductor sub-index down 0.44 percent, after TSMC lost 0.66 percent to end at NT$601.00 after hitting NT$610.00.

“TSMC’s fundamentals remain healthy. Today’s profit-taking was just technical in nature,” Hsu said.

Selling in TSMC spread to other semiconductor heavyweights. United Microelectronics Corp., a smaller contract chipmaker, fell 1.10 percent to close at NT$62.80, and IC packaging and testing services provider ASE Technology Holding Co. closed 0.49 percent lower at NT$102.50.

Bucking the downturn, Novatek Microelectronics Corp., which supplies drive ICs for flat panels, rose 2.36 percent to close at NT$520.00, while smartphone IC designer MediaTek Inc. ended unchanged at NT$1,075.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. fell 0.48 percent to close at NT$104.50, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., shed 3.16 percent to end at NT$1,990.00.

“Gains posted by old economy stocks were largely eroded, but the steel sector outperformed the Taiex due to robust global demand from massive infrastructure projects in several major economies, including the United States,” Hsu said.

In the steel sector, which rose 1.54 percent, China Steel Corp., the largest steel maker in Taiwan, rose 1.17 percent to close at NT$34.60.

Yieh Hsing Enterprise Co. gained 3.06 percent to end at NT$21.90, Chun Yu Works & Co. added 3.85 percent to close at NT$31.05, and Chung Hung Steel Corp. soared 6.23 percent to end at NT$40.90.

The transportation sector lost 1.33 percent. China Airlines closed 5.92 percent lower at NT$27.00, and EVA Airways fell 5.80 percent to end at NT$27.60.

Container cargo shipper Wan Hai Lines Ltd. lost 4.28 percent to close at NT$201.50, while rivals Evergreen Marine Corp. closed unchanged at NT$140.00 and Yang Ming Marine Transport Corp. rose 2.82 percent to close at NT$127.50.

“Today’s turnover shrank further, with more and more foreign institutional investors staying away as the Christmas holiday approaches,” Hsu said. “I expect such a quiet day will continue until they return after the New Year holiday.”

According to the TWSE, foreign institutional investors sold a net NT$9.09 billion worth of shares on the main board.

Source: Focus Taiwan News Channel

The manufacturing sector’s fixed assets grew at their fastest quarterly rate in 11 years in the third quarter, helped by semiconductor vendors’ aggressive capacity expansion, according to the Ministry of Economic Affairs (MOEA).

The fixed assets owned by manufacturers in Taiwan increased by about NT$496 billion in the July-September period, up 43.4 percent from a year earlier and also up 15.6 percent from a quarter earlier, data compiled by the MOEA’s Department of Statistics showed.

The year-on-year growth was the highest since the third quarter of 2010, when it hit 45.1 percent.

High-tech manufacturers, and especially semiconductor makers, continued to invest heavily in fixed assets such as factories and equipment at a time of booming demand for tech gadgets, the MOEA said.

Electronics component manufacturers, including semiconductor makers, increased their fixed assets by NT$347.2 billion in the third quarter, representing a 59.2 percent year-on-year increase and a 21.8 percent sequential rise, MOEA data showed.

Old-economy producers, such as chemical raw material suppliers and machinery makers also increased their investment to further account for the third quarter rise in fixed assets.

According to the MOEA, fixed assets owned by the manufacturing sector include machinery and other production equipment, factories and transportation equipment but does not include land purchases.

In the third quarter, investments in machinery and related items increased by NT$407 billion, accounting for 82.1 percent of the newly added fixed assets, the MOEA said.

The MOEA said fixed assets are expected to continue to grow in the fourth quarter as the semiconductor sector further expands capacity and more Taiwanese companies operating overseas invest at home.

Meanwhile, the MOEA said revenue posted by the local manufacturing sector in the third quarter hit a new high of NT$8.4 trillion, up 19.0 percent from a year earlier and up 6.4 percent from a quarter earlier.

The electronics industry benefited from the unveiling of new devices by major brands as well as higher sales by tech gadget suppliers related to emerging technologies such as 5G applications, high performance computing devices and automotive electronics, the MOEA said.

The MOEA said petrochemical, steel, machinery and auto makers also saw their sales grow at double-digit paces during the three-month period.

Source: Focus Taiwan News Channel