Day: January 3, 2023

Shares in Taiwan recouped earlier losses to close higher on Tuesday, the first trading session of 2023, but turnover remained slight amid worries over a possible global recession this year, dealers said.

The bellwether electronics sector led the rebound as buyers focused on large semiconductor stocks, while old economy stocks in the new energy development also attracted buying on the back of the government's efforts to push renewable power development, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up by 86.43 points, or 0.61 percent, at 14,224.12 after moving between 14,001.97 and 14,237.94. Turnover totaled NT$149.33 billion (US$4.86 billion).

The market opened down by 0.21 percent and reached the day's low in the early morning session as selling occurred, especially in the electronics sector.

The fall came following a 0.22-percent fall on the Dow Jones Industrial Average and a 0.11-percent fall on the tech-heavy Nasdaq index on Friday, the last trading session of 2022, as market sentiment was haunted by fears over a recession, dealers said.

TSMC

But, with the Taiex moving closer to the nearest technical support at around 14,000, bargain hunters became active and rushed to pick up semiconductor heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and select IC designers, to push up the main board to positive territory by the end of the session, dealers said.

"Judging from the buying in TSMC and other major tech stocks, I think government-led funds were behind today's buying," Hua Nan Securities analyst Kevin Su said.

"Such a low turnover made it easy for these funds to boost the Taiex to positive territory and shore up investors' confidence as worries over a recession created volatility in the global markets at a time of an aggressive rate hike cycle by the major central banks in the world."

"TSMC played a crucial role after making a comeback amid bargain hunting. The stock, again, dominated the trading session today, on the back of its large weighting," Su said.

After coming off the day's low of NT$443.00, TSMC, the most heavily weighted stock in the local market, rose by 1.00 percent to close at the day's high of NT$453.00.

TSMC's gains contributed about 40 points to the Taiex's rise and boosted the electronics sector by 1.06 percent to end 650.32, off a low of 637.89. The semiconductor sub-index also rose by 1.44 percent to close at 304.64, off a low of 297.40.

Other tech stocks

United Microelectronics Corp. (UMC), a smaller contract chipmaker, rose by 1.72 percent to close at NT$41.40, off a low of NT$40.25.

IC designers benefited from bargain-hunting with smartphone IC designer MediaTek Inc. rising by 3.04 percent to close at NT$644.00, and Novatek Microelectronics Corp., a UMC display driver IC design subsidiary, soaring by 6.02 percent to end at NT$344.50.

"A fall in mature IC prices from contract chipmakers is good for these IC designers," said Su.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. bucked the upturn, falling by 0.80 percent to close at NT$99.10, while flat panel maker AU Optronics Corp. and rival Innolux Corp. rose by 3.00 percent and 1.36 percent, respectively, to end at NT$15.45 and NT$11.20.

Renewable energy developers

"Select renewable energy developers attracted rotational buying after the Legislative Yuan just approved a special bill for infrastructure and other economic development projects," Su said, referring to a special budget bill which was passed on Dec. 30 to authorize the central government to spend up to NT$209 billion on infrastructure and other development projects in 2023 and 2024.

Amid optimism in offshore wind power development in Taiwan, suppliers such as Century Iron and Steel Industrial Co. and Ta Ya Electric Wire & Cable Co. got a boost Tuesday, rising by 2.71 percent and 2.60 percent, respectively, to close at NT$20.85 and NT$90.90.

In addition, Chung Hung Steel Corp. increased by 1.31 percent to end at NT$27.10.

Other old economy stocks appeared mixed. Textile brand Far Eastern New Century Corp. dipped by 0.63 percent to close at NT$31.70, and Eclat Textile Co. fell by 2.42 percent to end at NT$483.50, while Nan Ya Plastics Corp. increased by 1.27 percent to close at NT$71.90, and Formosa Plastics Corp. edged up by 0.23 percent to end at NT$87.00.

In the financial sector, which rose by 0.05 percent, Fubon Financial Holding Co. edged up by 0.18 percent to close at NT$56.40, while Cathay Financial Holding Co. dipped by 0.12 percent to end at NT$39.95.

Despite the gains in the Taiex, foreign institutional investors sold a net NT$101.25 million worth of shares on the main board Tuesday, according to the TWSE.

Source: Focus Taiwan News Channel

A batch of 6,400 kg of live Chinese mitten crabs were denied entry into Taiwan after tests showed them to contain excess levels of dioxins, the first such refusal in two years, according to the latest list of refused food shipments published by the Taiwan Food and Drug Administration (FDA) Tuesday.

The batch of Chinese mitten crabs imported by Shuo Hsuan International Trading Ltd. was found to contain dioxin at a level of 10.4pg/g wet weight and combined total for dioxins and dioxin-like polychlorinated biphenyls (DL-PCBs) of 10.8pg/g wet weight.

The levels are both much higher than the permissible level for dioxin of 3.5pg/g wet weight and combined permissible total for dioxins and DL-PCBs of 6.5pg/g wet weight, based on Taiwan's law, FDA Northern Center head Chen Ching-yu (???) told reporters.

Effectively immediately, the FDA has indefinitely suspended applications for import inspections from the Chinese aquafarm in Shandong Province where the polluted crabs were from as part of its efforts to step up source inspections.

Since October last year, Taiwan's customs have rejected 25 shipments of mitten crabs from China as a result of batch-by-batch inspections at the border, Chen noted.

Also named on the 17-item list were white rice from India, mandarins from South Korea, sea urchin gastrulas from Mexico, and fresh strawberries from Japan. All these substandard or polluted food shipments have either been destroyed or returned to their country of origin, Chen said.

In December, six shipments of fresh strawberries imported by Chuan Yong Fruit Co., Ltd. from Japan were found to contain two pesticides -- flonicamid and cyantraniliprole -- traces of which are not permitted in strawberries.

Imports of fresh Japanese strawberries are currently subject to a 20 percent to 50 percent random inspection rate since early last year, when imports from Japan were frequently discovered to contain high levels of pesticide residue.

Source: Focus Taiwan News Channel

Transportation Minister Wang Kwo-tsai (???) has called on the Evergreen Group to give disgruntled ground crew "special consideration" in handling their dismay over year-end bonuses that fell short of those paid at other Evergreen subsidiaries.

Dozens of ground crew employees, who work for EVA Air subsidiary Evergreen Airline Services Corp. (EGAS), took days off on Jan. 1 and Jan. 2 to protest their year-end bonus of one month in salary, which bred resentment because EVA Air employees received a bonus of three months' salary.

The workers' absence caused serious delays to dozens of passenger and cargo flights on Jan. 1 and to "a handful" of departing passenger flights the following day, according to EVA Air.

The situation was brought under control Tuesday, with only 10 employees taking leave, and no flights had been delayed, EGAS said, but some of its workers have suggested they may take leave during the Lunar New Year holiday season and 228 Peace Memorial Day.

Wang acknowledged in an interview that EGAS lost money in the past year because EVA Air operated fewer flights than usual due to COVID-19 border restrictions.

But, overall, the Evergreen Group still made a profit and should give EGAS employees special consideration so that they can have a good Lunar New Year holiday, especially since many of them are already at the lower end of the group's pay scale.

He did not specify what form the special consideration could take.

Wang said he had been in talks with EGAS Chairman Chen Yo-yu (???) over the possibility of raising EGAS employees' year-end bonus, and he hoped that the company could settle its differences with its workers.

Also on Tuesday, Deputy Transportation Minister Chi Wen-chung (???) said that even though all flights operated by Eva Air departed as scheduled on Tuesday morning, the Evergreen Group and EGAS need to take the year-end bonus issue seriously.

The Civil Aeronautics Administration and the Ministry of Transportation and Communications will continue communicating with the companies in the hope that the issue will not affect passenger travel before and during the Jan. 20-29 Lunar New Year holiday, he said.

In related news, Taoyuan International Airport Services Co. (TIAS), which is separate from the Evergreen Group, is expected to enter into negotiations with its union members Wednesday over their demands for a salary raise and reforms of its promotion policy, Wang said.

The TIAS union demanded during negotiations with TIAS late last month that their bonuses be increased, including raising the night shift allowance from NT$50 per hour to NT$75 per hour, and that they be given a 4 percent pay raise.

Union members also demanded revisions to a policy that promotes employees automatically when they have worked at TIAS for 10 years, because the existing policy has led to higher employee turnover.

After the two sides failed to reach an agreement, protesting union members said they would stage a demonstration in front of the ministry on Jan. 6 and concurrently hold a vote asking union members whether they supported striking over the Lunar New Year holiday.

Wang said Tuesday that the ministry would "do everything within its power" to prevent a strike by TIAS employees during the holiday, a peak time for air travel.

He said that he had been in talks with TIAS Chairman Hsieh Shih-chien (???) over issues raised by the union, and to his knowledge the TIAS was prepared to put forward a solution to those issues during another round of negotiations on Wednesday.

Source: Focus Taiwan News Channel