Financial firms dump stocks, flock to bonds

The bond rush was fueled by expectations of more rate hikes by the Fed and a global slide in stock markets, a government agency said

The country’s manufacturers invested NT$539.7 billion (US$17.24 billion) in fixed assets in the second quarter of this year, setting a record for the quarter, the Economy Ministry said on Monday last week.

Investments rose 25.8 percent year-on-year and 11.6 percent quarter-on-quarter, mainly due to the expansion of production by semiconductor firms, the ministry said.

Manufacturers’ fixed assets include machinery and other production equipment, factories, and transportation, but exclude land purchases.

Photo: CNA

The country’s major semiconductor firms poured funds into fixed assets from April to June to maintain their lead in high-end processes and meet demand for new technologies such as 5G applications, high-performance computing equipment and automotive electronics, the ministry said.

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Memory chip and circuit board suppliers also increased their fixed asset investments during the period, she added.

The electronic components sector spent NT$387.3 billion on fixed assets, up 35.9 percent annually and 9.1 percent quarterly, the ministry said.

Their spending accounted for 71.8 percent of all manufacturing fixed investment, she added.

The chemical materials sector followed with investments of NT$28.1 billion, or 5.2 percent of manufacturers’ total investments. The figure rose 8.3 percent year-on-year and 41.1 percent quarter-on-quarter as semiconductor manufacturers placed large orders, the ministry said.

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Many petrochemical companies are also investing heavily in equipment to manufacture value-added products, it said.

Computer and optoelectronic industry ranked third with investment of NT$14.1 billion, up 1.7 percent year-on-year and 16.3 percent sequentially, reflecting strong demand for servers and web -Communication devices.

The country’s manufacturing sector recorded revenue of NT$8.72 trillion, up 10.4 percent year-on-year and 4.3 percent qoq, and the highest level in the second quarter, thanks to solid global demand for technology equipment and rising commodity prices ministry said.

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The number includes income from foreign production facilities.

Investments in property, plant and equipment are likely to continue growing as semiconductor firms expand production and offshore wind firms develop new projects, the ministry said.

However, geopolitical tensions, rising inflation and inventory adjustments could weigh on growth, it said.

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