Preface

The Taiwan stock market has recently experienced a series of significant developments, influencing both the economy and investors. From TSMC's stellar earnings report to Line Pay's strategic expansion and Yang Ming's large-scale investment in LNG ships, these events are shaping the market's trajectory. This article delves into these key occurrences, providing a comprehensive overview of their implications.

Lazy bag

Key takeaways: TSMC exceeds financial expectations; Line Pay expands electronic payment services; Yang Ming invests heavily in LNG ships reflecting market confidence.

Main Body

On July 17, TSMC (Taiwan Semiconductor Manufacturing Company) held a much-anticipated financial briefing where it announced a groundbreaking second-quarter earnings report. TSMC’s EPS (Earnings Per Share) reached a record-breaking 15.36 NT dollars, surpassing foreign investment expectations. Furthermore, they projected a 7.7% quarterly increase in dollar-denominated revenue for Q3, continuing to set new single-quarter records. Significantly, TSMC adjusted its full-year growth forecast to a 30% increase, and elucidated the impact of currency fluctuations while revealing optimistic prospects for 2 nanometer technology advancements.

Following TSMC’s revelations, the Taiwan stock market rose by 70.38 points to close at 23,113.28. Foreign investors made a net purchase of 308 million NT dollars, predominantly focusing on traditional industry stocks like the Formosa Plastics Group, purchasing 44,000 shares in total. They also showed interest in airline and panel stocks, while selling 52,300 shares of the ETF 0050.

Meanwhile, the US dollar index's recent bullish trend saw a pause, with Asian currencies showing mixed movements on July 17. The NT dollar fell and then rose, finishing the day at an improved rate of 29.412 against the US dollar, ending a three-day depreciation streak. Despite this, uncertainties surrounding Taiwan's export tariffs to the US resulted in a cautious forex market, with combined turnover reaching only 1.45 billion USD in Taipei and Yuantai forex markets.

In a significant fintech development, Line Pay received approval from Taiwan's Financial Supervisory Commission to establish a wholly-owned subsidiary, "Line Electronic Payment Company," to operate its electronic payment business. This move marks a substantial step forward in electronic payments market. Banking officials noted that Line Pay must obtain an operating license within six months, and continue to monitor the separation progress from iPASS Corporation to ensure customer rights and interests are protected.

On economic forecasts, the Chung-Hua Institution for Economic Research released an updated outlook predicting Taiwan's economic growth rate to slow in the second half of the year. Taking into account uncertainty from tariff policies, currency trends, and base factors, the average growth for H2 is estimated at 1.08%. Combined with the first half, the full-year GDP is projected at 3.05%, maintaining a stable "over 3%" growth, characterized by a "hot-cold" pattern, steady both internally and externally.

National interest levels are keenly observing the potential impacts of US tariffs on Taiwan. Liu Meng-chun, head of the first research institute at Chung-Hua Institution, indicated that if the US imposes tariffs between 10-15%, a New Taiwan dollar exchange rate of approximately 30 to the US dollar might offset related impacts. However, if tariffs reach 25%, the NT dollar exchange rate may need to drop as low as 35 to balance the economic effects.

In energy investments, Yang Ming Marine Transport Corporation announced a significant investment of over 40 billion NT dollars in acquiring seven large LNG ships from Hanwha, with deliveries starting in 2028. This strategic move underscores Yang Ming's commitment to expanding its fleet capacity to meet future demands.

Key Insights Table