Panel, LED makers may gain from falling TWD

The report was released as the local unit fell against the greenback yesterday, weakening NT$0.011 to close at NT$29.570. Turnover totaled US$1.05 billion during the trading session.

The report cited a depreciation trend for both the Japanese yen and the Korean won and forecasted that the New Taiwan dollar will follow suit to keep Taiwan exports competitive.

In the report, Merrill Lynch cited historical data suggesting that a weakening of the New Taiwan dollar against the greenback would cause a funds outflow, which would then lead to pessimism among stock investors.

Yet, stocks would rise when the local unit strengthens against the yen, as the cost of importing goods from Japan would be lowered.

The island has a significant trade deficit with Japan and does not compete directly with the country, which is strong at the manufacturing of autos, home appliances and consumer electronics.

The report also found that stocks would lose steam when the depreciation of the local unit trails behind that of the won, the currency of Korea, which is a major competitor of Taiwan.

Among the industries that will benefit from the New Taiwan dollar's devaluation are LED and panel manufacturers, which get payments in the U.S. dollar, Merrill Lynch said. Machine tools manufacturers and marine transport operators are also expected to benefit.

Branded PC makers, meanwhile, may feel the pinch of a local currency devaluation, as they are more sensitive to exchange rate volatilities, Merrill Lynch said.

SHARE CLOSE
Blogger		Google+
Live Journal		Plurk
Stumble Upon

Tweet

	PREVIOUS ARTICLE
	CHT reports unaudited Q4 revenue growth of 2.5%; 2012 growth at 1.3%

NEXT ARTICLE
Lite-On to buy affiliate at over 20% premium

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

 Receive China Post promos
 Respond to this email

Submit