Taipei, Nov. 28 (CNA) Companies listed on the local main board and the over-the-counter (OTC) market enjoyed improving profitability for the first nine months of this year, even though the local economy showed signs of a slowdown, according to the Financial Supervisory Commission (FSC).
The FSC cited statistics as saying that more than 1,550 listed companies on the main board and the OTC market posted NT$1.5 trillion (US$45.73 billion) in aggregate pretax profit for the nine-month period, up 6.52 percent from a year earlier.
Tseng Ming-chung (曾銘宗), head of the FSC, said Saturday that the earnings report showed that Taiwanese firms remained profitable, so Taiwan’s equity market is worth investing in.
Judging from the profitability of these listed companies, Tseng said that he has faith Taiwan will be able to maintain its gross domestic product (GDP) at a 1 percent growth pace, adding that a recent stimulus package worth NT$4.41 billion announced by the government to raise consumer spending is expected to provide an additional boost to the local economy.
On Friday, the Directorate General of Budget, Accounting and Statistics trimmed its forecast of Taiwan’s 2015 GDP growth to 1.06 percent from an earlier estimate of a 1.56 percent rise, while several economic think tanks have voiced worries that it will be hard for Taiwan to maintain 1 percent growth in the wake of weakening global demand.
The Taiwan Institute of Economic Research (台經院) and the Chung-Hua Institution for Economic Research (中經院) have downgraded their forecasts for Taiwan’s growth this year to 0.83 percent and 0.9 percent, respectively.
In the first nine months, listed companies on the Taiwan Stock Exchange posted NT$1.42 trillion in pretax profit, up 7.75 percent from a year earlier, while listed firms on the local OTC market posted NT$87.4 billion in pretax profit, down 10.17 percent from a year ago, the FSC data showed.
The FSC said that the profit growth enjoyed by the listed companies on the main board resulted from international smartphone brands’ efforts to launch new models, which boosted shipments of products made by Taiwanese component suppliers and assemblers.
In addition, petrochemical firms listed on the main board benefited from falling operating costs in reflection of cheaper raw materials, the FSC said.
However, the top financial regulator in Taiwan said that listed companies on the local OTC market suffered a drop in profit during the same period because the construction material suppliers raked in smaller sales, and semiconductor makers faced rising competition from their rivals in China.
(By Tsai Yi-chu and Frances Huang)
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