Citigroup said it remained upbeat about the prospects for Taiwanese banks, despite several local financial heavyweights having come under pressure from global credit concerns.
"Banks are likely to benefit more from a valuations basis," compared with local insurance companies in investment portfolios, Citigroup analyst Braford Ti (
Ti also attributed his positive view on the banking sector to his confidence in the nation's wealth management business.
"Wealth management fees remained firm year-to-date as demand for currency-linked products offset reduced demand for overseas mutual funds, which accounted for the lion's share of fees last year," he wrote in the note.
Chinatrust Financial Holding Co (中信金控), First Financial Holding Co (第一金控) and Yuanta Financial Holding Co (元大金控) are favored picks by the Citigroup Global Market analyst, the note showed.
However, "global market uncertainties and concerns over overseas investments" would likely weigh on valuations of Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控), the parent groups of the nation's two largest life insurance companies, the note said.
Lehman Brothers analyst Sarah Hung (洪月娟) yesterday also raised her recommendation on the nation's financial stocks to "positive" from "neutral," citing positive outlook after the presidential election on Saturday.
As both ruling and opposition parties' presidential candidates favor closer economic and trade ties with China, financial stocks are likely to see "rerating" in the next two to three years, Hung said in her note to clients yesterday.
Hung projects an upside potential of 7 percent to 13 percent for financial share prices this year. She favored bank shares -- including Chinatrust Financial, Cathay Financial and Mega Financial Holding Co (兆豐金控) -- over those of insurance companies, which are heavily influenced by the New Taiwan dollar's recent appreciation, the Lehman Brothers note showed.
The analysts' remarks came as the Financial Supervisory Commission (FSC) said yesterday that the growing US subprime mortgage crisis and credit crunch has had only a minimal impact on Taiwan's financial sector.
FSC officials said the Taiwanese financial sector's losses stemming from the US subprime crisis amounted to about NT$25 billion (US$814.6 million).
However, the FSC said, the impact has been limited, as the NT$20 billion in losses suffered by Taiwanese banks represented only 0.089 percent of their total assets, while the NT$5 billion lost by insurance companies represented just 0.059 percent of the total assets of the nation's insurers.
The FSC's latest tallies show the nation's banks and insurance companies held a total of NT$75 billion in subprime products and NT$21.2 billion in structured investment vehicles as of the end of January this year.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS