E.Sun Financial Holding Co’s (玉山金控) decision to sell its securities investment trust subsidiary to Schroders PLC for NT$523 million (US$17.23 million), or NT$15.75 a share, is wise, although there are concerns over whether the smaller company can compete in the market and that may worry investors, analysts said yesterday.
“Such a clear-cut decision is wise if it stops potential losses and the subsidiary isn’t making much of a contribution,” Shen Chung-hua (沈中華), a finance professor at National Taiwan University, said via telephone yesterday.
There should be little impact on E.Sun’s operations since its securities unit would be able to manage the other related businesses, he said.
On Thursday, E.Sun and Schroders said the acquisition would be completed by October. E.Sun may also evaluate the possibility of forming a strategic partnership with Schroders, local Chinese-language media quoted company chief strategy officer Joseph Huang (黃男州) as saying yesterday.
He said the investment trust unit, which manages seven funds with a total size of NT$10.4 billion, accounted for only NT$348 billion, or 1 percent, of the parent company’s assets.
E.Sun shares dropped 5.76 percent lower to close at NT$13.9 yesterday amid concerns that the company’s asset value would fall to NT$796.6 billion after the sale, leaving it with a lower asset base and therefore at more of a disadvantage to the competition in the domestic market than before.
“It’s a pretty good idea to liquidate the unit for some cash,” a securities analyst said, speaking on condition of anonymity yesterday.
The analyst, however, expressed concern over the mid-size financial service provider’s management performance as investors have raised doubts about its ability to compete with other domestic banking giants in the future amid uncertainties and the selling pressure facing financial stocks both domestically and globally.
Susan Chu (朱素徵), a director at Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s Ratings Services, said that she believed “the deal is too small to have any impact or risk on the parent company” or its core banking unit.
And the credit rating company, which tracks E.Sun Commercial Bank (玉山銀行), has no plan to revise its rating on the bank, she said.
Shen, nevertheless, still expressed concern over the size of E.Sun, which he said would eventually be vulnerable as competition heats up.
‘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