Investment losses at Taiwan’s major financial holding companies ballooned 50 percent to a combined NT$1.24 trillion (US$39.97 billion) in the third quarter, with the results attributed to a decline in the value of overseas and domestic investments due to interest rate hikes and stock market routs, Financial Supervisory Commission data showed.
Losses from overseas investments last quarter surged 37 percent quarterly to a record NT$905 billion, while losses from domestic investments expanded 103 percent to NT$338 billion, a level never seen before, the data showed.
The decline in value of investment targets held by the financial companies occurred as share prices tumbled in the third quarter amid interest rates hikes — which pushed up bond yields, but drove down their prices.
Local financial holding companies reported combined investment losses of NT$380 billion in the US last quarter, the biggest losses among all overseas markets, the commission’s data showed.
US losses were up 48 percent from the second quarter, while losses in China totaled NT$72 billion, while the figure was NT$42 billion in France, the data showed.
Despite the widening losses, local financial holding companies expanded overseas investments last quarter to NT$20.35 trillion, up 6.8 percent from a quarter earlier. Local financial holding companies’ investments in the US rose 8 percent to NT$7.25 trillion, accounting for 35 percent of total overseas investments, the data showed.
The increase could be attributable to rate hikes by the US Federal Reserve, which prompted local life insurers to seek newly issued fixed-income investments to earn higher yields.
China was the second-largest market for local financial companies’ overseas investments, although the total rose less than 1 percent quarterly to NT$1.34 trillion, the data showed.
Investments in other markets grew faster, with the UK rising 10.7 percent quarterly to NT$1.17 trillion, France expanding 9.2 percent quarter-over-quarter to NT$1.19 trillion and South Korea growing 7 percent quarterly to NT$721 billion, the data showed.
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS