Rosy earning reports in the third quarter show that the nation's financial sector is gradually emerging from a 10-year recession, analysts said yesterday.
"Beginning from the fourth quarter, the financial sector is expected to outperform electronics shares on the TAIEX," said James Yeh (葉雲龍), a senior fund manager at HSBC Asset Management Taiwan.
Yeh's optimism was based on the fact that top financial holding companies including Cathay Financial Holdings Co (國泰金控) and Fubon Financial Holding Co (富邦金控) reported better-than-expected profits last week.
Cathay Financial said it had already met 99.5 percent of its profit target for this year with NT$20.9 billion in after-tax earnings, while Fubon reported its third-quarter profits rose to NT$3.87 billion, up from NT$3.53 billion, or 9.6 percent, a year earlier.
Mega Financial Holding Co (
On Friday, Fubon Financial closed up 0.56 percent to NT$35.8, Cathay Financial edged up 0.9 percent to NT$56, while Mega Financial ended 0.48 percent higher at NT$21.
Yeh said financial shares' uptrend will last at least until early next year, while some market watchers are more optimistic, saying that some blue-chip financial shares may see a 10 percent rise in the near future.
But William Fong (
Shares of some underperforming state-run banks, however, will benefit slightly from the bullish market, Fong added.
However, if the legislature eventually gives its approval to the size of Financial Restructuring Fund (
The government has vowed to lower the nation's bad-loan ratio to below 5 percent within two years after the bill is passed.
As of June, the nation's bad-loan ratio stood at 7.97 percent, or NT$1.13 trillion in bad debts, according to statistics provided by the central bank.
Both Yeh and Fong said that the financial sector's recovery is as solid as those in the stock market and property market. In light of improving economic fundamentals, the financial sector has begun to experience growth in lending since the second quarter this year and reasonable profit spreads, which Yeh expected to stabilize before the first half of next year.
Foreign investors, who used to put stock in electronics shares, are estimated to have invested more than NT$100 billion in financial shares over the past two months. The most-recommended financial shares include Cathay, Fubon and Mega. Under-valued Taishin Financial Holdings Co (
The banking sector's efforts to resolve bad loans while improving loan-loss coverage and credit-risk controls helped lift its rating to "stable" from "negative" by both Standard & Poor's and its local arm, Taiwan Ratings Corp (
But Mei Chiang (蔣梅香), director of Taiwan Ratings' financial service department, said that the company holds a neutral view toward the future performance of financial holding companies, whose synergies she said have yet to show.
"After reaping profits, the nation's financial holding companies need to further improve their internal risk management as well as capabilities in business innovation in the next two to three years," Chiang said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six