Stock investors have overreacted to media speculation over merger and acquisition (M&A) talks among the nation's financial institutions, which have contributed to the recent up-and-downs of the financial sector's shares, market watchers said yesterday.
"There may be a willingness among financial holding companies to initiate M&A talks, but none has finalized any ideal candidates in spite of market-rift rumors," said William Fong (
Investors have recently speculated more on financial shares than other shares because the financial sector's upward momentum is expected to outperform shares of other sectors, including blue-chip electronic shares, Fong said.
Against this backdrop, local Chinese-language media recently reported intensively that SinoPac Holdings Co (
The media yesterday also reported that Mega Financial Holding Co (兆豐金控) is aggressively seeking to merge with state-controlled First Financial Holding Co (第一金控). Both rumored-to-be-merged financial holding companies, however, flatly denied such media speculations, despite bank-merger plans usually exciting investors and bringing up their stock prices.
For example, SinoPac shares nearly doubled from NT$10.06 per share in May to Thursday's high of NT$20.2, although they slightly declined yesterday to close at NT$18.6.
"The price decline is just a short-term phenomenon and we have a bullish view toward SinoPac shares in the long run," Mike Chow (
SinoPac, which has a low bad-loan ratio with relatively small stock capital and above-par banking performance, has made itself a very popular candidate for M&As, Chow added.
The financial sector overall, nevertheless, is sure to come out of a decade-long recession and gradually turn upward, as the sector's weighted index has risen from November's 834.02 points to yesterday's 875.6 points, Chow said.
"The index may further climb over 922.54 points before the first quarter next year," Chow said, adding that the worst is over for the financial sector.
It appeared to pay off for banks, which aggressively wrote off their bad loans and consolidated themselves through M&As for the past two years.
The Ministry of Finance, moreover, announced on Thursday that the nation's insurers will be allowed to use its liquidity cash, including reserves, to undertake mergers by taking up majority shares, or so-called "hostile takeovers" -- a policy change that may also fuel the sector's M&A activities.
But Primasia's Fong yesterday dismissed such worries, saying few local insurers have had experience in undertaking hostile takeovers, which may backfire to negatively impact stock shares if managed carelessly.
A senior investment banker specializing in M&A businesses agreed, saying only capital-abundant Cathay Financial can afford to buy out other smaller financial companies.
"The remaining insurers are either cash-restricted or unmotivated," the banker said.
The banker also believes that M&A activities among financial institutions will continue at a slower pace.
"Other than SinoPac, there are few ideal candidates worth buying," he 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