Shinkong Life Insurance Co (新光人壽), the nation's third-largest life insurer, expects its hedging costs to nearly triple from last year after the insurer raised the proportion of overseas investments in its portfolios against a background of a weakening US dollar, the company said yesterday.
"We expect hedging costs to reach NT$5 billion this year, up from some NT$1.9 billion last year," Hsu Shun-yun (徐順鋆), manager of the accounting department at Shinkong Financial Holding Co (新光金控), Shinkong Life's parent company, told a media briefing yesterday.
The insurer's hedging expenses added up to NT$2.2 billion over the first six months of this year, which can be translated into a hedging-cost rate of around 2.8 percent, up from around 2 percent previously, according to the company.
The company is considering several options that could reduce its hedging costs, including natural hedging or basket hedging by diversifying the number of currencies in its portfolio and reducing exposure to the greenback, Shinkong Life's asset allocation manager Will Chung (
In pursuit of better investment returns, the insurer poured more than NT$30 billion (US$934 million) into its overseas portfolio over the previous two months, bringing its overseas investment ratio to 34.4 percent at the end of July, from 30.6 percent in May, according to the company's figures. This level is approaching the regulatory limit of 35 percent.
Shinkong Life had a net yield rate of between 3.5 percent and 4 percent, equivalent to a return of NT$1.2 billion per month, from its overseas investments after deducting the hedging cost, Hsu said.
The insurer said the yield rate of domestic investments was between 2.5 percent and 3 percent in May.
Shinkong Financial's January-July earnings of NT$6.47 billion, or NT$1.91 per share, beat its earlier financial forecast by 6 percent.
Chinatrust Financial Holding Co's (中信金控) earnings per share over the same period stood at NT$1.91 and those of Cathay Financial Holding Co (國泰金控) at NT$1.71, making Shinkong Financial one of the most lucrative investment targets in the finance sector.
Shinkong Financial hopes to garner another NT$700 million from cash dividends this month on top of the NT$1.5 billion cash dividend income for the first half of the year, Hsu said.
"Shinkong Financial has strong fundamentals, despite the recent allegations about insider trading, which should have only a short-term psychological influence on its share price," Chu Yu-chun (朱玉君), a finance analyst at SinoPac Securities Corp (建華證券), said in a report released last week.
The securities house expected Shinkong Financial, the nation's seventh largest financial holdings firm by assets, to report earnings of NT$7 billion, or NT$2.06 per share, this year. It has raised its target share price for the second half of the year to NT$40 from NT$35 and is recommending bottom fishing for the firm's shares.
The Taipei Prosecutors' Office indicted the financial holdings firm's chairman Eugene Wu (
Shinkong Financial spokesman Victor Hsu (
Shinkong Financial shares closed 0.17 percent higher at NT$29.85 on the Taiwan Stock exchange yesterday.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS