The proposed interest rate cap on credit and cash-card loans have continued to weigh on financial shares yesterday, dragging the TAIEX down by 80.33 points, or 1.27 percent, to 6249.19.
Shares of Chinatrust Financial Holding Co (
UBS Securities Ltd said the proposed bill is expected to eat into the bulk of banks' earnings and in turn depress the upside of the local stock market, once the planned restriction becomes law today.
"The planned restriction could reduce consumer banks' earnings by more than 25 percent once it takes effect," said Ken Chen (
Not only banks' earnings but their already weak long-term return on equity would come under more pressure. Moreover, foreign investors' confidence in Taiwan's regulatory environment would be impacted because of such micro-management and unpredictability, said Chen, who has received a flood of inquiries from foreign investor clients these past few days.
UBS currently holds an overweight rating of Taiwan's financial sector. Chen however shied away from confirming whether he would downgrade the rating if the proposed cap should pass the final reading in the legislature.
Fitch Ratings yesterday warned that the proposed changes to the Banking Law (銀行法) concerning consumer lending, if implemented, would likely lead to a surge in loan defaults with serious financial, social and economic consequences.
Up until now, Fitch Ratings has held the view that Taiwan was unlikely to experience a Korean-style consumer-debt crisis. However, if passed, these proposed measures make such a crisis highly likely and this will amount to an extraordinary act of self-inflicted damage by Taiwan's legislators, the company said in a statement released yesterday.
UBS predicted that the benchmark TAIEX can fluctuate between 6,300 and 6,400 points before hitting a forecasted high of 6,902 points at the end of the first quarter of next year, representing a 10 percent upside in the index plus a 5 percent dividend yield, Chen said.
However, the proposed cap on lending rates will be a downside risk, leading to a downward adjustment of the bullish forecast, he said.
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
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day