■ AIG gets the go-ahead
The Fair Trade Commission yesterday approved American International Group Inc's (AIG) application to acquire Taipei-based Central Insurance Co (中央產險) as a 100-percent owned subsidiary, according to a press release. AIG announced in February that it planned to absorb Central Insurance, the nation's sixth-largest non-life insurer with a market share of 6 percent, through a share-swap transaction during the third quarter. AIG plans to merge Central Insurance with its subsidiary AIU Insurance Co to form the nation's third-largest non-life insurer in terms of direct gross premiums written, topping NT$10 billion (US$318.5 million) a year. "It is estimated that the combined entity would take a 8.99 percent market share [if AIG's other subsidiary United Guaranty Mortgage Indemnity Co is merged as well]," the press release said.
■ Debts can be sold, FSC says
The Financial Supervisory Com-mission said yesterday that it had decided to conditionally lift the temporary ban that was set late last year barring banks from selling bad debts to asset management companies, one of the commission's measures to help bail out indebted credit and cash-card holders. "The decision was made to ensure consumers' rights and the development of the finance sector," the commission's acting spokesperson Amy Chin (金文悅) said. The decision took effect yesterday after the commission sent the official documents to the Bankers' Association (銀行公會), the financial regulator said. Asset management companies cannot resell the bad debts they buy to third parties. Debt collection activities have to be conducted by the original selling banks or the institutions those banks entrust or designate, the commission said. Asset management firms have to accept the repayment schemes the debtors and the original credit banks agreed during the debt negotiation mechanism, it said. Bad debts that had entered the negotiation mechanism before the reopening cannot be sold to asset management companies, the commission added.
■ ProMOS shares upgraded
ProMOS Technologies Inc (茂德科技), Taiwan's third-largest maker of computer memory chips, was upgraded to "outperform" from "neutral" by Credit Suisse Group, which cited improved profitability and stable product prices. Hsinchu-based ProMOS was expected to post a profit in the second quarter, Wang Wanli (王萬里), an analyst at Credit Suisse wrote in a report yesterday. ProMOS made a loss of NT$518 million (US$16.5 million) in the first quarter after it switched to using technology from South Korea's Hynix Semiconductor Inc last year. But Wang said ProMOS is "turning around from the transition and improving margins owing to stable prices." Wang raised his target price for ProMOS to NT$15 from NT$11.
■ FPG to boost investment
Formosa Plastics Group (FPG, 台塑集團), the nation's biggest industrial conglomerate, plans to invest NT$100 billion (US$3.2 billion) on new plants because of rising global demand for fuels and chemicals. The project will include a 150,000-barrel-a-day crude oil distillation unit, and a plant with an annual capacity of 1.1 million tonnes of aromatics, said Lee Chih-tsuen (李志村), president of Formosa Plastics Corp (台灣塑膠), yesterday.
■ NT gaining ground
The New Taiwan dollar gained ground against the US dollar on the Taipei Foreign Exchange yesterday, rising NT$0.062 to close at NT$31.398. Total turnover reached US$923 million.