Insurance stocks closed higher yesterday as the US Federal Reserve's first rate cut in four years prompted market speculation that prices of insurers' NT dollar-dominated assets could rise while insurers may shift focus from US-dollar assets to local assets.
Shares of Cathay Financial Holding Co (國泰金控), which owns Cathay Life Insurance Co (國泰人壽), the nation's largest life insurer, rose NT$3.2 -- or 4.31 percent -- to NT$77.4 yesterday on the Taiwan Stock Exchange.
Rival Shin Kong Financial Holding Co (新光金控), which controls Shin Kong Life Insurance Co (新光人壽), the nation's third-largest life insurer, saw its shares climb NT$0.35, or 1.16 percent, to NT$30.4.
The Fed lowered its benchmark lending yesterday by an unexpected 50 basis points, sparking a rally in global equities.
"For life insurers, the short-term effect from the Fed's rate cut is a lower hedge risk, if our central bank maintains its rate hike move unchanged," Lee Chang-ken (李長庚), chief strategy officer at Cathay Financial, said in a telephone interview last night.
Most of Taiwan's life insurers have in the past few years increased their overseas investments for higher yields and longer duration, Lee said. In doing so, they have also encountered a higher level of foreign exchange risk, he said.
"In the long term, we may adjust their investment portfolios ... but that will depend on how the Fed's reduction in the federal funds rate -- a short-term market rate -- will ripple through the system and affect the longer-term rates on which most of our different duration assets are based," Lee said.
Cathay Financial will invest more in local assets only if there are matches between its expectations of stable cash flows, high yields and balanced asset-and-liability management, he said.
The nation's central bank is expected to announce today whether it will adjust its interest rates to address concerns over slow exports, rising commodity prices and financial market worries.
In a report released yesterday titled Life Insurance Industry Risk Analysis: Taiwan, Taiwan Ratings Corp (中華信評) gave Cathay Life and other local life insurers a stable business outlook and a moderate industry risk.
"Stable economic conditions and improved operational flexibility have enabled insurers to manage themselves more proactively in terms of products, channels and investments, and to diversify their ventures,'' Susan Chu (
"Strong competition and a volatile investment environment are likely to be key sensitive factors affecting the sector's performance," she said.
Although the life insurance industry had a mediocre performance in recent years, the increasing shift away from these traditional products is expected to show improvement in the medium to long term, Taiwan Ratings associate Steven Chen (陳智誠) said in the report.
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
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],”