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Subprime exposure reduced

Taiwanese banks and insurers reduced their exposure to US subprime mortgage-related investments and structured investment vehicles to NT$93.64 billion (US$3.03 billion) in January, down from NT$97.2 billion the previous month.

"Several banks have either sold their investments or disconnected the investments' links to subprime mortgages, which drove the banking sector's subprime-related investments down by NT$6.6 billion to NT$52 billion [in January]," Financial Supervisory Commission Vice Chairwoman Susan Chang (張秀蓮) told a press briefing yesterday.

However, total losses generated by the investments of 21 banks and a dozen insurers increased slightly to NT$24.9 billion in January, up from NT$23.7 billion the previous month, after the value of the investments fell, Chang said.

US dollar life policy approved

The Financial Supervisory Commission yesterday gave its approval for the nation's first US dollar-denominated insurance product, to be launched by Cathay Life Insurance Co (國泰人壽).

"The new product will help local [insurance] policyholders to internationalize and diversify their wealth management," vice chairwoman Susan Chang (張秀蓮) told a media briefing yesterday.

The US dollar-denominated policies, which have higher interest rates, would be 10 percent to 30 percent cheaper than NT dollar-denominated policies, she said.

She said the commission was reviewing four other applications to also launch foreign currency-denominated insurance products from Shin Kong Life Insurance Co (新光人壽), Fubon Life Assurance Co (富邦人壽), Prudential Life Insurance Company of Taiwan (保德信人壽) and Nan Shan Life Insurance (南山人壽).

Statistics showed that, as of last year, local investors had invested NT$2.1 trillion in overseas funds, 51 percent of the nation's total NT$4.1 trillion investment in funds, Chang said.

Exchanges ink agreement

Taiwan Stock Exchange Corp (TSEC) said yesterday that it had signed a memorandum of understanding with Vietnam's Ho Chi Minh Stock Exchange (HOSE) to explore opportunities for cooperation, including cross listings.

Based on the memorandum, the cooperation may include technological assistance, training programs, cross listings and shared index prices, a statement from TSEC said.

Both exchanges believed that the agreement would contribute to the growth of the securities markets in both Taiwan and Vietnam, the statement said.

Specifically, it would not only benefit the exchanges but also the market participants in the respective countries, TSEC chairman Wu Rong-I (吳榮義) said in the statement.

Director resigns from E.Sun

A Temasek Holdings Pte representative resigned from the board of E.Sun Financial Holding Co (玉山金控) as a report said Singapore's state-owned investment company may sell its stake in the company.

Eric Chen (陳聖德), representative of Temasek-owned Adahlis Holdings BV, quit as a director, E.Sun said in statement to the Taiwan Stock Exchange late on Monday.

E.Sun executives said Temasek was seeking to sell its holding in the company and that Morgan Stanley may replace it as an investor, Citigroup Inc analysts said in a research report yesterday.

E.Sun will sell as much as US$300 million in unsecured convertible bonds overseas, 99 percent of which would be bought by Morgan Stanley Private Equity Asia or its designated investor, the company said in a separate statement to the Taiwan Stock Exchange late on Monday.
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