Cathay Financial Holding Co (國泰金控), the nation’s largest financial service provider by assets, topped the list of domestic financial institutions that have exposure to investments linked to the two ailing US mortgage-finance companies, Fannie Mae and Freddie Mac.
Cathay Financial said in a filing to the stock exchange yesterday that its exposure to the two US firms reached NT$239.14 billion (US$7.86 billion). However, the company said it did not expect to post losses from the investments.
The Financial Supervisory Commission (FSC) had said earlier that most of the investments by Taiwanese insurers were quality investments that should incur limited losses.
Shin Kong Financial Holding Co (新光金控) has the second highest exposure at NT$140 billion, but did not report losses.
Union Bank of Taiwan (聯邦銀行), Fubon Financial Holding Co (富邦金控), the nation’s second-biggest banking group, and Taiwan Life Insurance Co (台灣人壽) ranked third, fourth and fifth with their investment exposure reaching NT$21.4 billion, NT$20.6 billion and NT$13 billion respectively, their exchange filings showed yesterday.
Among the 33 financial companies that reported investment links to the two US mortgage-finance companies, only Mega Financial Holding Co (兆豐金控) and Taiwan Business Bank (台灣企銀) recognized losses of NT$20 million and NT$10 million respectively, their stock filings showed.
Nine financial companies — two financial holding firms, four banks and three non-life insurers — have no investments linked to the two companies, FSC statistics showed.
Grace Lin (林瑞雲), executive vice president of Mega Financial, said the company owned NT$3.8 billion in stocks and collateral bonds issued by the two US mortgage companies, with mark-to-market losses standing at NT$20 million.
Lin said she saw no cause for concern as the amount involved was moderate. However, the US subprime crisis has already eroded Mega Holdings’ profits by NT$4 billion in the first half of this year.
Yuanta Financial Holdings Co (元大金控), the nation’s fifth-largest financial service provider by assets, put its exposure to Fannie Mae and Freddie Mac at about US$3.5 million, company chairman and CEO Yen Ching-chang (顏慶章) said yesterday.
Meanwhile, the central bank said yesterday its financial standing remained robust but declined to reveal its portfolio in a measured attempt to calm public jitters over the ongoing financial woes plaguing the two top-tier US lenders, whose bonds are widely owned by foreign governments.
Central bank Deputy Governor George Chou (周阿定) told an emergency news conference that as of yesterday morning, the value of the bonds in its possession far exceeded that of their costs, meaning the bank remained financially sound.
“The bank only purchases long-term government bonds with top credit ratings,” Chou said. “The two troubled US lenders, Fannie Mae and Freddie Mac, have the backing of the government there.”
The companies, known as government-sponsored enterprises, touch nearly half of US mortgages by either owning or guaranteeing them. The debt securities they issue to finance their operations are widely owned by foreign governments, pension funds, mutual funds, big companies and other large institutional investors.
While the FSC has asked all domestic financial institutions to publish their exposure to Fannie Mae and Freddie Mac, Chou said that no central bank around the world is subjected to the requirement.
“Such disclosure will inevitably raise hackles in the financial market,” Chou said, urging the public to have confidence in the local stock market. Local share prices dived 4.51 percent to close at 6,834 points yesterday, the lowest since President Ma Ying-jeou (馬英九) took office on May 20.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
RSS