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.
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
RSS