E.Sun Financial Holding Co’s (玉山金控) decision to sell its securities investment trust subsidiary to Schroders PLC for NT$523 million (US$17.23 million), or NT$15.75 a share, is wise, although there are concerns over whether the smaller company can compete in the market and that may worry investors, analysts said yesterday.
“Such a clear-cut decision is wise if it stops potential losses and the subsidiary isn’t making much of a contribution,” Shen Chung-hua (沈中華), a finance professor at National Taiwan University, said via telephone yesterday.
There should be little impact on E.Sun’s operations since its securities unit would be able to manage the other related businesses, he said.
On Thursday, E.Sun and Schroders said the acquisition would be completed by October. E.Sun may also evaluate the possibility of forming a strategic partnership with Schroders, local Chinese-language media quoted company chief strategy officer Joseph Huang (黃男州) as saying yesterday.
He said the investment trust unit, which manages seven funds with a total size of NT$10.4 billion, accounted for only NT$348 billion, or 1 percent, of the parent company’s assets.
E.Sun shares dropped 5.76 percent lower to close at NT$13.9 yesterday amid concerns that the company’s asset value would fall to NT$796.6 billion after the sale, leaving it with a lower asset base and therefore at more of a disadvantage to the competition in the domestic market than before.
“It’s a pretty good idea to liquidate the unit for some cash,” a securities analyst said, speaking on condition of anonymity yesterday.
The analyst, however, expressed concern over the mid-size financial service provider’s management performance as investors have raised doubts about its ability to compete with other domestic banking giants in the future amid uncertainties and the selling pressure facing financial stocks both domestically and globally.
Susan Chu (朱素徵), a director at Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s Ratings Services, said that she believed “the deal is too small to have any impact or risk on the parent company” or its core banking unit.
And the credit rating company, which tracks E.Sun Commercial Bank (玉山銀行), has no plan to revise its rating on the bank, she said.
Shen, nevertheless, still expressed concern over the size of E.Sun, which he said would eventually be vulnerable as competition heats up.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS