Mega Financial Holding Co (兆豐金控) fell to a one-week low in Taipei trading after a newspaper reported the financial company plans to sell loans backed by real estate assets at a time when the property market is declining.
Mega Financial, the nation’s second-largest financial company by market value, declined 3.3 percent to NT$20.25 as of 11:46am on the Taiwan Stock Exchange, the lowest level since July 18. The benchmark TAIEX index dropped 3 percent.
Mega International Commercial Bank Co (兆豐國際商銀), Mega Financial’s wholly owned bank unit, plans to sell NT$3 billion (US$99 million) in loans collateralized by Rebar Group’s (力霸集團) cement factory in Ilan County by the end of next month, the Commercial Times reported yesterday, without saying where it got the information.
The bank also plans to sell NT$4.5 billion in loans in October backed by 51 floors of the 85-story Tuntex Sky Tower (高雄85摩天大樓) in Kaohsiung, the report said.
SLOWDOWN
“They may not sell the properties at a price high enough to cover the principles and interests, as the real-estate market is taking a hit amid a slowdown in the overall economy,” said Robert Chuang, who helps manage US$100 million in funds at HSBC Asset Management Ltd (匯豐銀行資產管理) in Taipei.
The bank may put off the auctions until the end of the year if the bids fail to fetch a “satisfactory level,” Simon Dzeng (曾垂紀), spokesman of Mega Financial said by phone yesterday.
Meanwhile, Yuanta Financial Holding Co (元大金控) fell to its lowest level in 10 days after it said its brokerage’s chairwoman had been detained, then released, as part of an investigation into its trading activities.
Yuanta lost 5.3 percent to NT$18.90, its lowest level since July 18, as of 9:48am in Taipei, compared with a 3 percent drop in the benchmark TAIEX.
RELEASED
Prosecutors released Yuanta Securities Co (元大證券) chairwoman Judy Tu (杜麗莊) on bail of NT$10 million (US$328,400) while former president Chang Li-Chiou (張立秋) put up NT$7 million, Yuanta Financial said in a statement on Saturday to the stock exchange.
Prosecutors searched Yuanta Securities offices on Friday as part of a probe into transactions related to the brokerage’s 2005 purchase of Yuanta Securities Investment Trust Co (元大投信) and the trust’s structured notes, according to the statement.
“We expect this corporate-governance-related news to have a negative impact on Yuanta’s near-term share price performance,” Goldman Sachs Group Inc analyst Vincent Chang wrote in a report yesterday.
“We believe the impact on core business could be limited, as prosecutors have made charges only at the individual level so far, not at the company level,” Chang said.
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