Negative for Citibank Taiwan
Fitch Ratings yesterday placed most of its Citibank Taiwan Ltd (花旗銀行) ratings on Rating Watch Negative on concerns over its parent Citigroup’s acquisition of Wachovia Corp’s retail, corporate investment and private banking operations.
The strategic benefits of Citigroup’s acquisition are tempered by its own escalating asset quality challenges, the international rating agency’s press statement said yesterday, adding that Citibank Taiwan’s rating revision was in line with the ratings on Citigroup’s principal members.
The ratings reflect Citibank Taiwan’s integral relationship with the group as well as the expected management and financial support from the parent, it said.
In a less likely scenario, Fitch would lower Citibank Taiwan’s ratings to better reflect its stand-alone financial profile should it find Citigroup too constrained by its financial flexibility on a parent level to extend its support to Citibank Taiwan when needed, the statement said.
UMC books asset impairment
United Microelectronics Corp (UMC, 聯電) said yesterday it had booked NT$3.22 billion (US$100 million) in asset impairment from the tumbling local stock market and slowing demand for semiconductor products.
But UMC stressed that the asset loss would not have a negative impact on its cash position.
Over the past six months, the prices of equities owned by UMC have fallen to a level below the purchase price, UMC said in a filing to the Taiwan Stock Exchange.
About NT$2.66 billion in asset impairments stemmed from Silicon Integrated Systems Corp (矽統科技). Silicon Integrated Systems shares have halved to NT$5.39 since the end of February.
UMC also booked NT$240 million in losses from chip tester King Yuan Electronics Co (京元電子) and losses of NT$200 million from Springsoft Inc (思源科技).
New iPods in Taiwan
Apple Computer Inc unveiled a series of new iPod MP3 players in Taiwan yesterday, but the company gave no word as to when the iPhone would become available here.
Chunghwa Telecom Co (中華電信), the nation’s biggest telecom service provider, said last year it was interested in collaborating with Apple to introduce the iPhone in Taiwan, but gave no timeframe.
“Many users buy a separate media player because they are comfortable with their existing mobile phones and want to keep their cellphones and players separate. They also don’t want to drain out cellphone batteries while playing games or music on the go,” Yeo Eng Yiong (楊應勇), senior manager of Apple’s iPod product marketing in the Asia-Pacific region, said yesterday.
Naphtha plant to restart
State-run CPC Corp, Taiwan (CPC, 台灣中油) will restart its No. 5 naphtha cracker in Kaohsiung by Oct. 13, vice president Chu Shao-hua (朱少華) said.
The company had initially hoped to resume production at the unit before the end of last month after regular maintenance, Chu said by telephone yesterday.
NT dollar at eight-month low
The New Taiwan dollar fell to an eight-month low after the US House of Representatives rejected a US$700 billion financial-rescue plan, spurring investors to shun emerging-market assets.
The local currency fell as much as 1 percent to NT$32.368 against the US dollar, the lowest level since Jan. 24, before ending down 0.3 percent to close at NT$32.13 on the Taipei Forex Inc.
The NT dollar lost 1.9 percent last month and has declined 5.5 percent this quarter.
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