Taiwan Ratings Corp (中華信評), a local arm of Standard & Poor’s (S&P), yesterday gave a “twAA-” financial strength and counterparty credit rating on MetLife Taiwan Insurance Co (大都會國際人壽) and placed it on a CreditWatch with negative implications.
The downgraded rating of the local insurer followed a move by S&P last week to place US-based MetLife Inc (MET) and its subsidiaries on CreditWatch with negative implications, Taiwan Ratings said in a press release yesterday.
The rating for MetLife Taiwan was in tandem with the rating for its parent company, given MetLife Taiwan’s strategically important status as a wholly owned subsidiary, it said.
The CreditWatch move was based on MET’s announcement that it would enter discussions with American International Group (AIG) to acquire American Life Insurance Co, an international life insurance subsidiary of AIG.
Although no agreement or assurances of an agreement have been made, the negative watch status stems from American Life’s asset size and the potential for the purchase to have a negative impact on MET’s financial stability, including capitalization and fixed charge coverage, as well as potential integration risks, the statement said.
The ratings on MetLife Taiwan continue to reflect the insurer’s satisfactory investment profile and good liquidity profile, which are tempered by its slightly weak competitive position among Taiwanese competitors, as well as marginal profitability, the statement said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS