Cathay Financial Holding Co (國泰金控), the nation’s largest financial service provider by assets, yesterday said it is trimming holdings in domestic telecom operators on concerns that ongoing price competition might deepen and sap profit margins.
As of June 30, the conglomerate’s main subsidiary, Cathay Life Insurance Co (國泰人壽), had invested NT$362.1 billion (US$12.08 billion) in the domestic stock market, accounting for 9.2 percent of its NT$3.93 trillion total investment funds, company data showed.
“We expect price competition over 4G services to sharpen going forward as telecom operators vie for market share, thereby squeezing profit margins,” group president Lee Chang-Ken (李長庚) said.
Cathay Life has cut its holding of telecom shares, normally deemed a stable source of dividends, and is aware that the adjustment might lessen its overall dividend income for this year, Lee said.
Stock market investment is estimated to generate NT$14 billion for the firm in dividend income for this year and it had booked NT$10.1 billion as of last month, according to the company.
The environment at home and abroad remains favorable for an increase in risky asset investments, as global central banks are cautious about raising interest rates for fear that tightening moves may weaken economic recovery.
Cathay Life plans to seek to lower durations for its bond holdings — standing at NT$2.1 trillion, including both foreign and domestic positions, or 53.5 percent of total assets under management — as the US Federal Reserve is likely to hike interest rates next year.
A tightening monetary cycle might benefit the banking arm, Cathay United Bank (國泰世華銀行,) with its net income set to rise between NT$2 billion and NT$2.2 billion for each 1 percent increase in interest rates, the company said.
Together, the life insurance and banking subsidiaries generated NT$31.9 billion in net income for the first six months, higher than the group’s recorded NT$30.6 billion profit during the same period.
Meanwhile, Lee voiced displeasure about media reports of the bank’s attempt to buy a minority stake in a Philippine bank, saying that premature information leaks were abnormal market practices that could sabotage deals.
“I will not comment on individual cases in line with a confidentiality agreement binding all parties involved,” Lee said.
Cathay Financial prefers to own absolute majority stakes when expanding in overseas markets so it can call the shots in policy decisions, but will accept restrictions imposed by overseas governments to keep foreign investments below the threshold, Lee said.
Thailand, Vietnam, Malaysia and Indonesia all ban foreign investors from owning a majority share in their financial institutions, Lee said.
Shares in Cathay Financial ended down 1.54 percent to NT$51 yesterday, weaker than the TAIEX’s 0.44 percent fall.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”