Financial Supervisory Commission chairman William Tseng (曾銘宗) yesterday listed the lack of consolidation in the domestic financial sector as the biggest regret of his time at the helm of the regulatory body, in light of the precipitous drop in financial shares.
“There are too many banks, insurers and securities brokerages vying for the domestic market, and the road toward further consolidation in the crowded field remains arduous,” Tseng said at a news conference.
The TAIEX yesterday plunged 2.68 percent to 8,114.26 points, dragging the financial sub-index 3.52 percent lower to 957.25 points, lower than the 971.66 when Tseng was appointed commission chairman in August 2013.
In particular, shares of Cathay Financial Holding Co (國泰金控), the nation’s largest financial services provider, yesterday fell 9.3 percent to NT$44.2.
“Compared with the technology sector bluechips, financial stocks are much less known on the international stage, leading to lower shareholding by foreign institutional investors and diminished price-to-earnings ratios,” Tseng said.
As a result, financial shares have not been able to garner more favorable valuation in the eyes of foreign institutional investors, he said.
In addition, within the confines of the nation’s highly competitive market, even bellwethers such as Cathay Financial have not been able to match the performance of its international peers and generate a return on assets of 1 percent and a return on equities of 15 percent, despite the firm’s NT$7 trillion (US$210.61 billion) in total assets, Tseng added.
Tseng remains upbeat about the domestic financial sector, as companies continue their overseas expansions, encouraged by a number of policies aimed at fostering regional champions for the Asian market.
However, he said that while investments and profits gained from other Asian markets have been rising quickly, it would take a few more years before these policies produce significant growth.
He said that in the first 11 months of last year, the domestic financial sector reported pre-tax income of NT$531.5 billion, of which banks contributed NT$345.3 billion, while insurers and brokerages contributed NT$153 billion and NT$33.2 billion respectively, for a new record high for the period.
Meanwhile, as of November, exposure in Asia by the domestic financial sector rose from US$171.6 billion to US$209.6 billion, profits also grew to US$1.36 billion, approaching the US$1.44 billion in annual profits derived from Asian markets in 2014, Tseng said.
He said that these results show the resilience of Taiwan’s financial sector amid an international downturn throughout the second half of last year, as companies still recorded earnings growth in relation to the highs set in 2014, while fulfilling the commission’s order to increase provisions by NT$20 billion against rising investment risk in China and the domestic real-estate market.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
DIGITAL COMMERCE: In 2016, only 2 percent of orders were delivered in Taiwan, but that has risen to 10 percent, Foodpanda Taiwan Co operations director Nick Yu said Online food delivery platforms have seen explosive growth in Taiwan this year, helped by business opportunities related to the COVID-19 pandemic, company executives said at a digital commerce conference in Taipei yesterday. When the threat of COVID-19 kept people from going out to eat, more people experimented with ordering food deliveries online, Foodpanda Taiwan Co Ltd (富胖達) operations director Nick Yu (余岳勳) said. Foodpanda started operations in Taiwan in 2012. “We experienced 5,000 percent growth in the past 24 months,” Yu said. “That’s more than the previous six years combined.” In 2016, only 2 percent of food orders were delivered in Taiwan, but that