Thu, Jan 07, 2016 - Page 13 News List

Barclays’ downsize shows pessimism, analyst says

Staff writer, with CNA

British banking group Barclays PLC’s plan to cut employees at its Taiwan operations indicates a downbeat outlook on the nation’s business prospects, an analyst said yesterday in Taipei.

Barclays’ plan to downsize is a vote against the local investment climate, Taiwan-based Investment Media Ltd (財金文化) chairman Hsieh Chin-ho (謝金河) said.

He was commenting on a Reuters report saying that Barclays would next week announce a cut in investment banking jobs in Asia — including in Taiwan and South Korea.

The downsizing is to be part of Barclays’ global restructuring efforts, which include closing its corporate finance and investment advisory operations in Taiwan and South Korea, where the bank’s corporate relationships have been weaker than in other markets, the report said.

Barclays would instead focus on its core business centers in areas such as Hong Kong, the report said.

However, Barclays’ planned exit from Taiwan is not the only worrisome development in the investment market, Hsieh said, noting that Tokyo-based online car dealer Auto Server Co plans to delist its shares from Taiwan’s over-the-counter (OTC) market this year.

Trading in the local equity market has been light for some time as major market players have remained on the sidelines or moved funds overseas, he said.

Even a company like Auto Server, with sound fundamentals and earnings per share of more than NT$6 for three years in a row cannot attract enough investment interest to survive in Taiwan’s capital market, Hsieh said.

Auto Server — the host of the ASNET platform that processes online bids for secondhand vehicles — launched a primary listing on the local OTC market on Jan. 14, 2014 at an issue price of NT$105 per share.

Auto Server shares yesterday closed unchanged at NT$88.3 in Taipei trading after the company made a public offer to buy back its shares on the market for NT$88.7.

Auto Server’s withdrawal from the OTC market resulted from the thin trading volume on the local equity market, which has also prompted the flight of other companies based overseas, Hsieh said.

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