The nation’s financial services firms are facing rising risk associated with the escalating US-China trade dispute, as they have a combined exposure of more than NT$10 trillion (US$321.25 billion) to the two nations, the Financial Supervisory Commission said yesterday.
The financial services sector had NT$8.09 trillion of exposure to the US as of the end of March, including insurers’ NT$6.5 trillion, banks’ NT$1.48 trillion and securities investment firms’ NT$124 billion, the commission said.
The sector’s exposure to China was NT$2.02 trillion as of the end of March, led by banks’ NT$1.75 trillion, insurers’ NT$262.2 billion and securities investment firms’ NT$13.5 billion, the commission added.
While the sector’s combined exposures to the two nations had fallen from NT$12.01 trillion a year earlier, the companies should still closely watch the development of the trade dispute and find ways to mitigate risks, the commission said.
The state-owned National Stabilization Fund (國安基金) would not intervene in the stock market, despite growing global volatility caused by rising trade tensions, Deputy Minister of Finance Frank Juan (阮清華) said.
Juan, who is also the executive secretary of the stabilization fund, told the Central News Agency that compared with markets in the US and Europe, Taiwanese markets remain resilient and there is no reason yet for the fund to consider intervention.
Although the fund did not intervene in local markets yesterday, analysts said government-led funds, such as the pension fund and labor insurance fund, did step in to prop up shares and bolster market confidence, helping shares recover after a tough opening period.
The TAIEX opened down 0.74 percent and dived to 10,363.02 points after five minutes of trading, but gradually recovered, closing 0.37 percent down on 10,519.25 points.
Foreign institutional investors sold a net NT$9.33 billion of local shares, while securities investment companies sold a net NT$575 million, Taiwan Stock Exchange data showed.
So far this week, the TAIEX has fallen 3.47 percent, better than declines of 5.35 percent in Japan, 5.13 percent in South Korea and 3.79 percent in Hong Kong, Securities and Futures Bureau Deputy Director Sam Chang (張振山) said.
Share prices would eventually react to economic fundamentals once investors calm down, Chang said, adding that local companies’ fundamentals are still strong and listed firms’ combined revenue rose 1.56 percent year-on-year in the first four months of the year.
Additional reporting by CNA
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by