Local financial conglomerates yesterday gave a mixed outlook and said they are braced for higher uncertainty and risks in exchange and interest rates stemming from US-China trade tensions.
Cathay Financial Holdings Co (國泰金控) has seen its net worth and return on investment recover in the first quarter, but would remain watchful as the trade situation unfolds, Cathay Financial chairman Tsai Hong-tu (蔡宏圖) told a shareholders’ conference in Taipei.
The US dollar exchange rate has been fluctuating, posing a challenge for hedging and forex business, Cathay Financial president Lee Chang-ken (李長庚) told reporters.
Its insurance arm, Cathay Life Insurance Co (國泰人壽), has adapted, Lee said.
Its business in Southeast Asia has reported stronger momentum compared with local sectors, with the life insurer’s branch in Vietnam seeing 58 percent growth in first-year premiums in the first three months of this year, Lee said.
Cathay would expand its operations in Vietnam when the timing is right and assess other investment opportunities in other countries in the region, he said.
Shareholders of Cathay Financial approved a proposal to distribute a cash dividend of NT$1.5 per common share, representing a payout ratio of 38 percent based on the company’s earnings per share of NT$3.95 last year.
Fubon Financial Holding Co (富邦金控) said it is monitoring the risks of volatile exchange and interest rates amid the trade dispute.
Fubon Financial would diversify its foreign-currency investment and cut its US dollar position to rein in risks, chairman Richard Tsai (蔡明興) told a separate shareholders’ conference in Taipei.
The trade issue is dampening global trade, but is also prompting Taiwanese companies to return home, Tsai said, citing a report by the US Federal Reserve, which said that Taiwan might benefit amid the tensions.
Fubon Financial is No. 1 for earnings per share among local peers and would strive to defend that position, he said.
Fubon Financial shareholders approved a proposal to distribute a cash dividend of NT$2 per common share, representing a payout ratio of 44 percent based on the company’s earnings per share of NT$4.52 last year.
Shin Kong Financial Holding Co (新光金控) said that this year would be better than last year on the back of steady growth in revenue and return on investment, as well as its planned Web-only bank, Shin Kong chairman Eugene Wu (吳東進) told another shareholders’ meeting.
Shin Kong’s shareholders approved a proposal to distribute a cash dividend of NT$0.2 per common share, representing a payout ratio of 22 percent based on the company’s earnings per share of NT$0.89 last year.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a