CENTRAL BANK TO CUT MARGIN RATE
Taiwan’s central bank asked the financial companies of four brokerages to cut interest rates on margin loans to help revive the stock market.
The central bank met yesterday with executives from firms including Yuanta Securities Co (元大證券) and Fubon Securities Co (富邦證券) to press for the change, the bank said in an e-mailed statement yesterday. A margin loan is from a brokerage to a client to invest in stocks.
The central bank has cut the island’s key lending rate by 2.125 percentage points since September.
The five government-controlled banks have agreed to lower rates for proprietary trading loans by between 1 and 1.5 percentage points, the central bank said. After the reduction, the interest rates will be between 4.25 percent and 5.25 percent.
In a separate statement, the central bank said it cut the interest it paid on reserves originating from passbook deposits to 0.2 percent from 0.275 percent. The amount paid on time-deposit reserves dropped to 0.921 percent from 1.421 percent.
FUBON TURNS PROFIT IN Q4
Fubon Financial Holding Co (富邦金控), Taiwan’s second-largest financial services company by market value, turned a profit in the fourth quarter.
The Taipei-based company had net income of NT$250 million (US$7.5 million) from a restated NT$940,000 loss a year earlier. The profit was calculated by subtracting the nine-month results from unaudited full-year figures released yesterday.
The company reported that full-year earnings fell 25 percent from a year ago to NT$10.8 billion, or NT$1.4 a share, from NT$14.4 billion in 2007, or NT$1.87 a share, a statement to the Taiwan Stock Exchange showed. The company didn’t give a reason for the earnings.
MOF MULLS CONVERTIBLE BONDS
Minister of Finance Lee Sush-der (李述德) said on Thursday that the ministry was considering issuing convertible bonds, which give the holder the option to exchange the bonds for shares that the government owns, in the hope of converting shares into cash to facilitate public infrastructure projects.
Lee said the ministry currently holds around 19 billion shares from government-controlled firms, with a market value of more than NT$500 billion (US$15.08 billion).
BANKERS GROUP TO OFFER DISCOUNT
To support the Cabinet’s plan to subsidize local companies that promise to lay off less than 1 percent of their work force this year, the Bankers Association of the Republic of China (銀行公會) on Thursday agreed to offer a discount of between 0.03 percentage points and 0.05 percentage points on its loan interest rates, a report said.
The discount is expected to take effect before the Lunar New Year, the Chinese-language Liberty Times reported yesterday.
However, the association also requested that the government guarantee 80 percent, from the current 50 percent to 60 percent, on the Credit Guarantee Fund it offers to SMEs in order to lessen the risks taken by the banks.
NT DOLLAR FALLS FOR SECOND DAY
The New Taiwan (NT) dollar fell for a second day as equity losses and an unprecedented slump in exports prompted global funds to pare local holdings.
The NT lost ground against the US dollar on the Taipei Foreign Exchange yesterday, declining NT$0.04 to close at NT$33.155. The currency touched NT$33.204 earlier, near a three-week low of NT$33.314 on Tuesday. Turnover was US$892 million.