Taiwan's Grand Cathay Securities Corp (大華證券), the top domestic equity underwriter, had its long and short-term credit ratings lowered by Taiwan Ratings Corp (中華信評) with negative outlook due to the slowing economy and more competition.
The weak local economy was hurting the capital markets and underwriters like Grand Cathay, Taiwan Ratings said. Grand Cathay also was being challenged by competitors who were growing bigger and stronger, it said.
Grand Cathay "may find it increasingly difficult to maintain its edge and a satisfactory performance relative to its peers," Taiwan Rating said in a statement.
Taiwan securities industry has seen a flurry of mergers in 1999 and 2000 after regulators eased rules on mergers in an attempt to promote consolidation in an over-crowded brokerage market.
Taiwan has more than 200 securities companies and expects foreign competition to intensify if the island wins entry into the WTO.
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