E.Sun Financial Holding Co’s (玉山金控) decision to sell its securities investment trust subsidiary to Schroders PLC for NT$523 million (US$17.23 million), or NT$15.75 a share, is wise, although there are concerns over whether the smaller company can compete in the market and that may worry investors, analysts said yesterday.
“Such a clear-cut decision is wise if it stops potential losses and the subsidiary isn’t making much of a contribution,” Shen Chung-hua (沈中華), a finance professor at National Taiwan University, said via telephone yesterday.
There should be little impact on E.Sun’s operations since its securities unit would be able to manage the other related businesses, he said.
On Thursday, E.Sun and Schroders said the acquisition would be completed by October. E.Sun may also evaluate the possibility of forming a strategic partnership with Schroders, local Chinese-language media quoted company chief strategy officer Joseph Huang (黃男州) as saying yesterday.
He said the investment trust unit, which manages seven funds with a total size of NT$10.4 billion, accounted for only NT$348 billion, or 1 percent, of the parent company’s assets.
E.Sun shares dropped 5.76 percent lower to close at NT$13.9 yesterday amid concerns that the company’s asset value would fall to NT$796.6 billion after the sale, leaving it with a lower asset base and therefore at more of a disadvantage to the competition in the domestic market than before.
“It’s a pretty good idea to liquidate the unit for some cash,” a securities analyst said, speaking on condition of anonymity yesterday.
The analyst, however, expressed concern over the mid-size financial service provider’s management performance as investors have raised doubts about its ability to compete with other domestic banking giants in the future amid uncertainties and the selling pressure facing financial stocks both domestically and globally.
Susan Chu (朱素徵), a director at Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s Ratings Services, said that she believed “the deal is too small to have any impact or risk on the parent company” or its core banking unit.
And the credit rating company, which tracks E.Sun Commercial Bank (玉山銀行), has no plan to revise its rating on the bank, she said.
Shen, nevertheless, still expressed concern over the size of E.Sun, which he said would eventually be vulnerable as competition heats up.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS