Taiwan Life Insurance Co (台灣人壽) said yesterday it was granted a license under China’s qualified foreign institutional investor (QFII) program, which would allow it to directly invest in Chinese securities in a bid to enhance its capital-use efficiency while boosting investment returns.
The Taipei-based insurer said in a stock exchange filing that it had secured the license from the China Securities Regulatory Commission. The filing did not say when the company — which began its QFII application late last year — would start investing in Chinese securities.
However, previous experience from other Taiwanese companies that have gained China’s QFII licenses, such as Fubon Securities Co (富邦證券) and Capital Securities Corp (群益證券), indicate that Taiwan Life would have to wait for an investment quota from China’s State Administration of Foreign Exchange before it can invest in yuan-denominated financial products, including A-shares, corporate bonds and bank debentures.
Other Taiwanese firms, such as Cathay Securities Investment Trust Co (國泰投信), Fuh Hwa Securities Investment Trust Co (復華投信), Shin Kong Life Insurance Co (新光人壽), China Life Insurance Co (中國人壽) and Polaris Securities Co (寶來證券), have also secured QFII status to access China’s stock market, which is almost four times bigger than the local bourse.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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