UNITED STATES
Treasury to sell off insurer
The Treasury Department said on Friday it expects to raise US$5 billion from its sale of American International Group stock, cutting the government’s stake in the bailed-out insurer to 55 percent. The sale, which would bring a profit of about US$300 million to the Treasury, comes as President Barack Obama campaigns for a second term and has been forced to defend his administration’s decision to use taxpayer money to prop up companies during the crisis. The Treasury Department priced the offering at US$30.50 a share, six percent above the US$28.72 price needed for the government to break even on its investment in the insurer. AIG intends to buy up to US$3 billion of the offering.
BANKING
Ex-banker in the spotlight
A 30-year-old former Barclays PLC swaps trader in New York, who was fired from the bank in 2010, is among those drawing scrutiny from prosecutors in the deepening scandal over the manipulation of global benchmark interest rates. US prosecutors in Washington are looking at Ryan Reich’s activities while at Barclays between August 2006 and March 2010, said several people familiar with the situation, who declined to be identified because the bid-rigging investigation is ongoing. Reich, now a portfolio manager with New York-based hedge fund WCG Management, was dismissed from Barclays for allegedly sending inappropriate e-mails seeking internal bank information, according to two sources familiar with the situation. One of those sources, who used to work for the bank, said the information Reich sought concerned how the LIBOR benchmark rate was going to be priced, information that could have been useful for his trading positions.
BANKING
UniCredit’s Q2 profits tumble
Italian bank UniCredit SpA on Friday said second-quarter profits dropped 67 percent as it reinforced its capital buffers by nearly 2 billion euros. The net profit of 169 million euros compared with 511 million euros in the same period last year and was below analyst forecasts for 269 million euros, according to a survey by Factset. The earnings were net of 477 million euros spent to buy back bonds in the first quarter. The bank, Italy’s largest by assets, raised provisions for bad loans by 60 percent to 1.9 billion euros “reflecting the deteriorating credit environment that unfortunately we see in Italy,’’ chief executive Federico Ghizzoni told analysts.
GREECE
ECB loans add to bailout
The European Central Bank (ECB) has saved Greece from bankruptcy for the time being by securing it interim financing in the form of additional emergency loans from the Bank of Greece, German newspaper Die Welt said yesterday. The ECB’s Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in yesterday’s edition. Until now the Bank of Greece could only accept T-bills up to a limit of 3 billion euros as collateral for emergency liquidity assistance (ELA), but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources.
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co. (better known as Foxconn) ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose 60 places to reach No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc. at 348th, Pegatron Corp. at 461st, CPC Corp., Taiwan at 494th and Wistron Corp. at 496th. According to Fortune, the world’s
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
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