Shares of Mega Financial Holdings Co (兆豐金控) ended down 2.13 percent yesterday after its banking unit was not selected to be the clearing bank for New Taiwan dollar transactions in China, dealers said.
Shares of Mega Financial closed at NT$22.95, just off an early low of NT$22.60, while the financial sector fell 0.3 percent and the benchmark TAIEX was down 0.36 percent.
INVESTORS
The central bank announced on Monday that the Bank of Taiwan’s (台灣銀行) Shanghai branch had been chosen as the NT dollar clearing bank in China, disappointing many investors who had hoped that Mega International Commercial Bank’s (兆豐國際商銀) Suzhou branch would get the business.
“It was a knee-jerk reaction to the central bank’s announcement yesterday, prompting many investors to cut their holdings in Mega Financial,” Grand Cathay Securities (大華證券) analyst Mars Hsu (徐振家) said.
MEMORANDUM
Taiwan and China signed a memorandum of understanding (MOU) on Aug. 31 to set up a currency clearing mechanism across the Taiwan Strait. Under the MOU, Taiwan was to select a Taiwanese bank which has already opened a branch in China to serve as the NT dollar transaction clearing bank, while China was to choose a Chinese bank to act as the yuan transaction clearing bank in Taiwan.
“As Mega Bank is one of the domestic banks that are good at foreign exchange business, many investors had bet that the bank would be named [the clearing bank],” Hsu said. “I suspect Bank of Taiwan was chosen largely because of its name, which clearly represents Taiwan.”
Hsu said the sale of Mega Financial shares should be short-lived because the setback would not be significant enough to affect the company’s bottom line.
Acting as the clearing bank could earn a financial institution an additional NT$1 billion (US$34 million) a year, but considering that Mega Financial’s paid-in capital is about NT$114.5 billion, not getting the business should not be a big deal to the company, he said.
LUCRATIVE BUSINESS
“The really lucrative business is settling yuan transactions in Taiwan rather than clearing NT dollar transactions in China due to the rising demand for the Chinese currency,” he said.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS