A recent policy change on investing in overseas real estate might benefit medium-sized life insurance companies, but will have little effect on their larger peers, international property consultancy CBRE Taiwan said yesterday.
The Financial Supervisory Commission unveiled new regulations governing investment in overseas real estate by insurance companies that might go into practice by the end of this month.
“The new rules will benefit medium-sized insurance companies with strong capitalization because they might allocate more funds to real-estate properties in foreign markets to pursue higher yields,” CBRE Taiwan managing director Joseph Lin (林俊銘) said in a report.
The incumbent regulations cap overseas real-estate investments at 10 percent of the net worth of local insurers. Under the new rules, their risk-based capital ratios will determine the ceiling, giving financially healthy insurers more investment flexibility, Lin said.
Real-estate properties, especially office buildings in gateway cities of advanced markets, will prove attractive investment targets given their relatively high rental yields, Lin said.
Rental yields in Taiwan have dropped to historic lows in recent years due to soaring property prices, but moderate rental increases, Lin said.
As a result, most properties in central Taipei fail to meet the minimum yield requirements of 2.485 percent, CBRE Taiwan said.
Investment opportunities overseas, which provide stable income streams and higher returns, will continue to attract Taiwanese insurers, despite the changes in total permitted allocations, Lin said.
However, large insurance companies might stay put because they have acquired properties overseas in recent years and would want to keep foreign stakes at allowed levels, Lin said.
Insurance companies may not apply for an additional quota for foreign investments once they exceed the limit, the commission said.
Domestic insurers are expected to display a strong interest in foreign properties because they generate stable fixed incomes, Lin said.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective