People’s Bank of China Deputy Governor Fan Yifei (范一飛) yesterday talked up the importance of asset management firms created to clean up bad loans at a briefing, saying that they played a key role in reducing corporate leverage.
Speaking in Beijing at the launch of restructured China Orient Asset Management Co Ltd (中國東方資產管理公司), a bad-loan manager backed by the Chinese Ministry of Finance and the National Council for Social Security Fund, Fan pointed at how the weakening economy had caused corporate leverage ratios and nonperforming loans to climb.
“All these require the financial management companies to play important roles in managing nonperforming assets, melting the risk and reducing the leverage,” Fan said, referring to bad loan managers.
China Orient Asset was restructured as a joint stock company earlier this year, with plans to seek strategic investors and an eventual public listing.
It was formed along with three other taxpayer-funded asset management firms during the banking crisis of the late 1990s to dispose of nonperforming loans. They ended up buying about 1.4 trillion yuan (US$208 billion at the current exchange rate) of bad loans from banks at face value, thereby protecting lenders from losses and relieving state-owned enterprises of their debt burdens.
That amount is about the same as the nonperforming loans China’s banks reported in June, figures from the industry regulator show.
While the official bad loan ratio held at 1.75 percent in the second quarter after increasing for almost three years, economists, including central bank adviser Huang Yiping (黃益平), have said China underestimates banks’ soured loans.
The Chinese State Council stepped up its fight against excessive leverage last week when it issued guidelines to reduce corporate debt and said it would not bear final responsibility for borrowing by companies.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS