Net foreign-exchange losses at local life insurance companies hit a record last year, but are expected to narrow this year thanks to the US Federal Reserve’s dovish stance, Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) said yesterday.
Domestic life insurers reported net foreign-exchange losses of NT$232.3 billion (US$7.53 billion) last year, up 31.9 percent from the net losses of NT$176.1 billion in 2017, commission data showed.
The commission attributed the increase to a higher hedging cost of NT$484 billion last year, as insurance firms had to pay more due to foreign-exchange volatility and widening interest rate differential between Taiwan and the US.
However, the FSC expects net foreign-exchange losses to decline this year, as the Fed has put interest rate hikes on hold, Koo told a question-and-answer session at the Legislative Yuan in Taipei.
That move would help stabilize the interest rate differential between the two nations, which means that the exchange rate between the New Taiwan dollar and the US dollar could be less volatile than last year, Koo said.
Local insurers’ overseas investments, including global bonds, totaled NT$16.73 trillion as of January, accounting for 68.06 percent of their working capital tallying NT$24.58 trillion, Koo said.
Insurance firms have been looking for overseas investment targets with higher returns, as the benchmark rates in Taiwan have been comparatively low since the central bank cut rates in 2001, except when they climbed above 3 percent before the financial crisis in 2008, Koo said.
However, central bank Deputy Governor Yen Tzung-ta (嚴宗大), who also attended the meeting, said that Taiwan’s rates are not the lowest in the world, as the 10-year government bond yield, which stands at 0.8 percent, is higher than those in Germany, France and the Netherlands.
The ratio of insurers’ overseas investments to their working capital is the highest in the world, which explains why the firms suffered higher foreign-exchange losses, Yen said.
STATE SUBSIDIES: The talks over a factory in Dresden have a top end on par with what Japan is offering TSMC and outdo a cap other firms are being offered in Europe Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is in talks to receive German government subsidies for as much as 50 percent of the costs to build a new semiconductor fab in the country, people familiar with the matter said. The government is in ongoing negotiations with TSMC, as well as its partners on the project — Bosch Ltd, NXP Semiconductors NV and Infineon Technologies AG — the people said, asking not to be identified because the deliberations are private. No final decisions have been made and the final subsidy amount could still change. Any state aid must also
South Korea would avoid capitalizing on China’s ban on a US chipmaker, seeing the move by Beijing as an attempt to drive a wedge between Seoul and Washington, a person familiar with the situation said. The South Korean government would not encourage its memorychip firms to grab market share in China lost by Micron Technology Inc, which has been barred for use in critical industries by Beijing on national security grounds, the person said. China is the biggest market for South Korea semiconductor firms Samsung Electronics Co and SK Hynix Inc and home to some of their factories. Their operations in China
GEOPOLITICAL RISKS: The company has a deep collaboration with TSMC, but it is also open to working with Samsung Electronics Co and Intel Corp, Nvidia’s CEO said Nvidia Corp, the world’s biggest artificial intelligence (AI) GPU supplier, yesterday said that it is diversifying its supply chain partners in order to enhance supply chain resilience amid geopolitical tensions. “All of our supply chain is designed for maximum diversity and redundancy so that we can have resilience. Our company is very big and so we have a lot of customers depending on us. And so our supply chain resilience is very important to us. We manufacture in as many places as we can,” Nvidia founder and chief executive officer Jensen Huang (黃仁勳) said in response to a reporter’s question in
BIG MARKET: As growth in the number of devices and data traffic accelerates, it will not be possible to send everything to the cloud, a Qualcomm executive said Qualcomm Inc is betting the future of artificial intelligence (AI) will require more computing power than what the cloud alone can provide. The world’s largest maker of smartphone processors is transitioning from a communications company into an “intelligent edge computing” firm, Qualcomm senior vice president Alex Katouzian said. The edge in question is the mobile device that a user taps to access a network or service, and Katouzian used his time headlining one of the major keynote events at the Computex show in Taipei to make the case for how big a market that would be. The US company’s chips help smartphones harness
RSS