The nation’s financial institutions reduced their investments in local and foreign stocks by NT$597 billion (US$19 billion) in the first seven months of this year, while increasing their bond holdings by NT$1.5 trillion, the Financial Supervisory Commission said on Thursday.
The moves came in response to global stock market routs and central bank rate hikes, the commission said.
As the US Federal Reserve is expected to raise key interest rates by another 75 basis points this month, local financial institutions are likely to continue to increase their bond holdings and cut stock positions, it said.
Photo: CNA
Taiwanese banks, insurance companies and securities firms had NT$3.1 trillion of local and foreign stocks as of the end of July, down NT$597.1 billion from the end of last year, the commission said.
Insurance companies in the first seven months invested NT$2.34 trillion in local and foreign stocks, compared with banks’ stock investment of NT$689.2 billion and securities firms’ NT$69 billion, it said.
Financial institutions’ combined bond holdings totaled NT$27.24 trillion as of the end of July, up NT$1.49 trillion from the end of last year, as central banks’ rate hikes drove up bond yields.
From January to July, life insurance companies increased their bond holdings by NT$904 billion, while banks boosted their holdings by NT$596.7 billion, the commission said.
Separately on Tuesday, the commission said an inspection found that 20 financial institutions had contravened credit control measures for real-estate financing set by the commission and the central bank.
The inspection of 10 banks, seven credit cooperatives and three bill financing companies found six major contraventions, the Financial Examination Bureau said.
The severest violations were related to the requirements on loan-to-value (LTV) ratio and the calculation of capital adequacy ratio, it said.
Three banks and one credit cooperative were found to have offered loans to home and land buyers with LTV ratios higher than the caps set by the central bank, the bureau said.
Four banks were found to have used incorrect risk weighting to calculate their assets, which resulted in higher capital adequacy, it said.
One bank and one credit cooperative were found to have lent funds to real-estate developers as working capital for salaries, rent and office overhead, whereas the funds were used in construction projects or for land purchases in contravention of banking rules, it said.
The bureau has demanded that the financial institutions correct their practices, and submitted its findings to the Banking Bureau and the central bank, which are expected to mete out fines soon, it said.
The commission said it has no plans to tighten regulations on real-estate financing by the end of this year and it expects financial companies to comply with the rules.
When Lika Megreladze was a child, life in her native western Georgian region of Guria revolved around tea. Her mother worked for decades as a scientist at the Soviet Union’s Institute of Tea and Subtropical Crops in the village of Anaseuli, Georgia, perfecting cultivation methods for a Georgian tea industry that supplied the bulk of the vast communist state’s brews. “When I was a child, this was only my mum’s workplace. Only later I realized that it was something big,” she said. Now, the institute lies abandoned. Yellowed papers are strewn around its decaying corridors, and a statue of Soviet founder Vladimir Lenin
UNIFYING OPPOSITION: Numerous companies have registered complaints over the potential levies, bringing together rival automakers in voicing their reservations US President Donald Trump is readying plans for industry-specific tariffs to kick in alongside his country-by-country duties in two weeks, ramping up his push to reshape the US’ standing in the global trading system by penalizing purchases from abroad. Administration officials could release details of Trump’s planned 50 percent duty on copper in the days before they are set to take effect on Friday next week, a person familiar with the matter said. That is the same date Trump’s “reciprocal” levies on products from more than 100 nations are slated to begin. Trump on Tuesday said that he is likely to impose tariffs
HELPING HAND: Approving the sale of H20s could give China the edge it needs to capture market share and become the global standard, a US representative said The US President Donald Trump administration’s decision allowing Nvidia Corp to resume shipments of its H20 artificial intelligence (AI) chips to China risks bolstering Beijing’s military capabilities and expanding its capacity to compete with the US, the head of the US House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party said. “The H20, which is a cost-effective and powerful AI inference chip, far surpasses China’s indigenous capability and would therefore provide a substantial increase to China’s AI development,” committee chairman John Moolenaar, a Michigan Republican, said on Friday in a letter to US Secretary of
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) market value closed above US$1 trillion for the first time in Taipei last week, with a raised sales forecast driven by robust artificial intelligence (AI) demand. TSMC saw its Taiwanese shares climb to a record high on Friday, a near 50 percent rise from an April low. That has made it the first Asian stock worth more than US$1 trillion, since PetroChina Co (中國石油天然氣) briefly reached the milestone in 2007. As investors turned calm after their aggressive buying on Friday, amid optimism over the chipmaker’s business outlook, TSMC lost 0.43 percent to close at NT$1,150
RSS