Investment losses at Taiwan’s major financial holding companies ballooned 50 percent to a combined NT$1.24 trillion (US$39.97 billion) in the third quarter, with the results attributed to a decline in the value of overseas and domestic investments due to interest rate hikes and stock market routs, Financial Supervisory Commission data showed.
Losses from overseas investments last quarter surged 37 percent quarterly to a record NT$905 billion, while losses from domestic investments expanded 103 percent to NT$338 billion, a level never seen before, the data showed.
The decline in value of investment targets held by the financial companies occurred as share prices tumbled in the third quarter amid interest rates hikes — which pushed up bond yields, but drove down their prices.
Local financial holding companies reported combined investment losses of NT$380 billion in the US last quarter, the biggest losses among all overseas markets, the commission’s data showed.
US losses were up 48 percent from the second quarter, while losses in China totaled NT$72 billion, while the figure was NT$42 billion in France, the data showed.
Despite the widening losses, local financial holding companies expanded overseas investments last quarter to NT$20.35 trillion, up 6.8 percent from a quarter earlier. Local financial holding companies’ investments in the US rose 8 percent to NT$7.25 trillion, accounting for 35 percent of total overseas investments, the data showed.
The increase could be attributable to rate hikes by the US Federal Reserve, which prompted local life insurers to seek newly issued fixed-income investments to earn higher yields.
China was the second-largest market for local financial companies’ overseas investments, although the total rose less than 1 percent quarterly to NT$1.34 trillion, the data showed.
Investments in other markets grew faster, with the UK rising 10.7 percent quarterly to NT$1.17 trillion, France expanding 9.2 percent quarter-over-quarter to NT$1.19 trillion and South Korea growing 7 percent quarterly to NT$721 billion, the data showed.
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