BANKING
Flagstar to buy Signature
A US banking regulator has struck a deal to sell most of the assets of the failed Signature Bank to another institution, the agency said on Sunday. Flagstar Bank, a subsidiary of New York Community Bancorp, is to assume all the deposits and some loan portfolios of Signature Bank, the Federal Deposit Insurance Corp said in a statement. Signature Bank held deposits of US$88.6 billion as of Dec. 31 last year, the statement said, adding that the bank’s 40 branches would open under Flagstar yesterday. About US$60 billion in loans and US$4 billion in deposits related to Signature Bank’s digital banking business will remain under the regulator’s control, the statement said. The regulator is also seeking a similar deal to sell off parts of Silicon Valley Bank.
HEDGE FUNDS
Volatility shuts macro fund
Veteran macro trader Adam Levinson is shutting down his hedge fund after being hit by losses amid ongoing bond market volatility. Levinson’s Graticule Asia macro hedge fund has plunged more than 25 percent since January, mostly during the days after the collapse of Silicon Valley Bank, people with knowledge of the matter said. His bets tied to front-end rates imploded and erased years of gains, they said. Graticule, based in Singapore, becomes the first known high-profile hedge fund felled by wild swings in bond markets, which were triggered by the SVB’s collapse as traders pulled bets on further rate hikes by central banks.
CENTRAL AMERICA
Difficult year forecast
Latin America and the Caribbean are expected to have a “difficult” year ahead, with barely 1 percent growth due to global uncertainty, the Inter-American Development Bank (IDB) said on Sunday. The growth figure “is very low given the developmental challenges in our countries,” IDB chief economist Eric Parrado said at the end of the financial institution’s annual general assembly in Panama. “In general, 2023 will be difficult for Latin America and the Caribbean, given the complexity of the global scenario and its major uncertainties,” Parrado said. The IDB projection is lower than the IMF’s expectation of 1.8 percent growth in the region, or the 1.3 percent estimation from the UN’s Economic Commission for Latin America and the Caribbean.
INTERNET
Sea turns a corner: founder
Sea Ltd (冬海) has made the changes it needs to deliver profits over the long term, billionaire founder Forrest Li (李小冬) said in a memo to staff, assuring workers who survived months of steep job cuts that the worst is over. The Asian Internet giant’s first-ever quarterly net profit marks a turning point for the company, Li said in a recent internal memo seen by Bloomberg News. The company made painful decisions to adapt quickly and has a stabler footing with fewer inefficiencies, the CEO said. However, he said the company still needs to prove that it can sustain a profit. “The world will be watching to see whether this quarter’s result is just a momentary blip or the start of a long-term trend,” he said. “Our job is not yet done.” In a stark about-face from years of global expansion, the company shuttered operations in India and some European and Latin American markets to trim costs and reach positive cash flows. “As a company, it is our first time going through a crisis of this magnitude,” Li said. “Taking major action early in this crisis — much earlier than most in our industry — was painful, but has put us in a stronger position today.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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