The domestic financial sector’s exposure to Israel, which has declared war on militant group Hamas, exceeded NT$172 billion (US$5.34 billion) as of the end of August, with the insurance sector accounting for about 98 percent of the total, the Financial Supervisory Commission (FSC) said.
Data compiled by the commissionC showed the three major financial industries — banking, insurance and securities — had a total exposure of NT$172.58 billion at the end of August.
Tensions in the Middle East have been escalating since Hamas launched a surprise attack on Israel on Saturday last week, with Israel declaring war on Hamas a day later, raising concerns over Taiwan’s investments in the country.
Photo: EPE/EFE
Following Israel’s blockade of the Gaza Strip and intensified missile exchanges, at least 2,600 people had been killed as of Thursday, with an additional 9,500 injured, international news reports have said.
The commission said that the domestic insurance industry had the largest exposure, worth NT$169.4 billion, to Israel as of August, with the investments all by life insurance companies, largely in Israeli government bonds, up NT$2.6 billion from a year earlier.
No non-life insurers in Taiwan hold Israeli government bonds, it added.
No credit rating downgrade has been announced for Israeli government bonds, despite the escalating military conflict; interest payments from the Israeli government continue and remain normal, the commission said.
According to local media reports, the insurance operations of five large financial holding firms — Cathay Financial Holding Co (國泰金控), Fubon Financial Holding Co (富邦金控), Shin Kong Financial Holding Co (新光金控), Yuanta Financial Holding Co (元大金控) and First Financial Holding Co (第一金控) — accounted for NT$102.8 billion of Israeli government bonds at the end of June.
Cathay Financial and Fubon Financial had NT$58.7 billion and NT$20.8 billion of Israeli government bonds respectively at the end of June, which made up 8 percent and 3 percent of the two companies’ respective net worth.
Analysts said risks from asset value impairment remain under control, the reports said.
Taiwan’s banking industry had about NT$3.18 billion in exposure to Israel at the end of August, with the exposure composed of NT$771 million in lending and NT$2.41 billion in investments, which came largely in the form of bond purchases for long-term investment purposes to receive stable fixed income, the commission said.
The banking industry has allocated about NT$227 million in provisions for potential losses from asset value impairment on the NT$2.41 billion investments in Israel, it added.
The domestic securities industry reported no exposure to Israel, while 106 mutual funds established by investment trust companies recorded a total of NT$6.22 billion in exposure to the country as of the end of August, up NT$1.08 billion or 21.13 percent from a year earlier, the commission said.
Securities and Futures Bureau Deputy Director-General Kao Ching-ping (高晶萍) said the increase in exposure from mutual funds came after select mutual funds targeting the emerging bond markets raised their investments in Israel.
Despite the increase in investments, the exposure accounts for only 0.1 percent of the combined size of mutual funds in Taiwan, down from 0.11 percent a year earlier, Kao said, adding that the ratio is low and risks remain controllable.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS