Fubon Financial Holding Co (富邦金控) yesterday voiced optimism about Taiwan’s economy, saying the worst is over and that GDP growth would reach 3 percent next year, which would be favorable to its operations.
Fubon Financial chief economist Rick Lo (羅瑋) unveiled his projections during an online media briefing, citing improvement in the nation’s exports, a critical economic gauge.
Exports last month slipped back into contraction, but might stage a sustained rebound from this month onward, the Ministry of Finance has said.
Photo: CNA
Major tech firms offered similar earnings guidance.
Lo said the market is now less concerned about whether the US Federal Reserve would raise its policy rate by another 25 basis points to tame inflation and avoid asset bubble busts.
The Fed would assign more importance to how its earlier rate hikes would affect the US economy, a process that needs more time to pan out, Lo said.
The restrictive monetary cycle is likely over in light of the latest US inflation data, he added.
The market is now looking at an interest rate cut of 0.75 percentage points by the Fed in June next year to avert a recession, Lo said.
A lenient monetary stance is favorable to corporate investment and capital expenditure as borrowing costs drop.
Private investment is widely expected to regain growth momentum next year after playing a laggard this year, Lo said.
Consumer spending would stay healthy, helped by a resilient job market, although the benefits of revenge consumption would taper off, he said.
Taipei-based Fubon Financial retained its title as the most profitable financial holding company with cumulative net earnings of NT$67.8 billion (US$2.13 billion), or NT$4.94 per share, company data showed.
Fubon Financial said it intends to raise its stakes in bonds and equities if monetary tightening is over.
It trimmed its stock holdings to 7.9 percent at the end of last quarter, from 8.8 percent a year earlier, after realizing capital gains, officials said.
Main subsidiary Taipei Fubon Bank (台北富邦銀行) last quarter became the nation’s second-
largest credit card issuer, based on the number of active cards, after it replaced Cathay United Bank (國泰世華銀行) in August as Costco Taiwan’s exclusive partner.
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