Shares of Citigroup fell 5.9 percent to US$32 yesterday, the lowest in four years, after Goldman Sachs Group Inc downgraded the stock to "sell" from "neutral" on Monday, predicting the bank could write off up to US$15 billion in soured investments, including mortgage losses, in coming months.
The US' second-largest bank by market worth, Citigroup is already reeling from its exposure to the US housing downturn and tighter credit markets.
The banking behemoth is searching for a new chief executive officer after former CEO Charles Prince stepped down on Nov. 5 as Citigroup revealed it was facing likely investment writeoffs of between US$8 billion and US$11 billion.
Analysts at Goldman Sachs believed the company could be forced to absorb bigger writeoffs.
"We currently assume Citigroup will take an US$11 billion writeoff in the fourth quarter of 2007, at the high end of the firm's guidance, and we also assume an additional US$4 billion writeoff in the first quarter of 2008," the Goldman analysts said in a report.
They said the bank "will likely face an increasingly challenging operating environment which is likely to pressure results in many of their businesses."
Citigroup made US$2.4 billion in net profit during the third quarter, but its profits slowed dramatically amid pre-tax losses of US$1.56 billion and other losses and writedowns totaling almost US$2 billion.
New York-based Citigroup said earlier this month that further writeoffs would likely act as a drag on its fourth-quarter earnings.
The Goldman analysts have trimmed their earnings forecast for Citigroup next year to US$3.80 per share compared with a prior assumption of US$4.65.
The Goldman analysts said they "do not expect a `quick fix' to some of Citi's issues," adding that "the lack of leadership at this point in Citi's storied history could not have come at a worse time."
Deutsche Bank AG on Monday also cut its price target for Citigroup by 15 percent to US$29. Deutsche Bank has a "sell" recommendation on the shares.
People can preregister to receive their NT$10,000 (US$325) cash distributed from the central government on Nov. 5 after President William Lai (賴清德) yesterday signed the Special Budget for Strengthening Economic, Social and National Security Resilience, the Executive Yuan told a news conference last night. The special budget, passed by the Legislative Yuan on Friday last week with a cash handout budget of NT$236 billion, was officially submitted to the Executive Yuan and the Presidential Office yesterday afternoon. People can register through the official Web site at https://10000.gov.tw to have the funds deposited into their bank accounts, withdraw the funds at automated teller
PEACE AND STABILITY: Maintaining the cross-strait ‘status quo’ has long been the government’s position, the Ministry of Foreign Affairs said Taiwan is committed to maintaining the cross-strait “status quo” and seeks no escalation of tensions, the Ministry of Foreign Affairs (MOFA) said yesterday, rebutting a Time magazine opinion piece that described President William Lai (賴清德) as a “reckless leader.” The article, titled “The US Must Beware of Taiwan’s Reckless Leader,” was written by Lyle Goldstein, director of the Asia Program at the Washington-based Defense Priorities think tank. Goldstein wrote that Taiwan is “the world’s most dangerous flashpoint” amid ongoing conflicts in the Middle East and Russia’s invasion of Ukraine. He said that the situation in the Taiwan Strait has become less stable
REASSURANCE: The US said Taiwan’s interests would not be harmed during the talk and that it remains steadfast in its support for the nation, the foreign minister said US President Donald Trump on Friday said he would bring up Taiwan with Chinese President Xi Jinping (習近平) during a meeting on the sidelines of the APEC Summit in South Korea this week. “I will be talking about Taiwan [with Xi],” Trump told reporters before he departed for his trip to Asia, adding that he had “a lot of respect for Taiwan.” “We have a lot to talk about with President Xi, and he has a lot to talk about with us. I think we’ll have a good meeting,” Trump said. Taiwan has long been a contentious issue between the US and China.
Japanese Prime Minister Sanae Takaichi yesterday lavished US President Donald Trump with praise and vows of a “golden age” of ties on his visit to Tokyo, before inking a deal with Washington aimed at securing critical minerals. Takaichi — Japan’s first female prime minister — pulled out all the stops for Trump in her opening test on the international stage and even announced that she would nominate him for a Nobel Peace Prize, the White House said. Trump has become increasingly focused on the Nobel since his return to power in January and claims to have ended several conflicts around the world,
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