Taiwanese mostly happy to keep capital at home despite China tensions, says Cathay executive (updated)

Cathay Financial Holding

05/11/2024 08:12

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      Taiwan markets seen in a state of 'precarious balance'
    

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      Cathay Financial to expand headcount by up to 10% next
year
    

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      Aims to catch up with UBS in Taiwan private banking in 5
years
    

  
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    By Faith Hung
       TAIPEI, Nov 5 (Reuters) - Taiwan's ultra wealthy are
keeping their assets in their home market despite escalating
tensions with China, betting that the island's tech industry
will continue to bring in robust returns, a senior Cathay
Financial  2882.TW  executive said.
    Robert Fuh, chief executive of Cathay Financial's private
banking unit, added that the division was confident enough of
its prospects to expand and plans to increase its headcount of
180 by as much as 10% next year.
    The potential for capital flight from Taiwan has often been
cited as a risk by analysts and investors as China, which views
the democratically governed island as its own territory, mounts
a sustained military pressure campaign. That's included four
major rounds of war games in the past two years.
    People in Taiwan have learned to keep calm and carry on, Fuh
said in an interview with Reuters on Monday.
    "So far we have not seen our clients closing accounts and
moving their assets offshore. Yes, there have been some, but
it's not developing into a trend," he added.
    He said a major factor in their reasoning was the importance
of Taiwanese companies like contract chip manufacturer TSMC
 2330.TW  in the booming artificial intelligence industry,
making investment opportunities on the island too lucrative to
pass up.
    "I think now is a time of precarious balance. Clients would
rather remain in place than move. Taiwan stocks have been pretty
immune to (cross-strait) tensions, mainly because Taiwan has
built unique technological industries that no other countries
would be able to replicate and build up any time soon," he said.
    "TSMC's expansions into America and Japan leave investors
with the impression of growth potential beyond imagination." 
    Taiwan, home to TSMC and many other suppliers to tech giants
Apple  AAPL.O  and Nvidia  NVDA.O , ranks as the world's 14th
wealthiest economy per capita, according to a Forbes report
based on 2024 GDP. That puts it ahead of China, Hong Kong, Japan
and South Korea.
    TSMC's share price has almost tripled in the past two years
while Taiwan's benchmark index is up 77%.
    Cathay Financial is Taiwan's largest financial holding firm
with around T$13.3 trillion ($415 billion) in total assets and
the private banking unit also has offices in Hong Kong and
Singapore.
    UBS is currently the dominant player in Taiwan's private
banking market.
    "We hope to catch up with them in five years," Fuh said.
Cathay Financial declined to disclose its current market share.
    

 (Reporting by Faith Hung; Editing by Edwina Gibbs)
 ((faith.hung@thomsonreuters.com;))