Uncertainty expected to plague capital market in Trump 2.0: FSC

Taipei, Jan. 22 (CNA) Uncertainty from the second term of U.S. President Donald Trump is expected to become a regular theme, haunting the capital market over the next year, Peng Jin-lung (彭金隆), chairman of Taiwan's Financial Supervisory Commission (FSC), said Wednesday.

At a news conference, Peng said that Trump's economic policies are expected to dictate the financial markets. At the same time, decisions made by the U.S. Federal Reserve will likely move interest rates in the United States and impact Taiwan's foreign exchange and stock markets.

As the top financial regulator in Taiwan, Peng said, the FSC will continue to pay close attention to the conditions of the local capital market, but it will not make any predictions on market performances.

Still, Peng said he remained "cautiously optimistic" about Taiwan's financial market this year, urging the local financial industry to be more alert to risks, improve its operations, and eventually return benefits to society, such as by raising employees' wages or increasing benefits for them.

Riding the waves of sound fundamentals, the local financial sector, which compromises the banking, securities, and insurance industries, raked in NT$1.02 trillion (US$31.1 billion) in combined net profit in the first 11 months of last year, marking the first time the three industries have recorded a net profit topping the NT$1 trillion mark, according to Peng.

The net profit also rose 44.15 percent from a year earlier, Peng said.

In addition, the local capital market also showed its strength, with the Taiex, the weighted index on the Taiwan Stock Exchange, soaring 28.47 percent in 2024, the highest gain among the markets in Asia, as the average daily turnover reached NT$412.4 billion, up 46.65 percent from 2023, statistics compiled by the FSC showed.

At the press event, Peng said that the FSC is exploring the possibility of requiring financial holding firms initiating a tender offer to acquire another firm to use all cash during the initial stage of the acquisition.

This measure aims to prevent arbitrage, which could cause market volatility and disrupt market order, he explained.

Peng also said that the FSC is considering the possibility of raising the current 10 percent threshold for financial holding firms targeted by buyers during the first stage of an acquisition deal.

The FSC will continue engaging with the industry regarding the rule changes and is likely to announce the adjustments after the nine-day Lunar New Year holiday, which begins on Jan. 25, the official added.