Defaults up for Taiwan banks on yuan bets

    TAIWAN’S bank clients who bought leveraged structured products that bet on a rising yuan are struggling to honor losses on their positions after the currency sunk.

    Investors failed to honor losses on almost NT$2 billion (US$59.5 million) in yuan target-redemption forwards and discrete knock-outs, derivatives that cease to exist after certain profit or exchange rate conditions are met, as of mid-January, Austin Chan, director general of the banking bureau of Taiwan’s financial supervisory commission, said in a Taipei media briefing Tuesday. Fitch Ratings said in December that a large drop in the yuan could see around US$2 billion of losses on such notes.

    Pacific Insurance sees 60% rise in profit

    CHINA Pacific Insurance (Group) Co. yesterday said that a significant rise in investment yield will lead it to record a 60 percent increase in its 2015 net profit.

    The Hong Kong and Shanghai-listed insurance company reported a net profit of 11.05 billion yuan (US$1.68 billion) in 2014.

    China Southern expects strong profit growth

    CHINA Southern Airlines Co., the country’s largest airline by fleet size, expects its net profit to have more than doubled in 2015 due to increased overseas travel by the Chinese, weak oil prices and lower forex losses as the yuan depreciated.

    China Southern expects its net profit to rise by between 110-130 percent in 2015 from 1.77 billion yuan (US$268.9 million) a year ago, it said yesterday. A rise in outbound tourism helped boost its business on international routes, while a fall in jet fuel prices reduced overall costs, the airline said.

    Authorities lift sales ban on Kaisa

    KAISA Group Holdings Ltd. yesterday said authorities in Shenzhen had lifted a sales ban on the bulk of its properties in its hometown Shenzhen, a move that would help the indebted developer’s restructuring efforts.

    Kaisa, which became the first mainland developer to default on offshore bond coupon payments in 2015, said in a statement the project area blocked by Shenzhen authorities from sales dropped by almost two-third since Nov. 10 and the area frozen by courts shortly after its financial difficulties became public has decreased by almost half.