Yuan should make up 10% of investor portfolios: bank
CNATAIPEI--Local investors should seize the launch of Chinese yuan-denominated transactions in Taiwan as an opportunity to build up their yuan holdings and make the unit account for 10 percent of their foreign currency portfolios, the Chinatrust Commercial Bank said Friday.
February 9, 2013, 12:03 am TWN
The bank, one of Taiwan's leading lenders and a banking arm of Chinatrust Financial Holding Co., said that as the yuan is riding a wave of appreciation on the back of an economic rebound, the currency could be at a relative low in the first half of this year, which could make it a good buying point for investors.
The bank said that for more aggressive investors who are willing to take risks, the percentage of the yuan weighting in their portfolios could rise to as much as 25 percent.
On Wednesday, a total of 46 banks operating in Taiwan, including 29 domestically registered ones, launched yuan-denominated business, such as taking deposits, extending loans and making remittances after Taipei and Beijing set up a cross-Taiwan Strait currency-clearing mechanism.
Local media reported that on the first day of the yuan-denominated business, banks in Taiwan took in 1 billion yuan (NT$4.8 billion) in deposits, as they have been offering relatively high interest rates to attract customers.
First Commercial Bank, another leading lender in Taiwan, absorbed 350 million yuan in deposits on the first day, the biggest amount among all the banks, while Mega International Commercial Bank came in second with 250 million yuan in deposits, the reports said.