Fubon Financial Chairman Tsai Ming-hsing: Oil Prices Could Plunge, Rate Hike Pressure to Ease if US-Iran War Ends Soon

(Central News Agency, reporter Zeng Yunting, Taipei, 12th) Fubon Financial Holding Chairman Tsai Ming-hsing said today that the most critical factor currently affecting global inflation remains oil prices. If the US-Iran war ends in the short term, "oil prices could plummet," which would be a timely rain for the global economy, especially for East Asian countries heavily dependent on energy imports. This would not only help alleviate inflationary pressure but could also reduce pressure for interest rate hikes in various countries. Conversely, if oil prices remain high, interest rate hikes may be unavoidable.

Fubon Financial held its 115th annual shareholders' meeting today, during which the 114th business report, financial statements, and profit distribution plan were approved. A cash dividend of NT$4.25 per common share was distributed, the highest among financial holding companies and matching Fubon Financial's historical record.

In an interview after the meeting, Tsai pointed out that oil prices are a major source of inflation. However, the current surge in oil prices has not been as severe as past oil crises. One reason is the transformation of China's energy structure, which has reduced its dependence on oil and significantly decreased consumption. China has also vigorously developed clean energy sources like solar power, slowing global crude oil demand growth. Additionally, most oil-producing countries have recently increased production, ensuring relatively ample supply.

Tsai stated that under the intertwined influence of supply, demand, and geopolitics, oil prices have risen but have not yet experienced a historical surge. If the US-Iran war ends in the short term, oil prices could plummet, which would be a timely rain for the global economy, particularly for East Asian countries heavily reliant on energy imports.

Regarding interest rates, Tsai said that whether rates are hiked will highly depend on oil price trends. If oil prices fall, leading to lower inflation, the probability of rate hikes naturally decreases. However, if oil prices remain high, rate hikes are likely unavoidable.

Commenting on Fubon Life Insurance's plan to invest in SpaceX, Tsai stated that SpaceX currently has a very high valuation and holds a dominant, leading position in the global space industry. It is one of the few companies with a global monopoly. SpaceX's core advantage lies in its reusable rockets, which significantly reduce launch costs and even allow it to execute missions for NASA, as well as support satellite launches and commercial services.

He noted that SpaceX is further developing low-earth orbit satellite communications and space computing centers, and may even advance towards lunar computing bases and long-term Mars colonization concepts in the future. Although some of these visions require time to materialize, technological progress continues. Tsai believes that market opinions on SpaceX are divided, but from a long-term perspective of 3 to 10 years, the stock still holds high development potential.

Fubon Financial's after-tax net profit last year was NT$120.94 billion, with earnings per share of NT$8.37. Looking ahead to the performance of the holding company's subsidiaries this year, Tsai said that as of May this year, all Fubon Financial subsidiaries have achieved record profits. Overseas banking locations such as Taipei Fubon Bank's Hong Kong branch and Fubon Hua Yi Bank have also performed well, with banking, life insurance, and securities businesses all maintaining double-digit growth. (Editor: Pan Yijing) 115/06/12