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Fitch upgrades 2 Taiwan securities companies, affirms 4 others

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Fitch upgrades 2 Taiwan securities companies, affirms 4 others

Fitch Ratings upgraded the national long-term rating of Taiwan-based Grand Fortune Securities Co. Ltd. to A-(twn) from BBB+(twn).

The rating agency said May 10 that it also upgraded the national short-term ratings of Grand Fortune Securities and Oriental Securities Corp. to F1(twn) from F2(twn). Fitch also affirmed the latter's long- and short-term issuer default ratings at BB+ and B, respectively, as well as its national long-term rating at A-(twn).

The outlook for both securities firms are stable.

The ratings upgrade on Grand Fortune Securities is driven by Fitch's view on the strength of its franchise in the Taiwanese equity underwriting segment, while the upgrade on Oriental Securities' ratings reflects the strength in its liquidity profile.

In addition, Fitch also affirmed the long- and short-term issuer default ratings of Concord Securities Co. Ltd. at BB+ and B, respectively, as well as its national long- and short-term ratings at A(twn) and F2(twn).

The national long-term ratings of Ta Ching Securities Co. Ltd. and Horizon Securities Co. Ltd. were affirmed at BBB+(twn) and BBB(twn), respectively, while their national short-term ratings were affirmed at F2(twn) and F3(twn), respectively.

Further, the rating agency also affirmed the long- and short-term issuer default ratings of TaChan Securities Co. Ltd. at BB and B, respectively, as well as the company's national long- and short-term ratings at BBB+(twn) and F2(twn), respectively.

The outlook on the four companies are all stable.

Fitch said ratings upgrades for the six companies are unlikely, given their overall modest franchises. Ratings downgrades for Oriental Securities, Grand Fortune Securities, Ta Ching Securities and TaChan Securities are less likely due to their healthy balance sheets with ample buffers in capital and liquidity.

Concord Securities' inability to execute a consistent strategy for sustained earnings improvement through a wider product offering could lead to a ratings downgrade, while a significant deterioration in Horizon Securities' capitalization could lead to the same.