Fitch cuts Horizon Securities, affirms eight others

Fitch Ratings said it downgraded Horizon Securities Co., Ltd. to national long-term BBB(twn) from BBB+(twn) and to national short-term F3(twn) from F2(twn) and revised the outlook on the national long-term rating of Pacific Securities Corp. to negative from stable.

The agency affirmed Oriental Securities Corp., Concord Securities Corp., Ta Chong Securities Co., Ltd., Ta Ching Securities Co., Ltd., Tachan Securities Co., Ltd., Reliance Securities Co., Ltd., Pacific Securities and Primasia Securities Co., Ltd.

The outlook is stable, except for Pacific.

The downgrade of Horizon's ratings reflects its high volatility in earnings relative to peers due to its limited scale in the core brokerage business and elevated market risk exposures through proprietary trading, according to the agency.

The revised outlook on Pacific reflects the reassessment that a significantly improved business model is unlikely in the near-term, the agency noted.

The ratings of the affirmed securities companies reflect their ability to keep their risk profiles in check despite heightened market volatility and depressed trading volumes, the agency said.

Ongoing weak equity market sentiment is likely to result in losses in brokerage operations due to a sharp decline in commissions and likely losses in trading, Fitch said.

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