Shares of Fubon Financial Holding Co (富邦金控) fell 7 percent yesterday, the daily limit, on the first day of trading. Shareholders dumped banking sector shares en masse, disappointing many investors that anticipated a boost from the listing of financial holding companies.
Analysts shied away from commenting on the drop, saying it was only short-term.
"We decline to comment on individual share prices," said Sophia Cheng (誠淑芬), Merrill Lynch vice president. "However, on the general performance of the financial and banking sector, we think the sector has performed quite well recently. Yesterday's decline was a short-term move of profit-taking by investors."
The share price of the new Fubon holding company opened at NT$39.5 or up 7 percent from its listing price of NT$37. But the price went south followed by heavy selling from shareholders to close at NT$34.5, down 7 percent.
While Fubon Holding tanked, Hua Nan Financial Holding Co (華南金控) shares skyrocketed.
The share price of Hua Nan Holding closed at NT$20.4, up 7 percent from its listing price of NT$19.1.
"The government is a major shareholder of Hua Nan and it's keen to boost the share price to show that it has a strong commitment to financial reform" through the creation of financial holding companies, said Nora Hou, banking analyst at CLSA Ltd in Taiwan.
Chang Hwa Bank (彰化銀行), First Commercial Bank (第一銀行), International Commercial Bank of China (中國商銀), Chinatrust Commercial Bank (中信銀行), Chiao Tung Bank (交通銀行), and Taipei Bank (台北銀行) all saw their share prices plummet to the 7 percent daily limit yesterday.
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