Financials suffer for a second day

Stocks dropped for a second day, led by financial companies such as Cathay Financial Holding Co (國泰金控) and Chinatrust Financial Holding Co (中信金控).

The government has pushed back the timeframe for banks to meet lower bad-loan ratio targets, which will slow down a balance sheet clean-up, a local newspaper reported, citing a meeting chaired by Vice Premier Lin Hsin-i (林信義).

``Everybody is using stricter standards to judge financial holding companies now,'' said Belinda Yu, who manages NT$8 billion (US$230 million) of assets at Jih Sun Securities Investment Trust Co (日盛投信).

The TAIEX shed 54.48, or 1.2 percent, to close at 4,550.83. The benchmark rose as much as 1.5 percent in intra-day trading. Banks and insurers were the second-biggest decliners as a group. More than three stocks fell for every one that gained. The value of overall trade was NT$65.2 billion.

Cathay Financial, which owns the country's largest life insurer, fell NT$0.90, or 2.3 percent, to NT$38.50. Chinatrust Financial dropped NT$0.40, or 1.4 percent, to NT$29.30.

The Ministry of Finance now targets a cut in banks' average non-performing loan ratio to 6 percent by the end of the year and to 5 percent by the end of next year, according to the report. The two targets were initially scheduled for June and December this year, respectively.

Advanced Semiconductor Engineering Inc (日月光), the world's second-largest chip packager, rose NT$0.10, or 0.5 percent, to NT$18.60. The company expects sales to increase by about a fifth this year and reported that its fourth-quarter loss narrowed.