Financial firms gain on TAIEX

Stocks gained, led by financial companies such as Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holdings Co (新光金控) as some investors bet lenders will benefit after cleaning up bad loans last year.

"Banks are ready for a good year," said Jerry Chen, who helps oversee US$640 million of Taiwanese equities as research head at First Global Investment Trust Co (元大投信) in Taipei.

"Financial companies have muddled through a strenuous period when many lenders sacrificed profits to clean their books," Chen said.

The TAIEX gained 5.34, or 0.1 percent, to 6,269.71 yesterday. The stock market will be closed for the holiday from Jan. 19 through Jan. 26.

For the week, the index gained 0.7 percent. About six stocks rose for every five that declined. The Futures Index shed 0.2 percent to 6,285.

Cathay Financial Holding, the owner of the nation's largest life insurer, climbed NT$0.50, or 0.9 percent, to NT$57.

Shin Kong Financial, which owns the second-largest Taiwanese life insurer, gained NT$1.70, or 6.9 percent, to NT$26.50.

Some exporters such as Taiwan Semiconductor Manufacturing Co (台積電) and Quanta Computer Inc (廣達電腦) fell as investors sold shares in companies that count US-denominated proceeds as main source of revenue, amid concern an appreciation in the local currency will erode exporters' profit.

The NT dollar was poised for its third winning week after global investors extended purchases of the nation's stocks, raising demand for the currency.

Money managers abroad in the first 10 trading sessions this month bought a net NT$80 billion of Taiwan's shares after NT$14 billion in the previous 10 days, according to Bloomberg data. The NT dollar has gained 0.9 percent so far this year.

"The rising local currency will hurt exporters' profit margin," said Phil Chen, who manages funds worth US$46 million at Grand Cathay Securities Investment Trust Co (大華投信).