Cathay Financial leads TAIEX to three-year high

Stocks ended at their highest level in almost 41 months yesterday, as investors continued to buy non-technology stocks on expectations of improved earnings this year, analysts said.

The TAIEX gained 16.19, or 0.25 percent, to 6,565.37, the highest since Sept. 27, 2000.

More than one stock gained for every one that declined. Taiex Futures for February delivery rose 0.09 percent to 6,571.

"Non-tech stocks are stronger, mainly because their revenues will be quite good amid economic recovery this year," said Michael Hsu, assistant vice president at Jih Sun Securities Investment Consulting (日盛投顧).

Cathay Financial Holding Co (國泰金控) added NT$2, or 3.3 percent, to NT$63.50. Its unit, Cathay Life Insurance Co (國泰人壽), will pay NT$8.2 billion (US$248 million) to develop commercial buildings in the Hsinyi business district, the company said in a statement late Friday.

Investors also bought bank shares because of the belief Taiwan's recovering property market would help banks solve their bad loan problems, as many borrowers use real estate as collateral, dealers said.

Chang Hwa Commercial Bank (彰化銀行), the country's sixth-biggest bank by assets, rose NT$1.40, or 6.7 percent, to NT$22.20. The lender said Friday after the market closed that it has no plans to seek a merger. The company was responding to media reports that it may combine with Chinatrust Financial Holding Co (中信金控).

The market's gains were capped by the decline in the electronics sector after the 0.97 percent fall in the NASDAQ composite index in US trading Friday.