Tue, Jul 20, 2004 - Page 10 News List

Cathay Financial cites market for slide

BLOOMBERG

Cathay Financial Holding Co (國泰金控), the nation's biggest financial services company, had a profit decline in the second quarter, citing a weak stock market.

Profit at the company, which owns the country's largest life insurer, fell to about NT$5.9 billion (US$174 million) from NT$6.5 billion a year ago. The figures were derived by subtracting first-quarter from first-half figures given.

Cathay Financial cut its stock investments in the second quarter by NT$10 billion to NT$106 billion, spokesman Lee Chang-ken (李長庚) told foreign journalists at a briefing.

The benchmark TAIEX dropped 10.5 percent in the period, dragged by concerns about the outlook of global technology shares and rising oil prices.

"The weak stock market said it all," said Chu Yu-chun (朱玉君), a banking analyst at SinoPac Securities Corp (建華證券). "Cathay Financial probably would have posted some unrealized stock losses in the second quarter."

For the first half, profit was about NT$17.9 billion, based on unaudited figures, Lee said. That compares with NT$13.8 billion posted in the same period a year earlier. Cathay Financial plans to report audited first-half earnings on July 30 or Aug. 2, Lee said.

The stock rose 1.7 percent to close at NT$59.50 before yester-day's briefing.

For the second half, "the outlook, such as fixed income, will be stable, except for equity markets, which could be volatile," Lee said.

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