TSE announces freeze rule
The Taiwan Stock Exchange Corp (TSE) yesterday announced that, starting in September, the local bourse will suspend trading for half an hour if the benchmark TAIEX tumbles by 10 percent in a single trading day.
The measure supports the new ease-of-trading restriction, also to be introduced in September, which will allow locally traded stocks to rise or fall up to a limit of 15 percent. Stock fluctuations are currently limited to 7 percent.
The new regulation also states that, should a single stock rapidly rise or fall by more than 5 percent, the stock market will also suspend trading for two to three minutes. During the suspension period, investors will still be able to place orders.
The suspension can be only implemented once per trading day before 12:30pm, one hour before the trading closes, the TSE said.
Cathay to tap Chinese market
Cathay Financial Holding Co (國泰金控), the nation's biggest financial services provider, said it plans to expand into the property insurance market in China after becoming the country's first financial company to sell life policies in China.
"When the time is right, we will actively apply to enter the property insurance business," chairman Tsai Hong-tu (蔡宏圖) said at an opening ceremony in Shanghai for the company's life venture with China Eastern Airlines Corp (東方航空), the nation's third-biggest air carrier.
Unit Cathay Life Insurance Co's (國泰人壽) venture with China Eastern took in about 7 million yuan (US$845,549) of premiums since opening for business on Jan. 24, officials said.
Last December China allowed overseas life insurers to sell group insurance, pension and health insurance products, and scrapped all geographical restrictions on them to meet pledges made on joining the WTO in 2001.
The Financial Supervisory Commission also gave permission to three Taiwanese insurers to set up subsidiaries in China, which has yet to approve them, the commission said Oct. 27.
Taishin to increase payouts
Taishin Financial Holdings Co (台新金控), The nation's second-biggest issuer of credit cards, agreed yesterday to more than triple its payout on an equity-linked contract to investors, disregarding a last-minute plunge in the underlying stock.
Taishin was "shocked" by the plunge in Fubon Financial Holding Co (富邦金控) shares on Feb. 21, which cut its payout on the product to 2.38 percent from 9 percent, company spokesman Bingo Lee said in an interview.
Taishin reached an agreement with JP Morgan Chase & Co, which handled the sell order, to disregard the trade and use NT$31.70 as the figure to pay investors instead of its closing price of NT$29.50, he said.
Fubon Financial shares, which fell by their daily limit for the first time in more than two years on Feb. 21, were the worst-performing stock of a basket of five stocks stipulated in the contract, meaning the stock became the benchmark for the product's returns to investors.
JP Morgan provided equity derivatives to help Taishin hedge risks against payouts for the equity-linked contract, the US-based investment bank said in a statement. JP Morgan denied it caused the "extraordinary price movements of Fubon" shares, which also affected the settlement amount of its hedging transaction with Taishin, the statement said.
NT dollar strengthens
The New Taiwan dollar kept advancing against the US greenback, gaining NT$0.024 to NT$31.175 on the Taipei Foreign Exchange yesterday. The turnover was US$1.478 billion.
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