Print

Mail

wiki links

Steel and financials boost TAIEX to five-week high

The TAIEX had its biggest gain in five weeks yesterday, as buying in steel and financial companies offset early weakness in technology stocks.

The TAIEX rose 125.36 points, or 1.9 percent, to 6,719.96. Yesterday's gain was the biggest since a 2 percent advance on Jan. 3. The steel and financial sub-index rose 3.65 percent and 2.4 percent, respectively.

"The market shrugged off the declines on Wall Street, and investors focused on financials and steel," Capital Securities (群益證券) institutional sales trader David Issokson said.

Traders speculated government funds were also trying to boost the market late in the session, lending support to technology stocks.

Taishin Financial Holdings Co (台新金控) jumped after saying it will make bad loan provisions in last year's financial results to clean up its balance sheet. The company said it would make a profit this year.

"The market sees as positive for financial shares to write off bad loans that will clean their balance sheets," said Michael On, who manages the equivalent of US$60 million as managing director at Beyond Asset Management Co in Taipei.

Taishin Financial, the nation's second-biggest credit-card issuer, jumped NT$1.35, or the daily limit of 7 percent, to NT$20.90.

Taishin said it will make provisions of NT$19.1 billion (US$595 million) in last year's results, leading to a loss of more than NT$3 billion for last year.

The provisions are to cover potential bad loans at its credit-card unit, said the company's president, Julius Chen (陳淮舟), in a briefing in Taipei last Friday.

Shares of Taishin Financial also climbed after the company said Nomura Holdings Inc, Japan's biggest brokerage, will make an investment in a private placement. Taishin Financial will sell NT$4 billion of securities to Nomura.

The index that tracks 45 banking and insurance shares in the Taiex rose 2.4 percent and accounted for about 20 percent of the benchmark's climb.

Cathay Financial Holding Co. (國泰金控), the country's biggest financial services company, added NT$1.80, or 2.9 percent, to NT$63.30.

Meanwhile, China Steel Corp. (中鋼) rose NT0.90, or 3.1 percent, to NT$29.70. China Steel and several Taiwanese and Japanese companies will set up a US$15 million venture in China to develop a distribution network for steel products, the Economic Daily News reported, citing an executive of China Steel's trading company subsidiary.
This story has been viewed 1406 times.