With the appointment of Financial Supervisory Commission (FSC) chairman Sean Chen as vice premier expected to expedite cross-strait financial exchanges, financial shares played a leading role as the local bourse finished higher yesterday, indicating a positive response to the move, pundits said.
“Given his solid financial expertise and experience, financial developments across the Taiwan Strait will become healthier and faster,” Ray Chou (周雨田), a research fellow at Academia Sinica, told the Taipei Times by telephone.
Prior to joining the FSC, Chen served as chairman of SinoPac Financial Holding Co (永豐金控) and Taiwan Cooperative Bank (合作金庫銀行). During his term as FSC chairman, he worked to normalize cross-strait financial relations, including in March publicizing new regulations governing cross-strait market access for the banking, securities brokerage and insurance sectors.
The Cabinet yesterday also appointed First Financial Holding Co (第一金控) chairman Chen Yuh-chang (陳裕璋) to succeed Sean Chen as FSC chairman.
He previously worked for the securities bureau under the Ministry of Finance, which was later transformed into the commission’s securities and futures bureau.
“The nomination of candidates for the five major municipalities and the small Cabinet reshuffle strengthens President Ma Ying-jeou’s (馬英九) leadership in the KMT [Chinese Nationalist Party],” Citigroup Taiwan Inc chief economist Cheng Cheng-mount (鄭貞茂) said in a client note yesterday.
“With the economy improving and the KMT more solidified, we believe the chances are increasing that the ruling KMT will win the year-end elections,” he said.
In response to Premier Wu Den-yih’s (吳敦義) remark that he would announce more Cabinet changes on Monday, FSC vice chairman Lee Jih-chu (李紀珠) confirmed that she was offered three positions, including chair of Taiwan Financial Holding Co (台灣金控).
While she could remain in her current position, Ma and Wu would prefer her to take advantage of the reshuffle to broaden her experience, Lee told a media briefing yesterday.
“I like all the new posts and I am sure they [the president and the premier] will make the best arrangements for me,” she said.
After taking up the vice premiership, Sean Chen yesterday said that he would assist the premier in implementing the Cabinet’s economic and financial policies.
Pundits have said major tasks awaiting Chen include the promotion of the government-proposed economic agreement with China, free-trade agreements with other countries, boosting private investment and reducing unemployment to below five percent by the end of this year.
The local bourse rallied yesterday with the benchmark TAIEX rising 167.87 points, or 2.21 percent, to close at 7,770.57, a rise attributed both to the reshuffle of finance related Cabinet members and a surge of 148.65 points on Wall Street overnight.
“The market interpreted this as positive for financial firms. The new Cabinet will aim to get the economic cooperation framework agreement (ECFA) signed in June as its first priority,” SinoPac Securities Corp (永豐金證券) said in a note to investors yesterday.
The financial and insurance sub-index edged up 27.85 points or 3.5 percent, to close at 823.1, outperforming all the other categories on the main bourse, Taiwan Stock Exchange’s data showed.
Bevan Yeh (葉獻文), a fund manager at Prudential Financial Securities Investment Trust Enterprise Co (保德信投信), offered a note of pointing out that the rapid shrinking of daily market turnover to under NT$100 billion in recent days indicated that investors remain cautious.
Market turnover totaled NT$97.53 billion (US$3.1 billion) yesterday on the main bourse, compared with NT$76.15 billion the previous day, according to stock exchange data.
“In the near term, there is less chance that the bulls will be able to push the TAIEX higher,” Yeh said.
He also said that a daily turnover of NT$120 billion would present a good gauge to measure improved investor sentiment.
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