Shares of Fubon Financial Holding Co (富邦金), one of the nation’s leading financial firms, rose yesterday after the company reported improved first-half results, dealers said.
Recent strong interest by foreign institutional investors also encouraged retail investors to chase Fubon Financial shares, helping to push the stock up, they said.
Fubon Financial’s advance led the financial sector to trend higher and helped propel the broader market, they added.
Fubon Financial shares closed 1.03 percent higher at NT$49 yesterday, while the TAIEX rose 1.37 percent, Taiwan Stock Exchange figures showed.
“The results for the first half of the year served as a catalyst for Fubon Financial shares,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said. “Many investors are hoping that its bottom line will continue to improve in the second half and are betting that the stock will rise further on the back of sound fundamentals.”
At an investors’ conference on Thursday, Fubon Financial said its net profit for the first six months of the year rose 53 percent from a year earlier to NT$27.3 billion (US$909.4 million), while its earnings per share hit NT$2.67, up 42 percent year-on-year.
As of the end of June, Fubon Financial’s return on assets and equity stood at 1.13 percent and 16.17 percent respectively. In the first six months of last year, those figures were 0.85 percent and 12.15 percent respectively.
The firm’s total assets for the first half of the year rose by 19 percent annually to NT$5.12 trillion.
Fubon Financial expects to book about NT$10.31 billion in cash dividends from its equity investments in the second half of the year, which could boost its bottom line for the rest of the year.
Tang said Fubon Financial’s 80 percent stake in China-based First Sino Bank (華一銀行) is expected to contribute to the parent company’s earnings this year.
“Judging from these financial figures, Fubon Financial has become one of the best financial holding companies in Taiwan. That’s why foreign institutional investors have been picking up the stock in recent sessions,” Tang said.
From May 6 to Thursday, foreign institutional investors bought a net 240 million Fubon Financial shares, Tang said. They now hold about a 32 percent stake in the financial holding company and there is still room for them to raise their holdings in the stock, he said.
Led by Fubon Financial, the financial subindex rose 1.54 percent to 1,124.74 points yesterday, Taiwan Stock Exchange data showed.
“The financial sector has been outperforming the broader market in the past few sessions and its gains have helped to stabilize the index,” Tang said.
However, after their strong showing, Fubon Financial shares could face stiff technical resistance at about NT$50, he added.
“With the broader market still in consolidation mode, it would not be easy for Fubon Financial to clear the technical hurdles any time soon,” he said.
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