Politics weighs on trading
Shares ended flat yesterday amid investor uncertainty ahead of local elections tomorrow, dealers said.
The TAIEX rose 7.05 points, or 0.09 percent, to close at 7,684.67 on turnover of NT$113.91 billion (US$3.54 billion).
Thirty stocks, mostly small caps, surged to their 7 percent daily limit, while 12 went limit-down.
However, losers outnumbered gainers 1,617 to 959, while 270 were unchanged.
“Political uncertainty affected sentiment throughout the session ... Against this backdrop, investors opted to stay on the sidelines,” said Chen Yu-yu (陳育娛) of Capital Securities Corp (群益證券).
ICBC interested in Cathay
Cathay Financial Holding Co (國泰金控) shares climbed yesterday after Reuters reported that Industrial and Commercial Bank of China Ltd (ICBC, 中國工商銀行) was in talks to buy a stake in the Taiwanese company.
Cathay Financial gained 3 percent to close at NT$58.80 in Taipei, after climbing as much as 3.9 percent, the most since Oct. 7. ICBC fell 1.3 percent in Shanghai.
ICBC, China’s largest bank and the biggest in the world based on market value, is interested in buying a 20 percent stake in Cathay Financial, Reuters said on Wednesday, citing people it didn’t identify.
Talks are at an early stage, the news agency reported. Cathay said in a statement yesterday that the information in media reports wasn’t released by the company.
FSC lists Dubai exposure
The local financial sector’s exposure to Dubai World, which sought to delay its US$59 billion debt payments, and Dubai-bound equities investments totaled NT$34.7 billion (US$1.08 billion), including NT$21 billion in loans, the Financial Supervisory Commission’s (FSC) latest statistics showed.
Lin Tung-liang (林棟樑), deputy director of the commission’s Banking Bureau, said 35.8 percent of the NT$21 billion in outstanding loans — including NT$8 billion granted to Dubai World alone — had been collateralized.
About 21 domestic banks, including nine state-run banks, have reported their exposure, he said.
FSC Chairman Sean Chen (陳冲) had told the legislature on Wednesday that the local banking sector’s non-performing loan ratio wouldn’t rise by another 0.5 percentage points even if the total loan exposure turns sour.
“The risk exposure will be containable,” Chen said.
CPT may reduce shares
Chunghwa Picture Tubes Ltd (CPT, 中華映管), the nation’s third-largest flat-panel maker, said in a stock filing yesterday it wouldn’t rule out reducing its outstanding shares to improve its net value per share.
The Taoyuan-based company said its net value per share has dropped recently, after it issued new shares below their par value of NT$10.
CPT’s board on Oct. 21 approved a plan to issue as many as 6 billion shares in a private placement.
NT dollar inches up
The New Taiwan dollar was little changed, after rising to the highest level in two weeks, on speculation the central bank will curb gains to support exports.
The NT dollar traded at NT$32.150 versus the greenback as of 4pm, up NT$0.02 from the previous day, Taipei Forex Inc said. It earlier touched NT$32.093, the strongest level since Nov. 19.
“The central bank doesn’t want to see the Taiwan dollar level below NT$32.00,” said Janet Lin, a currency trader at Taiwan Business Bank (台灣企銀). “Before the year-end, I think the rate will be stable unless the stock market strengthens.”
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