Cathay Financial, Taiwan's top financial holding firm, posted a forecast-beating quarterly profit due to a strong rally in Taiwan stocks, and it could have a better 2010 as a historic Taiwan-China deal takes effect this month.
The T$3.4 billion ($107 million) net profit, beating a market forecast of T$2.14 billion, was based on the 2009 annual profit of T$11.1 billion that Cathay disclosed on Sunday, according to Reuters calculations.
The outlook for Cathay and local peers is expected to improve this year, in part because the cross-strait deal opens the way for tie-ups between Chinese banks and their Taiwan counterparts, allowing the latter to tap the massive Chinese market. "Cathay's size and leading role in the market make the company an attractive target for many Chinese financial institutions," said analyst Dexter Hsu of J. P Morgan.
The agreement, set to take effect on January 16, comes amid warming relations between former enemies China and Taiwan, and a flurry of activity involving financial groups and investors on both sides of the Taiwan Strait.
China's ICBC was in talks to buy a Cathay stake in a potential $3.4 billion deal in what could be the first direct investment by a Chinese bank into a Taiwan financial group, sources told Reuters last month.
Comments
Comments are closed.