Cathay Financial’s class A shares soar on TWSE debut

By Christine Chou, The China Post

TAIPEI, Taiwan — Cathay Financial Holdings’ (國泰金控) class A preferred shares saw brisk trading as they made thier debut on the Taiwan Stock Exchange Tuesday. The round of fundraising — registered under the title Cathay Financial Holding Co., Ltd. Preferred Stock A (CTFHCPSA) — would help Cathay compete in the Asia market, Cathay United Bank president Alan Lee (李偉正) said.

Lee said the NT$35 billion raised at this stage would be used to purchase perpetual subordinate debt issued by Cathay Life Insurance (國泰人壽), as a means of strengthening its insurance arm’s capital structure.

The remaining proceeds will be used to bolster Cathay United Bank’s operating funds, he said. Cathay Financial Holdings said it would issue 833 million class A preferred shares at the price at NT$60 per share. It said the dividend rate for the first seven years will be 3.8 percent per annum. Yuanta Securities (元大證券), the underwriter for Cathay Financial Holdings, said this offering would see the largest secondary market volume recorded in Taiwan, as the local capital market hasn’t seen volume up to NT$50 billion since the initial public offering of Chunghwa Telecom (中華電信) in 2000. Yuanta Securities reported that Cathay Financial Holdings’ offering was oversubscribed, saying this was a vote of confidence from new local individual and institutional investors in addition to the firm’s existing shareholders.   Yuanta added that it hoped more companies would seek to raise funds through leveraging the local capital market. Cathay Financial Holdings saw combined earnings of up to NT$48 billion last year, with earnings per share at NT$3.79, second among financial holdings firms after Fubon Financial (富邦金控) at NT$4.72.