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Securities firms see profits rise in March by more than 10 percent

TAIPEI--Taiwan's securities firms saw their combined net profit rise more than 10 percent month-on-month in March with the help of rising share prices, according to the Taiwan Stock Exchange (TWSE).

The increase also reflected an upswing in daily turnover after the Financial Supervisory Commission (FSC) relaxed day trading rules to allow investors to buy and then sell any of 200 selected stocks on the main board and over-the-counter market on the same day, starting in January.

Local securities firms combined for a net profit of NT$3.6 billion (US$120 million) in March, up 12.5 percent from a month earlier and 177 percent higher than a year earlier, according to TWSE statistics.

During the month, the weighted index on the main board rose 209.7 points, or 2.43 percent, as foreign investors continued injecting funds into the local market, while average daily turnover rose 4.8 percent from a month earlier to NT$97 billion.

For the first quarter, net profit posted by local securities firms rose 74.4 percent from a year earlier to NT$8.2 billion, growth that showed the local bourse was responding positively to the FSC's market boosting measure, the exchange said.

The FSC also announced in late March that it would allow intraday short selling of 200 selected stocks beginning at the end of June.

The 200 designated stocks are constituents of the FTSE TWSE Taiwan 50 Index, the FTSE TWSE Taiwan-Mid-Cap 100 Index, and the GreTai 50 Index.

The exchange said that while the announcement has yet to take effect, the move toward shedding restrictions on trading has convinced a growing number of investors to pour funds into Taiwan's equity markets.

Even with the relaxation of securities trading rules, the number of investors defaulting on their deals is on the decline, the TWSE said, indicating that securities firms have tightened their risk control procedures.

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