05.04.2001
Brokerages' earnings results tracking the market down

• Local brokerage houses have announced disappointing after-tax EPS results for April, with some companies even booking losses.

• Yuanta (6004 'Yuan Da Zheng') recorded the highest EPS of NT$1.14 in the first four months, although after-tax EPS for April is only NT$0.10. Polaris (6011 'Bao Lai Zheng') also earned NT$0.10 per share in the month and had the third highest accumulated EPS of NT$0.88, behind Taiwan International's (6012 'Jing Ding Zheng') NT$1.11.

• Some houses have suffered losses due to market weakness. Yung Chong (6009 'Yung Chong Zheng') and Tai Yu (6002 'Tai Yu Zheng') (using monthly mark-to-market accounting) had to book provisions for investment losses, bringing April EPS down to negative NT$0.09 and negative NT$0.02, respectively.

• Securities firms rung in spectacular results in 1Q01 due to the write-back of unrealized investment losses. However, we see the April results as reflecting much more accurately the true state of operations. Brokerages' earnings performance is strongly correlated with market transaction volume, which does not promise anything special for 2Q01.

WilliamFong@Primasia.com +886-[0]2-2547-8864