07.23.2001
Banking: Visit: Cathay Life expecting a turnaround

• Development: Cathay Life posted 7.5% YoY increase in 1H01 revenue after revision of its pricing policy. Facing a low interest rate environment, the company has begun to increase overseas investment along with rates for policy loans.

• Analysis: Firm is shifting reliance away from low rate deposits. Looking at investments, government permits Cathay Life to hedge using futures. Company also benefits from relaxation of insurance law, which allows greater flexibility in equity holdings.

• Primasia View: We believe the recent price correction for Cathay Life has increased its attractiveness as a long-term investment.