10.18.2001
Consolidation in securities sector accelerating

• Prior to Cathay Life's announcement (detailed above), several securities companies had met with the insurance giant to discuss the possibility of merger, including Capital (6005.TT), Yuanta (6004.TT), Master Link (6006.TT) and Jih Sun (6014.TT). As financial institutions rush to submit FHC applications for Nov., we expect consolidation in the securities industry to continue. Short-term share price performance will be affected by market news and rumors. Although most firms will suffer from low commission income in the short run, low valuation provides good buying opportunities for financial groups. We maintain our Accumulate recommendation on Yuanta, which trades around 0.8x book.