Financial holding companies hit new highs again! ETF component adjustments have fueled the rise, with several major stocks like Taishin and Shin Kong Financial competing to climb higher.

Financial and insurance stocks showed strong momentum immediately after the Taiwan stock market opened on December 17. The industry index surged past 2412.7 points during the session, setting a new historical record. Among them, Taishin Shin Kong Financial (2887), which was newly included as a component of the high-yield index ETF with a scale of over NT$400 billion, exhibited the strongest momentum. Driven by continuous buying pressure, the stock price once soared nearly 7%, breaking the NT$21 mark, with a high of NT$21.60. The closing price was NT$21.25, up 5.99% for the day, hitting a new all-time high.

ETF Component Adjustment Sparks Accumulation Wave, Capital Injection of Several Trillions

Recently, Taiwan stock index ETFs have been optimizing their constituent stocks, leading to large capital inflows and outflows. Among them, Yuanta Taiwan High Dividend ETF added Taishin Shin Kong Financial to its holdings starting December 16, initiating an approximately eight trading day transition period for accumulation. This move attracted major fund managers to preemptively position, with over 136,000 shares bought on December 16 alone, immediately boosting the stock price from red to green, with trading volume surpassing 430,000 shares. The popularity continued into December 17, with pre-market trading volume exceeding 490,000 shares, approaching the previous day’s total volume.

Financial Sector Rallies Across the Board, Multiple Heavyweight Stocks Reach New Highs

In addition to Taishin Shin Kong Financial, the entire financial holding industry stocks demonstrated strong momentum. Fubon Financial rose over 3%; CTBC Financial and Cathay Financial both increased by more than 4%. Cathay Financial (2882) reached NT$73.2, a new high since June 2008. KGI Securities gained over 2%; Yuanta Financial and Fubon Financial rose more than 1%, with Fubon Financial (2881) reaching a intraday high of NT$97.9, continuing to climb toward a new historical high, just shy of NT$100.

Profitability Momentum Turns Positive, Stable Interest Rates Favor Earnings Outlook

Institutional analysts pointed out that financial stocks posted a net profit of NT$59.087 billion in November after tax, a 71% increase compared to the same period last year. The growth was driven by substantial capital gains realized by life insurance companies, steady growth in bank net interest and fee income, and increased securities brokerage performance due to active stock market trading.

Looking ahead, Hong Yuan Investment Consulting noted that the cumulative profit of financial stocks in the first ten months of this year reached NT$5,065 billion, a slight decline of over 5% compared to the same period last year. In the first half of the year, asset impairments were caused by the sharp appreciation of the New Taiwan dollar, but in the second half, with the depreciation of the New Taiwan dollar and rising bond and stock markets, full-year profits are expected to be comparable to last year. As interest rate environments stabilize, signs of improvement are seen in bank net interest margins and life insurance hedging costs, gradually turning industry profit outlook optimistic.

However, analysts also warn of risk factors. Life insurers are required by regulation to set aside 30% of pre-tax profits for foreign exchange fluctuation reserves by December, which may lead to increased losses for the month. Therefore, for financial holding companies that rely on life insurance as a profit pillar, their ability to distribute cash dividends next year still needs cautious assessment. Market expectations suggest that overall financial holdings’ dividend payouts in 2026 may be slightly lower than those in 2025.

With Christmas holidays approaching, foreign investors are gradually shifting toward defensive positioning. Financial stocks with relatively low bases and stable dividend characteristics have become key targets for capital inflow, continuing to push the sector upward.