Taiwan's Chinatrust shares jump on AIG's unit deal

TAIPEI, Nov 18 (Reuters) - Shares of Chinatrust Financial (2891.TW: Quote, Profile, Research) rose as much as 4 percent on Wednesday after saying it agreed to buy a 30 percent stake of AIG's (AIG.N: Quote, Profile, Research) Taiwan unit from China Strategic (0235.HK: Quote, Profile, Research).

Chinatrust, Taiwan's top credit card issuer, said late on Tuesday it agreed to buy the stake of Nan Shan Life for $660 million.

In exchange, China Strategic would take a 9.95 percent Chinatrust stake, worth about T$20.8 billion ($648 million), via a private placement.

The news sent shares of Chinatrust and China Strategic higher. At around 0340 GMT, Chinatrust had climbed 2.5 percent after opening 4.2 percent higher. China Strategic shot up 13.33 percent in Hong Kong trading.

Both shares outperformed Taiwan's main index .TWII and the Hang Seng Index .HSI, respectively.

The acquisition will allow Chinatrust a foothold in the insurance market, analysts said.

"Chinatrust has been eager to expand into the insurance business. The stake purchase makes it possible," said an analyst at an European brokerage.

"The stake investment is only 30 percent, which would be manageable for Chinatrust," he said, declining to be identified as he was not authorised to speak to media.