New Year optimism drives TAIEX, as do steel and financials

Shares ended sharply higher Friday on optimism the new year will usher in a stronger performance by the economy and improved returns for investors, dealers said.

The TAIEX finished 150.87 points higher, or 2.6 percent, at 6,041.56. Trading totaled NT$112.4 billion (US$3.3 billion), the highest since Nov. 6, when NT$138.6 billion worth of shares changed hands, indicating most investors are back from the recent holidays.

Advancing issues outpaced decliners by nearly an eight-to-one margin, while 87 issues ended the day unchanged.

"Investors welcomed 2004 warmly, on the strength of strong liquidity," said Tu Jin-lung (杜金龍), executive vice president at Grand Cathay Securities Corp (大華證券).

"They appeared eager to build positions for the new year, when improved economic fundamentals are expected," Tu said.

Steel shares led gains, with the steel subindex rising 4 percent, while financial shares added 3.9 percent.

China Steel Corp (中鋼) rose 3.2 percent to close at NT$29.1 and was the second most actively traded share on the bourse.

Financial shares were active on positive outlook. Hua Nan Financial Holdings Co (華南金控), the owner of Taiwan's fifth-largest bank in terms of assets, gained NT$1.60, or 6.5 percent, to NT$26.40 after a Chinese-language newspaper forecast that the lender would register increased profits this year.

The bank may earn NT$11 billion, or NT$2.20 a share, in 2004, the paper reported, citing unidentified company officials, up from an estimated 2003 profit of NT$9.6 billion.