TAIEX climbs to four-week high

Shares ended at a four-week high yesterday, led by stocks that Morgan Stanley Capital International Inc plans to add to its Taiwan Index at the end of the month, analysts said.

The TAIEX finished 46.88 points, or 0.8 percent, higher at 5,981.48, its highest level since closing at 5,998.08 on April 13.

Dealings rose to NT$77.34 billion (US$2.46 billion) from NT$56.10 billion in the previous session.

Advancers outnumbered decliners 526 to 314, while 179 issues ended the day unchanged.

"The new MSCI components spurred buying by foreign investors, but how high the bourse will go from here depends on whether retail investors catch on," said Andrew Teng (鄧安瀾), a manager at Taiwan International Securities (金鼎證券).

Retail investors account for the majority of trade on the local bourse, according to analysts.

Roger Yu (游智超), an analyst at Polaris Securities Co (寶來證券), said the inclusion of HannStar Display Corp (瀚羽彩晶) in the MSCI Taiwan Index was a "surprise," because it is the smallest of the nation's five major liquid-crystal-display panel producers.

HannStar soared by the daily maximum of 7 percent to NT$9.52 and was yesterday's most actively traded stock, with 222.4 million shares changing hands, three times the volume of the next most active stock, Silicon Integrated System Corp (矽統), which rose 4.2 percent to NT$16.

Yu said he expects HannStar to rise another 20 to 30 percent by the third quarter.

MSCI, the closely watched global index provider, said on Thursday that it will add nine stocks to its Taiwan Index and delete six after the market closes May 31.

Other new MSCI components include Fuhwa Financial Holdings Co (復華金控), which surged 6.8 percent to NT$15.65, and personal-computer maker Mitac International Corp (神達), which rose 4.3 percent to MT$31.5.

Additions also include High Tech Computer Corp (宏達電子), Taiwan Fertilizer Co (台肥), U-Ming Marine Corp (裕民海運), Waterland Financial Holdings Co (國票金控) and Wintek Corp (勝華科技).

Among the MSCI stocks to be deleted from the Taiwan Index are consumer electronics maker Sampo Corp (聲寶), which fell 0.8 percent to NT$6.22, and BES Engineering Corp (中華工程), which slid 0.6 percent to NT$4.74. Other deletions are Arima Computer Co (華宇電腦), Continental Engineering Corp (大陸工程), Prodisc Technology Inc (精碟) and WUS Printed Circuit Co (楠梓電子).

EVA Airways Corp (長榮航空) initially rose 2.3 percent after the People First Party and the Chinese Communist Party said they would jointly push for the resumption of direct flights and shipping across the Taiwan Strait by next year.

EVA's stock ended down 0.3 percent at NT$15.3, as investors assessed the scenario as uncertain.

"All this talk of direct air links by 2006 is just lip service until Taiwan's ruling party buys into the deal," said Alan Tseng (曾炎裕), a vice president at Capital Securities Corp (群益證券).