Foreigners' stock buying hits record

Net buying by foreign investors of Taiwan's stocks totaled NT$575.7 billion (US$17.53 billion) through Dec. 23, setting a record high for the nation's stock market, the Taiwan Stock Exchange Corp (TSE) said yesterday.

During the same period, the proportion of foreign investors' share values accounted for 30.95 percent of the total market, surpassing the 25 percent target set by the government for this year, the head of the stock exchange said yesterday.

"These records reflected foreign investors' support of the government reforms on securities market," TSE chairman Wu Nai-jen (吳乃仁) told reporters at a year-end press briefing.

Though Taiwan was not able to be categorized as a "developed market" by the FTSE Group -- a British indices and associated data services provider -- this year, it showed significant improvements in most of the ratings, he said.

"For next year, with the opening of the omnibus account as well as new transfer matching services for block trade, we believe the bourse's performance will further advance," Wu said.

The exchange aims to aggressively improve foreign investors' understanding of local reform policies, to prove that after several years of effort, local securities markets have standards similar to those in other developed markets, he added.

According to TSE president Chen Ming-tai (陳明泰), the price-earnings ratio (P/E ratio) of the local bourse up to Dec. 23 was 17, up from a ratio of 12 last year. The ratio measures corporate earnings power and is used by investors to gauge market demand for stocks, with a higher number indicating higher demand.

The total market value of Taiwan's stocks hit NT$15.69 trillion, up from NT$13.98 trillion last year, Chen added.

However, the number of publicly listed companies this year reported a slight decline to 692 from 697, as a result of mergers and the delisting of firms, he added.

The TAIEX yesterday dropped 27.19 points to close at 6,548.34. Turnover was NT$137 billion.

Meanwhile, Wu had little to say about the planned resignation of United Microelectronics Corp (UMC, 聯電) chairman Robert Tsao (曹興誠) and the company's recent spat with financial regulators over the chipmaker's disclosures. Wu only said that people have to take responsibility for their actions and that government authorities are only carrying out their duties.

"The role of the stock exchange now is only to offer precise and detailed transaction information to the related authorities for further probes," he said, refusing to say which UMC executives are suspected of involvement in insider trading.

Tsao announced on Thursday that he is planning to leave his position next year to protect shareholders' interests from political influence. His action came after the nation's financial regulators step-ped up probes into alleged insider trading linked to the company's belated disclosure of revised earnings.

UMC, the world's second-largest made-to-order chipmaker, said in a statement to the stock exchange earlier yesterday. that the report about a company executive involved in illegal insider trading was not true.

The statement came after the Chinese-language newspaper the United Evening News reported that UMC vice chairman Peter Chang (張崇德) may have profited illegally by selling 3 million UMC shares he owned in September, about one month later than originally planned.