Hopes for cross-strait liberalization push shares higher

Share prices edged up 0.32 percent yesterday on continuing hopes the government would, despite its stated reluctance, relax limits on investment in China, dealers said.

They said investors remained hopeful that a government sponsored forum on reviving the economy, which was scheduled to wrap up late yesterday, would see some easing up on ties with China in the hope of boosting overall trade.

Market trend-setter Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest contract chip maker, provided no lead as its lackluster guidance for the remainder of the year more than offset solid second quarter results.

The TAIEX closed up 20.82 points at 6,480.07, on turnover of NT$75.60 billion (US$2.30 billion).

Risers outpaced decliners 559 to 402, while 149 stocks remained unchanged.

"Not a few people believe that Premier Su Tseng-chang (蘇貞昌) might opt for a more liberal approach toward China to set himself apart from President Chen Shui-bian (陳水扁)," SinoPac Securities (建華證券) assistant vice president Alvin Teng (鄧可欣) said.

Such expectations emerged as Su was seen likely deviating from Chen's tougher stance in order to boost his chances in the 2008 presidential race, Teng said.

Should there be a breakthrough in cross-strait trade issues, the local bourse would get a significant boost against the backdrop of a volatile global environment, he added.

TSMC closed up NT$0.20 at NT$54.40. The company said on Thursday its second quarter net profit doubled to NT$34 billion from the year-earlier period.