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Asian stocks see out 2006 with end-of-year rally

Asian stocks ended the trading year on Friday on another high as Sydney, Shanghai and Singapore closed at record highs with gains capped by profit taking.

The profit taking followed mild losses on Wall Street overnight and resulted in Hong Kong easing off its record high but elsewhere the year end rally could not be thwarted with Shanghai soaring 4.22 percent.

Taipei, Manila and Kuala Lumpur also registered solid gains while Bangkok was little changed and Tokyo ended the day flat in thin half day trade. Jakarta and Seoul were closed for public holidays.

TAIPEI

Share prices closed up 1.17 percent at a more than a six-year high on continued year-end window-dressing activity and a stronger NT dollar following the central bank's decision on Thursday to raise interest rates.

Dealers said the central bank's move has triggered expectations of a further influx of foreign capital into Taiwan.

The weighted index closed up 90.79 points at 7,823.72 on turnover of NT$102.95 billion (US$3.16 billion).

"The rate hikes by the central bank boosted the Taiwan dollar and triggered a buying spree in the stock market," said Johnny Lee, manager at President Securities.

"Prospects of upswing in interest rates are drawing a rosy picture for the local currency and heightened hopes for more foreign capital inflows," he said.

Amid such hopes, investors extended their window-dressing activity into the last session of the year, he said.

"With regional currencies poised for further appreciation, more funds may move in [to Asia] ... and liquidity needs to find exit" through instruments such as equities, Lee said.

Meanwhile, the launch of Microsoft's new operating system Vista should boost demand for electronic products such as notebook computers and benefit the entire supply chain.

United Microelectronics Corp closed up 0.10 at 20.25.

TOKYO

Share prices inched up in the final trading session of this year to leave the benchmark index with a gain of 6.92 percent over a turbulent year marked by financial scandals.

The Nikkei-225 index gained 1.02 points to 17,225.83. Volume was 985 million shares, compared with 1.77 billion for all Thursday.

The final day of trade was quiet, with the market little affected by Wall Street's slip overnight.

Mitsushige Akino, chief fund manager at Ichiyoshi management, said investors might start the new year by selling shares because the market had been overheating.

"There might be a short-term position-adjusting early next year but the key is whether the market will be helped by buying on dips," he said.

HONG KONG

Share prices closed 0.19 percent weaker, trading just below the key 20,000-point mark, as investors locked in profits in some China stocks and select blue chips.

Dealers said turnover thinned from Thursday when the benchmark index broke the 20,000 points level for the first time, and investors took a cautious stance ahead of the long weekend.

The Hang Seng Index closed down 37.19 points at 19,964.72.

"The market was weak, with some profit-taking in China related stocks and select blue chips, as investors turned cautious after more than 600-point gain in the last two days," said Castor Pang, strategist at Sun Hung Kai Financial group.

"Turnover was trimmed in late trade as investors were readying for the New Year holiday," he said.

Pang noted that property counters outperformed as the sector has lagged the market's gains this year.

Looking ahead, Pang said that trade will remain volatile next week.

SHANGHAI

Share prices closed sharply higher, adding 4.22 percent to bring gains for a remarkable year to 130 percent as both foreign and domestic investors bet big on China's booming growth story.

Dealers said a fifth consecutive record breaking day was driven by year-end window-dressing and a rising yuan, with heavyweight banks, property developers and airlines snapped up on the last trading day of the year.

They said the market now looks well set to test new highs early next year but that with current valuations beginning to look stretched, there is likely to be a correction at some point.

The Shanghai A-share Index soared 114.04 points to 2,815.13 and the Shenzhen A-share Index was up 11.67 points or 2.09 percent at 569.58.

The Shanghai Composite Index, which covers A and B-shares, closed up 107.88 points or 4.2 percent at 2,675.47, a fresh all-time high.

SYDNEY

Share prices ended the year at record levels, adding 0.17 percent despite a lack of strong momentum in the half-day trading session.

Dealers said while some investors were tempted to lock in profits, most held off selling on the strong prospects for corporate earnings, merger and acquisition activity and the expectation of continued growth in price earnings multiples despite the market's record-breaking run.

The S and P/ASX 200 climbed 9.4 points to 5,669.9. Trading was light, with 824.7 million shares changing hands.

SINGAPORE

Share prices capped the year by closing at another record high, boosted by gains in small-caps.

The Straits Times Index rose 22.34 points to 2,985.83. Volume was 1.84 billion shares.

"There is some window-dressing, but volumes on blue chips are light. You see more activity on the second-liner and third-liner stocks," said a dealer with a foreign brokerage.

Singapore Telecommunications led blue-chip winners with a gain of 0.04 to close at 3.28. Singapore Airlines added 0.10 to 17.50 while ST Engineering dropped 0.02 to 3.08.

KUALA LUMPUR

Share prices closed 0.68 percent higher on the year's final trading session, as blue-chips were boosted by last-minute window dressing.

Dealers said plantation stocks attracted follow-through interest on the back of higher crude palm oil prices.

The composite index closed up 7.39 points to 1,096.24. Volume totaled 995.02 million shares.

BANGKOK

Share prices closed flat, amid expectations for a rebound after the New Year holiday weekend following last week's plunge due to new foreign currency rules.

Dealers said there was a lack of good news to boost Thai trading as the baht remained strong despite the stiff currency rules, while the central bank is unlikely to cut interest rates next month.

The composite index lost 0.63 points to 679.73 on turnover of 1.3 billion shares.

The Thai market will open only three days next week after the New Year holiday tomorrow and Tuesday.

Foreign investors, who make up some 40 percent of the Thai stock market, remained cautious of government economy policy after last week's abrupt U-turn on currency rules aimed at curbing the baht.
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