Stocks rose to a fresh six-year high, led by China Steel Corp (中鋼), after local newspapers reported that the Taiwanese steelmaker may post a record profit this year.
China Steel is likely to raise domestic steel prices for the third quarter on May 24 on strong demand and tight supply at home, the Chinese-language Economic Daily News reported yesterday.
The newspaper said the company would increase prices by 5 percent on average and may report profit of NT$70 billion (US$2.1 billion) this year. Another newspaper Apple Daily also carried a similar report yesterday, without citing where it obtained the information.
China Steel shares rose 1.8 percent to close at NT$40.50 on the Taiwan Stock Exchange yesterday, outpacing a 0.58-percent increase in the benchmark TAIEX index.
China Steel executive vice president Chung Lo-min (
"Prices should rise, as our domestic prices are still lower than international levels, but how much, I don't know," Chung said.
From August 2005 to today, China Steel's share prices have risen by 55.8 percent, moving in tandem with the uptrend in the steel sector, statistics compiled by the SinoPac Securities Corp (
Taiwanese steelmakers also gained after China's government said it would increase export taxes on 142 goods, including a 5 percent to 10 percent increase in its export tariffs placed on various steel products. An index tracking shares of 23 Taiwan steelmakers rose 1.5 percent.
Shares of Tung Ho Steel Enterprise Corp (東和鋼鐵), the nation's second-largest steelmaker by market value, rose 1.2 percent to NT$38.65 and Feng Hsin Iron & Steel Co (豐興鋼鐵), the third largest, increased 0.85 percent at NT$41.90.
"China's attempt to curb steel product exports will allow other Asian suppliers to take up a bigger market share or raise prices," said Phil Chen (陳憲志), who manages US$154 million at Grand Cathay Securities Investment Trust Co (大華投信).
On the main bourse, TAIEX closed up 47.04 points at 8,188.63, after trading between 8,158.29 and 8,205.89, on turnover of NT$116.58 billion (US$3.53 billion).
This is the highest closing level since 8,257.88 points on Aug. 21, 2000.
Risers led decliners 694 to 429, with 222 stocks unchanged.
Dealers attributed the rise to follow-through buying after Monday's rally. They added that market sentiment was also supported by gains in a number of regional markets, noting a sense of relief that there had been no adverse fallout from the latest tightening of monetary policy in China.
Chinese share prices extended record gains yesterday, adding 0.94 percent as investors bet on further gains amid a growing consensus that the government can do little to stop the advance, dealers said.
The benchmark Shanghai Composite Index, which covers both A-shares and B-shares, closed up 38.15 points at 4,110.38.
Seoul, Singapore, Kuala Lumpur, Jakarta and Manila followed suit by also closing at record highs. Tokyo rose 0.70 percent, Sydney gained 0.47 percent and Mumbai was up a more modest 0.24 percent while a surge in oil prices added some extra shine to Bangkok which gained 0.62 percent.
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