Tue, Jun 05, 2007 - Page 12 News List

TAIEX jumps to six-year high

UNFAZED BY CHINA'S WOES Taiwan's bullish market should continue throughout this month, despite the big fluctuations seen on the Chinese bourses, an analyst said

By Jackie Lin  /  STAFF REPORTER , WITH BLOOMBERG

The TAIEX shot to a six-year high yesterday on the back of a strong electronics sector and improving industrial outlooks for both the US and Taiwan, analysts said yesterday.

The TAIEX rose 44.89 points to close at 8,294.79 yesterday, its highest close since July 19, 2000. Turnover was NT$116.87 billion (US$3.5 billion).

"Taiwan's listed companies have reported fairly good performances and the shares of IC [integrated circuit] design firms have recently shown strong upturns, both of which have driven up the local bourse to create a new high," Andrew Tsai (蔡明彥), vice president of research at Taiwan International Securities Corp (金鼎證券), said in a telephone interview.

Foreign investors have maintained their holdings in local shares, he said.

The MSCI Standard Index Series increased the weighting of the Taiwan index last Thursday.

Statistics released yesterday by the Taiwan Stock Exchange showed that foreign investors bought a net NT$13.32 billion worth of local shares last week.

Since the beginning of this year, foreign investors bought NT$2.19 trillion and sold NT$2.11 trillion worth of local shares as of last week, leading to a net purchase of NT$85.01 billion, the exchange's data showed.

The market also reflected investors' upbeat sentiment about the US following reports that showed employment and manufacturing in Taiwan's second-largest overseas market expanded more than expected.

"A resilient US economy will provide sustainable demand for overseas products," said Liu Ju-ming (劉儒明), who helps manage US$1.7 billion at IBT Securities Co (台灣工銀證券) in Taipei.

"Investor confidence in Asian exporters will be strengthened accordingly," Liu said.

Hon Hai Precision Industry Co (鴻海精密), the nation's biggest electronics exporter, added NT$3.5, or 1.4 percent, to NT$246.

Taiwan Semiconductor Manu-facturing Co (台積電), the world's biggest supplier of made-to-order chips, climbed NT$0.3, or 0.4 percent, to NT$69.10.

High Tech Computer Corp (宏達電), the biggest maker by volume of handsets based on Microsoft Corp's Windows operating system, rose NT$17, or 2.8 percent, to NT$631.

Taiwan's bullish market should continue throughout this month, unfazed by the big fluctuations seen on Chinese bourses over the past few days, Tsai said.

This is because the so-called "China-concept" stocks do not account for a heavy weighting in the TAIEX and the domestic capital previously flowing to China's stock market has recently returned to avoid Beijing's new control measures, he said.

China's benchmark stock index yesterday posted its largest points fall after Beijing's main business daily signaled that officials would not try to halt a slump that has erased more than US$350 billion in market value in four days.

Looking ahead, the TAIEX index should be able to challenge the 8,400 mark this week and the benchmark could rise to 8,600 later this month, Tsai said.

He suggested that investors choose semiconductor or financial shares for the mid-term as a conservative but stable strategy.

Also see story:
China's CSI 300 Index posts record drop

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