Stimulus plan boosts shares
The TAIEX closed up 1.31 percent yesterday as buying continued, after the legislature passed a stimulus plan last week to boost the local economy, dealers said.
The weighted index rose 75.68 points to 5,857.64 on turnover of NT$148.58 billion (US$4.41 billion).
The market opened 0.56 percent higher and the upside continued, with interest in construction and infrastructure stocks after a NT$149 billion stimulus was approved on Friday to combat the global economic meltdown.
“Investors appeared upbeat because of stimulus plan, expecting the government to do more to prevent the local economy from deteriorating,” Grand Cathay Securities (大華證券) analyst Mars Hsu said.
“It seemed that such optimism overwhelmed fears that the market would pull back on profit-taking after a recent strong showing,” Hsu said.
Since the beginning of last month, the market has risen more than 28 percent.
However, Hsu said investors had better keep alert as the index is approaching strong technical resistance in the 5,900 to 6,000 point range.
“I do not suggest investors chase prices for the moment,” he said.
Large cap China Steel (中鋼) led the gains, up 4.62 percent at NT$26.05 on hopes that the new stimulus plan would lift domestic demand for raw materials for construction, dealers said.
Buying also targeted flat panel makers, which have been benefitting from large orders from China, dealers said.
Chi Mei Optoelectronics (奇美電子) gained 6.67 percent to NT$18.40 and AU Optronics rose 2.62 precent to NT$33.25.
Hon Hai Precision (鴻海精密) rose 5.28 percent to NT$85.80 ahead of an annual general meeting scheduled for Thursday, when investors hope it will announce positive news.
Want Want to raise funds
Want Want China Holdings Ltd (旺旺中國控股), the country’s largest maker of rice cakes, plans to sell US$100 million in Taiwan depositary receipts to draw a wider group of investors, its underwriter said in a statement yesterday.
The company, controlled by billionaire Tsai Eng-meng (蔡衍明), plans to price the shares at between NT$12.50 and NT$15.50 each, Grand Cathay Securities Corp (大華證券) said in the statement. The final price for the shares, which will start trading on April 28, will be decided at a later date.
The Shanghai-based company will be the first to raise funds by issuing shares in Taiwan after the government eased restrictions to boost the capital markets last year. The government said in July it would scrap a rule that bans companies with major stakeholders from China from selling shares on the stock exchange.
“Want Want has ample liquidity, so the main reason for returning to Taiwan to list is to support the Taiwanese government’s policy,” the underwriter said.
The Taiwan listing also offers cost-savings and tax benefits for its investors, it said.
AU unit buys bonds
AU Optronics Corp (友達光電), the world’s third-largest maker of liquid-crystal displays, said a wholly owned unit bought NT$500 million (US$14.8 million) in Forhouse Corp convertible bonds in a private placement, the Hsinchu-based company said in an exchange filing yesterday.
Electronics firm denies report
Xiamen Overseas Chinese Electronic Co (廈華集團) denied a newspaper report that said it may sell assets to TPV Technology Ltd (冠捷科技), a filing yesterday to Shanghai’s stock exchange said. Chunghwa Picture Tubes Co (華映), Xiamen Overseas’ biggest shareholder, is not in talks with TPV, the statement said.