TAIEX rallies in late trade
The TAIEX closed up 0.46 percent yesterday after bargain hunters emerged in late trade to recoup early losses, dealers said.
The weighted index rose 26.28 points to 5,781.66 on turnover of NT$121.46 billion (US$3.59 billion).
The market extended losses from Friday’s sell-off throughout most of the session, but bargain-hunting eventually helped to offset the downside, dealers said.
“Judging from today’s [yesterday’s] movements, it seems that the market has strong support at the 5,600 point level,” Concord Securities (康和證券) analyst Allen Lin said.
Financial stocks also attracted buying on hopes that Taiwan and China would forge closer business ties in the upcoming cross-strait talks scheduled for Sunday, dealers said.
“Financial stock holdings by foreign institutional investors remain relatively low. Their further buying is likely on better cross-strait economic exchanges,” Lin said.
Nanya shares plunge
Nanya Technology Corp (南亞科技), the nation’s second-biggest chipmaker, plunged after its board approved a plan to sell new shares and cancel existing equity.
The chipmaker plans to sell as many as 4 billion new shares via a private placement and 4 billion shares to the public, vice president Pai Pei-lin (白培霖) told reporters after markets closed on Friday. Nanya will also cancel 66.43 percent of outstanding share capital to help boost its book value.
“Even after the capital reduction, the company’s sale of new shares will dilute earnings,” Yuanta Securities Co (元大證券) analyst Iris Guo said. “Moreover, it doesn’t look like the chip memory industry will recover anytime soon.”
Makers of computer-memory chips, which temporarily hold data and help computer processors run multiple programs simultaneously, lost a combined US$12.5 billion in 2007 and last year, the most ever, Gartner Inc analyst Andrew Norwood said.
CAL looks for profits
China Airlines Ltd (CAL, 華航), the nation’s largest air carrier, aims to turn profitable in the second quarter from a year earlier because of a rise in passengers from China, spokesman Bruce Chen (陳鵬宇) said yesterday.
Chen declined to comment on a report by the Chinese-language Apple Daily yesterday that the company may post a profit in the first quarter. China Airlines reported a second-quarter net loss of NT$3.56 billion (US$105 million) last year. The company posted a record loss of NT$32.4 billion last year.
Yulon shares dragged lower
Shares in Yulon Motor Co (裕隆汽車), the nation’s biggest automaker, dropped to their lowest level in almost two weeks after Macquarie Group Ltd reduced its recommendation on the stock to “neutral” from “outperform.”
Macquarie cited risks at the company’s own-brand business and downgraded Yulon’s earnings projections for this year.
NT dollar in late rally
The New Taiwan dollar yesterday pared the day’s loss against the greenback, rebounding from a one-week low on speculation China’s stimulus package would help boost the nation’s exports.
“If you look at the impact of all the economic developments in China, it’s still positive for the NT dollar,” said Daniel Soh, an economist at Forecast in Singapore. “China is trying to be competitive in many areas, but the proportion that they import from Taiwan and [South] Korea will continue to grow.”
The local currency weakened by NT$0.014 to close at NT$33.830 against the greenback, Taipei Forex Inc data showed. Earlier it dropped as much as 0.4 percent to NT$33.955, the weakest level since April 8.