Local shares slid 0.8 percent as investors turned cautious yesterday in the wake of accusations of irregularities involving two construction firms, analysts said.
The TAIEX, which gained more than 3,000 points since November and touched 7,084 points during trading on Monday, has come under pressure for a correction, said Winson Wang (王榮旭), an analyst at Marbo Securities Consultant Co (萬寶證券投顧).
The benchmark index fell 55.94 points to 6,893.14 after fluctuating between 6,847.76 and 6,931.29, Taiwan Stock Exchange Inc (TWSE) statistics show.
Transactions amounted to NT$156.2 billion (US$4.8 billion) with foreign funds buying a net NT$8.11 billion, TWSE data showed.
ADJUSTMENTS
“It is not uncommon for investors to adjust their portfolio after unfavorable reports about listed companies come to light,” Wang said by telephone.
“The correction for the two construction firms in particular may persist for a while,” he said.
The probe into China Metal Products Group (勤美建設) and Prince Housing and Development Corp (太子建設) over insider trading, breach of trust and forgery triggered panic selling of their stocks, which closed down by their daily limit to NT$37.5 and NT$17.5 respectively.
The construction sub-index dropped 5.7 percent and dragged down asset issues by 3.7 percent, TWSE tallies showed.
The stock exchange said it would not take action against the two firms before the investigation is finished.
Analysts said the investigation has had a limited impact on the local bourse, which will resume its bullish performance after the adjustment ends.
“The stock market will continue to benefit from excess capital at home and abroad,” Wang said.
He predicted the index would move above the 7,000-point level later this month.
OPTIMISM
Mike Chow (周道中), a senior manager at Yuanta Core Pacific Capital Management (元大京華投顧), was also optimistic. He thinks the TAIEX will pick up in a day or two now that the global slump has stabilized.
“It is unlikely the stock market would take a dive when economic data in the US and elsewhere have shown improvement,” Chow said by telephone.
He dismissed links between the probe and the dip in the TAIEX, saying profit-taking accounted for the adjustment.
Idle funds would continue to dominate the equity market in the short run, he said.
But Ta Chong Bank (大眾銀行) chairman Chen Chien-ping (陳建平) said market momentum may not be strong enough to sustain the liquidity-driven rally.
The local capital market had recently seen full participation by retail investors instead of institutional investors, which may trigger fluctuations this quarter, Chen said.
ADDITIONAL REPORTING BY JOYCE HUANG
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS