Taipei shares close down
Taiwanese share prices closed down 1.95 percent yesterday following a tumble on Wall Street and heavy losses for the nation’s agriculture and tourism sectors in the wake of Typhoon Morakot, dealers said.
The weighted index fell 137.71 points to 6,931.80 on turnover of NT$95.67 billion (US$2.99 billion).
Taipei shares were in line with regional falls amid weak US sentiment, Alex Huang (黃國偉) of Mega Securities (兆豐證券) said.
“The pullback is not strong, which shows that investors are still expecting positive results from electronic companies in the second-half,” he said.
The Tourism sector shed 3.48 percent, with Morakot causing more than NT$100 million in damage to hotels and other facilities.
Financials shed 2.30 percent. Cathay Financial (國泰金控) was down 2.5 percent at NT$48 per share on possible bad debts to be written off following typhoon-related damage.
Reconstruction spurs stocks
China Steel Structure Co (中國鋼鐵結構), a maker of steel structures for bridges and high-rises, led Taiwan’s infrastructure stocks higher on hopes reconstruction efforts after a typhoon will boost the company’s revenue.
China Steel Structure surged by the 7 percent daily limit to close at NT$25.25, the most in four months, while Lucky Cement Corp (幸福水泥) also climbed 7 percent to NT$9.83, its highest since July 25 last year.
“Investors are optimistic, hoping reconstruction efforts will mean more expenditure quickly and this will benefit the companies,” said Harvey Chang, a fund manager at SinoPac Securities Investment Trust Co (永豐投信), who helps oversee NT$50 billion.
Gains may be limited if the government’s response is “much slower than expected,” he said.
EVA to raise NT$7.42 billion
EVA Airways Corp (長榮航空), Taiwan’s second-biggest airline, plans to raise as much as NT$7.42 billion (US$225 million) from a share sale to fund aircraft purchases and repay bank loans, it said in an exchange filing today.
The carrier, based in Taoyuan County, plans to sell 700 million shares at NT$10.60 each, according to the statement.
Local currency plummets
The New Taiwan dollar yesterday dropped to a four-week low as signs the US economic recovery is faltering damped the outlook for the nation’s exports.
“The final demand story in the US is quite a bit of a concern,” said Craig Chan, a Singapore-based strategist at Nomura Holdings Inc, Japan’s biggest brokerage.
“It basically dampens the scope for Asian central banks to allow their currencies to appreciate, particularly the cyclical currencies such as the NT dollar,” Chan said.
The local currency fell 0.3 percent to close at NT$32.985 against the greenback on turnover of US$806 million.
It earlier reached NT$32.995, the weakest level since July 20.
Air China to buy Citic shares
Air China Ltd (中國國航) will pay HK$6.34 billion (US$818 million) for 491.9 million shares in Cathay Pacific Airways Ltd (國泰航空), buying the stock from Citic Pacific Ltd (中信泰富), the companies said in a joint statement yesterday. Air China and Citic Pacific each held a 17.5 percent stake in Cathay before the transaction.
Swire Pacific Ltd (太古) will buy 78.7 million shares in Cathay Pacific from Citic for HK$1.01 billion, increasing its stake in the airline to 42 percent.
Air China’s stake will rise to 29.99 percent, the statement said.
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