Tue, Sep 14, 2010 - Page 12 News List

TAIEX soars past 8,000 in wake of ECFA

By Ted Yang  /  STAFF REPORTER

The local stock market yesterday rallied 2.55 percent, the biggest advance over the past year, with financial sector getting the strongest lift after the newly inked cross-strait Economic Cooperation Framework Agreement (ECFA) trade pact took effect.

The benchmark TAIEX rose 201.19 points to 8,091.3 points, exceeding the psychologically important level of 8,000 and hitting its highest level since the April 27 closing of 8,146 points.

Turnover rose slightly to NT$120.29 billion (US$4.61 billion) from NT$159.31 billion on Friday.

Financial shares scored the highest gains, up 3.3 percent, ­followed by textiles at 2.89 percent, and construction stocks at 2.51 percent, Taiwan Stock Exchange’s data showed.

“Following the signing of the ECFA, there is a lot of imaginary room for conventional industry shares,” Kevin Chung (鍾國忠), an analyst with Jin Sun Securities Investment Consulting Co (日盛投顧), said by telephone.

In the conventional industries category, automobile shares posted the largest increase of 5.14 percent because of various incentives provided by the cross-strait trade pact, with Yulon Motor Co (裕隆汽車) advancing by the 7 percent daily limit to NT$52.3.

Tourism shares also rose on expectations that the government may raise the daily quota for Chinese tourists to as many as 10,000 a day. Formosa International Hotels Corp (晶華酒店), the nation’s largest hotel operator, surged by the 7 percent daily limit to NT$524, while Ambassador Hotel Ltd (國賓飯店) increased 2.7 percent to NT$46.5, data showed.

Chung said that financial and banking stocks surged in part on market expectations that the central bank will raise the policy rate during its board meeting at the end of this month and that several local banks may be able to set up branches in China as early as next month.

Stock exchange tallies showed that Chang Hwa Commercial Bank (彰化銀行) yesterday picked up 3.76 percent to NT$19.30, Fubon Financial Holding Co (富邦金控) gained 3.43 percent to NT$39.15 and Cathay Financial Holding Co (國泰金控) rose 3.19 percent to NT$48.5.

The analyst, however, downplayed the impact of the tougher Basel III bank rules — which were agreed upon on Sunday by regulators from 27 nations to force banks to more than triple the amount of top-quality capital they must hold in reserve — on yesterday’s pick-up in the financial sector.

Meanwhile, the machinery and electronics sector closed up 2.41 percent, the foodstuffs sector up 1.82 percent, the cement sector 1.77 percent higher and the paper and pulp sector up 0.91 percent, stock exchange data showed.

Among large-cap high-tech stocks, smartphone maker HTC Corp (宏達電) gained 6.87 percent to a record high of NT$716, while camera lens firm Largan Precision Co (大立光) rose 6.88 percent to NT$668, data showed.

Kang Hui-mei (康惠媚) Waterland Securities Co (國票證券) said at a forum in Taipei that the TAIEX could possibly exceed 10,000 points if the benefits brought by the trade agreement with China continued, without specifying a time frame.

“It would be no problem for Taiwanese share prices to top 10,000 points,” Kang said, adding that the ECFA, coupled with the government’s aggressive efforts to allure global investment, may lead to a re-rating of the local bourse.

This story has been viewed 1859 times.
TOP top