Wed, Dec 16, 2015 - Page 14 News List

Taiwan shares rise, led by semiconductor stocks

WALL STREET:Dealers said that the market opened up 0.42 percent in response to a rebound on Wall Street on the back of an increase in prices of crude oil

Staff writer, with CNA

Shares in Taiwan yesterday closed higher as the semiconductor sector led an upturn on the back of newly announced buyout deals at a time when the global integrated circuit business is in consolidation mode, dealers said.

Siliconware Precision Industries Co (SPIL, 矽品精密), the world’s third-largest IC packaging and testing service firm, made a strong showing after local rival Advanced Semiconductor Engineering Inc (ASE, 日月光), the largest in the world, which holds a 25 percent stake in SPIL, said a day earlier that it wants to acquire the remaining 75 percent, the dealers said.

Inotera Memories Inc (華亞科技), one of Taiwan’s leading DRAM chipmakers, attracted significant buying in the stock market after US-based counterpart Micron Technology Inc — which already has a 33 percent stake in Inotera — announced that it is buying the remaining 67 percent, dealers said.

Despite the strength of the entire semiconductor sector, the broader market encountered some selling in the latter part of the session as investors locked in their earlier gains amid concern over a possible interest rate hike by the US Federal Reserve, they said.

The weighted index on the Taiwan Stock Exchange closed up 33.19 points, or 0.41 percent, at the day’s low of 8,073.35, off an early high of 8,140.06, on turnover of NT$72.329 billion (US$2.19 billion).

The market opened up 0.42 percent in a knee-jerk reaction to a rebound on Wall Street, where the Dow Jones Industrial Average closed up 0.68 percent overnight after crude oil prices bounced back, dealers said.

Buying accelerated, helping the weighted index breach the 8,100-point mark before selling set in, and became more obvious in the late trading session to erode the gains on the broader market at the close, they said.

“Judging from the reduced market turnover, I think that many investors preferred to stay on the sidelines amid rising fears that foreign institutional investors will move more funds out of the region,” Ta Ching Securities (大慶證券) analyst Andy Hsu said. “Concerns over a further fund exodus have resulted from the likelihood of a rate hike by the Fed.”

The Fed has a two-day policymaking meeting yesterday and today. The market widely expects that the US central bank will begin a rate-hike cycle.

“That’s why investors were reluctant to hold on to their stocks, even though the local main board moved above the 8,100-point mark in the morning session. They simply wanted to keep more money on hand by capitalizing on the early upturn,” Hsu said.

The semiconductor sector closed up 0.64 percent and the bellwether electronics sector ended up 0.4 percent.

Inotera gained 10 percent to close at NT$42.5 after Micron proposed an acquisition through its subsidiary in Taiwan, with the total consideration to reach NT$130 billion. The deal is expected to be completed in the second or third quarter of next year.

“The broader market encountered some selling, in particular in the late session, with several large-cap stocks in focus,” Hsu said. “It is possible that the main board will suffer more pressure as foreign investors keep repatriating their funds.”

Among the stocks that encountered late-session selling, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, fell 0.72 percent to close at NT$138, smartphone camera lens supplier Largan Precision Co (大立光) lost 2.05 percent to end at NT$2,160 and Formosa Plastics Corp (台塑) closed down 1.12 percent at NT$70.5.

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