Shares of transportation-related stocks rose on the government’s mega-plan to develop the area surrounding Taiwan Taoyuan International Airport into an aerotropolis.
The transportation sub-index climbed 2.12 percent to close at 78.44 points yesterday, outperforming the benchmark TAIEX’s 0.62 percent rise, Taiwan Stock Exchange data showed.
“The transportation stocks with an asset story in the Taoyuan area may get the most benefit from the Taoyuan Aerotropolis Project,” Capital Securities Corp (群益證券) said in a daily research note yesterday.
Shares of Farglory Free Trade Zone Investment Holding Co (遠雄自貿港投資控股), an air cargo and warehouse unit of Farglory Group (遠雄集團), which plans to develop a free-trade zone in Taoyuan, rose by the daily limit of 7 percent to NT$21.65.
Evergreen International Storage & Transport Corp (長榮國際儲運) — a subsidiary of Evergreen Group (長榮集團), which is engaged in cargo transportation, warehousing, oil distribution and passenger transportation business — also rose by the daily limit to NT$20.85.
Three major listed airlines in Taiwan saw shares soar yesterday: China Airlines Ltd (CAL, 中華航空), Taiwan’s largest international carrier in terms of fleet size, gained 3.81 percent to NT$12.25; EVA Airways Corp (長榮航空) rose 2.69 percent to NT$17.2; and TransAsia Airways Corp (復興航空) increased 3.86 percent to NT$14.8.
Meanwhile, the project may bring more people to the area and spur business at Novotel Taipei Taoyuan International Airport (華航諾富特桃園機場飯店), the airline’s subsidiary, Liu said.
In the long-term, Liu said he expected real-estate costs in the area to go up because of the project.
On Tuesday, Minister of Transportation and Communications Mao Chi-kuo (毛治國) said the Cabinet had approved the ministry’s plan to invest NT$336.6 billion (US$11.46 billion) in the Taoyuan Aerotropolis (桃園航空城) project, with the private sector injecting NT$126.4 billion.
The project, which is scheduled to be completed by 2030, includes the expansion of Taiwan Taoyuan International Airport, as well as the construction of a new hotel, international convention center and residential buildings. It is expected to generate NT$2.3 trillion in economic benefits and create thousands of jobs, the ministry said.
In the Global Competitiveness Report 2012-2013, released by the World Economic Forum (WEF) earlier this month, Taiwan saw its overall infrastructure quality ranking slip to No. 27 this year among 144 countries, from No. 25 last year. Within the infrastructure category, Taiwan’s ranking in air transport infrastructure improved to 44th place from 51st and its railway, roads and ports infrastructure rankings moved up to 11th, 21st and 29th place, from 12th, 25th and 35th.
Additional reporting by Kevin Chen