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Record foreign buying pushes TAIEX up 1.29 percent

The God of Wealth, left, distributes a red envelop to wish a stock investor of the Polaris Securities Co. good fortune in the new year in Taipei yesterday. Most people returned to work yesterday after the end of the Lunar New Year holiday. PHOTO: SEAN CHAO, TAIPEI TIMES

Record net buying of the nation's stocks by foreign investors after the week-long Lunar New Year holiday pushed the TAIEX up 1.29 percent on the local bourse yesterday.

The benchmark index edged up 77.80 points to close at 6,112.40, its highest close since Jan. 3. Turnover was NT$92.94 billion. Gainers outnumber decliners 542 to 272 with 170 stocks remained unchanged.

Strong foreign inflows also helped boost the New Taiwan dollar yesterday. The currency rose NT$0.029 to close at NT$31.651 against the US dollar on the Taipei foreign exchange market.

Overseas investors yesterday bought a record net NT$20.45 billion worth in shares. Foreign net buying last made a record on March 2 of last year when NT$19.4 billion worth shares were bought that day alone.

Foreign investors focused mainly on blue-chip companies such as United Microelectronics Corp (UMC, 聯電), Advanced Semiconductor Engineering Inc (日月光), and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), according to the Taiwan Stock Exchange.

TSMC rose 1.9 percent to NT$54.50, while UMC rose 2.94 percent to NT$21. Advanced Semiconductor closed limit-up at NT$24.30.

"The momentum mainly came from the purchasing spree by foreign investors," said Daniel Tseng (曾建詮), a manager at Fubon Securities Investment Services Co (富邦投顧).

Foreign investors have been pouring funds into Asian stock markets recently, said Tseng, adding that as much as US$270 million was injected into South Korea in just three days during the Lunar New Year break.

Tseng said he expects the upward-trend of TAIEX to keep pace with the rebounding US and Asian bourses. Among his favorites are shares of the upstream electronics players, such as semiconductor and thin-film-transistor liquid-crystal-display makers.

Another analyst is also bullish on the local market, in light of good performances by bourses around the world as well as a relatively stable cross-strait and domestic political climate.

"The TAIEX may soar to 6,300 or 6,400 this month as long as daily turnover hits NT$100 billion," said Wu Pei-wei (吳佩偉), a portfolio manager who manages a US$30 million fund for ABN-AMRO Asset Management in Taipei.

Financial stocks such as financial holding companies like Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding (新光金控) are also good picks, as they should benefit from rising interest rates, Wu said.

Cathay Financial and Shin Kong closed up 0.79 percent and 1.93 percent at NT$63.50 and NT$31.70.
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