Staff Reporter
Stocks rallied to a 20-month high yesterday, as investors snatched up electronics shares amid signs indicating that the government will further relax the decades-long restrictions on China-bound investment.
Companies with a pressing need to build up their presence in China, such as top contract chipmaker Taiwan Semiconductor Manufacturing Corp (TSMC,
The two companies have been calling the government to ease investment restrictions in China.
"An easing cross-strait trade policy will help Taiwanese firms, especially electronics companies, to lower costs by using cheaper labor [in China], and thereby safeguard their competitiveness," said Stevie Chou (
The benchmark TAIEX index jumped 95.43 points, or 1.49 percent, to close at 6,512.63 yesterday, marking its highest level since April 28 last year. Turnover expanded to NT$114.87 billion (US$3.45 billion) from NT$105.2 billion the previous day.
The planned policy changes will also help local companies increase their financial flexibility, Chou said. Under current government restrictions, some Taiwan companies choose to trade their shares in Hong Kong, he added.
Premier Frank Hsieh (
In addition to the policy change, foreign investors' aggressive buying also helped drive the stock market higher, said Henry Miao (
"Overseas fund managers are favoring Asian stocks and they are boosting their purchases," Miao said.
Foreign investors increased their net buying of local stocks to roughly NT$8 billion yesterday. United Microelectronics Corp (UMC,
UMC shares climbed 1.55 percent to NT$19.65.
Miao expected that foreign fund mangers will continue their buying and help boost the TAIEX to around 6,800 points by the end of the year.
Shares of Yaego Corp (
The Chinese-language online news service provider Yahoo Kimo Inc (
Yaego denied the report in mid-session, but said it welcomed long-term investors.
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