Profit-taking erases TAIEX gains
Taiwanese shares closed little changed yesterday as profit-taking on construction and tourism shares wiped out early gains driven by Wall Street’s latest rally, dealers said.
Technology stocks outperformed the broad market, taking a cue from their counterparts in the US, they said.
The weighted index closed up 8.98 points at 9,083.32, off a high of 9,160.10 and a low of 9,047.66, on turnover of NT$164.75 billion (US$5.44 billion).
Decliners outnumbered advancers 1,259 to 1,084, with 267 stocks unchanged.
Michael On, president of Beyond Asset Management Co Ltd, said investors cashed out yesterday after previous gains as expectations for better cross-strait relations between Taipei and Beijing had already been factored in, especially for tourism and construction plays.
He said technology stocks attracted interest with the NT dollar dipping against its US counterpart yesterday morning.
Rating hurts Taiwan Cement
Taiwan Cement Corp (台泥), Taiwan’s biggest cement-maker, fell to the lowest in more than a week in Taipei trading after Morgan Stanley reduced the rating on the stock to “equal-weight,” citing concern earnings may be eroded by higher coal prices.
Taiwan Cement stock dropped as much as 1.8 percent to NT$55 and traded at that level as of 12:12pm, the lowest since April 11.
“Earnings in the first quarter of 2008 are likely to disappoint on coal-cost squeeze on margins,” Jeremy Chen, an analyst at Morgan Stanley, wrote in a note to clients yesterday.
Chen lowered the recommendation from “over-weight” and also cut the stock’s 12-month price target by 13 percent to NT$52.
Taipei-based Taiwan Cement is scheduled to report first-quarter results by the end of the month.
Thermal coal prices at Australia’s Newcastle port, a benchmark for Asia, rose for a third week as constraints on exports in New South Wales and Queensland limit supplies amid rising demand from power generators.
Cosmos board OKs reduction
The board of Cosmos Bank (萬泰銀行) yesterday agreed to reduce its capital by 67.072 percent, or NT$56.59 billion (US$1.868 billion), a statement from the bank said.
After the share reduction plan, the bank’s total paid-in capital will be NT$27.78 billion with net equity remaining unchanged at NT$32.3 billion, it said.
Cosmos’ capital adequacy ratio will also remain unchanged at 20.72 percent.
The capital reduction plan will be submitted to its shareholders for approval at an annual meeting next month.
Chinese tycoons eye real estate
Visiting Chinese real-estate tycoons yesterday expressed upbeat views on the local property market once direct links are further facilitated.
“We’re optimistic about Taiwan’s real-estate market since it is pretty open, transparent and full of business opportunities,” Li Sze Lim (李思廉), chairman of Guangzhou R&F Properties Co (廣州富力地產), told reporters in Taipei during the group’s briefing by the Taipei City Government.
Li said that he would most likely consider local property investment in the areas that combine commercial, leisure and residential purposes.
Li is among a nine-member delegation, that arrived in Taipei yesterday for a four-day business exploration trip.
NT dollar weakens
The New Taiwan dollar yesterday weakened by NT$0.004 to trade at NT$30.288 against the greenback on turnover of US$912 million.
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