Shares rise 1.77%
Taiwanese shares closed up 1.77 percent yesterday on extended buying in property and select high-tech stocks, dealers said.
The weighted index rose 110.06 points to 6,341.21 on turnover of NT$95.55 billion (US$2.90 billion).
Upon opening, firms packed with large property assets gained further on Friday’s upside on hopes that the opening of the Neihu Line on the Taipei MRT scheduled for July 4 would boost property prices, dealers said.
“Despite the gains, the market still traded in a narrow range. The market is likely to move higher on technical factors, but the room for upside is limited,” Capital Securities (群益證券) analyst Chen Yu-yu (陳育娛) said.
Chen said that as daily turnover remained relatively low, it was unlikely that the market would pass the strong resistance barrier above 6,500 points.
“The low trading volume showed [that] many investors remained on the sidelines. It is not a good time to chase prices now,” Chen said.
Old economy stocks appeared active compared with the bellwether electronic sector throughout trading, dealers said.
Far Eastern Textile (遠東紡織) gained 6.99 percent to NT$38.25, Shihlin Paper (士林紙業) rose 6.87 percent to NT$77.80 and Taiwan Fertilizer (台肥) added 2.24 percent to NT$100.50.
All three companies benefited from large property assets, dealers said.
Nanya to raise NT$12.2bn
Nanya Technology Corp (南亞科技), the nation’s second-largest memory-chip maker, plans to raise NT$12.2 billion (US$371 million) in a private placement of 1 billion shares to units of the Formosa Plastic Group (台塑).
Nanya will sell the shares to Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals & Fiber Corp (台灣化纖), Formosa Plastics, Formosa Petrochemical Corp (台塑石化), Mai-liao Power Corp (麥寮電廠) and Chang Gung Medical Foundation (長庚醫療財團法人), the Taoyuan-based company said in an exchange filing yesterday.
Nanya joins rival Powerchip Semiconductor Corp (力晶) in plans to sell new shares to raise funds to pay off debt and boost working capital. Nanya, whose largest shareholder is Nan Ya Plastics, also plans to use the funds to buy equipment, it said.
NT dollar falls, Barclays upbeat
The New Taiwan dollar slightly weakened by NT$0.002 yesterday to close at NT$32.898 against the US dollar on turnover of US$619 million.
Despite yesterday’s decline, Peter Redward, head of emerging Asia research at Barclays Capital in Singapore, yesterday had an upbeat view on the local currency’s outlook.
“In Taiwan’s case, the overall balance of payment is extremely robust. We’re looking for a current-account surplus in the vicinity of 11 percent of gross domestic product this year and about US$39 billion of inflows,” Redward told Bloomberg News.
“It largely comes down to what the central bank wants to do with the currency. In our opinion they’re comfortable with a modest upside to the NT dollar. They’re mindful of the fact that the economy is still in the early phases of a recovery,” Redward said.
“We believe that the views on inflation going forward are beginning to shift. As we head toward year-end, it’s going to become increasingly apparent that the deflationary pressures that have existed are dissipating very quickly. Policymakers will be more willing to let the currency appreciate,” he said.
In general, Barclays was maintaining quite a bullish stance on Asian currencies, he added.
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