Thu, Dec 17, 2015 page13

• Taiwan shares rise after Wall Street gains

  • Staff writer with CNA
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  Shares in Taiwan yesterday extended their gains from a session earlier as investors were encouraged by the triple-digit point gains posted on Wall Street overnight to pick up large-cap stocks, in particular in the bellwether electronics sector, dealers said.

  Buying also focused on old economy heavyweights, such as petrochemical and textile stocks, while the financial sector under-performed the broader market amid fears that returns of the sector’s overseas customers could be squeezed after a possible US Federal Reserve rate hike, they said.

  The weighted index on the Taiwan Stock Exchange closed up 111.31 points, or 1.38 percent, at NT$8,184.66, after moving between NT$8,121.86 and NT$8,204.2, on turnover of NT$88.13 billion (US$2.67 billion).

  The market opened up 0.86 percent in a knee-jerk reaction to the Dow Jones Industrial Average’s 156.41 point, or 0.9 percent, gain overnight, and buying of large-cap, high-tech stocks, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), and spread to the traditional industry sectors, dealers said.

  “Judging from the increased buying at home and abroad, I think that concerns over a likely interest rate hike by the Fed have been largely allayed,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said, referring to Wall Street and regional markets, such as Tokyo and Hong Kong.

  The US Fed began a two-day policymaking meeting on Tuesday and the global financial markets have widely anticipated that the US central bank will increase interest rates by 0.25 percentage points.

  “Currently, investors are waiting for the Fed’s comments on the US economy for more clues on how the central bank might implement its interest rate hike cycle next year,” Huang said.

  Led by the gains posted by international equity markets, the local electronics sector closed up 1.54 percent and the semiconductor sub-index ended up 2.86 percent after contract chipmaker TSMC — the most heavily weighted stock in the local market — gained 3.99 percent to close at NT$143.5.

  Among other integrated circuit stocks, IC packaging and testing services provider Advanced Semiconductor Engineering Inc (日月光) rose 2.65 percent to end at NT$35.5 and DRAM maker Inotera Memories Inc (華亞科) added 10 percent, the maximum daily increase, to close at NT$27.8 after US-based Micron Technology Inc proposed acquiring the Taiwanese firm.

  Bucking the upward trend, IC designer MediaTek Inc (聯發科) fell 2.32 percent to close at NT$253.

  In the old-economy sector, Formosa Chemicals and Fibre Corp (台化) gained 1.63 percent to close at NT$68.5, China Petrochemical Development Corp (中石化) added 10 percent to end at NT$7.84 and textile maker Makalot Industrial Co (聚陽) rose 3.59 percent to close at NT$231.

  “The gains posted by old-economy stocks suggest that conglomerates in the sector have started their year-end buying of their own shares in a bid to dress up their books,” Huang said.

  The financial sector closed up 0.55 percent, with Mega Financial Holding Co (兆豐金) increasing 0.95 percent to close at NT$21.35, while Fubon Financial Holding Co (富邦金) remained unchanged at NT$45.95.

  “Despite strong gains, the weighted index failed to close above the 8,200-point mark, since turnover was not big enough to push share prices even higher,” Huang said. “With the presidential election approaching, many investors did not want to chase prices right now.”
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