Taiwan stocks rose for a third day in four, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after gains in the NASDAQ Comp-osite Index spurred foreign and local buying of electronics companies on hopes of an improvement in earnings next year.
On Friday, the NASDAQ gained 1.5 percent.
The TAIEX gained 89.24, or 2 percent, to 4,608.22, its biggest advance in a week. Two stocks rose for every one that fell. The total value of trade was NT$107.2 billion (US$3.1 billion), a 23 percent increase from NT$87 billion on Friday.
The NASDAQ, 52 percent of whose market value are computer and telecommunication stocks, and the TAIEX Index, 62 percent of whose market value are electronics stocks, have a correlation of 0.9 over the last six months. A value of 1 means the two securities move in lockstep.
The TWSE Index has surged 34 percent since its year low Oct. 3. The NASDAQ has gained 20 percent during the same period.
Made-to-order chipmakers gained after the widely watched Philadelphia Semiconductor Index, a price-weighted index of 16 companies that design and manufacture chips, rose 1.6 percent Friday.
"What people are buying into is the second-half of 2002" for stocks like TSMC and UMC, said Ming Kai Cheng, an analyst at CLSA Ltd in Taipei. "Incrementally we'll not see much good news for the foundries."
TSMC, the biggest made-to-order chipmaker, rose NT$0.50, or 0.7 percent, to NT$74. United Microelectronics Corp (UMC,
Telecommunication equipment shares rose on expectations orders on expectations US consumer confidence is increasing, raising hopes sales of the nation's products may pick up.
Accton Technology Corp (智邦科技) rose NT$3, or 5.5 percent, to NT$57.50. D-Link Corp rose NT$2.70, or 6.8 percent, to NT$42.60. Sunplus Technology Ltd (凌陽科技) rose NT$2, or 2.3 percent, to NT$87.50.
Non-computer exporters gained on expectations US consumer confidence is recovering and that will help boost sales and earnings. "The economy is about ready to hit bottom," said Mark Zandi, chief economist at Economy.com in West Chester, Pennsylvania. "The consumer is going to continue to spend enough to forestall a more debilitating recession."
Test-Rite International Ltd (
Quanta Computer Inc (廣達電腦) rose NT$3.50, or 4.3 percent, to NT$85. The nation's biggest notebook computer maker estimates production in China and Taiwan will reach 1 million a month by the end of 2003 and sales will reach US$10 billion by then, the Economic Daily newspaper reported, citing Chairman Barry Lam (林百里).
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
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The US House of Representatives yesterday unanimously passed the Taiwan Conflict Deterrence Act, which aims to disincentivize Chinese aggression toward Taiwan by cutting Chinese leaders and their family members off from the US financial system if Beijing acts against Taiwan. The bipartisan bill, which would also publish the assets of top Chinese leaders, was cosponsored by Republican US Representative French Hill, Democratic US Representative Brad Sherman and seven others. If the US president determines that a threat against Taiwan exists, the bill would require the US Department of the Treasury to report to Congress on funds held by certain members of the
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