Lo­cal mar­ket soars on back of heavy fi­nan­cial stocks buy­ing

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan spiked Thurs­day to its high­est level in seven and a half years, as buy­ing ro­tated to the fi­nan­cial sec­tor amid hopes that Taipei and Shang­hai will launch a plat­form to trade stocks on both ex­changes, deal­ers said.

The buy­ing was fo­cused on fi­nan­cial hold­ing com­pa­nies that have big se­cu­ri­ties busi­ness op­er­a­tions, since in­vestors and se­cu­ri­ties were op­ti­mistic that they would ben­e­fit from such trade lib­er­al­iza­tion, deal­ers said.

The bell­wether elec­tron­ics sec­tor ex­tended its gains from the pre­vi­ous ses­sion, led by semi­con­duc­tor stocks, as in­vestors here were en­cour­aged by the 1.37 per­cent gain by the Philadel­phia Semi­con­duc­tor In­dex overnight, deal­ers said.

The weighted in­dex on the Tai­wan Stock Ex­change ended up 184.49 points, or 1.91 per­cent, at 9,797.49, af­ter mov­ing be­tween 9,655.30 and 9,814.88. Turnover to­taled NT$143.17 bil­lion (US$4.60 bil­lion) dur­ing the ses­sion.

The mar­ket opened up 0.56 per­cent on fol­low-through buy­ing from the pre­vi­ous ses­sion and gained mo­men­tum as in­ter­est fo­cused on large- cap fi­nan­cial stocks.

The buy­ing was spurred by hopes that the pro­posed Taipei- Shang­hai plat­form would be mod­eled on the Shang­hai-Hong Kong Stock Connect that was launched last year, deal­ers said.

Buy­ing was also seen in the high-tech and old econ­omy sec­tors, which helped push the in­dex past the 9,800-point mark at one point be­fore some profit tak­ing emerged late in the ses­sion, deal­ers said.

The fi­nan­cial sub-in­dex closed up 4.65 per­cent. China Devel­op­ment Fi­nan­cial Hold­ing Co. (

) and Fubon Fi­nan­cial Hold­ing Co. ( ) rose by the max­i­mum daily 7 per­cent to close at NT$11.80 and NT$61.70, re­spec­tively. Yuanta Fi­nan­cial Hold­ing Co. ( ) gained 6.50 per­cent to end at NT$17.20.

“Look­ing at the strong buy­ing in those fi­nan­cial stocks that have large se­cu­ri­ties op­er­a­tions, it seems many in­vestors, in par­tic­u­lar for­eign in­sti­tu­tional in­vestors, are ex­pect­ing a stock plat­form sim­i­lar to the Hong KongShang­hai link,” said in­vest­ment con­sult­ing firm CMoney an­a­lyst Chen Wei-tai.

Hopes about a Taipei-Shang­hai stock mech­a­nism have been high since Jiang Yang ( ), vice chair­man of the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion (CSRC), was re­ported as say­ing that the CSRC is study­ing the fea­si­bil­ity of such as a plat­form.

“With the strong buy­ing

in fi­nan­cial stocks, the fi­nan­cial sec­tor ac­counted for more than 20 per­cent of the to­tal turnover to­day,” Chen said. “That’s why the lo­cal in­dex was able to clear the tech­ni­cal hur­dles ahead of 9,700 points.”

Mean­while, the elec­tron­ics sub-in­dex closed up 1.61 per­cent and the semi­con­duc­tor sub-in­dex ended up 2.10 per­cent, led by Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC, ), deal­ers said.

TSMC rose 2.44 per­cent to close at NT$147.00. “TSMC, the most heav­ily weighted stock on the lo­cal mar­ket, also helped an­chor to­day’s gains and the buy­ing also spread to other in­te­grated cir­cuit stocks,” Chen said.

IC pack­ag­ing and testing ser­vices provider Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. (

) rose 1.48 per­cent to close at NT$44.60, and it com­peti­tor Sil­i­con­ware Pre­ci­sion In­dus­tries Co. ( ) gained 4.31 per­cent to end at NT$52.00.

“Af­ter to­day’s up­turn, the lo­cal bourse would need to pause be­fore an­other take­off,” Chen said. “Oth­er­wise, the mar­ket would over­heat tech­ni­cally, which would bode ill for fu­ture move­ment.”

He said in­vestors should con­tinue to pay at­ten­tion to the cur­rent earn­ings sea­son on Wall Street, which may af­fect global mar­kets.

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