Lo­cal shares stag­nant amid fears over selling by for­eign in­sti­tu­tional in­vestors

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan closed lit­tle changed Wed­nes­day as in­vestors feared more for­eign selling af­ter for­eign in­sti­tu­tional in­vestors shifted to the sell side on Tues­day, deal­ers said.

The bell­wether elec­tron­ics sec­tor fell into the dol­drums, while se­lect “Ap­ple con­cept stocks” at­tracted buy­ing on hopes that the launch of the next-gen­er­a­tion iPhone will boost their ship­ments in the sec­ond half of this year.

Ap­ple Sup­pli­ers

Among the Ap­ple sup­pli­ers in Tai­wan that ral­lied Wed­nes­day was smart­phone cam­era lens maker Lar­gan Pre­ci­sion Co. (

). It ex­tended its gains from Tues­day to hit a new clos­ing high amid op­ti­mism over its earn­ings out­look, deal­ers said.

Buy­ing ro­tated to old econ­omy stocks, es­pe­cially in the petro­chem­i­cal and ce­ment sec­tor, be­cause of their rel­a­tively low val­u­a­tions, push­ing the mar­ket’s bench­mark in­dex slightly higher at the close, they said.

The weighted in­dex on the Tai­wan Stock Ex­change ended up 6.17 points, or 0.06 per­cent, at 9,397.31, af­ter mov­ing be­tween 9,364.38 and 9,409.44, on turnover of NT$77.74 bil­lion (US$2.52 bil­lion).

The mar­ket opened up 2.45 points and rose to the day’s high in the wake of gains seen on Wall Street overnight amid re­duced con­cerns over Greece’s debt prob­lems, deal­ers said.

But af­ter the in­dex breached the 9,400-point level, some in­vestors be­gan selling their hold­ings to lock in prof­its, send­ing prices lower, they said.

For­eign In­vestors Cut Hold­ings

“In­vestors sim­ply used for­eign in­sti­tu­tional selling on Tues­day as an ex­cuse to be cau­tious. Many of them have been afraid that for­eign in­vestors will con­tinue to cut their hold­ings,” Mega In­ter­na­tional In­vest­ment Ser­vices Corp. an­a­lyst Alex Huang said.

Although the weighted in­dex closed up 0.52 per­cent on Tues­day, for­eign in­sti­tu­tional in­vestors sold a net NT$1.30 bil­lion in lo­cal shares on the main board. They were net buy­ers of NT$289 mil­lion in shares on the ex­change Wed­nes­day.

“The Wed­nes­day ses­sion ap­peared quiet on thin trad­ing vol­ume. The lo­cal eq­uity mar­ket failed to climb out of con­sol­i­da­tion mode be­cause of the lack of fresh leads,” Huang said.

The elec­tron­ics sec­tor

closed down 0.06 per­cent, while Lar­gan, the most ex­pen­sive stock in the lo­cal mar­ket, rose 0.70 per­cent to close at NT$3,580.00, off an early high of NT$3,620.00.

Among the other Ap­ple sup­pli­ers in Tai­wan, me­tal casing maker Catcher Tech­nol­ogy Co. ( ) rose 0.40 per­cent to end at NT$378.50, and iPhone as­sem­bler Pe­ga­tron Corp. ( ) gained 0.23 per­cent to close at NT$88.70.

Old Econ­omy Sec­tor

In the old econ­omy sec­tor, Formosa Plas­tics Corp. ( ) added 1.66 per­cent to close at NT$73.30, and Nan Ya Plas­tics Crop.( ) rose 1.69 per­cent to end at NT$72.40, while Asia Ce­ment Corp. ( ) closed up 1.24 per­cent at NT$36.80.

“These tra­di­tional in­dus­trial stocks had suf­fered heavy losses in re­cent ses­sions. So I think their gains were tech­ni­cal in na­ture as in­vestors wanted places in which to park their funds for the mo­ment,” the an­a­lyst said.

Huang said the mar­ket’s bench­mark in­dex is ex­pected to con­tinue to range be­tween 9,300 points and 9,500 points in the near term, but selling could emerge af­ter the in­dex moves above 9,400 points.

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