Tai­wan shares soar up to 7,675.64 on hopes of gov­ern­ment in­ter­ven­tion

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan staged a strong tech­ni­cal re­bound and moved sharply higher Tues­day, as in­vestor con­fi­dence was buoyed by ex­pec­ta­tions that the Na­tional Fi­nan­cial Sta­bi­liza­tion Fund would en­ter the mar­ket to prop up share prices, deal­ers said.

The bell­wether elec­tron­ics sec­tor stoked the rally, with mar­ket heavy­weights such as con­tract chip-maker Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC,

) and smart­phone cam­era lens sup­plier Lar­gan Pre­ci­sion Co. (

) lead­ing the way. Bar­gain hun­ters also chased fi­nan­cial stocks to push up the in­dex even fur­ther, they said.

The weighted in­dex on the Tai­wan Stock Ex­change (TWSE) closed up 265.30 points, or 3.58 per­cent, at 7,675.64, af­ter mov­ing be­tween 7,368.47 and 7,677.93, on turnover of NT$120.52 bil­lion (US$3.70 bil­lion).

The mar­ket opened up 0.23 per­cent but soon fell into the red af­ter the Dow Jones In­dus­trial Av­er­age fell 3.57 per­cent overnight, deal­ers said.

Bar­gain hun­ters then turned ac­tive to pick up large-cap stocks in both the elec­tron­ics and fi­nan­cial sec­tors on hopes that the na­tional sta­bi­liza­tion fund would en­ter the mar­ket, they said.

Mar­ket mo­men­tum ac­cel­er­ated mid­way through the morn­ing and con­tin­ued un­til just be­fore the end of the ses­sion when the bench­mark in­dex hit its daily high, they said.

Sta­bi­liza­tion Fund

Vice Premier Chang San-cheng ( ) an­nounced around noon Tues­day that the sta­bi­liza­tion fund com­mit­tee had au­tho­rized the fund to in­ter­vene in the mar­ket if nec­es­sary to mit­i­gate the im­pact of volatil­ity from global mark­ers.

“The pres­ence of the sta­bi­liza­tion fund showed the gov­ern­ment’s sup­port for lo­cal shares,” Marbo Se­cu­ri­ties In­vest­ment Con­sult­ing an­a­lyst Chang Chih-cheng said.

“The an­nounce­ment re­stored mar­ket con­fi­dence, lur­ing in­vestors to take ad­van­tage of the rel­a­tively low val­u­a­tions of many stocks.

“Judg­ing from the gains posted by large-cap stocks, gov­ern­men­tled funds, such as the la­bor pen­sion fund, were among the bar­gain hun­ters who jumped in to chase prices,” Chang said.

Semi-con­duc­tor Stocks

In the two trad­ing ses­sions be­fore Tues­day’s re­bound, the Taiexfell 7.71 per­cent.

Chang said TSMC, the most heav­ily weighted stock in the lo­cal mar­ket, was one of the big­gest ben­e­fi­cia­ries of bar­gain hunt­ing be­cause the stock had been over­sold.

“As TSMC re­turned to an up­ward trend and rose sharply, the broader mar­ket was able to climb out of the dol­drums,” he said.

TSMC rose 7.39 per­cent to close at NT$123.50, with 95.03 mil­lion shares chang­ing hands. But Chang urged in­vestors to be­ware of tech­ni­cal re­sis­tance for TSMC at around NT$130.00.

Among other semi­con­duc­tor stocks, Sil­i­con­ware Pre­ci­sion In­dus­tries Co. ( ), one of Tai­wan’s lead­ing in­te­grated cir­cuit pack­ag­ing and test­ing ser­vices providers, rose 8.82 per­cent to close at NT$40.10 on fol­low- through buy­ing from a ear­lier.

The buy­ing came af­ter ri­val Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. ( ) launched a ten­der of­fer to buy an up to 25 per­cent stake in Sil­i­con­ware, start­ing Mon­day.

ASE added 2.52 per­cent to end at NT$32.60.

Lar­gan, a ma­jor Tai­wanese sup­plier to Ap­ple Inc., gained 10 per­cent, the max­i­mum daily in­crease, to close at NT$2,945.00.

“As Lar­gan is the most ex­pen­sive stock here, the gains may have re­sulted from in­sti­tu­tional in­vestor in­ter­est, in par­tic­u­lar for­eign in­vestors, who can af­ford such a high-priced stock,” Chang said.


For­eign Buy­ers Bought

NT$3.66 Bil.

Ac­cord­ing to the TWSE, for­eign in­sti­tu­tional in­vestors bought a net NT$3.66 bil­lion in lo­cal shares on the main board Tues­day af­ter selling a net NT$6.6 bil­lion in shares on Mon­day.

The fi­nan­cial sub-in­dex also ben­e­fited from hopes of the sta­bi­liza­tion fund’s in­ter­ven­tion, clos­ing up 3.62 per­cent at 1,000.21.

Among the big gain­ers, Fubon Fi­nan­cial Hold­ing Co. rose 3.18 per­cent to close at NT$51.90, CTBC Fi­nan­cial Hold­ing Co. gained 3.98 per­cent to end at NT$18.30, and Cathay Fi­nan­cial Hold­ing Co. added 5.37 per­cent to end at NT$43.20.

“With the fi­nan­cial sub-in­dex re­turn­ing to the 1,000-point level, the sec­tor has be­come tech­ni­cally stronger. But where the sec­tor will go from here de­pends on when for­eign mar­kets will sta­bi­lize,” Chang said.

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