Airline, tourism stocks jump on US visa free expectations
October 3, 2012, 11:42 am TWN
TAIPEI -- Shares of Taiwan-based airlines and tourism operators moved higher yesterday on expectations that Taiwan will soon be admitted to the United States' visa waiver program, dealers said.
The buying reflected investors' optimism that the granting of visa free status will spark increased interest in traveling to the U.S. and boost the revenue of Taiwan's international carriers and travel agencies, they said.
Dealers cautioned, however, that the tourism sector has been hurt by the sluggish global economy and said it was too early to say how much of a positive effect Taiwan's admission to the U.S. visa waiver program will actually have.
High international crude oil prices may also offset any sales boost airlines get from an increase in tourists to the U.S., they added.
China Airlines added 2.89 percent to NT$12.45, and rival EVA Airways gained 3.21 percent to NT$17.7.
Phoenix Tours International rose 7 percent, the maximum daily increase allowed, to NT$64.9.
Meanwhile, shares in Taiwan staged a technical rebound yesterday as investors were given a jolt of confidence by a report showing improved manufacturing activity in the United States in September, dealers said.
Buying returned to companies in the Apple supply chain on hopes that the launch of the iPhone 5 will boost shipments, and interest then spread to other high-priced high-tech stocks to give the broader market a boost, they said.
The weighted index closed up 42.46 points, or 0.55 percent, at 7,718.68, after moving between 7,683.03 and 7,726.61, on turnover of NT$63.07 billion.
The market opened up 0.36 percent on a knee-jerk reaction to a report overnight that the U.S. manufacturing sector expanded in September, making investors at home and abroad more optimistic about the global economy, dealers said.
"It seemed that many investors felt relieved to some extent after the latest U.S. manufacturing data," said Mega Securities analyst Alex Huang. "To global investors, the U.S. economy, the largest in the world, is not as bad as the market had previously thought.
"Such improved sentiment toward the global economy encouraged investors around the region to buy," Huang said.