TAIEX closes out above 8,000-point mark
CNATAIPEI -- Shares in Taiwan closed above the 8,000 point mark Friday as bargain hunters rushed to pick up large-cap stocks in the wake of a rebound staged on Wall Street overnight, dealers said.
August 31, 2013, 12:03 am TWN
Electronics heavyweights, particularly in the semiconductor sector, attracted buying after Advanced Semiconductor Engineering Inc. (ASE) priced its US$400 million overseas convertible bonds at a 30 percent premium over its share price, they said.
Buying spread to the old economy and financial sectors in anticipation of the latest index adjustments by MSCI Inc. to raise Taiwan's weighting in three of its indices set to take affect after market closing, they added.
The weighted index closed up 104.23 points, or 1.31 percent, at the day's high of 8,021.89, off an early low of 7,936.82, with turnover of NT$80.95 billion (US$2.70 billion).
The market had opened up 0.41 percent as investors took cues from the gains posted by Wall Street overnight after the U.S. reported 2.5 percent growth in its gross domestic product for the second quarter, an upward revision from the original prediction of 1.7 percent, dealers said.
Led by the bellwether electronics sector, the local market continued to steam ahead, and large-cap stocks in the non-high tech sector moved higher to vault the index past 8,000 points at the end of the session, they said.
“Judging from the gains posted by these market heavyweights, I suspect buying largely came from foreign institutional investors who follow closely the MSCI index adjustments,” Ta Ching Securities analyst Andy Hsu said.
In mid-August, MSCI announced it had raised Taiwan's weighting in the Emerging Markets Index, the All Country Asia Index (excluding Japan), and the All Country World Index — adjustments that would take affect after market closing on Friday.
Hsu said foreign buying focused on the electronics sector as ASE, the world's largest integrated circuit packaging and testing services provider, set the conversion price for the bond sale at NT$33.085, a 30 percent premium over its closing price of NT$25.45 Thursday.
ASE closed up 3.93 percent at NT$26.45 with 50.21 million shares changing hands, while rival Siliconware Precision Industries Co. ended up 1.36 percent at NT$33.60.
Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in the local market, rose 1.82 percent to close at NT$100.50, while smartphone vendor HTC Corp. gained 5.74 percent to end at NT$156.50 on speculation that the company will launch a new flagship model in the fourth quarter.
LED chip supplier Formosa Expitaxy Inc. closed up 7 percent at NT$18.90 after the Investment Commission approved a deal to allow China-based counterpart Sanan Optoelectronics Co. to acquire a 19.9 percent stake the Taiwanese company.
In the non-electronics sector, Hotai Motor Co. and Yulon Nissan Motor Co. gained 7 percent, the maximum daily increase, to close at NT$296.00 and NT$304.50, respectively, while Fubon Financial Holding Co. ended up 1.86 percent at NT$41.00.
“Despite the latest gains, the local market remains in consolidation mode as it still faces stiff technical resistance at around 8,050 points,” Hsu said.
“With concerns over a possible tapering of the U.S. Federal Reserve's stimulus measures in place, the upside of local shares could be limited,” he said.