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Shares of ASE rebounds on foreign institutional buying

TAIPEI--Shares of Advanced Semiconductor Engineering Inc. (ASE, 日月光) rebounded Tuesday morning as investors took cues from strong buying by foreign institutions a day earlier despite the company's pollution problems, dealers said.

The interest in ASE shares also reflected technical support after it fell below NT$26.00 (US$0.88) Monday amid fears that operations at one of the factories in the company's Kaohsiung complex will be suspended because it has been discharging untreated wastewater, they said.

ASE rose by the maximum daily 7 percent to close at NT$27.55. Some analyst said the government is unlikely to shut down the plant, given the economic situation.

Foreign institutional investors bought a net 112.90 million ASE shares last week and a net 25.60 million shares on Monday, when ASE was the biggest net buy among foreign investors on the main board.

Among the upbeat foreign brokerages, UBS Securities and Bank of America Merrill Lynch have maintained a "buy" recommendation on ASE shares. Merrill Lynch said that even if the K7 plant were shut down, it would have little impact on ASE's sales unless the shutdown were to continue for more than 6 weeks.

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