2-way day-trading kicks off, index surges to 6.5-yr high
By John Liu, The China Post
July 1, 2014, 12:01 am TWN
TAIPEI, Taiwan -- The 2-way day trading opened Monday and pushed local shares to 9,393.07 yesterday, a record for the past six years and seven months.
The Taiwan Stock Exchange's main index rose 86.24 points Monday to close at 9,393.07 on turnover of NT$101.04 billion (US$3.38 billion). The Taiwan Stock Exchange yesterday announced that investors are allowed to engage in both sell-first and buy-first day trading from 30 June 2014.
Yesterday marked the end of the first half of 2014, during which the local stock market climbed up 781 points, which was equivalent to 9.07 percent. The 9,393.07 point is also the highest point since Ma Ying-jeou's inauguration as president.
The market capitalization hit NT$26.8516 trillion yesterday. For the 9.3263 million securities account holders, the average earning is NT$250,000 per person for the first half of 2014.
The booming stock performance is the result of global economic recovery, the government's stimulus policy, good fundamentals on the corporate side, and great infusion of foreign capital, said analysts.
The Financial Supervisory Commission's (FSC) permission for day trading went into effect yesterday. The FSC predicted another 3-5 percent increase in turnover after the go ahead of day trading. The FSC currently allows day trading on 200 stocks, and plans to further relax the day trading practice on 1,200 additional stocks in the second half of the year. As a result, the market expects the stock market to further climb up in the remainder of 2014.
It appears that Taiwan has turned into a foreign capital magnet. Statistics show that foreign investors overbought NT$277.7 billion in the first half of 2014, much higher than the NT$199 billion level accumulated throughout 2013. It was also a new record for the first six months of the year.
Institutional investors are upbeat about Taiwan's stock performance down the road. With companies' higher profitability and abundant capital in the market, Daiwa Securities has raised its six-month target index from 9,200 points to 9,800 points.
On the exchange market, the U.S. dollar fell against the Taiwan dollar yesterday, shedding NT$0.047 to close at NT$29.915. The greenback opened at a high of NT$29.97 and had a low of NT$29.837 before the close. Turnover totaled US$765 million during the trading session.