Taiwan stocks close almost flat, TAIEX rises 3.01 points

By closing, the local benchmark index TAIEX rose 3.01 points to 7,215.88 on a reduced trade volume of NT$83.947 billion.

A rebound seen at the end of trade Saturday continued yesterday morning, with buy orders exceeding sell orders throughout the trading day. Saturday was a business day to make up for the holiday on Feb. 19, which would make for a weeklong Lunar New Year break.

While buys were active, most investors were unwilling to chase prices, causing the TAIEX to hover around Saturday's close.

Construction shares rose by the biggest margin, followed by rubber shares as investors hoped for stronger demand from the snowbound east coast of the United States as well as from China, whose auto industry has picked up steam of late.

Chunghwa Telecom closed down NT$3.2 at NT$59.7 after trading was halted for the past few days, during which most Taiwan stocks tumbled. The trade suspension was part of Chunghwa Telecom's capital reduction effort.

Chunghwa Picture Tubes again closed at its daily limit of NT$3.34, after it denied that Samsung bought a stake in it. The company had fourth quarter net revenue of NT$16.773 billion, translating into an operational loss of NT$6.474 billion, a pretax loss of NT$12.193 billion, a net loss of NT$11.918 billion, and loss per share of NT$0.72, it said during its investors' conference Friday. Its TFT-LCD business had a revenue of NT$14.525 billion, translating into pretax loss of NT$5.972 billion.

Most IT shares had mediocre performances. Semiconductor design shares were among the better performing IT shares yesterday.

Far Eastern Department Store rose yesterday by 1.74 percent to NT$23.45. The Far Eastern Group's market capitalization had lost NT$30 billion over three days ending last Friday. On Friday, Far Eastern Department Store, Far Eastern New Century and Asia Cement all fell by their daily limit to NT$24.75, NT$30.95 and NT$28.3, respectively.

The Ministry of Economic Affairs last week invalidated the Far Eastern Group's ownership of Sogo Department Store through Pacific Distribution Investment Co. Far Eastern Department Store, Far Eastern New Century and Asia Cement were asked to report within a week how the latest dispute could affect their operations, said Lee Chi-meng, head of the Securities and Futures Commission under the Financial Supervisory Commission, Friday.

Institutional investors were on the sell side. Net purchases of NT$343 million and NT$545 million by investment trusts and securities firms, respectively, were not enough to offset a total net sale of NT$15.721 billion by foreign/Chinese investors. Together the three made a total net sale of NT$14.833 billion.

According to analysts, there could be a “technical rebound” over the next two days before trading comes to a weeklong halt, as the TAIEX has already fallen by a significant margin. Analysts also called for caution, as trade volume has continued to shrink. Investors should refrain from buying before trade volume expands, they said.

Wednesday will be the last day of trading before the Lunar New Year break, which begins on Saturday, Feb. 13. Stock markets will be closed on Thursday and Friday to make room for settlements, all of which will be completed on Friday.

The break will last for a whole week. Trading will resume on Monday, Feb. 22.

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