Taiwan stocks attractive to long-term investors: manager

Fu Hsu-cheng, manager of the High-Growth Fund offered by Fubon Asset Management, further stressed investors may enter the market when the TAIEX is between 7,000 and 7,500. The local benchmark stock index yesterday closed at 7,886.34.

According to Fu, the 130 companies tracked by Fubon posted total net profits of NT$660 billion last year, and he expects the figure will rise to NT$1 trillion this year, a growth of 50 percent.

“These companies began to turn a profit during the third quarter last year, amid the financial storm,” Fu said. “This indicates Taiwan firms are recovering at a much faster pace than their overseas counterparts.”

It is estimated the TAIEX will surge past its former high of 8,395 in the next quarter or two, Fu said.

“It will take some three to five months for stocks to go through this current correction, given the TAIEX had climbed for 13 months in a row,” he said.

Yet, from a long-term perspective, Taiwan stocks are attractive, as currently, their average yield is 5.08 percent, higher than the 3.66 percent for U.S. 10-year treasuries, he said.

Meanwhile, Taiwan stocks rose slightly yesterday, increasing by 38.5 points, or 0.49 percent.

The TAIEX at one point hurdled the 7,900 mark yet fell below it at the later part of the trade. Foreign investors expanded their purchases, causing trade volume to reach a high of NT$135.875 billion.

Altogether, Taiwan's three institutional investors made a total net purchase of NT$14.768 billion, breaking down into a net buy of NT$12.449 billion by foreign/Chinese investors, a net sale of NT$208 million by securities trusts, and a net purchase of NT$2.527 billion by securities firms.

Financial shares were among the stocks that performed better. Shin Kong Financial Holding Co., owner of Taiwan's third-largest life insurance company, surged 4.6 percent to NT$12.45 after it was raised to “buy” at SinoPac Financial Holdings Co. It was also newly rated “buy” at Redford Assets Management Ltd.

The company posted a profit of NT$1.41 billion in the fourth quarter, according to a statement on its Web site Wednesday. The company reported a loss of NT$9.7 billion in the same quarter a year earlier, according to Bloomberg data.

In other stocks, Epistar Corp., Taiwan's largest maker of light-emitting diodes, rose for the second day, gaining 6.3 percent to NT$103, the highest since Jan. 25, after the Commercial Times Wednesday cited chairman Li Ping-Chieh as saying supplies of the diodes won't exceed demand.

Phison Electronics Co., a maker of NAND flash chips used to store data in digital cameras, portable music players and mobile phones, jumped 6.8 percent to NT$242.50, the highest since Jan. 20, after researcher ISuppli Corp. said industry-wide sales of the chips grew more than 15 percent last year.

Huaku Development Co., Taiwan's second largest residential apartment builder, increased 1.2 percent to NT$84.50, the highest since Jan. 21. The company bought a parcel of land in Taipei's Tienmu area for NT$7 billion at an auction. The cost was 41 percent higher than the reserve price of NT$4.97 billion, selling agent CB Richard Ellis said in a press release.

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