TAIEX inches higher as Apple concept stocks gain
CNATAIPEI--Shares in Taiwan moved higher Tuesday after local suppliers to Apple Inc. posted gains on hopes that the U.S. consumer electronics giant will launch new products to boost their shipments, dealers said.
August 14, 2013, 12:00 am TWN
Among the gaining Apple concept stocks, smartphone camera lens supplier Largan Precision Co. and Pegatron Corp., which is thought to assemble iPad minis for Apple, led the electronics sector to post gains, the dealers said.
Buying also spread to the old economy sector, in particular retail stocks, as investors took cues from improvements in profitability for the second quarter of this year, they said.
The weighted index closed up 82.89 points, or 1.04 percent, at the day's high of 7,986.27, off an early low of 7,935.79, on turnover of NT$78.18 billion (US$2.61 billion).
The market opened up 0.41 percent despite a lackluster Wall Street performance overnight as buying in the local suppliers for Apple continued to boost the broader market, the dealers said.
Gains posted by Tokyo and Seoul promoted more investors to resume buying in the local market, with interest extending to select traditional industrial stocks to push the index even higher at the end of the session, they said.
“Buying in the Apple suppliers was ignited by a high-tech blog that said the U.S. company is planning to unveil new products in September,” KGI Securities analyst Eason Lee said.
All Things D, a Wall Street Journal affiliate, which tracks inside Apple information and has a solid record in reporting, gave the new product launch lead, saying that the electronics company will hold an event for the new product announcement Sept. 10.
“It was no surprise that major Taiwanese Apple suppliers got a boost today, which improved investor sentiment toward the local electronics sector,” Lee said. The electronics sub-index closed up 1.65 percent.
Largan rose 4.19 percent to close at NT$1,120, the highest closing level in the stock's history, while Hon Hai Precision Industry Co., which assembles iPhones and iPads, gained 2.06 percent to end at NT$79.10.
Pegatron gained 6.86 percent to end at NT$48.30 after the company said it is possible that its non-computing operations, which include communications device production, will post a 40-50 percent sequential increase in sales in the third quarter, which prompted investors to think the company is securing orders from Apple.
Buying was also seen among certain old economy stocks, with President Chain Store Corp., which operates the 7-Eleven Convenience Store chain in Taiwan, up 4.25 percent to close at NT$221.00.
President announced that a day earlier that it posted NT$4.87 billion in net profit, 25.44 percent up from a year earlier.
“The local market needs larger turnover, say NT$85 billion or higher, to jump over the nearest technical hurdle ahead of 8,050 points,” Lee said.