OTC market bouncing back against main board plunge
February 6, 2014, 12:04 am TWN
TAIPEI--The over-the-counter (OTC) market appeared resilient on the back of local retail and institutional buying Wednesday, although the main board suffered sell-offs by foreign institutional investors, dealers said.
"Heavy selling by foreign institutional investors in large-cap stocks on the main board prompted local investors to move their funds into small cap stocks on the OTC market," MasterLink Securities analyst Tom Tang said.
After opening about 1.3 percent lower, the index on the OTC market staged a rebound to recoup its earlier losses and close unchanged at 128.66 points on turnover of NT$19.44 billion (US$642 million).
The OTC market outperformed the main board, where the weighted index on the Taiwan Stock Exchange closed down 2.34 percent at 8,264.48 after foreign investors served as net sellers of NT$44.39 billion-worth of shares.
Foreign institutional investors sold a net NT$514.93 million on the OTC market during the session.
"As foreign investors dominated trading in large-cap stocks, local investors shifted their attention to small-cap ones, in particular on the OTC market," Tang said.
On the OTC market, a total of 38 stocks even rose 7 percent, the maximum daily increase, against stiff downward pressure in their large cap counterparts on the main board.
Among the stocks that gained 7 percent on the OTC market, metal stamping product supplier China Fineblanking Technology Co. closed at NT$34.10 and enameled wire maker Feng Ching Metal Corp. ended at NT$19.90.
Chairman of the GreTai Securities Market (GTSM) Wu Sou-shan said the OTC market has appeared active on an increase of buying in small-cap stocks.