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June 23, 2017

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Local shares end up, buoyed by electronics and petrochemicals

TAIPEI -- Shares in Taiwan closed higher as late session buying boosted select large-cap stocks in both electronics and petrochemical sectors, while the property sector steamed ahead amid hopes that the government will push for urban renewal projects, dealers said.

Trading volume passed the NT$100 billion (US$3.13 billion) mark before the latest MSCI index adjustment comes into effect after the close of the local market on Wednesday, they said.

The weighted index on the Taiwan Stock Exchange ended up 48.33 points, or 0.53 percent, at a high for the day of 9,240.71, from an early low of 9,189.62, on turnover of NT$100.73 billion.

The market opened up 3.72 points and buying increased on a rising property sector. End of day buying pushed up shares in market heavyweights such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) and smartphone camera lens supplier Largan Precision Co. (大立光) which lifted the broader market, dealers said.

"Due to a cut in the weighting of Taiwan's stocks on the MSCI index, some foreign institutional investors sold their holdings but others picked up bargains, which increased turnover to more than NT$100 billion today," Mega International Investment Services Corp. analyst Alex Huang said.

MSCI to Lower Taiwan's Weighting

Earlier this month, MSCI, a global index provider, announced it would lower Taiwan's weighting in the MSCI Emerging Markets Index, which is closely watched by foreign investors, from 12.20 percent to 12.12 percent after a semi-index review.

"The downgrade has had little impact on today's trading. I think the weighting cut had been factored into share prices already," Huang said. "More important, the cut was not intolerable at all," Huang said.

"The late session buying in select large cap stocks showed that many investors remained willing to raise their holdings before the index moves closer to the nearest technical resistance at about 9,300 points," he said.

Shares in TSMC, the most heavily weighted stock in the local market, rose 0.55 percent to close at NT$183.00, off an early low of NT$181.50, with 39.67 million shares changing hands and Largan, a supplier to Apple Inc., added 1.37 percent to end the day at NT$3,690.00.

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