Taiwan stocks gains on back of strong Wall Street rally
The China Post news staff and CNA
December 20, 2012, 12:08 am TWN
TAIPEI, Taiwan -- Shares in Taiwan ended in positive territory yesterday following a rally on Wall Street overnight that was driven by rising optimism that Washington will reach an agreement to resolve a pending fiscal cliff, dealers said.
Buying focused on select large-cap electronics stocks, such as the world's largest handheld device camera lens supplier Largan Precision Co., as investors took advantage of a recent retreat, they said.
Major flat panel makers Chimei Innolux Corp. and AU Optronics Corp. continued to move higher amid optimism over a recovery in display prices, while the financial sector was boosted by futures-led buying, they added.
The weighted index closed up 33.73 points, or 0.44 percent, at 7,677.47, after moving between 7,647.01 and 7,685.63, on turnover of NT$85.39 billion.
Separately, Lee Sush-der, chairman of GreTai Securities Market, yesterday expressed his confidence in Taiwan stocks next year as the economy picks up steam.
Lee, a former finance minister, cited data by various economic institutions as indicating Taiwan's growth next year will be around three percent. Further, increasing stock trade volume and prices indicate a turnaround in the capital market, he said.
Internationally, the U.S. is heading toward further economic growth, given increased exports, taxes and the prospect its fiscal cliff situation may soon see a solution, he said.
Lee also expressed optimism for a boost in trading on GreTai, where Taiwan's over-the-counter (OTC) and emerging stocks are traded. Most of these stocks are energy and electronic shares that Lee said have huge growth potential.
"Despite economic volatilities, certain industries have shown resilience, and stocks issued by operators in these sectors will help raise the visibility and trade volume of GreTai," he said.
As for IPOs on GreTai next year, Lee was more conservative, saying he expects 40 firms to get listed in OTC market and 60 in emerging market, the same figures as this year.
He attributed his conservatism to the imposition of the stock capital gains tax, which will take effect Jan. 1.
According to Lee, OTC and emerging stocks have combined market value of NT$1 trillion and combined capital of NT$700 billion.
"Daily trade volume averages around NT$11.7 billion, which is a little low," Lee said. "There is definitely room to grow."