Back to list

Taiwan shares extend momentum as electronics sector gains

2019/04/17 17:37:53

CNA file photo

Taipei, April 17 (CNA) Shares in Taiwan strengthened Wednesday from a session earlier as the bellwether electronics sector continued momentum, led by large-cap stocks, although the gains were capped ahead of 11,000 points, dealers said.

Hon Hai Precision Industry Co., the world's largest contract electronics maker and also one of the local tech heavyweights, attracted strong buying on the back of hopes that company chairman Terry Gou (郭台銘) will run for president in 2020, the dealers said.

A deal reached by U.S-based consumer electronics giant Apple Inc. and smartphone chip designer Qualcomm Inc. overnight to each drop litigation against each other also lent support to their suppliers in Taiwan, they added.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 69.41 points, or 0.64 percent, at 10,997.26, after moving between 10,961.61 and 11,016.92, on turnover of NT$166.69 billion (US$5.40 billion).

The market opened up 0.31 percent on follow-through buying from a session earlier, when the Taiex closed up 0.48 percent, as Hon Hai continued an uptrend amid expectations that Gou will run for president, the dealers said.

Buying in Hon Hai spread to other firms under the corporate umbrella of Hon Hai Group, while a settlement between Qualcomm and Apple sparked interest in other large-cap tech stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and integrated circuit packaging and testing services provider ASE Technology Holding Co., which pushed up the Taiex to over 11,000 points at one stage, the dealers added.

"Strong buying in Hon Hai shares started yesterday after Gou said he is considering the possibility of a presidential bid," said Mega International Investment Services Corp. analyst Alex Huang. "The gains posted by Hon Hai continued today and it seems that investors have embraced high hope that Gou will enter the presidential race."

Gou said a day earlier that he is mulling a presidential bid and is expected to make a decision soon.

Due to the hope of Gou's presidential bid, Hon Hai, the second- largest-cap stock in Taiwan after TSMC, rose 2.11 percent to close at NT$91.80, with 90.34 million shares changing hands.

Among the gaining stocks under Hon Hai Group, flat panel maker Innolux Corp. added 1.97 percent to end at NT$10.35.

Also in the electronics sector, TSMC benefited from the Qualcomm-Apple settlement, rising 1.75 percent to close at NT$261.50 as investors were upbeat that TSMC will become one of the beneficiaries of the deal between the two American tech giants.

Another beneficiary was ASE, which rose 5.92 percent to end at NT$75.20.

Bucking the upturn on the main board, however, MediaTek Inc., a rival of Qualcomm, fell 3.83 percent to end at NT$288.50.

"Due to the strong showing of these tech heavyweights, today's turnover expanded to more than NT$160 billion as the electronics sector accounted for about 75 percent of the total trading volume," Huang said. The previous day's turnover stood at NT$132.93 billion.

According to the TWSE, foreign institutional investors bought a net NT$9.42 billion-worth of shares on the main board Wednesday.

Huang said, however, that non-tech stocks generally appeared sluggish, with food brand Uni-President Enterprises Corp. down 1.09 percent to close at NT$72.80 and Taiwan Cement Corp. down 0.83 percent to end at NT$41.95.

In the mixed financial sector, which closed up only 0.02 percent, CTBC Financial Holding Co. lost 0.49 percent to close at NT$20.35, but E. Sun Financial Holding Co. was up 0.21 percent to end at NT$23.95.

"Judging from today's movement, I think the main board is faced with stiff technical resistance ahead of 11,000 points," Huang said. "In addition to the technical hurdles, investors had better pay close attention to an investor conference scheduled by TSMC for Thursday to give its first-quarter results and guidance for the second quarter, which could move the market," he said.

(By Frances Huang)
Enditem/J