Taiwan shares close up on positive earnings reports by tech firms

04/28/2022 05:54 PM
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Taipei, April 28 (CNA) Shares in Taiwan bounced back Thursday from a slump the previous session, with the bellwether electronics sector leading the rebound, after two major semiconductor suppliers reported strong second-quarter net profits, dealers said.

Despite the gains, turnover remained moderate, as investors were cautious ahead of next week's policymaking meeting of the U.S. Federal Reserve, which has already kicked off an interest rate hike to tackle inflation, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 116.03 points, or 0.71 percent, at 16,419.38, after moving between 16,256.88 and 16,455.57. Turnover totaled NT$255.88 billion (US$8.67 billion).

The market opened up 0.29 percent, and buying soon accelerated, with the tech sector steaming ahead, led by contract chipmaker United Microelectronics Corp. (UMC) and smartphone IC designer MediaTek Inc., which reported impressive first-quarter results on Wednesday, dealers said.

The electronics sector rose 1.06 percent, with the semiconductor sub-index ending up 1.39 percent, as investors ignored a lackluster finish of the tech-heavy Nasdaq index in the United States overnight.

"Investors seized on UMC and MediaTek's first-quarter results to hunt bargains," following the Taiex's 2.05 percent drop on Wednesday, MasterLink Securities analyst Tom Tang said. "I suspect the buying came partly from government-led funds, which helped push up the entire index."

UMC soared 9.23 percent to close at NT$48.50, after it reported a 24.2 percent growth in its first-quarter profit to a quarterly record of NT$19.81 billion, with earnings per share of NT$1.61.

The company also forecast continued growth of pricing power and sales in the second quarter, saying that strong demand for automotive electronics, industrial semiconductors and Internet chips will offset the weaker smartphone market.

MediaTek shares, meanwhile, ended 2.48 percent higher on Thursday at NT$828.00, after it reported a record first-quarter net profit of NT$33.26 billion, which was a quarterly increase of 10.7 percent, and an EPS of NT$21.02.

In its guidance, MediaTek said its second-quarter sales are expected to grow by a quarterly 3-10 percent and its 2022 revenue will increase by an annual 20 percent.

"The guidance by the two companies helped allay some worry among investors about demand, as the market has been bothered by the slowdown so far this year," Tang said.

Among the other semiconductor heavyweights, Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, rose 0.95 percent to close at NT$531.00, and display driver IC designer Novatek Microelectronics Corp. surged 5.23 percent to end at NT$382.50.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. gained 1.50 percent to close at NT$101.50, while flat panel makers AU Optronics Corp. and Innolux Corp. soared 4.91 percent and 6.49 percent, respectively, to end at NT$17.10 and NT$13.95, on expectations that product prices will soon bottom out.

Many old economy stocks also saw gains, led by the food sector, which rose 1.89 percent on bargain hunting, dealers said.

Uni-President Enterprises Corp., one of the country's leading food brands, climbed 1.49 percent to close at NT$68.30, and rival Wei-Chuan Foods Corp. surged 4.09 percent to end at NT$22.90. In the financial sector, Shanghai Commercial & Savings Bank rose 1.25 percent to close at NT$48.75, and Yunata Financial Holding Co. gained 0.97 percent to end at NT$26.00.

The transportation sector, where several major shipping stocks are traded, failed to ride the upturn, however, falling 1.13 percent.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 1.43 percent to close at NT$138.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. dropped 0.41 percent and 1.39 percent, respectively, to end at NT$120.50 and NT$142.00.

"Before the Fed concludes its two-day policymaking meeting (that starts May 3), caution is expected to prevail in the markets at home and abroad, amid worry over a hawkish U.S. central bank," Tang said. "In Taiwan, the Taiex is expected to keep moving in a narrow range, between 16,300 and 16,500 points, before the Fed meeting concludes."

According to the TWSE, foreign institutional investors sold a net NT$15.85 billion worth of shares on the main board Thursday.

(By Frances Huang)


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