Taipei shares sharply higher on US rebound; TSMC up on share buyback UPDATE

Taipei shares sharply higher on US rebound; TSMC up on share buyback UPDATE

	Published : Wed, 14 Nov 2007 03:15 By : Agencies Print this Story

TAIPEI (XFN-ASIA) - Share prices were sharply higher in early trade following a solid bounce on Wall Street overnight and a significant pullback in oil prices.

Technology stocks got a boost from Nasdaq's upswing, with TSMC also gaining on news of a share buyback to accommodate a planned stake sale by Royal Philips Electronics NV.

At 9.30 am, the weighted index was up 223.20 points or 2.56 pct at 8,950.41, after moving in the range of 8,942.60 and 8,971.93.

Turnover was at 41.70 bln twd.

Dealers noted that the rally was broad-based, with the food sector up 5.47 pct, construction sector up 4.22 pct, electronics sector up 2.79 pct and financial sector gaining 1.70 pct.

'What we are seeing is mostly a knee-jerk reaction to Wall Street's ending its recent streak of losses in a quite dramatic manner,' said Michael Hsu, assistant vice president at Taiwan Life Asset Management.

A stronger than usual rebound is only to be expected after an overshooting on the downside, he said.

'Rebound is a fitting description because nothing fundamental has changed much,' he said, noting that 'Wall Street had pulled down regional markets along with it previously.'

He added that US markets will continue to dictate the local bourse's movements in the near term.

Hsu said the rebound stands a good chance of pushing the benchmark index to beyond 9,200 points so long as turnover does not expand too dramatically.

A hasty expansion in volumes may result in investors seeking to recover previous losses, he said.

TSMC was up 0.90 twd at 62.60 and UMC was up 0.55 twd or 2.91 pct at 19.45,

TSMC said its board has approved repurchase of up to 3.03 pct of its shares outstanding from the open market for a maximum of 1.5 bln usd, or about 48.50 bln twd.

The buyback plan was devised as part of an agreement the company made with Royal Philips Electronics NV in March for the latter to dispose of its holding in TSMC in an orderly manner.

TSMC plans to buy back up to 800 mln common shares at prices ranging from 43.20 twd to 94.20 twd per share between Nov 14, 2007 and Jan 13, 2008.

Philips intends to sell up to 1.5 bln usd worth of TSMC shares on the open market during the period

Among other stocks, China Steel was up 0.95 twd or 2.18 pct at 44.50 after saying that it sees room for a hike in domestic basic prices of its key steel products in the first quarter of 2008.

(1 usd = 32.30 twd)

philip.wang@afxasia.com

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