Taipei shares outlook - Higher on technical rebound after Wall St gains

Taipei shares outlook - Higher on technical rebound after Wall St gains

	Published : Mon, 15 Oct 2007 01:25 By : Agencies Print this Story

TAIPEI (XFN-ASIA) - Share prices are expected to open higher on a technical rebound, with Wall Street's gains Friday expected to offset concerns over the China market, dealers said.

The local bourse may take its lead from firmer US stocks on M&A activity, stronger-than-expected retail sales last month and a jump in wholesale prices in September.

Local firms with operations in the mainland will look to China stocks for direction after a decision by the People's Bank of China to raise the reserve requirement for commercial banks by 0.5 percentage points to 13 pct, to take effect from Oct 25.

On Friday, the weighted index closed down 201.20 points or 2.07 pct at 9,496.47, on turnover of 153.32 bln twd.

Foreign investors were net sellers of shares worth 9.34 bln twd, local investment trusts were net buyers of shares worth 1.62 bln twd; while brokers were net sellers of shares worth 725.42 mln twd

Alex Huang, an assistant vice president at Mega International Investment Services Co Ltd, said Taipei stocks may stage a comeback after sharp declines in the previous session.

'That drastic correction should pave the way for a technical bounce, with the Wall Street lead serving as a positive driver as well.'

China stocks' moves today amid reserve requirement hikes could set a tone for Taiwanese firms with mainland presence.

He said investors are also awaiting major developments from the Chinese Communist Party's five-yearly Congress this week.

Also in focus today will be liquid crystal display panel makers, amid strong demand for panels.

Members of the Formosa Plastics group could also be in the spotlight after a report that Formosa Plastics Corp's proposed refinery project in Ningbo, in eastern China's Zhejiang province, has been ordered halted by Chinese authorities, while a proposed ethylene plant with capacity of 1.2 mln tons will now be controlled by China National Petroleum Corp instead of Formosa.

'That group is a heavyweight, we will see how its member stocks react to such a lead,' Huang said.

(1 usd = 32.60 twd)

adela.lin@afxasia.com

xfnal/xfntm

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