Taipei shares close at year's high on Wall St rise, UMC ruling

Taipei shares close at year's high on Wall St rise, UMC ruling - UPDATE

	Published : Mon, 29 Oct 2007 07:21 By : Agencies Print this Story

TAIPEI (XFN-ASIA) - Share prices closed sharply higher, with the weighted index breaking this year's record, as sentiment was bolstered by a combination of Wall Street's rally on Friday, gains in the local currency, and a favorable legal ruling for United Microelectronics Corp.

The Hsinchu District Court on Friday cleared three UMC executives, including honorary chairman Robert Tsao, of charges on breach of trust and faulty accounting in relation to Chinese chip maker HeJian Technology (Suzhou) Co Ltd.

The court also cleared UMC honorary vice chairman John Hsuan and TC Cheng, president of an investment arm wholly owned by UMC, of similar charges for their alleged roles in the company's offer of assistance in the establishment of the Chinese company, in defiance of local regulations.

The weighted index closed up 178.37 points or 1.85 pct at 9,809.88, after moving in a range between 9,735.43 and 9,822.37.

The index surpassed the year's high of 9,807 points set on July 26.

Turnover was at 180.85 bln twd.

The Taiwan dollar closed the morning at 32.368/dollar, compared with the previous close of 32.465.

Risers led decliners 1,319 to 726, with 245 stocks unchanged.

A total of 53 stocks closed limit-up and seven limit-down.

The heavily weighted financial and electronics sectors were up 2.70 pct and 1.84 pct, respectively.

The construction sector was up 4.16 pct, textile up 2.61 pct, food up 1.62 pct, plastics/petrochemical up 1.22 pct, paper up 0.97 pct and cement up 0.34 pct.

On Friday, the Dow Jones industrial average rose 134.78 points or 0.99 pct to 13,806.70, largely due to strong earnings from Microsoft Corp and an optimistic outlook for Countrywide Financial Corp.

SinoPac Securities assistant vice president Alvin Teng said the Taipei bourse's gains may have paled in comparison with the record-setting performance this morning of other markets in the region, such as those in Hong Kong and Seoul, but he said more capital inflow may be expected in the near term due to the strength of the Taiwan dollar.

'Our rally did not stand out in the regional bull run inspired by Wall Street's upturn. We remained a laggard (even) as we attempted (successfully) to set a new high for the year, while markets like Hong Kong and Seoul continued to break their all-time records,' Teng said.

However, he added that the fact that Taiwan is still trying to catch up with the major markets in the region could be a positive factor as local stocks could attract laggard interest and capital inflow, with the help of a strong local currency.

But he also cautioned that after breaching the year's record, the weighted index may start meeting resistance as it approaches the next benchmark of 10,000 points.

'Some profit-taking above 9,807 points should be hardly surprising,' he said.

UMC closed up 0.85 twd or 4.05 pct at 21.85 and TSMC was up 2.30 twd or 3.73 pct at 63.90.

Acer rose 4.90 twd or 6.69 pct to 78.10, extending recent gains driven by its solid nine months to September earnings, as investors cheered the company's favorable outlook for shipments of personal computers for the fourth quarter of the year and beyond.

Hon Hai was up 5.00 twd or 2.04 pct at 250.00. On Saturday, its unit Foxconn (Far East) Ltd spent 239.30 mln hkd for a 0.347 pct stake in China's Alibaba.com Ltd.

Chi Mei Optoelectronics advanced 1.30 twd or 3.02 pct to 44.40 on a report that the Chi Mei group is expecting 50 pct growth in shipments of CHIMEI-branded LCD TVs in 2008.

AU Optronics jumped 3.30 twd or 5.02 pct to 69.00, Innolux surged 9.00 twd or 5.90 pct to 161.50 and Chunghwa Picture rose 0.25 twd or 2.09 pct to 12.20.

Yageo climbed 0.30 twd or 2.43 pct to 12.65 after announcing further expansion of its manufacturing lines and sales channels in China.

Cathay Financial gained 2.90 twd or 3.60 pct to 83.40 and First Financial rallied 0.90 twd or 3.63 pct to 25.70.

(1 usd = 32.40 twd)

philip.wang@afxasia.com

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Taipei shares close at year's high on Wall St rise, UMC ruling - UPDATE