Taiwan stocks edged down 0.14 percent from a 5-1/2-year high on Friday as profit-taking kicked in late in day, but flat panel maker AU Optronics led some tech shares higher.
The benchmark TAIEX closed at 7,093.05 points, having earlier risen as high as 7,160.74, the strongest level since September 16, 2000. The measure, up 4.6 percent this week, has added 7.2 percent in the past three weeks amid signs of improving relations between China and Taiwan.
Among the most active, the electronics sub-index jumped 0.46 percent, and the banking and insurance sub-index dipped 0.65 percent. Trading surged to T$167.8 billion (US $5.2 billion), a level not seen since January 6. In spite of today's slight decline, fund managers remain bullish as they see Taiwan shares as cheap compared to others in the region.
"Taiwan shares are very attractive to foreign investors, as their PE is 13-15 times 2006 estimates," said Wu Shu-ting, a vice president of JF Asset Management, which looks after T$120 billion of clients' money. That compared to Thai shares, at about the same level, and Indian stocks, which trade at about 25 times, she said.
AU, the most active by value and second-most active by volume, closed unchanged after jumping as much as 4.1 percent on Friday. Its American Depository Receipts surged 9.14 percent overnight after Taiwan's number one flat panel maker said it swung to profit in the first quarter.
"AU's earnings topped expectations, sparking hopes this year's Q2 will not be as slow for tech companies as it has been," Wu said.
Foreign investors have bought a net T$122.4 billion of Taiwan shares so far this month, the most net monthly purchase since December 2005.
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