Taiwan stocks little changed

Taiwan shares ended flat on Thursday, even as Cathay Financial and other financial firms rose on investor enthusiasm amid huge foreign fund flows into the Taiwan market. The main TAIEX share index edged down 0.09 percent to close at 7,686.52 points, pulling back a touch from its highest close in more than six years on Wednesday.
The financial sub-index rose 1.34 percent, while the electronics sub-index slipped 0.45 percent. The market has staged a strong rally since mid-July on heavy fund inflows by foreign investors. "What we have seen is a liquidity-driven rally boosted by foreign investors. They like Taiwan shares due to lower P/E multiples than those in Hong Kong and Shanghai," said David Dong of Uni-President Asset Management, which oversees T$60 billion (US $1.86 billion) in client assets.
"Foreign investors will extend their buying throughout December." Net purchases by foreign investors have reached T$38 billion so far this month, compared with T$113.4 billion for the whole month of November and T$58.1 billion for October, according to the Taiwan Stock Exchange.
On the shipping front, The transport sub-index slipped 0.37 percent after the Commercial Times newspaper reported that the world's top container shipper, A.P. Moeller-Maersk will cut its cargo volume to and from Taiwan by 15 percent.
Powerchip Semiconductor Corp, Taiwan's top DRAM memory chip maker, dropped 1.6 percent, erasing gains at the opening, despite reports during trade that it and Japanese rival Elpida Memory Inc would build a new DRAM factory.
After the market close, Powerchip announced it would form a T$40 billion ($1.24 billion) chip-making joint venture in Taiwan with Elpida. The joint venture's main asset will be a plant making 12-inch wafers in the central Taiwan city of Taichung, Powerchip vice president Peter Ting told Reuters ahead of a media briefing to announce the deal. Index heavyweight Cathay Financial, the island's top financial holding company, rose 3.96 percent. State-run Taiwan Cooperative Bank was up 2.05 percent.
First Financial, Taiwan's number-four financial holding firm, rose 2.3 percent. First Financial said on Wednesday that its banking arm expected to post a profit of T$13.8 billion to T$14 billion in 2007, compared with a profit of T$10.7 billion for this year's first 10 months.