Taiwan stocks end flat

Taiwan stocks ended flat on Wednesday as shares of chipmaker TSMC were unchanged after its share buyback plan, while major hotel operators outperformed on hopes of increasing numbers of Chinese tourists.
The main TAIEX share index inched down 0.02 percent, or 1.46 points, to 7,292.34, under pressure from weak US stocks as bank shares fell on fresh worries about the economy and further fallout from the mortgage crisis. Among major winners, hotel operators Leofoo Development Co and Formosa Hotel both rose by their 7 percent daily limit, lifting the tourism sub-index 5.82 percent.
Their gains came after local media reported tourism association executive Chang Shuo-lao had travelled to Beijing in a bid to boost the number of mainland tourists coming to Taiwan under a new agreement. In the tech sector, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's biggest contract chip maker, gave up early gains to end flat after its board approved a plan to buy back up to T$16.5 billion ($529 million) worth of its shares. However, Hon Hai Precision, a big electronics parts maker, rose 0.57 percent and the electronics sub-index was up 0.24 percent.
"Compared to other shares, tech stocks have better sales momentum in their current peak season, and their price to earnings ratio is quite low now," said Lin. Mutual fund giant Fidelity International said it had increased its exposure to Taiwan's battered technology sector, lured by its low valuations and often healthy dividend yields. Cathay Financial, the island's largest financial holding firm, dropped 1.24 percent, dragging the financial sub-index 0.98 percent lower.
"The outlook for financial shares remains to be seen, and will depend on any further fallout of the US mortgage crisis," said Kevin Chang, an analyst of Yuanta Securities. Mobile phone maker Compal Communications jumped 5.47 percent after media report the company could fare well next year after developing a smartphone using Microsoft software, with Palm and Motorola placing orders.