Taiwan stocks extend winning streak

Taiwan stocks rose 1.32 percent on Wednesday to a more than two-month closing high, with smartphone maker HTC leading gains after the company posted a 2008 net profit that was better than analysts had expected. The main TAIEX share index ended 62.58 points higher at 4,789.84, its strongest close since November 5, 2008.
The market has now risen more than 7 percent since December 29, notching up a five-session winning streak. Turnover was moderate at T$97 billion ($2.9 billion), up from T$81 billion a day earlier, as foreign funds gradually returned to the domestic market after pulling out amid a world-wide financial crisis last year. "Foreign investors are buying back local stocks as movement in US stocks stabilises," said Tu Jin-lung, chairman of Grand Cathay Investment Services.
Tu expected the market to test as high as 5,000 points before the Lunar New Year holiday later this month. Since December 1, foreign funds have pumped a net T$25 billion into Taiwan's stock market, reversing major outflows for most of the year.
Shares of HTC Corp, the second-most active share by turnover, jumped 2.06 percent to T$347, after the firm posted a 0.9 percent fall in 2008 net profit from the prior year on Tuesday, beating analysts' expectations. "Even though HTC's profit fell, the market had pretty much priced in all bad news," said Tu, adding that HTC shares had a good chance of rising to T$500 this year.
Taiwan Semiconductor Manufacturing Co, the world's top contract chip maker, fell 2.3 percent, after a newspaper report on Wednesday quoted J.P. Morgan's technology research head as saying the chip maker's utilisation rate could fall to as low as 30 percent in the first quarter.
The semiconductor sub-index gained 0.39 percent, while the electronics sub-index rose 0.97 percent. DRAM shares were mixed after Nanya Technology said on Wednesday, it planned to raise the contract prices of its chips, but that it was too early to say demand would pick up significantly.
Nanya Technology rose 1.25 percent but Powerchip, Taiwan's top DRAM maker, fell 2.0 percent and ProMOS lost 6.25 percent. A local newspaper reported that capital expenditure at global DRAM chip makers will fall 40-50 percent in 2009, as the industry grapples with a supply glut and falling prices.