Taiwan stocks hit a fresh 5-1/2-year high on Monday as massive buying from foreign investors and a stronger local currency cheered investors. Cathay Financial Holding and other companies with large property portfolios companies led the way. A rally on Wall Street also helped the market stage an across-the-board rally, with AU Optronics leading some technology stocks higher.
The main stock index ended up 1.41 percent at 7,474.05 points, its highest since September 2000 and 13 percent higher than in early April, when the current rally began. The biggest winner was the construction sub-index, which rose 5.81 percent. Others included the financial sub-index, up 2.6 percent, and electronics, up 0.99 percent.
"Investors are happy because foreign investors just haven't been able to stop buying Taiwan stocks for almost a month now," said Sheng Yen, a fund manager at Franklin Templeton First Taiwan Securities Investment Trust.
"I think the market is getting kind of speculative at this point, but most investors still seem pretty optimistic," he said.
Foreign investors have bought a net T$215.6 billion (US $6.9 billion) of Taiwan shares in the past five weeks, the most since December 2005, when their net purchase was T$238.7 billion. The Taiwan dollar rose to its highest in more than 10 months on Monday after weaker-than-forecast US jobs growth cut expectations of more US interest rate rises.
Stocks backed by large property portfolios rose on investor hopes a stronger Taiwan dollar would boost their values. Cathay Financial, Taiwan's largest financial holding firm with assets of T$3.7 trillion (US $118 billion), closed 3.05 percent higher.
Cathay Construction, Taiwan's largest real estate developer and part of Cathay Financial, soared by the 7 percent daily limit. Hung Sheng Construction also finished up 7 percent. AU, the world's number-three flat panel maker, gained 0.92 percent after the Nasdaq finished up 0.8 percent. Taiwan Semiconductor Manufacturing Co, the world's top contract chip maker, added 1.31 percent.
Vanguard International Semiconductor surged 7 percent to a one-week high. TSMC and the government's Development Fund, the two largest shareholders of Vanguard, have jointly nominated former Finance Ministry Lin Chuan as Vanguard's chairman to upgrade the corporate governance.
Hon Hai Precision, which makes electronic gear for clients like Hewlett-Packard, rose 0.87 percent after slipping 1.31 percent earlier in the day. Hon Hai said its chairman planned to sell 7 million of his shares.