TAIPEI — Shares in Taiwan closed higher in a quiet session Friday with turnover continuing to dip to a new low this year, as many foreign institutional investors were away for the Christmas vacation, dealers said.
The gains on the broader market were largely led by select large-cap stocks in both the electronics and old economy sectors on futures-led buying as foreign institutional investors still held a large chunk of the long position contracts in the futures market, they said.
The weighted index on the Taiwan Stock Exchange ended up 38.92 points, or 0.47 percent, at 8,363.28, after moving between 8,320.10 and 8,364.30, on turnover of NT$40 billion (US$1.22 billion).
The market opened 4.58 points higher and trended even higher on follow-through buying from a session earlier with market heavyweights in focus, and the strength continued into the end of the session, helping the index close near the day’s high, dealers said. Foreign Investors Absent “With many foreign institutional investors absent from the trading floor during the Christmas season, the local main board appeared very quiet and turnover continued to shrink,” Hua Na Securities analyst Kevin Su said.
According to Su, Friday’s trading volume was even lower than the NT$55.8 billion recorded on Christmas Day last year. “I think that market sentiment has been haunted by political uncertainty ahead of the Jan. 16 presidential election, thus many investors appeared reluctant to chase prices for now.”
Su said despite the thin turnover, the index still closed above the closing level of the previous session thanks to buying in select large-cap stocks. “To my knowledge, foreign institutional investors built more than 20,000 net long position contracts in the futures market as of Thursday. Futures-led buying gave a boost to the spot market today,” Su said. Electronics Sector The bellwether electronics sector closed up 0.58 percent and the semiconductor sub-index ended up 0.85 percent, with Advanced Semiconductor Engineering Inc. (日月光), the world’s largest integrated circuit packaging and testing firm, up 1.2 percent to close at NT$38.45.
Among other IC stocks, contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, gained 0.7 percent to end at NT$143.00, and dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. (南亞科) rose 6.5 percent to close at NT$50.80.
Smartphone vendor HTC Corp. (宏達電) rose 1.8 percent to end at NT$75.50 after the company announced it has teamed up with German auto maker Volkswagen to tap into the fast-growing Internet of Vehicles market. Old Economy Sector In the old economy sector, Nan Ya Plastics Corp. (南亞塑) rose 1.4 percent to close at NT$58.80, and food maker Uni-President Enterprises Corp. (統一) gained 0.9 percent to end at NT$55.70.
Among the gaining financial stocks, E. Sun Financial Holding Co. (玉山金) rose 0.8 percent to close at NT$19.25, and Yuanta Financial Holding Co. (元大金) also added 0.8 percent to end at NT$12.15. “Before foreign institutional investors return to the trading floor after the New Year holiday, it is possible that the local equity market will continue to move in a narrow range on thin turnover,” Su said. “So, it is unlikely for the index to close above the 8,400 points any time soon.”