Asian Stocks: Taiwan's TWSE Has Biggest Gain Since October 2002
March 29 (Bloomberg) -- Taiwan's TWSE Index had its biggest gain since October 2002 after President Chen Shui-bian agreed to a recount to settle his disputed election.
The TWSE rose 5.6 percent to 6474.11 at the 1:30 p.m. close in Taipei. It was the benchmark's biggest jump since Oct. 15, 2002, recouping more than half of last week's 10 percent loss. Taiwan Semiconductor Manufacturing Co. and Cathay Financial Holding Co. led gains.
``A speedy recount is the best solution to end the political deadlock,'' said Tom Fu, who helps manage $4.5 billion at Prudential Securities Investment Trust Co. in Taipei. ``That will allow investors to refocus on market fundamentals.''
Elsewhere, Japan's Nikkei 225 Stock Average shed 0.5 percent to 11,718.24 after the yen strengthened against the dollar on a London-based Times newspaper report saying Japan's policy of selling yen ``has officially come to an end.'' Kyocera Corp. fell.
Thailand's SET index slid 1.8 percent, the biggest drop in Asian stock benchmarks, on concern violence may be spreading in the Muslim-dominated south after a bomb blast on Saturday injured tourists. PTT Pcl, the state-controlled energy company, declined.
The MSCI Asia-Pacific Index, which tracks the performance of 856 stocks in 14 countries, added 0.3 percent to 95.55. Benchmarks in South Korea and New Zealand rose, while all other indexes in Asia apart from Japan's Topix index fell.
Peaceful Protests
Only three of the 642 stocks traded on the Taiwan Stock Exchange declined today. Taiwan Semiconductor, the island's biggest company by value, jumped 5.1 percent to NT$61.50.
Cathay Financial climbed 6.3 percent to NT$59. Shares of other financial shares such as First Financial Holding Co., Hua Nan Financial Holdings Co. and Chang Hwa Commercial Bank rose on optimism they may benefit from an election victory by Chen. Chen has been restructuring the industry by pressuring companies to cut off delinquent debtors and combine their businesses.
The government set up a NT$140 billion ($4.2 billion) fund to bail out bankrupt lenders and passed the Financial Holding Company Act in 2001, allowing lenders and insurers to merge.
``Financial industry reform is what most investors can agree on as a major achievement in Chen's first term,'' said Liu Juming, who helps manages $2 billion at Fuh-Wa Asset Management Co. ``The worse time is over for financial companies.''
Chen agreed to a recount of the presidential vote and the establishment of an independent task force to probe charges that he faked an assassination attempt to win votes. About 500,000 opposition protestors who rallied on Saturday dispersed peacefully. Chen had won by 30,000 of 13 million votes cast.
Until the election, Taiwan was Asia's second-best performing stock market this year. The TWSE had gained 16 percent, more than any other benchmark except those in China. Its March 4 peak of 7034.10 represented a 70 percent gain from last year's low, set on April 28.
Yen Gains
Kyocera, the world's largest maker of ceramic packaging used to protect finished microchips, declined 2.1 percent to 8,710 yen. Shin-Etsu Chemical Co., the world's biggest maker of polyvinyl chloride resin and silicon wafers, lost 2.3 percent to 4,350 yen.
Overseas sales at Kyocera and Shin-Etsu Chemical account for more than half of their revenue. Kyocera has gained more than a fifth this year, and Shin-Etsu has risen as much as 6 percent.
Japan no longer needs a weaker currency to bolster exports, the Times of London reported, citing unnamed employees at the Bank of Japan. The country's central bank will only sell yen to buy dollars when there is ``extraordinary volatility'' in the market, the newspaper said.
``The report on Japan's currency policy change has sparked concern over the potential threat from a strong yen,'' said Yoshihisa Okamoto, who helps manage the equivalent of $2.1 billion in assets at Fuji Investment Management Co. in Tokyo. ``It became a great excuse for some to lock in the recent gains'' in share prices.
The yen has gained 14 percent in the past 12 months against the dollar threatening to lower the value of exporters' overseas earnings. It recently traded at 105.54 a dollar.
Bomb Blast
Thailand's SET fell 12.13 to 653.12. The benchmark, which more than doubled last year, is the world's worst performer this year, dropping 15 percent in dollar terms.
PTT shed 3.4 percent to 141 baht. Advanced Info Service Pcl, Thailand's No. 1 mobile-phone company, fell 4.4 percent to 86.50 baht.
A blast Saturday night in a town on the Malaysian border packed with nightspots and karaoke bars injured 28 people, the first time attacks have targeted civilians or tourist districts, Agence France-Presse reported. Government Spokesman Jakrapob Penkair didn't confirm the number injured.
``We believe that the violence in the Southern provinces of Thailand is now a major concern for investors,'' DBS Vickers Securities (Thailand) Co. said in a note to clients. ``There is so far no indication that the government is able to control'' the violence.
Samsung Electronics
South Korea's Kospi index climbed 1.2 percent, led by Samsung Electronics Co. and LG Electronics Co., after Samsung Securities Co. raised its stock-price estimates for the two companies because of higher earnings prospects.
Samsung Electronics, the world's largest maker of computer- memory chips, climbed 1.8 percent to 555,000 won. Samsung Electronics's shares may rise as high as 730,000 won in the next six months, said Samsung Securities, which raised its share-price estimate by 10.6 percent.
LG Electronics, South Korea's second-largest electronics maker, gained 3 percent to 68,700 won. Samsung Securities said it raised its six-month stock-price estimate by 5.4 percent to 78,000 won, as the company's television sales will lift earnings.
Advanced Info Service Pcl (ADVANC TB)
Cathay Financial Holding Co. (2882 TT)
Kyocera Corp. (6971 JP)
LG Electronics Inc. (066570 KS)
PTT Pcl (PTT TB)
Samsung Electronics Co. (005930 KS)
Shin-Etsu Chemical Co. (4063 JP)
Taiwan Semiconductor Manufacturing Co. (2330 TT)
To contact the reporter on this story:
George Hsu in Taipei at georgehsu@bloomberg.net; Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.
To contact the editor of this story:
Teo Chian Wei at cwteo@bloomberg.net.
Last Updated: March 29, 2004 02:39 EST
