Taiwan’s shares rose, driving the benchmark index up the most in 11 months, after Finance Minister Chang Sheng-ford said government-controlled funds should buy equities.
The benchmark Taiex index closed 3.1 percent higher at 7,326.01, the biggest advance since Dec. 21. Formosa Petrochemical Corp. (6505) surged the most in 13 months and Taiwan Semiconductor Manufacturing Co. (2330), which has the biggest weighting on the index, jumped to a record.
State-controlled funds and banks that are partially owned by the government should buy local stocks at lows, the Central News Agency cited Chang as saying yesterday. The index fell to 7,088.49 on Nov. 21, the lowest level since July 26. Taiex trading volumes were 49 percent higher than the 30-day average, while the gauge’s 30-day volatility rose to 14.7, the highest level since Aug. 22, data compiled by Bloomberg show.
“The market had been performing very badly recently and investors are catching onto any cues to enter the market,” Bryan Chen, a fund manager at Taipei-based Union Securities Investment Trust Co., said in a phone interview today.
The National Stabilization Fund, created in March 2000 to provide support when markets are threatened by non-economic factors, isn’t intervening in the market at this stage, Deputy Finance Minister Tseng Ming-chung said by phone in Taipei today.
Taiwan’s Cabinet plans to propose stock market-stimulus measures in a month, Taipei-based Unique TV reported, citing Cabinet spokeswoman Cheng Li-wun. Cheng didn’t pick up calls to her office and her mobile phone.
Formosa Petrochemical climbed 6 percent to NT$84.50, the biggest gain since Oct. 24, 2011. Taiwan Semiconductor added 4.6 percent to a record NT$95.50.
Zhen Ding Technology Holding Ltd. (4958), which designs and makes circuit boards, rose by the daily 7 percent limit to NT$78. The stock posted the biggest gain in the Taiex as concern eased that government funds will halt investment in companies with lower market capitalization.
SinoPac Securities Corp. raised its share-price estimate on Zhen Ding to NT$108 from NT$104 today, saying the recent decline was an “overreaction” to earlier reports that government funds would be banned from investing in smaller and overseas- incorporated companies. Zhen Ding slumped 11 percent in the week to Nov. 21.
The island’s statistics bureau is scheduled to report revised third-quarter gross domestic product data at 4:30 p.m. in Taipei today. Taiwan’s economy probably expanded 1 percent from the previous year, according to the median estimate of 13 economists surveyed by Bloomberg. The government reported a preliminary growth rate of 1.02 percent on Oct. 31.
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