By WSJ Staff
Taiwan shares were flat at 8817.07 Friday afternoon, erasing earlier gains, as profit-taking in behemoth TSMC offset gains in financial stocks spurred by Beijing’s approval for five Taiwanese banks to begin China operations.
China’s banking regulator said Friday it approved the Chinese branches of five Taiwan banks to begin operations in China: the Shanghai branches of First Commercial Bank, Cathay Financial Holding Co. unit Cathay United Bank Ltd., and Land Bank of Taiwan Co., as well as the Kunshan branch of Chang Hwa Commercial Bank Ltd. and the Suzhou branch of Taiwan Cooperative Bank.
Traders say the Taiex is set to continue to find firm support at 8800 and view its uptrend as intact, with 8900 remaining the immediate resistance as investors refrain from making big bets toward the year’s end.
SinoPac Securities analyst Jonathan Liao says liquidity, politics and GDP growth — but not corporate earnings — will likely drive the Taiex to 10,000 next year. He said the stock market has not overheated as the long-margin balance remains low at around 1.3% of the Taiex’s total market value.
He expects the trade pact with China to continue to boost Taiwan’s GDP. TSMC was down 1.2% at NT$72 and HTC was off 1.8% at NT$856, but Cathay Financial was up 1% at NT$46.85, while Chang Hwa rose 0.2% to NT$23.70 and Taiwan Cooperative Bank was up 0.2% at NT$23.30.
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