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Largan shares up; Taiex boosted by ECB policy

Largan shares up; Taiex boosted by ECB policy

Taipei, Jan. 23 (CNA) Shares of Largan Precision Co. (???), one of Taiwan's leading smartphone camera lens suppliers, steamed ahead Friday morning as investors remained upbeat over its prospects, dealers said. Largan, the most expensive stock in Taiwan's market, got a boost from foreign institutional buying as foreign funds kept moving into Taiwan, especially after the European Central Bank (ECB) announced a American-style quantitative easing program overnight, they said. Along with other blue chips, such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the broader market moved higher on ample liquidity in the wake of the ECB's announcement, they added. As of 11:19 a.m., shares of Largan had added 3.05 percent to NT$2,705 (US$86.17), with 1.38 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.97 percent at 9,460.41. Among other gaining market heavyweights, TSMC, the most heavily weighted stock in the local market, had risen 3.21 percent to NT$144.50, and Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, had risen 1.87 percent to NT$87.10 as of 11:19 a.m. "Judging from the current buying in Largan and other blue chips, I suspect that foreign institutional investors have remained on the buy side," MasterLink Securities analyst Tom Tang said. "After the ECB announced overnight that it would pump funds into the market, foreign institutional investors have intensified their efforts to increase their holdings in their global portfolios, including Taiwan shares," Tang said. The ECB said it will purchase 60 billion euros (US$68.19 billion) worth of bonds a month as part of its QE program, higher than earlier market expectations of 50 billion euros. "Largan has been one of the favorites of foreign institutional investors because the company has sound fundamentals. It was no surprise that the stock attracted strong buying soon after the local bourse opened, and led other market heavyweights higher as well," Tang said. Before Friday, Tang said, foreign institutional investors had been net buyers of Largan shares for 12 consecutive sessions and had bought a net 3 million Largan shares during that time. Several foreign brokerages have projected a target price of more than NT$3,000 for Largan shares, with Macquarie Securities' target price of NT$3,120 the highest so far. Tang said that if foreign buying continues, the stock would likely hit NT$3,000 soon. "Largan's bottom line appears very solid after the company reported its 2014 results. Investors have high hopes that the company's profitability will further strengthen this year due to an increase in shipments to Apple," Tang said. In 2014, Largan posted NT$144.85 in earnings per share, sharply up from NT$71.64 in EPS recorded in 2013. Some market analysts expect the company's EPS to hit around NT$168 this year. Tang said the strong interest in Largan shares also reflected expectations that the company will issue a high cash dividend of around NT$60 for 2014 based on the strong EPS. (By Han Ting-ting and Frances Huang)


Updated : 2021-09-18 05:41 GMT+08:00