Asia Watch

By THIS IS MONEY
Updated:

 

RISING prices had buyers queuing for Asia's leading semiconductor manufacturers today. Sluggish trading in other sectors limited overall gains despite last month's rise in US manufacturing output to its highest since October 2000.

With Japanese markets still closed for the New Year holidays, investors were left to go bargain-hunting elsewhere in the region. The chip craze spread from South Korea to Taiwan, Singapore, Malaysia and Thailand as investors sought out stocks that had been left behind in the recent rally.

Buying was buoyed by further evidence that semiconductor sales and prices bottomed out in the closing months of last year. The US-based Semiconductor Industry Association re-ported yesterday that global sales climbed 1.6% to $10.6bn (£7.3bn) in November.

The association also stood by earlier predictions that fourth-quarter sales of semiconductors would be 4.7% ahead of the previous three months.

Prices have matched the increase in demand, and a basic 128 D-ram chip is now selling for 50% more than in early November.

Warnings from US analysts that share prices may be running ahead of reason failed to deter most investors, although South Korean's tech-heavy market pared back earlier gains and failed to match yesterday's 4.5% surge.

Turnover was dominated by a massive 275m shares in Hynix Semiconductor, which ended the morning up 2.52%, after opening with a 5%-plus gain. Demand was boosted by a 30% increase in the price of the company's made-tomeasure microchips.

Other stocks eased as some investors judged that the Kospi's recent startling performance had moved into profit-taking territory, and the index rose a modest 4.66 points to 729.61.

Taiwan chipmakers, which have gained more than 30% since Christmas Eve, resumed their climb, but the pace slowed through the morning, and some selected selling left the Weighted Average down 73.73 points at 5526.32.

The most active stock in Hong Kong was telecommunications group Pacific Century Cyberworks, which rallied more than 5% on plans to revamp its Network of the World internet site, which is expected to result in job losses at its London studios.

Analysts believe that reality is now setting in at the company, after its stock became Hong Kong's worst performer last year.

HSBC Holdings continued to recover after a recent sell-off, and the Hang Seng index gained 68.18 points to 11,419.03. Singapore stocks reached their highest levels in a month, led by technology counters, and the Straits Times index gained 21.41 points to 1647.10. In contrast, old-economy blues took Australia's All Ordinaries down 26 points to 3358.5.

Falling copper prices hit stocks such as BHP Billiton and Rio Tinto, while financial services group AMP slid heavily after warning that investment income would be down for last year.

Buying of Malaysian technology stocks took the Kuala Lumpur Composite index up 2.97 points to 685.80, Thailand's SET index added 4.87 points to 310.06, but the Jakarta Composite drifted down 3.41 points to 380.05.

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