Taiwan stocks rose 1.41 percent to a 25-month high on Friday, as signs of improving cross-strait ties bolstered investor hopes of increasing demand for hotels and real estate developers like Cathay Construction.
Adding to the gains, High Tech Computer and other companies in the cellphone business companies jumped amid expectations of a promising outlook.
Sony Ericsson posted a quarterly pretax earnings that beat market expectations and gave an upbeat 2006 forecast for the global mobile phone market.
The benchmark TAIEX closed at 6,952.54 points, its highest since March 9, 2004, when the index was at 6,973.90. Among the winners, the tourism sub-index ended up 2.53 percent and the construction sub-index was up 1.93 percent.
"Investors were cheered as the rally seems like a non-stop one for now," said George Hou, president of JF Asset Management, with T$120 billion (US $3.69 billion) assets under management.
"The only two factors we see that could hurt the market are higher interest rates and oil prices. But they have been offset by the optimism of better relations between Taiwan and China." Shares worth T$118.8 billion (US $3.66 billion) changed hands, compared with T$130.8 billion a session earlier.
Taiwan's opposition Nationalist Party arrived in Beijing on Thursday with more than 100 politicians and business people for an economic forum with China's ruling Communist Party. That came just days after Taiwan's government said it may lift a ban on visits by Chinese tourists to the island.
Hotel and real estate stocks rose. Among the most active, Cathay Construction, Taiwan's top real estate developer, soared by the maximum daily 7 percent for a second day to T$18.90. Highwealth Construction rose 3.16 percent to T$32.60.
Shares related to mobile phones rallied. Smartphone maker High Tech topped the most active list by value and ended 1.88 percent higher at T$920. Largan Precision, one of the world's largest makers of lenses used in high-end phones, rose 3.24 percent to T$606.
Taishin Financial Holding Co finished up 1.85 percent at T$19.25 and state-run Chang Hwa Bank rose 1.05 percent to T$19.25. Taishin's Chief Financial Officer Carol Lai said Taishin planned to buy a further 10 percent stake in Chang Hwa for about T$11.8 billion, a move that would help Taishin become Taiwan's second-largest financial holding firm with total assets of T$2.4 trillion. BenQ Corp, Taiwan's largest maker of computer gear, gained 0.18 percent to T$27.40. BenQ is expected to swing to a quarterly loss, but analysts said the worst was over for company.
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