Taiwan shares may see continued upside next week

2007-12-28 02:03:31 AFP

TAIPEI, Dec 28, 2007 (AFP) - Taiwan share prices are expected to extend gains next week as political uncertainties eased after opposition presidential candidate Ma Ying-jeou was cleared of corruption charges, dealers said Friday.

Buying in conglomerates was likely to intensify Monday, the last trading session of 2007, as firms attempt to dress up their books, they said.

However, upside may be limited by concerns that the murder of Pakistani opposition leader Benazir Bhutto will threaten geopolitical security to boost oil prices and undermine the global economy, they added.

The weighted index is expected to move between 8,200 points and 8,500 points next week, dealers said.

For the week to December 28, the weighted index closed up 455.51 points or 5.74 percent at 8,396.95 after a 2.18 percent decline a week earlier.

Average daily turnover stood at 89.78 billion Taiwan dollars (2.76 billion US), compared with 112.16 billion dollars the previous week.

"The market is still in a technical rebound after recent heavy losses. Ma's ruling is expected to encourage more buying," Taiwan International Securities analyst Arch Shih said.

Shih said expected strong buying from business groups on Monday, in particular, is likely to boost share prices as they try to dress up their books.

"Such a practice has become a year-end ritual. It will help extend the current rebound," he said.

But a dealer with a local brokerage, who asked not to be named, said possible volatility on Wall Street after Bhutto's death may weigh on the market.

"The 8,500 point level represents a near-term technical hurdle before some consolidation. With the weighted index approaching that level, investors had better remain cautious," he said.