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Shares of Hong Kong-listed Taiwan companies rose sharply yesterday, with some hitting record highs on hopes of better cross-Straits relations.
Hotel operator Fujian Holdings led the rally with its shares jumping 38.46 percent to HK$0.90. Insurer Min Xin Holdings rose 16.67 percent to close at HK$4.55.
Fubon Bank (Hong Kong), which is trying to invest in a mainland bank, finished the day at HK$9.10, a 15.63 percent jump. Xiamen Port, a potential beneficiary of direct transport between the mainland and Taiwan, gained 9.66 percent to end at HK$2.61.
And snack maker Want Want (China) rose to a record high of HK$3.20, up 3.56 percent.
Some larger Taiwan-business stocks also posted gains. Athletic-shoes maker Yue Yuen inched up 1.46 percent to HK$24.25. Mobile-components maker Foxconn climbed 5.3 percent to HK$11.92.
Analysts said the rally was mainly driven by the news that former Kuomintang Chairman Lien Chan started his nine-day mainland trip yesterday.
Taiwan media reported that Lien will meet President Hu Jintao.
The visit came after Kuomintang's Ma Ying-jeou won the Taiwan "presidential" election in March, signaling an improvement in cross-Straits ties.
Analysts said Lien's visit boosted the hopes that three "direct links" will be realized.
Businesses across the Straits have dreamt of having direct transport, investment and postage between the mainland and Taiwan, rather than having to go through Hong Kong.
"Today's rally was mainly due to the disappearance of political uncertainty, as Ma has just announced the last group of cabinet members," said Tony Yang, the investment banking manager at Capital Securities. "Therefore, a deregulation to allow Taiwan companies to invest more on the mainland is very likely underway."
Broad market
Energy and financial plays boosted Hong Kong shares yesterday, although poor earnings spurred profit taking in heavyweights China Life and Sinopec, in which market players were said to be eagerly awaiting any earnings.
The benchmark Hang Seng Index ended up 0.59 percent at 25,666.29 points.
The China Enterprises Index of Hong Kong-listed mainland companies, or H-shares, see-sawed between red and black during the day, and they ended down 0.18 percent at 14,196.66 after a drop in Shanghai.
"The market has an attitude of hold and wait," said Kenny Tang, associate director in the research department at Tung Tai Securities.
"The future contracts will expire, and investors are awaiting a decision on the US Fed interest rate, as well as more first-quarter results."
The Fed plans to announce its rate decision on Thursday. Earlier that day, the Commerce Department will release first-quarter data on the gross domestic product.
Chen Hong contributed to the story.
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