TW Stock 28 Oct

14:47 28Oct2008 RTRS-Taiwan stocks rebound from 5-yr low; hotels rise

* Taiwan stocks swing 6 percent into the black
* Tourism shares up before visit by top Chinese envoy
* Electronics gain despite bleak outlook

(Updates comments, hot stocks; Adds details)
By Kelvin Soh
TAIPEI, Oct 28 (Reuters) - Taiwan stocks rebounded from a
five-year low to close 0.76 percent higher on Tuesday, mirroring
similar comebacks in regional bourses and pulled up by tourism
shares ahead of an upcoming visit by a top Chinese envoy.
The main TAIEX share index <.TWII> closed 33.10 points higher
at 4,399.97, bouncing back after shedding more than 5 percent in
early trading and hitting an over 5-year intraday low of
4,110.09.
"We're seeing Hong Kong lead the way today," said Michael On,
managing director of Beyond Asset Management. "There are some
very attractive stock valuations in the Taiwan market and this is
probably why investors are buying."
However, even after taking into consideration Tuesday's rise,
the index has lost more than 27 percent of its value since Sep.
15, when U.S. investment bank Lehman Brothers filed for
bankruptcy.
The broader tourism sub-index <.THOI> climbed 5.77 percent,
led by major hospitality groups Formosa Hotel <2707.TW> and
Leofood Development <2705.TW>, both of which went 7 percent limit
up.
Many investors expect a boom in mainland tourists following a
visit to the self-ruled island by the mainland's top envoy Chen
Yunlin next week, analysts said.
Chen is expected to visit Taiwan for his first time from Nov.
3-7 to discuss new direct flights and food safety. [ID:nTP378000]
Many of the island's export-reliant technology shares also
clawed back from early losses to record gains.
Tech bellwether TSMC <2330.TW>, the world's top contract
chip maker, was up 3.66 percent, reversing some of its losses
recorded after four consecutive days of negative trade.
Downstream tech companies also shrugged off earlier fears of
a bleak outlook ahead of the critical year-end holiday season.
Hon Hai <2317.TW>, Taiwan's top electronic parts maker, saw
its share price swing 10 percent during the day to close 3.27
percent higher.
PC makers Acer <2353.TW> and Asustek <2357.TW>, both of which
had lost more than 6 percent in morning trading, also reversed
course to end the session up about 1 percent.
The broader electronics sub-index <.TELI> and semiconductor
sub-index <.TSII> ended up 1.39 percent and 2.69 percent,
respectively.
Taishin Financial <2887.TW> and Shin Kong Financial <2888.TW>
rose by the daily maximum limit, helping the banking and
insurance sub-index <.TFNI> pare earlier losses to close 0.41
percent lower.
"Taishin and Shin Kong climbed because their prices have
fallen a lot," said Nora Hou of Deutsche Securities. "They are
both trading at valuations below their industry average, which is
possibly why investors are buying into them."
"I would however not recommend buying these shares now
because the market would continue to be volatile," she said.