Taiwan exchange rises most in 18 years as China Mobile takes stake in Far EasTone
Far EasTone Telecommunications Co. (TPE:4904), Taiwan's third-largest telecoms company, surged to its 7 percent daily limit after China Mobile agreed to buy a 12 percent stake for NT$17.8 billion ($529 million).
The news caused Taiwan’s stock index to rise 6.7 percent (meaning almost all the s\exchanges 692 stocks rose to the upper limit) - the highest amount since the first island allowed mainland investment in the island in 1991. Taiwan’s Taiex Index, was already the world’s third-best performer this year.
In talks held in Nanjing on the mainlnd this Sunday (pictured), the mainland-based Association for Relations Across the Taiwan Straits (ARATS) and the Taiwan-based Straits Exchange Foundation (SEF) agreed to "actively encourage and promote mainland companies to conduct inspections and invest on the island".
Chinese mainland and Taiwan also signed agreements Sunday on launching regular flights across the Taiwan Straits, and boosting cooperation in finance and handling criminal proceedings.Ties between Taiwan and China have improved since President Ma Ying-jeou took office in May and dropped the confrontational stance of his predecessor, Chen Shui-bian.
Mainland China has attracted direct investments of USD48 billion from Taiwan since the of opening up reforms laucnhed 30 years ago.
Now, mainland investment in Taiwan, will help its crisis-perplexed economy. The Asia Development Bank has predicted that Taiwan's economy will contract 4 percent this year.
Shares of companies based in Xiamen, the city that lies opposite Taiwan, also advanced on the mainland today. Xiamen International Port（SZ:000905;HK:3378）surged 10 percent on Shenzhen and 12 percent on Hong Kong. Xiamen International Airport（SH:600897）advanced7.22 percent.
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