Taiwan share prices are expected to continue firmer this week, building on the positive tone created by President Chen Shui-bian's more conciliatory stand on relations with China, dealers said. They said increased foreign investor interest has also boosted sentiment, encouraging local retail and institutional investors to return to the bourse which had been boxed in for most of the past five months. "President Chen's statement after his meeting with opposition leader James Soong Thursday led investors to expect a calmer domestic political scene and improved ties with the mainland," said Huang Hsun-hui, analyst at Capital Securities.

In his talks with Soong, chairman of the People First Party, Chen reaffirmed his pledge not to declare independence nor change Taiwan's official name - the Republic of China - in his latest peace overture to Beijing.

Beijing reacted positively on Friday by urging Taipei to open discussions on the launch of direct chargo flights and more charter passenger services between the two longstanding rivals.

For the week to February 25, the weighted index gained 92.40 points or 1.51 percent to 6,207.83 points compared with the 1.34 percent advance the previous week.

Average trading volume rose to 93.18 billion Taiwan dollars (3.00 billion US) from 84.32 billion dollars last week.

"Electronic heavyweights such as Taiwan Semiconductor Manufacturing Co and United Microelectronics are expected to lead the next wave of gains while stocks of LCD and DRAM makers are also key targets for investors," Huang said.

Transport companies should also attract strong support amid hopes for better ties with China, he added.

A key issue in the improved atmosphere will be the controversial "anti-secession" law, to be discussed by China's National People's Congress scheduled in early March, but the impact could be limited, Huang said.

Copyright Agence France-Presse, 2005