HONG KONG -- Taiwan's Formosa Plastics rallied on Friday for the first time in four days on expectations that U.S. President-elect Donald Trump's economic policies will benefit the company's planned expansion of a U.S. plant.
At one point, shares rose 1.70 New Taiwan dollars, or 1.91%, to NT$90.50. The company's stock closed the day at NT$89.40.
On Friday, Taiwanese media, including the online edition of the Economic Daily News, reported that the country's largest chemical manufacturer plans to expand its plant in the U.S. state of Texas.
Along with expectations for increased production, investors believe Trump will implement policies favorable to the company's business. Formosa Plastics executives have previously said the new administration's policies will work to the advantage of its U.S. subsidiary.
According to the reports, Formosa Plastics plans to invest $3.3 billion to construct a third facility at the plant. The new facility is scheduled for completion between July and September 2018, with full operations starting in 2019. Output in the initial year of operation is expected to reach $2.8 billion, the reports said.
According to the Economic Daily News, Formosa Plastics executives cited Trump's nomination of former Texas Governor Rick Perry as secretary of the U.S. Department of Energy as the major reason for the expansion plans. The company has a good relationship with Perry.
Formosa Plastics anticipates positive effects on the development of the chemical industry in Texas, hence the expansion plan.
In addition, Trump has promised fiscal stimulus measures including massive tax cuts.