TAIEX rises 5 percent as chipmakers edge upward

The TAIEX posted its biggest gain in two weeks yesterday on expectations electronic parts makers will forecast better sales in the new year. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) led gains.

The TAIEX rose 208.08 points, or 4 percent, to reach 5,372.81, boosting the index 5.1 percent over the last two days. Within the index, 496 stocks rose and 32 fell. The total value of shares traded yesterday was NT$121.1 billion (US$3.5 billion), up 39 percent from Monday.

"People expect companies to say they will get better orders next year," said Tu Kuei-shiong, who manages NT$200 million (US$5.7 million) in Taiwan stocks at Lian-Shan Investment Management Co in Taipei.

"Those that took money out of the market at 5,600 are now trying to buy back shares because they expect stocks to move up."

Tu has been buying shares such as computer maker Acer Inc (宏電) when the key index has dropped.

The index has gained 13 percent in the year to date and 56 percent since its year low Oct. 3.

Chipmaker TSMC rose NT$2.5, or 3.1 percent, to NT$83.5. Last week, TSMC chairman Morris Chang (張忠謀) said he expects the global semiconductor industry to recovery more fully in the second-half of next year after contracting this year. The company is the biggest made-to-order chipmaker.

United Microelectronics Corp (UMC, 聯電), the second-biggest made-to-order chipmaker, rose NT$1, or 2.1 percent, to NT$48.2.

Computer and parts makers rose after the Market Intelligence Center (市場情報中心) reported that Taiwan's share of global desktop computer production will rise 1 percent next year over this year as more companies from Japan and the US seek a cheaper production base.

Taiwan's desktop computer makers' share of global production are forecast to rise to 25 percent next year compared to 24 percent this year and are predicted to increase to 26 percent in 2003, the center said in a statement.

Acer Inc (宏電) rose NT$1.1, or 6.6 percent, to NT$17.9. Asustek Computer Inc (華碩電腦), the nation's biggest computer motherboard maker, rose NT$7.5, or 5.2 percent, to NT$153. First International Computer Inc (大眾電腦), a desktop computer maker, rose NT$0.75, or 6.6 percent, to NT$12.15.

Banks gained on expectations that the central bank will lower interest rates again if the US Federal Reserve cuts its key rate. Taiwan policy makers are concerned that any cut at present may attract some money out of Taiwan.

Another rate cut could help companies in Taiwan better meet their debt obligations to the banks and lower the financial institutions' non-performing loans.

Chinatrust Commercial Bank (中國信託銀行), the second-biggest lender by market value, rose NT$0.8, or 4 percent, to NT$20.9. Chang Hwa Commercial Bank (彰化銀行), the second-biggest listed lender by assets, rose NT$0.65, or 4.7 percent, to NT$14.45. First Commercial Bank (第一銀行), the biggest listed lender by assets, rose NT$1.3, or 6.6 percent, to NT$20.9.

Hon Hai Precision Industry Co (鴻海精密) rose NT$8, or 5.4 percent, to NT$156. The company, which makes everything in a computer except chips, said it plans to invest US$57 million in China unit Foxconn Electronics Inc to expand production to tap the growing Chinese economy.