Financials fall on central-bank report

Stocks fell for the fourth day, led by Chinatrust Financial Holdings Co (中信金控) and Mega Financial Holding Co (兆豐金控), after a central bank research report said the financial market is too crowded.

Taiwan Semiconductor Man-ufacturing Co (台積電) advanced after National Semiconductor Corp of the US said it will give it more business.

"TSMC is positioned to be the biggest beneficiary when major US chipmakers pare internal productions to cut costs," said Mike Shiao, who manages the NT$1.1 billion (US$32 million) Growth Fund at Invesco Taiwan Ltd.

The TAIEX shed 2.35, or 0.1 percent to close at 4,548.35. The benchmark climbed as much as 1 percent in intra-day trading. Four stocks fell for every three that gained. For the week, the index rose 1.2 percent.

Trading was worth NT$49.9 billion, about 40 percent below the daily average in the past three months.

Chinatrust Financial dropped NT$0.50, or 1.7 percent, to NT$28.70. Mega Financial lost NT$0.10, or 0.6 percent, to NT$17.20.

The nation's financial market, which has allowed the formation of 14 financial holding companies since 2001, can only support as many as 10 lenders, a local newspaper reported, citing a research report by the central bank.

TSMC rose NT$0.80, or 1.8 percent, to NT$44.90. United Microelectronics Corp (聯電), its smaller rival, added NT$0.10, or 0.5 percent, to NT$20.3.

California-based National Semiconductor expanded an agreement to order more products from TSMC, after saying it plans to fire 5 percent of its employees and sell some slower-growing businesses.

Separately, Merrill Lynch & Co raised its recommendation on the semiconductor industry to "slightly positive" from "negative," a day after Morgan Stanley raise ratings on Intel Corp.

Picvue Electronics Ltd (碧悠), the maker of electronic displays used in mobile phone handsets, rose NT$0.30, or 2.4 percent, to NT$13. The company received an order for 100,000 cell phone displays from an unidentified South Korean company, according to president Lin Wen-pin (林文斌).

Powerchip Semiconductor Corp (力晶半導體), the nation's third-largest maker of computer-memory chips, rose NT$0.30, or 3.2 percent, to NT$9.60. The company forecast demand will recover in the second half of this year, according to chairman Frank Huang (黃崇仁).

Uni-President Enterprises Corp (統一企業) rose NT$0.05, or 0.5 percent, to NT$11.10. The company won the sole rights to sell instant noodles and beverages in the Beijing's Forbidden City, according to company spokesman Simon Hung (洪士民).