Fri, May 30, 2003 - Page 11 News List

Government efforts move stock market upwards

BLOOMBERG

Taiwan stocks rose for a fifth day in six, paced by big companies such as Cathay Financial Holding Co (國泰金控) and Nan Ya Plastics Corp (南亞塑膠), as government funds bought shares to help boost prices, some investors said.

The TAIEX added 68.63, or 1.5 percent, to 4543.04. The Taiwan Futures Index fell 0.7 percent to 4453. About same number of stocks gained and declined.

The index surged 50 points in the last two minutes of trading after being little changed for three hours. Some investors said government funds bought shares to help boost the index above the 4500-point level.

"The government must knew it is important for the index to surpass the barrier to continue the rally," said Eddie Chiu, who manages the equivalent of US$124 million in the Hitech Fund at First Global Investment Trust Co (元大投信).

The government can intervene in the stock market through four government funds: the Labor Retirement Fund, the Postal Savings Fund, the Civil Servant Pension Fund and the Labor Insurance Fund.

The government doesn't comment on the funds' activities in the stock market.

Cathay Financial, Taiwan's largest financial company by market value, rose NT$1.3, or 3.2 percent, to NT$41.90.

Nan Ya Plastics Corp, a unit of Formosa Group (台塑), rose NT$1, or 2.7 percent, to NT$37.50.

Taiwan this month cut its annual growth forecast to 2.89 percent from 3.68 percent as SARS slows spending, investment and trade.

"Taiwan's economy and the government have already been beaten badly by SARS, so a stock market rally might just be what's needed," Chiu said.

AU Optronics Corp (友達光電), the world's fourth-largest maker of flat-panel displays, rose NT$0.40, or 2 percent, to NT$20.40 after it said second-quarter profit will fall about three-quarters from a year ago to NT$1 billion.

China Steel Corp (中鋼), Taiwan's largest steelmaker, rose NT$0.20, or 1 percent, to NT$20.40. China Steel will set steel prices for the third quarter after the market closes today. The company has raised its prices of steel products since the second quarter last year.

Polaris Securities Co (寶來證券), Taiwan's largest on-line stockbroker took control of Central Insurance Co (中央產險) in a shareholders meeting yesterday, a local newspaper reported.

Polaris won six of the nine seats on the board of directors, the report said. Polaris rose 40 cents, or 2.7 percent, to NT$15.50. Central Insurance fell 10 cents, or 1.1 percent, to NT$9.10.

ProMOS Technologies Inc (茂德科技), Taiwan's largest computer memory chipmaker, plans to apply for listing on the Taiwan Stock Exchange, ProMOS said in a statement.

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