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TSMC gains on report of production increase

Stocks advanced yesterday for the sixth day in seven. Taiwan Semi-conductor Manufacturing (TSMC, 台積電), the nation's biggest stock by market value, led gains after a newspaper reported its factories will increase production.

Petrochemical stocks such as Formosa Plastics Corp (台塑) and Nan Ya Plastics Corp (南亞塑膠) declined as some investors judged recent gains have outpaced their earnings growth.

The TAIEX added 12.86, or 0.3 percent, to 4,555.90. About seven stocks gained for very three that declined. The index rallied 4.7 percent this week and advanced 9.8 percent for the month. Turn-over amounted to NT$99.86 billion (US$2.87 billion).

The Taiwan Futures Index rose 1.3 percent to 4,510.

TSMC rose NT$1.50, or 3 percent, to NT$53.50.

United Microelectronics Corp (聯電) rose as much as 6.7 percent early on, but closed up 4.3 percent at NT$21.80.

"There is increasing evidence that demand for electronics and semiconductors has improved," said Celine Chiang (江宜津), who manages the US$14 million Chronicle Fund at Polaris International Securities Investment Trust Co (寶來投信) in Taipei.

"Buying from foreign and institutional investors supported the market today, while technical factors set in to put a lid on the upside," said Tu Jin-lung (杜金龍), executive vice president of Grand Cathay Securities Co (大華證券).

"Riding on concerns over a technical resistance above 4,646 points on the index, investors in late trade pocketed profits after strong showing in mid-session trade," Tu said.

The increased turnover was a concern as such volatility coupled with volume growth might create pressure in the near term, he added.

Formosa Plastics fell NT$3.20, or 6.6 percent, to NT$45.50. The company had as of Thursday gained 11 percent since May 20, compared with the benchmark index's 6.7 percent gain in the same period.

Nan Ya Plastics lost NT$1.40, or 3.7 percent, to NT$36.10.

"China's demand for materials is strong," Chiang said. "But not enough to supply the current rally in Taiwanese plastic makers."

Formosa Chemicals & Fibre Corp (台塑化纖) fell NT$0.50, or 1.3 percent, to NT$37.30. The company plans to invest NT$33 billion (US$951 million) to expand its domestic petrochemical plants, according to its president Wang Wen-yuan (王文淵).

China Steel Corp (中鋼) fell NT$0.20, or 1 percent, at NT$20.20, in part on profit-taking after the stock hit an intraday high of NT$20.60.
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