MediaTek, Cathay pace gains

Stocks yesterday, led by some of the nation's largest companies such as Asustek Computer Inc (華碩電腦) and MediaTek Inc (聯發科技), after a Chinese-language newspaper said 17 local brokerages plan to buy NT$4 billion (US$116 million) of stocks to set up a new fund.

Cathay Financial Holding Co (國泰金控) gained after saying yesterday after the market closed that it plans to repackage as much as US$1 billion worth of shares as global depositary receipts.

The TAIEX added 24.48, or 0.5 percent, to 4,933.79. About two stocks gained for every one that declined. July futures on the index gained 0.7 percent to 4,940.

Polaris Securities Co (寶來證券) and 16 other brokerages plan to set up a fund that tracks the performance of a Polaris Securities index that consists of 50 of the country's largest stocks, a Chinese-language newspaper reported.

Polaris other participating brokerages will buy shares from the market starting yesterday and the fund will start trading on Monday, the report said.

Asustek NT$3, or 3.4 percent, to NT$92. MediaTek, the country's highest priced stock and a member of Polaris' index, rose NT$4, or 1.2 percent, to NT$342.

"There's abundant liquidity in Taiwan waiting for a reason to buy stocks," said Fam Hsieh, a fund manager at Grand Cathay Securities Trust Co (大華投信).

Cathay Financial rose NT$0.40, or 0.9 percent, to NT$43.70. Repackaging existing local shares to overseas depositary receipts may provide a way for the government and its other major shareholders to pare their stakes without hurting the local stock price.

Far EasTone Telecommunications Co (遠傳電信) shed NT$0.30, or 1.1 percent, to NT$26.80. The company said yesterday it's in talks to buy KG Telecommunications Co (和信電訊).

First Financial Holding Co (第一金控) rose NT$0.10, or 0.5 percent, to NT$21.70. It will buy a life-insurance joint venture between Mass-Mutual Financial Group and Mercuries & Associates Ltd (三商行) in Taiwan, the cnYES.com news Web site reported.

The lender will pay for Taipei-based MassMutual Mercuries Life Ltd in stock, the Web site reported.

Ritek Corp (錸德) rose NT$0.20, or 0.8 percent, to NT$25.50. The company expects the recordable-DVD disc market to double annually the next five years, a Chinese-language newspaper reported, citing chief executive officer Gordon Yeh (葉垂景).