Tue, Jul 29, 2003 - Page 11 News List

US report drives TAIEX up to a 13-month high

LOOKING UP The report on factory orders for durable goods raised hopes of renewed growth in Taiwan's biggest market for export products

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Stocks rose, with the TAIEX advancing to a 13-month high yesterday. Exporters such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) gained after a US report on factory orders for durable goods buoyed optimism of accelerating economic growth in the world's largest economy.

The TAIEX gained 57.05, or 1.1 percent, to 5,451.80, the highest since June 21 last year. August futures on the benchmark added 1.7 percent to 5,475. About two stocks gained for every one that declined.

About 6 billion shares changed hands, 39 percent above the average trading in the past three months. The value of trading was NT$146.7 billion (US$4.3 billion), 61 percent above the three-month daily average.

"More and more evidence is pointing to a healthy economic recovery in the US," said Eddie Chiu, who manages the equivalent of US$116 million for First Global Investment Trust Co's (元大投信) Hitech Fund.

"Export-oriented economies like Taiwan will benefit the most in the US recovery," he said.

Chiu's fund has gained 26 percent this year, compared with a 21 percent gain for the benchmark index. Chiu expects the TAIEX to reach 6,000 in the second half.

Taiwan Semiconductor, the world's largest maker of computer chips on a subcontracting basis that relies on the US for three- quarters of its sales, gained NT$1, or 1.8 percent, to NT$58.

United Microelectronics Corp (UMC, 聯電) gained NT$0.20, or 0.8 percent, to NT$25.

Other exporters also gained. Hon Hai Precision Industry Co (UMC, 鴻海) gained NT$3, or 1.9 percent, to NT$164. Pou Chen Corp (寶成), the nation's largest shoemaker whose clients include Nike Inc, gained NT$2.80, or 6.8 percent, to NT$43.90.

China Development Financial Holding Corp (中華開發金控) fell NT$0.50, or 3.8 percent, to NT$12.85 after on Friday it lowered its 2003 pretax profit forecast to a NT$13.4 billion (US$390 million) loss, blaming bad loans.

China Development said the new profit forecast reflects its plans to set aside NT$16.9 billion to write off bad loans in the second half of this year. China Development in January forecast a pretax profit of NT$10.08 billion for the year.

Chunghwa Telecom Co (中華電信) gained NT$1, or 1.9 percent, to NT$52.50. The government on Friday sold an additional 1.5 percent stake in Chunghwa following a share sale in the US on July 18.

The government sold 14.5 million Chunghwa Telecom shares in the form of American depositary receipts for US$14.24 per share. Ten of the common shares are bundled as one ADR.

Cathay Financial Holding Co (國泰金控) rose NT$0.30, or 0.7 percent, to NT$42.70. Cathay Financial on Friday said second-quarter income surged more than 13-fold following its acquisition of Taiwan's 11th-biggest bank by assets. Profit rose to NT$6.5 billion from NT$486 million in the year-earlier quarter.

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