President Chen's economic optimism boosts TAIEX

Stocks rose for the first day in three yesterday. Hon Hai Precision Industry Co (鴻海精密) and Acer Inc led gains in consumer electronics companies after President Chen Shui-bian (陳水扁) said the economy may expand more than 3 percent this year as consumer spending increases.

The TAIEX added 40.64, or 0.8 percent, to 5,255.24. Index futures expiring this month rose 0.3 percent to 5,265. About twice as many stocks gained as declined.

About 3.1 billion shares changed hands, 29 percent below the average daily trading in the past three months. The value of trading was NT$73 billion (US$2 billion), 24 percent below the three-month daily average.

Chen, who spoke Monday after the market closed, said next year's pace of growth will be faster than the government's 2.89 percent forecast for this year. The economy grew 3.54 percent last year.

"The Chen administration is determined to prop up the economy, so we can expect heavy government spending in the following months leading up to the election," said Mike Shiao, who manages the US$12 million Taiwan Select Growth Fund at Invesco Taiwan Ltd (景順投信), in Taipei.

His fund has gained 25 percent in the past three months, while the TAIEX has risen 23 percent.

Hon Hai, the nation's largest electronic maker, rose NT$3, or 2.5 percent, to NT$125.50.

Acer rose NT$0.80, or 1.7 percent, to NT$48.10.