Mega leads way as TAIEX approaches18-month high

Stocks rose to its highest in almost 18 months yesterday, led by Mega Financial Holding Co (兆豐金控) after a Chinese-language newspaper reported the government approved the company's application to set up an office in Suzhou, China.

The TAIEX gained 35.18, or 0.6 percent, to close at 6,077.89, the highest since April 29 last year. About three stocks gained for every two that declined. The Taiwan Futures Index shed 0.1 percent to 6,072.

About 5.2 billion shares changed hands, 25 percent above the average daily trading in the past three months. Shares worth NT$111.9 billion traded, 16 percent above the three-month daily average.

China Development Financial Holding Corp. (中華開發金控), the nation's largest investment bank, gained NT$0.10, or 0.7 percent, to NT$14.75. China Development plans to double the size of its asset management unit to NT$10 billion (US$295 million), a local newspaper reported.

Hon Hai Precision Industry Co (鴻海精密), the country's biggest electronics company by sales, shed NT$2, or 1.3 percent, to NT$156 after it said it will spend $18 million to buy a mobile-phone factory belonging to Motorola in Chihuahua, Mexico.

Hon Hai also signed a long-term manufacturing agreement with Motorola, the company said in a statement distributed through the Taiwan Stock Exchange.

Mega Financial, the nation's third-largest financial services company, rose NT$0.80, or 4 percent, to NT$21. The government approved a revived application by International Commercial Bank of China (中國商銀) to set up a representative office in Suzhou, the newspaper reported, citing unidentified people at the bank.

International Commercial is a commercial banking and foreign exchange unit of Mega Financial.

United Microelectronics Corp (UMC, 聯電), the world's second- largest maker of computer chips on a subcontracting basis, added NT$0.60, or 1.9 percent, to NT$31.80.