Shares rose to a two-month high, led by China Development Financial Holding Corp (中華開發金控), after a Chinese-language newspaper said the bank may buy a rival lender to tap the nation's retail lending market.
"China Development Financial as well as many other large Taiwanese financial companies are seeking takeover targets as the government encourages industry consolidation," said Jerry Chen, head of research at First Global Investment Trust Co (元大投信). "Taiwan needs fewer and better banks."
The TAIEX rose 83.86, or 1.4 percent, to 6125.42, the highest since Nov. 5. About four stocks gained for every one that declined. Taiex Futures for January delivery rose 1.5 percent to 6144.
About 6.7 billion shares changed hands, 69 percent above the three-month daily average. Shares worth NT$135.6 billion traded, 59 percent above the three-month daily average.
China Development Financial, Taiwan's fourth-largest financial company by market value, jumped NT$1, or 5.8 percent, to NT$18.20. It may buy privately held retail lender Macoto Bank (誠泰銀行) in Taipei, the report said, citing people it didn't identify.
The acquisition may help China Development to increase its share of Taiwan's personal-banking business, the paper said.
While Macoto Bank denied it was in talks with China Development, it did not rule out a merger with a financial holding company, the paper added.
China Steel Corp (
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