Stocks gain as investors trumpet earnings growth

Stocks advanced yesterday after some investors said that the TAIEX's 7.6 percent drop this month doesn't reflect corporate earnings growth. AU Optronics Corp (友達光電) led gains among stocks that have fallen the most this month.

"Investors in the past weeks have ignored the fact that many corporate earnings are still sound," said Fam Hsieh (謝良武), a fund manager at Grand Cathay Securities Trust Co (大華投信).

"Stock prices will eventually be restored to their fair value," Hsieh said.

The TAIEX rose 66.90, or 1.3 percent, to 5,398.61. Futures for delivery next month added 1.5 percent to 5,353. Four stocks gained for each that declined.

AU Optronics added 2.8 percent to NT$41.

Taiwan Semiconductor Manufacturing Co (台積電) jumped 2 percent to NT$41.70. Rival United Microelectronics Corp (聯電) added 1.4 percent to NT$21.30.

Evergreen Marine Corp (長榮海運) shed 0.8 percent to NT$24.90.

Evergreen said it may invest in a port project in Ningbo, a company official said.

"We just signed a letter of intent, which is non-binding, on a port project with Ningbo Port Authority and is subject to evaluation," said spokesman Nieh Kuo-wei (聶國維).

Formosa Plastics Corp (台塑), the nation's largest maker of polyvinyl chloride, fell 1.5 percent to NT$47.30.

Formosa Plastics plans to invest NT$10 billion in the next five years to make waterproof, tear-resistant plastic paper in Taiwan as well as in China and Vietnam, company executive Wu Chia-chau (吳嘉昭) said.