Local bourse at month-high on back of strong IT stocks

Stocks rose to a one-month high yesterday, led by surging chip makers and packagers.

The TAIEX rose 46.79 points, or 0.71 percent, to 6,660.76, its highest close since Feb. 20 when the index finished at 6,686.55.

It also gained for a seventh day, heading for its longest winning stretch in more than four years.

"It appears that investor sentiment for upstream semiconductor-related shares has been strong," said Shawn Wang, a trader at Fubon Securities (富邦證券).

United Microelectronics Corp (UMC, 聯電), the world's second-largest contract chipmaker by revenue, gained 3.2 percent at NT$21.15, on hopes the utilization of its factories this year may be better than the market previously expected, the trader said.

The market now expects the company's factory utilization to reach 80 percent from around 70 percent last year, analysts said.

Larger rival Taiwan Semiconductor Manufacturing Co (台積電) rose 0.9 percent to NT$64.8.

But Alan Tseng (曾炎裕), vice president at Capital Securities (群益證券), said that UMC also rose because foreign investors had lately been heavily buying Taiwan's contract chipmakers.

Advanced Semiconductor Engineering Inc (日月光), the world's largest chip packager by revenue, rose 3.4 percent at NT$31.75, with the market expecting stronger demand for chip packaging in the second quarter than in the first quarter, analysts said.

"The company's revenue is likely to grow in the second quarter from the first on strong demand for chip testing in communications devices, more than previously expected," said Andrew Chen, an analyst at Yuanta Core Pacific Securities (元大京華證券).

Siliconware Precision Industries Co (矽品精密), the nation's second largest, climbed 2.1 percent to NT$43.15.

Chip packagers may raise prices by as much as 10 percent in June, the Chinese-language Commercial Times said, without saying how it got the information.

Electronics companies rose 1.1 percent overall, but the steel sector surged 3 percent, outperforming other sectors, partly on expectations of a 10 percent rise in iron ore prices this year.

China Steel Corp (中鋼) rose 1.8 percent to NT$30.95 on a report that it may raise product prices as demand has outpaced the nation's capacity.

Steel wire makers such as Feng Hsin Iron & Steel Co (豐興鋼鐵) and Wei Chih Steel Industrial Co (威致鋼鐵) may raise prices as strong demand has started to cause shortages in some products, the Economic Daily News, a Chinese-language daily reported, citing an unidentified steel distributor. Feng Hsin rose 6 percent to NT$30.85. Wei Chih advanced 5.1 percent to NT$4.73.