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Sat, Feb 03, 2001 - Page 18 News List

TAIEX rises to highest level since last November

BLOOMBERG , TAIPEI

Taiwan's key stock index rose to its highest in almost three months after the central bank followed the US and cut interest rates, which may spur economic growth and demand for electronic products.

Via Technologies Inc, the island's largest chipset maker, also paced gains after it said January sales nearly doubled from a year ago.

The TWSE Index advanced 151.33, or 2.6 percent, to 6,049.26, its highest close since Nov. 10. It rose 3.4 percent in the week.

Within the index, 469 stocks rose and just 15 fell. The total value of trade was NT$165 billion (US$5 billion), more than double the year-to-date average of NT$75.8 billion.

The Central Bank of China cut the rediscount rate, charged to commercial lenders for 10-day loans, to 4.375 percent from 4.625 percent, the second reduction in just over a month.

"Just like the US the interest rate cut will help investor confidence," said James Liu, who manages NT$3 billion (US$93 million) in Taiwan equities at ING CHB Securities Investment & Trust Ltd. in Taipei. "We believe an interest rate cut is good for electronics. It will help confidence as inventories may fall and companies may make more purchases." Further boosting sentiment were expectations that Taiwan's Premier Chang Chun-hsiung (張俊雄) and President Chen Shui-bian (陳水扁) will accept parliament's demand to resume work on an incomplete nuclear power plant.

Chang met with Legislative Yuan President Wang Jin-pyng (王金平) yesterday morning to try to resolve the deadlock that has added to investors' concerns about the strength of the island's government.

The following stocks made significant gains or losses.

Via Technologies Inc (威盛電子) rose NT$7.00, or 2.6 percent, to NT$280.00 after the biggest maker of chipsets in Taiwan said its January sales were NT$3 billion, up almost 91 percent from January 1999. The company's stock is up 54 percent this year compared with the TWSE Index's 28 percent gain.

Banks advanced as an interest rate cut by the central bank may spur loan demand and income. "Buy Chinatrust and Taishin as major beneficiaries of lower interest rates," Credit Suisse First Boston analyst Sherry Lin wrote in a report to clients. "Sector restructuring is likely to take place this year. Sinopac's excellent franchise almost guarantees its alliance with other powerful financial institutions." China Development Industrial Bank (中華開發工業銀行), the biggest bank in Taiwan, rose NT$2.20, or 6.2 percent, to NT$37.80.

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