US interest rate action spurs stocks

Stocks rose yesterday, led by chipmakers such as United Microelec-tronics Corp (聯電), on hopes US demand for Taiwan electronic products will pick up after the Federal Reserve cut interest rates to the lowest in six years.

The TAIEX rose 99.89, or 1.8 percent, to 5,608.50. It rose to its intra-day high of 5,683.63 in the first minutes of trading.

Within the index, 243 stocks rose and 180 fell.

The total value of trade yesterday was NT$128 billion (US$3.9 billion), compared to a year low of NT$41.2 billion Tuesday. A third of Taiwan's exports are sold in the US.

"The market and investors were excited by the news" of the Fed rate cut, said Cheng Yi-sheng, who helps manage NT$1.6 billion (US$50 million) in Taiwan stocks at Taiwan Securities Ltd (台証證券).

He bought electronic stocks yesterday.

"A rebound of 7 percent to 10 percent by the end of the month" in the TAIEX to 5,900 to 6,000 is likely, Cheng said.

The NASDAQ Composite Index, 60 percent of whose market value are computer and communication shares, had its fourth-largest gain in 30 years Wednesday, gaining 8.1 percent. Electronic stocks make up 61 percent of the market value of the TAIEX.

Companies who make chips on a made-to-order basis rose.

Investors who want to invest in "TSMC and UMC will be encouraged by the NASDAQ's gains, though I don't think they will outperform the market in the next two weeks," Cheng said.

UMC gained NT$3.50, or 6.9 percent, to NT$54.

Taiwan Semiconductor Manu-facturing Co (台積電) rose NT$5.50, or 6.5 percent, to NT$90.50.

Banks advanced. Investors hope the central bank will cut rates for a fifth time since December after the latest US rate cut. The central bank has cut it key rediscount rate 62.5 basis points since December.

China Development Industrial Bank (中華開發工銀), Taiwan's biggest bank by market value, rose NT$0.60, or 2 percent, to NT$31.10.

Chinatrust Commercial Bank (中國信託商銀), the second-biggest bank, rose NT$0.10, or 0.4 percent, to NT$24.80.

Computer makers rose. Apple Computer Inc said sales of its Itanium laptop and new PowerMacs picked up.

Investors and analysts hope demand for Taiwan-built computers will pick up as more companies order from the nation's manu-facturers in an effort to cut costs at home.

Quanta Computer Inc (廣達電腦), which makes computers for Apple, rose NT$1, or 0.9 percent, to NT$113.

Acer Inc (宏電) rose NT$0.70, or 3 percent, to NT$23.90.

Flat panel display makers advanced.

"We like the TFT-LCD [thin film transistor liquid crystal displays] such as Unipac, Acer Display," Cheng said. "Prices and demand will rise in the second quarter."

Acer Display Technology Inc rose NT$2.50, or 7 percent, to NT$38.30. Unipac Optoelectronics Corp (聯友光電) rose NT$1.90, or 6.7 percent, to NT$30.10.

Acer Sertek Inc (宏科) rose NT$1, or 1.5 percent, to NT$67.50. The maker of electronic components said its 2000 profit rose 70 percent to NT$969 million.

China Airlines (華航) rose NT$0.20, or 1.1 percent, to NT$18.50. Taiwan's largest airline said Wednesday its first-quarter sales rose 18.7 percent and set a target of a 10.2 percent sales increase for 2001 as it expands capacity and routes.

Delta Electronics Inc (台達電子) rose NT$2, or 1.9 percent, to NT$106.50. The power supply and video display maker said its 2001 profit rose 41 percent to NT$5.2 billion.

Greatek Electronics Inc (超豐電子) rose NT$0.60, or 2.2 percent, to NT$28.50 after the maker of integrated circuits said its 2000 profit rose 47 percent to NT$525 million.