Merger report sends Hua Nan higher

Taiwan stocks were mixed as Hua Nan Commercial Bank (華南商銀) gained after a local newspaper reported the bank may merge with rival Chiao Tung Bank (交通銀行).

Chipmaker United Microelectronics Corp (UMC, 聯電) fell, leaving the broad market mixed, on concern interest rate cuts by central banks around the world will take some time to boost the global economy and revive demand for electronic goods. Taiwan's export orders fell last month.

The TAIEX rose 1.07, or 0.02 percent, to 5,597.70.

Within the index, 209 stocks rose and 233 fell. The total value of trade today was NT$57.5 billion (US$1.7 billion), a third less than the year-to-date average of NT$85.6 billion.

"The economy is very slow," said Simon Chao, who manages about NT$700 million (US$21 million) at President Investment Corp in Taipei. "Demand for electronics is expected to slow in May and June, which is the traditional low season for sales." Industrial production fell 4.4 percent in March from a year earlier after February's 9.1 percent gain, and overseas orders for Taiwan-made goods dropped 1.1 percent to US$12.5 billion, the government said. The seasonally adjusted jobless rate rose to a record 4.1 percent from February's 3.7 percent.

Investors are also concerned about China's reaction to a possible US weapons sale to Taiwan this week and to the US' decision to grant former Taiwan president Lee Teng-hui (李登輝) a visa to visit the US. China opposes international visits by Taiwan politicians.

Chipmakers fell on concern the economy of Taiwan's biggest export market, the US, will continue to slow.

The US accounts for about a third of the island's exports. A Bloomberg survey showed that US first-quarter gross domestic product, a tally of the goods and services produced in the US, probably grew 1 percent.

Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電), the world's biggest chipmaker on a made-to-order basis, fell NT$0.50, or 0.6 percent, to NT$90. UMC, TSMC's biggest rival, fell NT$0.50, or 0.9 percent, to NT$53.

Hua Nan Commercial Bank rose NT$0.30, or 1.3 percent, to NT$22.80. Taiwan's fourth-largest bank by market value is in merger talks with Chiao Tung Bank, the island's seventh-largest lender, the Economic Daily News reported, without citing sources.

The two banks may form a holding company to purchase each other's shares and bring Hua Nan and Chiao Tung into one group the newspaper reported.

Chiao Tung rose NT$0.20, or 0.8 percent, to NT$26.80.

Flat panel display makers were mixed after the Nikkei English News reported, without citing sources, that NEC Corp plans to halt production of liquid-crystal display panels for personal computers because falling prices have eroded earnings. "It's true that we are reviewing the LCD business but we cannot comment on it at this stage," NEC spokesman Shinichi Kaed said.

Acer Display Technology Inc (宏電) was unchanged at NT$39. Unipac Optoelectronics Corp (聯友光電) fell NT$0.50, or 1.6 percent, to NT$29.90.

Grand Cathay Securities Corp (大華證券) rose NT$1.20, or 6.5 percent, to NT$19.60. On Friday, Taiwan's government approved China Development Industrial Bank's (中華開發工銀) plan to boost its stake in Grand Cathay Securities Corp in the island's first hostile takeover, a move analysts say will spark more such bids for banks. China Development Bank offered to pay NT$5.1 billion to buy 22 percent of Taiwan's top equity underwriter.