TSMC, Hon Hai lead stock gains

Taiwan stocks rose, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Hon Hai Precision Co (鴻海精密), as investors bet demand for semiconductors and computer parts would start rising in the second half of the year.

The TWSE Index rose 45.02, or 0.9 percent, to 5271.30, its highest close since May 3. Within the index, 227 stocks rose and 189 stocks fell. Trade at NT$49.3 billion (US$1.4 billion) was 38 percent lower than the six-month daily average of NT$80.2 billion.

"In the second quarter we've probably seen the worst" in terms of demand for computer, consumer electronic and telecommunication chips, said William Dong, a director at UBS Warburg Securities Ltd in Taiwan. "I expect a slight pick up of demand in June. May is typically the weakest month." Some banks rose on optimism Parliament may reconvene for a special session to pass finance-related laws that will help banks consolidate.

TSMC rose NT$2, or 2 percent, to NT$99, its highest since Feb. 15. The biggest made-to-order chipmaker said Sales in the first five months of the year rose 19.2 percent to NT$57.3 billion. Sales in May fell 22 percent to NT$8.6 billion, from the previous year and dropped 7.4 percent from April.

United Microelectronics Corp (UMC, 聯電), its biggest rival, fell NT$0.50, or 0.9 percent, to NT$55. UMC said May sales fell 40 percent on year and 15 percent from April to NT$4.95 billion. Sales in the first five months of the year fell 1.7 percent from a year ago to NT$34.4 billion.

Hon Hai Precision Industry rose NT$7, or 3.8 percent, to NT$190 after its sales in May beat expectations.

Taiwan's biggest maker of computer connectors and cases said sales in May rose 58 percent from a year ago and fell 8 percent from April to NT$9.4 billion.

"They did much better than my expectations because they've been stealing market share," said Alison Yip, an analyst at CLSA Emerging Markets in Taipei.

Some banks rose on optimism Parliament may reconvene to pass finance-related laws, including the Financial Holding Company Act (金融控股公司法), that may speed up mergers in the banking industry.

Chinatrust Commercial Bank (中國信託商銀), Taiwan's second-largest bank by market cap, rose NT$0.80, or 3.3 percent, to NT$25.

United World Chinese Commercial Bank (世華商銀), the third largest, rose NT$0.20, or 0.9 percent, to NT$23.20.

Hua Nan Commercial Bank (華南商銀), Taiwan's fourth biggest, rose NT$0.20, or 0.9 percent, to NT$21.70.

Advanced Semiconductor Engineering Inc (日月光半導體) rose NT$0.60, or 2.5 percent, to NT$25.10. The second-biggest provider of chip-assembly services said sales in May fell a third to NT$1.4 billion from last year and dropped 15 percent from April.

Quanta Computer Inc (廣達電腦) rose NT$1, or 0.9 percent, to NT$117.50. Taiwan's largest maker of notebooks said sales in May rose 36 percent from last year, but fell 1.8 percent from April to NT$9.4 billion.

Siliconware Precision Industries Co (矽品精密) rose NT$0.40, or 1.8 percent, to NT$22.20. Taiwan's second-largest chip assembler said sales in May fell 29 percent on year and 4.4 percent from April to NT$1.2 billion.