Stocks mixed; banks, insurers up

Banking and insurance stocks rose, led by Cathay Life Insurance Ltd (國泰人壽), as investors their earnings will get a boost from property sales after the government proposed cutting by half capital gains tax on property profits for two years.

Leaving the broad market mixed, Hon Hai Precision Industry Ltd (鴻海精密) fell after the computer parts maker's second-quarter profit was unchanged as its margins shrank because customers slashed prices.

Hon Hai's "margins are dropping because of market erosion in their contract manufacturing business and PC connector business," said Alison Yip, an analyst at CLSA Global Emerging Markets in Taiwan.

"In the third quarter, their pretax margins will continue to drop," she said.

The TWSE Index rose 5.58, or 0.1 percent, to 4,509.44. The index gained 4.6 percent in the week. Within the index, 317 stocks fell and 143 rose.

The total value of stocks traded today was NT$51.82 billion (US$1.50 billion), 28 percent less than this year's daily average of NT$72.44 billion.

Banks and insurers rose after the government proposed cutting by half the capital gains on land sales for two years. It need legislative approval to become law.

The Taiwan Stock Exchange's Bank and Insurance Index rose 1.9 percent, completing a 13 percent gain this week.

Cathay Life Insurance, which has more than 90 commercial buildings and 90 big plots of land, rose NT$1.80, or 4.6 percent, to NT$41.10.

China Development Industrial Bank (中華開發銀行) gained NT$0.40, or 1.7 percent, to NT$23.80.

Shin Kong Life Insurance Ltd (新光人壽) rose NT$1.50, or 6.6 percent, to NT$24.30.

Hon Hai Precision, which makes everything in a computer except chips, plunged NT$10, or 7 percent, to NT$133.50. The company's net income in the three months to June was little changed from a year ago at NT$2.3 billion.

Five analysts surveyed by Bloomberg News expected profit to rise to NT$3.1 billion. Hon Hai's customers include Dell Computer Corp.

Memory chipmakers slid after the spot price for their main

product fell to less than a tenth of what it was a year ago, according to DRAM Exchange, a market place for memory chips.

The spot price for the 64-megabit dynamic random access memory chip is at US$0.75, down from about US$9 a year ago.

Mosel Vitelic Inc (茂矽電子) fell NT$0.15, or 1.3 percent, to NT$11.35. Winbond Electronics Corp (華邦電子) shed NT$1, or 5.2 percent, to NT$18.10.

Asustek Computer Inc (華碩電 腦) fell NT$4.50, or 3.5 percent, to NT$126. The computer motherboard and notebook computer maker's profit in the three months to June 30 dropped 14 percent to NT$2.92 billion from a year ago. Sales in the second quarter fell 7 percent to NT$16 billion.

Hua Nan Commercial Bank (華南銀行) rose NT$0.40, or 2.2 percent, to NT$18.90.

Quanta Computer Inc (廣達電腦) rose NT$2, or 2.7 percent, to NT$77 after it said net income in the three months to June rose 92 percent from a year earlier to NT$3.7 billion. That's better than the NT$3.1 billion average estimate of analysts surveyed.

Via Technologies Inc (威盛電子) fell NT$9, or 5.1 percent, to NT$168. The stock has dropped 18 percent since Aug. 23 after the company said its second-quarter profit dropped 41 percent as it cut prices for its chipsets to bolster sales.

The company also has no license from Intel Corp to sell the quicker Pentium-4 based chipsets, while rivals Silicon Integrated Systems Corp (矽統科技) and Acer Laboratories Inc (揚智科技) both have the licenses.