Taiwan stocks rose, led by Asustek Computer Inc (華碩電腦), on optimism orders for motherboards will increase after its customer Hewlett-Packard Co said it will buy Compaq Computer Corp for US$25 billion.
"People think that after the merger, there will be order consolidation" and Asustek may get more sales, said Teresa Chen, an analyst at Deutsche Securities in Taiwan.
Leaving the broad market mixed, Hon Hai Precision Industry Ltd (鴻海精密) declined on concern price cuts by competitors will prompt Hon Hai to follow suit, eroding its margins.
The TWSE Index advanced 38.76, or 0.9 percent, to 4493.53, after falling as much as 1.1 percent. Five stocks fell for every four that rose. Trade today was NT$51.1 billion (US$1.48 billion), up from NT$41.29 billion yesterday.
Companies that supply parts to Hewlett-Packard, the second-biggest computer maker, gained on hopes they'll receive more orders after H-P said it will buy Compaq Computer for US$25 billion in stock.
Asustek Computer Inc surged NT$8.50, or 6.7 percent, to NT$135.50. Deutsche's Chen says Asustek ships between 12 percent and 15 percent of its motherboards to H-P. Compal Electronics Inc (仁寶電腦), which counts H-P as its second-largest customer, rose NT$2.20, or 7 percent, to NT$33.70, Chen said. Quanta Computer Inc (廣達電腦)which counts H-P as its biggest customer, rose NT$5, or 6.5 percent, to NT$82.
Hon Hai Precision Industry Ltd (鴻海) fell NT$1, or 0.8 percent, to NT$123.50 on concern the company may continue to experience eroding margins as competitors cut prices. Angela Soh, an analyst at ING Barings (Hong Kong) Ltd, has cut her 2001 recurring earnings-per-share forecast for the company by 15 percent to NT$5.85 from NT$6. She expects the stock, which has fallen 21 percent since Aug. 27, to fall to NT$100.
Banks and insurers gave back some of last week's 13 percent rally as a group on speculation parliament will approve a 50 percent cut in profits on capital gains from property sales.
Cathay Life Insurance Ltd (國泰人壽) fell NT$0.70, or 1.7 percent, to NT$39.70. China Development Industrial Bank (中華開發銀行) fell NT$0.50, or 2.1 percent to NT$23.20. First Commercial Bank (第一銀行), the biggest listed lender by assets, fell NT$0.70, or 3.8 percent, to NT$17.60. Hua Nan Commercial Bank (華南銀行) fell NT$0.50, or 2.7 percent, to NT$18.40.
Thin film transistor liquid crystal display makers fell on concern prices will remain below the cost of production, prompting further losses.
Taiwan Semiconductor Man-ufacturing Co (
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