Cathay Life boosts bourse

Taiwan's key stock index rose, led by Cathay Life Insurance Co (國泰人壽) after the company's chairman said the insurer was interested in buying a bank.

Leaving the broad market mixed, Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電) fell following the release of a US Federal Reserve survey saying the US economy showed few signs of improvement in late October and the first half of November, damping hopes US demand for the island's goods would pick up. Taiwan sells more than a fifth of its exports to the US.

The TAIEX rose 18.25 points, or 0.4 percent, to 4,465.83 after earlier falling as much as 1.6 percent. Within the index, 249 stocks fell and 222 rose. The total value of shares traded yesterday was NT$65.7 billion (US$1.9 billion), down from NT$98.5 billion on Wednesday and NT$125.3 billion Tuesday.

"Taiwan's heavy concentration on technology is hurting" Taiwan technology stocks, said Frank Chiang, who helps manage US$750 million in global emerging markets at Montgomery Asset Management in San Francisco. "The economy is not doing well, unemployment is up and domestic consumption is slowing. It's not a good situation."

Chiang isn't buying any more Taiwan stocks and favors Korean shares.

Taiwan's economy contracted 4.21 percent in the third quarter and 2.35 percent in the second. The jobless rate rose to 5.33 percent in October, a record.

Next year, Taiwan may widen the 7 percent daily limit by which stocks may rise and fall, Minister of Finance Yen Ching-chang (顏慶章) said.

Cathay Life rose NT$1.60, or 3.9 percent, to NT$43.10 after chairman Tsai Hong-tu (蔡宏圖) said the company was "still very interested" in buying United World Chinese Commercial Bank (世華銀行), Taiwan's third-biggest bank. Cathay Life, the nation's biggest insurer by market value, said in October it was considering making a bid for the lender.

Made-to-order chipmakers declined after the widely watched Philadelphia Semiconductor Index, a price-weighted index of 16 companies involved in the design and production of chips, plunged 4.7 percent yesterday.

TSMC fell NT$1, or 1.4 percent, to NT$73. TSMC's US shares fell 6.4 percent to US$15.32 yesterday.

United Microelectronics Corp (UMC, 聯電) fell NT$0.60, or 1.5 percent, to NT$39.40. UMC's US shares fell 3.4 percent to US$7.68 yesterday.

China Development Industrial Bank (中華開發銀行) rose NT$0.50, or 2.7 percent, to NT$19.30 after the biggest lender by market value was given approval to set up a financial holding company yesterday, a move that may herald more mergers and acquisitions among the nation's financial companies.

Chinatrust Commercial Bank (中國信託銀行), which also won approval to set up a holding company, rose NT$0.60, or 3.5 percent, to NT$17.90.

Hua Nan Commercial Bank (華南銀行), who also got permission to set up a financial holding company, rose NT$1.20, or 7 percent, to NT$18.40.