TAIEX rises to five-week high as TSMC advances

Taiwan's TAIEX had its biggest gain in five weeks after President Chen Shui-bian (陳水扁) appointed a premier who's expected to be more focused on pulling the economy out of recession.

Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電) led gains after a report said the chipmaker plans to establish a factory in China, where costs are lower than in Taiwan. Computer makers including Acer Inc (宏電) gained after Dell Computer Corp. said fiscal fourth-quarter sales and earnings will exceed its forecasts.

The TAIEX surged 275.25, or 5 percent, to 5798.05, its biggest gain since Dec. 12. Within the index, 474 stocks rose and 50 fell. The total value of trade was NT$132.4 billion (US$3.8 billion), below Friday's NT$133.7 billion. President Chen named Yu Shyi-kun premier after Cabinet members submitted their customary post-election resignations.

"He has a solid, capable image," said Michael Ding (丁予嘉), chief investment officer at International Investment Trust Ltd (國際投信), which manages NT$16 billion (US$457 million) in Taiwan stocks, referring to Yu. "He's close to Chen Shui-bian and will probably be perceived as a good executive able to deliver things." Investors say the index, which has rallied 68 percent since Oct. 3, may climb further if a U.S.-led recovery takes place by mid-year, as expected.

"Looking ahead, things are positive," said Steven Hsieh, who manages about NT$2.5 billion (US$71 million) in Taiwan stocks at Dresdner Asset Management Taiwan Ltd. "There's a consensus that there will be a world economic recovery and Taiwan will be one of the beneficiaries." Credit Suisse First Boston Inc forecasts the index will climb another 29 percent to 7,504 this year.