TAIEX posts biggest gain in a month, UMC leads

The TAIEX posted its biggest one-day gain in more than a month, led by United Microelectronics Corp (UMC, 聯電) after the No. 2 made-to-order chipmaker sold a fifth of its unused production equipment to cut costs.

The TAIEX rose 196.32, or 3.6 percent, to 5696.11, its largest one-day gain since Jan. 21. Electronics shares accounted for more than three-quarters of the rise. UMC, the second-largest made-to-order chipmaker and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), its larger rival, led gains.

"Lots of positive news has been coming out of UMC recently," said Kevin Lee, who manages NT$750 million (US$21 million) in stocks at Polaris Securities Investment Trust Co (寶來投信).

"Investors are increasingly interested in the chipmaker in anticipation of rising sales in March and the second quarter." Shares also rose after the government said export orders rose a better-than-expected 9.16 percent in January, boosting investor optimism about the nation's economic recovery.

"The recovery's mild, but better than expected," said Katrina Ma, who manages NT$10.4 billion in bonds at Invesco Taiwan Ltd.

Within the index, 464 stocks rose and 48 fell. The total value of trade was NT$110.3 billion, 17 percent higher than the six-month daily average of NT$94.4 billion.

UMC rose NT$2.90, or 6.9 percent, to NT$44.70. The second-largest made-to-order chipmaker, which said 55 percent of its chip-making operations were idle in the fourth quarter, said it sold about a fifth of its unused production equipment for US$225 million.

On Tuesday, it spent NT$548 million to buy back 13 million of its own shares.

TSMC, UMC's larger rival, rose NT$2, or 2.5 percent, to NT$82.

Computer-parts makers rose on optimism an economic recovery in the US, the nation's biggest export market, will boost orders for personal computers and other consumer electronics. Taiwan's export orders and factory production rose in January for the first time in 11 months.

Asustek Computer Inc (華碩), Taiwan's largest motherboard maker, gained NT$6, or 3.7 percent, to NT$170. Hon Hai Precision Industry Co (鴻海), which makes everything in a computer except the chips, rose NT$5, or 3.2 percent, to NT$160. Quanta Computer Inc (廣達), Taiwan's largest notebook computer maker, rose NT$5, or 4.3 percent, to NT$121.

Acer Inc (宏電) rose NT$1.3, or 6.8 percent, to NT$20.40. Wistron Corp (緯創), Acer's manufacturing unit, received an order to assemble Microsoft Corp's Xbox game console, the Economic Daily News reported, without citing anyone.