Stocks advance as economy revives, Compal Inc leads

Taiwan stocks advanced after the nation's overseas orders unexpectedly increased in March, boosting optimism a reviving economy will help corporate profits.

Compal Electronics Inc (仁寶電腦) and other computer-related shares were the biggest advancers as a group. Export orders rose 1.7 percent from a year earlier, the Ministry of Economic Affairs said.

The TWSE Index added 64.77, or 1 percent, to 6455.39 as about five stocks rose for every two that fell. The total value of trade was NT$103 billion (US$3 billion), more than a 10th below the six- month daily average of NT$121 billion.

First Commercial Bank (第一銀行) fell NT$0.60, or 2.1 percent, after Salomon Smith Barney downgraded the bank to "sell" from "underperform" and CLSA Ltd re-initiated coverage of First Commercial with a "sell" recommendation.

"The banks have plans to write off bad loans, but fundamentally nothing's changed yet," said David Chu, who manages NT$700 million in stocks at Reliance Securities Investment Trust Co (德信證券投信). "In the short term, funds will flow back into electronics stocks."

Computer maker Compal Electronics rose 1.6 percent to NT$49.50 after it reported first-quarter profit rose almost two-thirds from a year ago.

Property developer Cathay Real Estate Development Co (國泰建設) rose NT$0.70, or 6.8 percent, to a 52-week high of NT$11 on optimism the nation's real-estate market is reviving after the National Property Bureau under the Ministry of Finance auctioned 52 properties for NT$192 million Tuesday, beating its floor price by 14 percent, the bureau said in a statement.

Hua Nan Financial Holdings Co (華南金控) rose NT$1.40, or 5.4 percent, to NT$27.20. Morgan Stanley Dean Witter & Co raised its rating on the company to ``equal-weight'' from "underweight."