Stocks advance, CTB starts merger

Taiwan stocks gained, led by banks, after CTB Financial Holding Co (交銀金控) said it's merging with International Commercial Bank of China (中國商銀) as part of a government-led push for the nation's lenders to consolidate.

"Any financial merger news is good in general, plus banks are also actively writing off their bad loans," said Julian Chen, who helps manage NT$1 billion (US$29 million) in Taiwan equities at National Investment Trust Co. "It would be good to buy some financial stocks." The TWSE index added 47.55, or 0.8 percent, to 5711.53, its third rise in eight days, as three stocks gained for every one that fell. Some NT$92.2 billion in shares changed hands, 22 percent less than the three-month daily average.

CTB Financial surged NT$1.3, or 6.8 percent, to NT$20.5 while International Commercial shares added NT$0.80, or 3.7 percent, to NT$22.6. CTB Financial will merge with fellow state-backed lender International Commercial to form the island's largest publicly traded lender by assets, seeking to compete more effectively with rivals.

Au Optronics Corp (友達光電) rose NT$0.30 or 0.6 percent, to NT$49.8. The third-largest maker of flat-panel displays said that sales tripled in April to NT$7.5 billion, from NT$2.5 billion a year ago.

Formosa Plastics Corp (台塑) rose NT$1.6, or 4.3 percent, NT$39.1. The flagship of Taiwan's largest industrial group said April sales rose 19 percent to NT$5.96 billion from the previous year.

Macronix International Co (旺宏電子) rose NT$0.40, or 1.6 percent, to NT$25.2. The maker of chips for Nintendo Corp's video-game consoles said it bought back 14.1 million of its shares at an average price of NT$25.19 yesterday.

Nanya Technology Corp (南亞科技), Taiwan's biggest computer memory-chip maker, tumbled NT$1.8, or 5.8 percent, to NT$29 after the price of its main product had its biggest drop in six weeks. The price of a standard 128-dynamic-random-access- memory-chip yesterday fell 4.5 percent, according to DRAM Exchange, a market place for memory chips.

Nan Ya Plastic Corp (南亞塑膠) rose NT$0.20, or 0.7 percent, to NT$30.3. The unit of Taiwan's largest industrial group posted a 15 percent sales increase in April from a year earlier.

Quanta Computer Inc (廣達電腦) rose US$0.50, or 0.5 percent, to NT$106. Taiwan's largest notebook maker plans to help shareholders, including the government, raise US$455 million by selling their holdings in the company.

Sunplus Technology Co (凌陽科技) gained NT$1, or 0.8 percent, to NT$124. Taiwan's largest designer of chips used to run cameras and toys reported sales in April rose 43 percent to NT$726.5 million, a monthly record.