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14:06 03Feb2009 RTRS-Taiwan stocks hit 3-wk closing high as DRAMs rally

* Tech shares push market to three-week closing high
* ProMOS limit-up on expectations of new loans
* Cement, airlines rally on gains in China stock market
* Acer up as the firm expects global market share to rise

(Adds details and quote)
By Gina Chang
TAIPEI, Feb 3 (Reuters) - Taiwan stocks rose 2.65 percent on
Tuesday to its strongest finish in three weeks, with DRAM makers
such as ProMOS <5387.TWO> leading the rally on hopes the
struggling firm was close to raising new loans to pay off debts.
The main TAIEX share index <.TWII> ended 112.83 points higher
at 4,372.81, its highest finish since Jan. 14. Turnover was light
at T$59.6 billion ($1.8 billion), but higher than Monday's T$50
billion.
The electronics sub-index <.TELI> gained 2.71 percent and the
semiconductor sub-index <.TSII> was up 2.93 percent, getting a
lift from a 7 percent rally in ProMOS.
A group of banks agreed to provide about T$5 billion in new
loans to ProMOS, as it races to raise cash to pay off debt amid
the sector's worst downturn, two banking sources said on Tuesday.
[ID:nTP348974]
"It seems ProMOS can take a breather for now. But the
positive impact will be shortlived. No one can say for sure what
will happen to ProMOS next," said Tu Jin-lung, chairman of Grand
Cathay Investment Services.
Tu expected the broader market to trade between 4,300-4,800
points this week.
Shares of Powerchip <5346.TWO>, Taiwan's top DRAM firm, also
ended limit up, while smaller rival Nanya Tech <2408.TW> jumped
6.16 percent.
Investors ignored a note by U.S. research firm iSuppli saying
that capital expenditure by DRAM makers worldwide was expected to
fall by a sharper-than-expected 63 percent this year as
manufacturers struggle with the industry's downturn.
[ID:nSEO66677]
Taiwan Semiconductor Manufacturing Co (TSMC) <2330.TW>
, the world's top contract chip maker, advanced 2.51
percent after a local newspaper said the firm was considering a
capital reduction ahead of a meeting by its board of directors
next Tuesday.
Other bright spots were the cement sub-index <.TCMI> and the
transportation sub-index <.TTPI>, which surged 5.98 percent and
4.33 percent, respectively.
China plays - including Taiwan Cement <1101.TW>, China
Airlines <2610.TW> and Eva Air <2618.TW> - all finished limit-up,
boosted by the strong performance of China's stock markets on
Monday and Tuesday after the Lunar New Year holiday.

HOT STOCKS
-- Acer <2353.TW>, the world's No. 3 PC brand, gained 2
percent after saying on Monday it expects its global PC market
share to climb by between 2-3 percentage points this year.
[ID:nTP318539]
-- The world's top laptop contract manufacturer Quanta
<2382.TW> rose 1.35 percent on a newspaper report that the firm
would launch a multi-touch touchscreen device in the second
quarter of this year for PixArt Imaging <3227.TWO>.
Shares of PixArt went limit up.
-- Compal Electronics <2324.TW>, a smaller rival of Quanta,
jumped 4.79 percent on a newspaper report that it expects to meet
its original target of 25-35 percent growth in shipments
this year, even as the global slowdown saps demand for technology
products.