* Market extends gains for a third straight session
* Powerchip, ProMOS jump on hopes of sector consolidation
* Hon Hai rises on report of listing overseas unit in Taiwan
(Adds details and quote)
TAIPEI, Feb 4 (Reuters) - Taiwan stocks rose for a third day
on Wednesday to finish at a three-week closing high, with
DRAM makers Powerchip <5346.TWO> and ProMOS <5387.TWO> rallying
in hopes of a sector consolidation.
The main TAIEX <.TWII> share index closed up 0.39 percent or
17.16 points to 4,389.97, its strongest finish since Jan. 14. But
the index gave up some of its early gains as some investors
locked in profits.
Turnover was light at T$61.5 billion ($1.8 billion), but
higher than Tuesday's T$59.8 billion.
The semiconductor sub-index <.TSII> was up 0.32 percent,
while shares of top DRAM maker Powerchip and smaller rival
ProMOS gained 4 percent and 4.65 percent, respectively. But
shares of Nanya Technology <2408.TW> fell 3.61 percent.
Taiwan's economics minister said on Tuesday consolidation of
the island's struggling DRAM sector could come within one month
at the earliest. [ID:nTPU001073]
"I am not that sure the government will lead consolidation
in the DRAM sector. I think the government is still quite
cautious and prefers DRAM firms to strike a consolidation deal
themselves," said Andrew Deng, a vice president of Taiwan
International Securities.
Powerchip shares, which ended at T$3.64, also got a lift as
Goldman Sachs raised its target price for the company to T$4.0
from T$2.9, citing easing financing concerns as it could follow
a similar path as ProMOS <5387.TWO> to secure loans.
[ID:nTP21659]
The market was further boosted as Taiwan's top financial
regulator said on Tuesday it was studying measures to make it
easier for local companies to meet their debts during the
deepening global recession. [ID:nTP345608]
"The measure is negative in the longer term as the number of
companies' outstanding shares will rise. But it could provide a
short-term relief for companies, like ProMOS, that are under
imminent pressure to pay off debts," said Deng.
ProMOS is due to repay T$11 billion worth of convertible
bonds on Feb. 14.
Deng said the market would be under pressure as expected
weak economic data and company results are due to be announced
within two weeks. He expected the TAIEX to trade between
4,000-4,400 points for the rest of this week.
Taiwan will announce its January consumer price data on
Thursday and export data next Monday. On Tuesday, Taiwan said
its leading indicators index in December fell for a 13th
straight month, painting a grim outlook for the trade-reliant
economy.
Taiwan Semiconductor Manufacturing Co (TSMC) <2330.TW>
percent after denying a report on Tuesday that it was evaluating
a plan to reduce its capital to return cash to shareholders.
[ID:nTP339428]
The electronics sub-index <.TELI> was up 0.67 percent.
Shares of Hon Hai <2317.TW>, Taiwan's top electronics parts
maker, rose 0.33 percent after local media said a company
executive met representatives from the Taiwan Stock Exchange to
discuss the possibility of listing its overseas units, such as
Foxconn <2038.HK>, in Taiwan.
Hon Hai planned to issue corporate bonds within the next two
weeks, another local newspaper reported.
HOT STOCKS
-- ASE <2311.TW> fell 0.84 percent, after BNP Paribas
lowered its 2009 financial forecasts on the world's top chip
packager as falling chip prices hurt profit margins.
[ID:nTP18302]
------------------------------------------------------------
Move on day 0.39 percent
Close on day 4,389.97
2009 intraday high 4,817.44
2009 intraday low 4,164.19
All time high 12,682.41 12 FEB 1990
------------------------------------------------------------
For a table of foreign trading in Taiwan stocks,
double-click on [ID:nTP170358]
(US$1=T$33.6)
(Reporting by Gina Chang; Editing by Ken Wills)
((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters
Messaging:gina.chang.thomsonreuters.c
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