tw stock 0217

13:55 17Feb2009 RTRS-Taiwan stocks close lower, ProMOS slumps after loan

* DRAM, financial shares drop after ProMOS banking loan
* Acer drops after smartphone launch

(Adds details and quotes)
TAIPEI, Feb 17 (Reuters) - Taiwan stocks ended 2.17 percent
lower on Tuesday, with shares of DRAM companies such as ProMOS
<5387.TWO> slumping even after a bank consortium agreed to lend
the struggling DRAM maker T$3 billion.
The main TAIEX share index <.TWII> closed down 99.48 points
at 4,491.78. ProMOS shares dropped by their 7 percent daily
limit, while the semiconductor sub-index <.TSII> shed 4.24
percent.
"Investors are having doubts whether ProMOS could survive in
the longer term. If the DRAM sector continues to worsen and
ProMOS fails to turn to profit, the loan will eventually be a
waste," said Michael On, a managing director of Beyond Asset
Management.
On expected the market to trade between 4,450-4,600 points
this week.
A banking syndicate agreed to give a new T$3 billion ($87
million) loan to ProMOS, which needs the money to help pay off
convertible bonds, the lead bank in the syndicate said on Monday.
[nTP271468]
Some 97 percent of holders of T$11 billion worth of European
Convertible Bonds (ECB) issued by ProMOS coming due this week
intend to redeem them, a local newspaper said on Tuesday.
Powerchip <5346.TWO> and Nanya Tech <2408.TW>, Taiwan's top
two DRAM companies, both ended limit-down. The electronics
sub-index <.TELI> lost 2.93 percent.
Uncertainty over the DRAM sector also weighed on the
financial sub-index <.TFNI>, which slid 2.07 percent. Cathay
Financial <2882.TW>, Taiwan's top listed financial holding firm,
dropped 2.65 percent.
Turnover was light at T$63.6 billion ($1.8 billion), lower
than T$72.4 billion in the previous session.
On said investors also fretted about Taiwan's fourth-quarter
economic data due out on Wednesday, after Japan posted its worst
economic decline since 1974 in the final quarter of 2008.
[ID:nT74412]
Taiwan's economy likely saw a record contraction in the
fourth quarter, a Reuters poll showed. [ID:nTP367581]
Acer Inc <2353.TW>, the world's third-largest PC brand, fell
6.3 percent after entering the increasingly crowded smartphone
market with the unveiling of its first