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14:10 27Feb09 RTRS-Taiwan stocks hit 2-week closing high, DRAMs up * Market rises for 3rd day on DRAM, tourism issues * Chunghwa Picture Tubes down on report of seeking state aid * Cathay Fin drops after downgrade by JP Morgan (Adds details and quote) TAIPEI, Feb 27 (Reuters) - Taiwan stocks rose 0.85 percent on Friday to a two-week closing high, with DRAM shares including Powerchip <5346.two> rallying before Taiwan's government announces plans to overhaul the sagging industry next week. The main TAIEX share index <.TWII> closed 38.59 points higher at 4,557.15, logging its strongest finish since Feb. 16 and extending a 2 percent rise in the previous two sessions. Turnover was light at T$68.8 billion ($2 billion), but higher than Thursday's T$58.8 billion. Shares of Powerchip, Taiwan's top DRAM company, jumped 3.66 percent, and smaller rival Nanya Tech <2408.tw> rose 0.31 percent and ProMOS <5387.two> jumped by its 7 percent daily limit. The semiconductor sub-index <.TSII> rose 1.04 percent. "A consolidation will be positive for the DRAM industry in the longer term, but DRAM shares will remain volatile as there are still many problems in the DRAM sector." said John Chiu, a vice president of Fuh Hwa Securities Investment Trust. Taiwan's economics ministry said earlier this week it would postpone to next week the unveiling of a plan to overhaul the island's DRAM sector. [ID:nTP50297] Local media cited Japanese reports on Friday that Japan's Elpida <6665.t> will announce consolidation with Powerchip, Rexchip and ProMOS <5387.two> as soon as next week. The electronics sub-index <.TELI> was up 1.4 percent. However, LCD maker Chunghwa Picture Tubes <2475.tw> dropped by its 7 percent daily limit. Its losses came after a local newspaper cited a senior company executive as saying that the firm is seeking government assistance in getting a one-year extension of a T$15 billion loan that will mature this year. "Investors have been worried that more industries will need state support after DRAM," said Alex Huang, a vice president of Mega International Securities. "But the situations between Chunghwa Picture Tubes and ProMOS are very different. Chunghwa still has cash at hand, so investors shouldn't be too worried about this company," said Huang, who expected the market to trade between 4,500-4,650 next week. AU Optronics <2409.tw> and Chi Mei <3009.tw>, Taiwan's top two flat panel makers, gained 2.16 percent and 0.44 percent, respectively. Another big winner was the tourism sub-index <.THOI>, which rose 1 percent after China pledged to try to increase the number of Chinese tourists visiting Taiwan. [ID:nTP127432] Hotel operators Formosa Hotel <2707.tw> and Leofoo Development Co <2705.tw> gained 0.73 percent and 2.62 percent, respectively. Cathay Financial <2882.tw>, Taiwan's largest listed financial holding firm, dropped 1.58 percent after being downgraded by JP Morgan to "underweight." [nSEO207897] Shin Kong Financial <2888.tw> dropped 4 percent after a newspaper reported the firm said its insurance affiliate Shin Kong Life, Taiwan's No. 3 life insurer, will not rule out selling some of its real estate assets. The financial sub-index <.TFNI> edged up 0.12 percent. HOT STOCKS -- Hon Hai <2317.tw>, the island's top electronics gear maker, rose 2.05 percent. The world's top contract notebook PC maker Quanta <2382.tw> fell 0.7 percent while smaller rival Compal <2324.tw> was 3.59 percent higher. Mobile phone giant Nokia's entry to the laptop PC market could benefit contract manufacturers such as Compal, Quanta and Hon Hai, a local newspaper reported. --------------------TAIEX IN PERSPECTIVE-------------------- Move on day 0.85 percent Close on day 4,557.15 2009 intraday high 4,817.44 2009 intraday low 4,164.19 All time high 12,682.41 12
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