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14:39 06Apr09 RTRS-Taiwan stocks end at 6-month highs on financials, LCDs * Market rises for 5th straight session * Financials lead on hopes of potential agreement with China * LCD shares up on China's television subsidy programme (Updates indexes, adds quotes) By Gina Chang TAIPEI, April 6 (Reuters) - Taiwan stocks rose 0.48 percent on Monday to a six-month closing high, with Cathay Financial <2882.tw> leading financial shares up, after gains in U.S. peers and ahead of the signing of a financial agreement with China. The main TAIEX share index <.TWII> ended 26.59 points higher at 5,556.22, marking its fifth consecutive day of gains and its strongest close since Oct. 3. The gains, however, were tempered as some investors locked in profits after the market's 7 percent rally over the past five sessions. Turnover was active at T$147.6 billion ($4.5 billion) but lower than a 10-month high of T$162 billion in the previous session. The banking and insurance sub-index <.TFNI> was among the biggest winners, jumping 1.69 percent, with Cathay Financial, Taiwan's largest financial holding firm, ending up 1.18 percent. "Investors are snapping up financial stocks as they have far lagged the broader market and tech shares in Q1," said Katty Wang, a fund manager at Prudential Financial Securities Investment Trust. "But a pullback in financial issues could be underway as investors await more developments in the expected signing of a financial MoU between Taiwan and China." Taiwan's top China policymaker said last week it would strike a general financial deal when top negotiators from both sides meet in the second quarter. However, Shin Kong Financial <2888.tw>, parent of the island's No.3 insurer, fell 0.44 percent. The firm said on Friday it had sold a prime property to ING Life via an auction for T$11.6 billion, in the latest effort to aid its struggling insurance arm. [ID:nTP46338] "The price Shin Kong sold was in line with market expectations and was already factored in, so the news didn't move its stocks much today," said Bevan Yeh, another fund manager of Prudential Financial. The TAIEX will likely rise further despite recent gains, analysts said. "The rise in foreign exchange reserves showed that there are more foreign fund inflows. This will help local stocks continue rising to around 6,000 points" in the short term, said Michael On, a managing director of Beyond Asset Management. Taiwan's foreign exchange reserves, the world's fourth-largest, rose to $300.1 billion at the end of March due to an appreciation of the euro, British pound and other major currencies against the U.S. dollar, as well as returns from forex reserves management, the central bank said on Friday. [ID:nTPU001259] In the tech sector, LCD shares rallied on media reports China would increase its subsidy for televisions by 75 percent as part of a programme to boost sales in the countryside. [nTP42916] Shares of AU <2409.tw> and Chi Mei <3009.tw>, Taiwan's top LCD makers, rose 4.14 percent and 6.73 percent, respectively. HOT STOCKS -- Acer Inc <2353.tw>, the world's third-largest PC brand, rose 0.55 percent after it expected its performance to be better this quarter than the previous three months, and was starting to see a longer wait for certain components. [ID:nTP27088] -- Largan Precision <3008.tw>, which makes camera lenses used in mobile phones, fell by its 7 percent daily limit after a local newspaper quoted the firm as saying its current orders stretched only to April and it was only forecasting a significant recovery in the second half of this year. Largan could not be immediately reached for comment. --------------------TAIEX IN PERSPECTIVE-------------------- Move on day 0.48 percent Close on day 5,556.22 2009 intraday high 5,624.28 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$33.1) (Reporting by Gina Chang; Editing by Muralikumar Anantharaman) ((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters
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