Taiwan stocks hit two-week high

Taiwan stocks rose 0.28 percent to a two-week closing high on Monday, the first trading day after the long Lunar New Year holiday, bolstered by DRAM makers such as Powerchip following the insolvency of Qimonda. The main TAIEX share index ended 12.01 points higher at 4,259.98, its strongest finish since January 19. The electronics sub-index rose 1.34 percent.
Shares of Powerchip and Nanya Technology, the island's two biggest DRAM makers, both jumped by their 7 percent daily limit, pushing the semiconductor sub-index 3.37 percent higher. Smaller rival ProMOS ended limit up, paring earlier losses. The company is under pressure to repay T$11 billion ($333 million) in company debt by February 14, a local newspaper said on Monday.
"After Qimonda failed, DRAM makers will benefit in the short term from lower production capacity in the sector. But we need to see how the global economy fares and whether demand will finally rise," said Eddy Chen, a vice president of National Investment Trust.
Qimonda on Friday became the first major maker of dynamic random access memory (DRAM) chips to file for insolvency as a result of huge industry price declines and a global financing squeeze. Electronic components research firm DRAM eXchange said in a statement last week that prices of key DRAM chips could rise to vendors cash cost level, helped by Qimonda's insolvency filing.
Taiwan's top LCD maker AU Optronics and smaller rival Chi Mei both rose more than 1 percent. Their gains came after a local newspaper reported that specialty glass maker Corning, whose glass is used in flat-panel displays, said demand for LCD screens could rebound by the next quarter.
However, the financial sub-index fell 2.95 percent to its lowest closing level in more than 2 months on lingering concerns about rising bad debts amid the global economic slowdown. Cathay Financial, the island's top listed financial holding firm, dropped 4.51 percent. Chinatrust Financial, Taiwan's largest credit cards issuer, shed 5.02 percent.
Turnover on the main exchange was light at T$50.3 billion, slightly higher than T$49 billion in the previous session, as most investors stayed sidelined on worries over dismal results of US firms and worsening local economic figures, said Wang Kao-hsiung, a vice president of KGI Securities. Wang expected the market to trade between 4,000-4,400 points this week.