Taiwan shares prices closed up 1.66 percent Monday to hit the highest level this year, led by large-cap electronic stocks after flat-panel monitor maker Innolux Display announced a major acquisition, dealers said. The weighted index rose 127.05 points to 7,792.68, the highest closing level so far in 2009, on turnover of 123.26 billion Taiwan dollars (3.83 billion US dollars).
Gainers led losers by 1,800 to 866 with 244 stocks unchanged. The market was lifted by Innolux's weekend announcement that it would acquire Chi Mei Optoelectronics in a share swap deal for 5.38 billion US dollars to form Chimei Innolux Corporation.
The market opened up 0.47 percent and buying accelerated to boost flat panel makers amid optimism triggered by the acquisition, while interest also spread to select old-economy stocks as they were market laggards, dealers said. Chi Mei rose 6.91 percent to 20.10 Taiwan dollars, while Innolux gained 2.98 percent to 48.40 dollars.
"The combination will no doubt boost the new entity's international presence. Based on the strong gains, investors are very happy about that," Mega Securities analyst Alex Huang said. The Innolux-Chi Mei deal has raised hopes that the sector will enter an era of consolidation, dealers said.
Chunghwa Picture Tubes added 6.98 percent to 3.68 as investors have expected the firm would be the target for acquisition, while AU Optronics closed up just 0.16 percent at 31.70 on concerns it would be threatened by the new entity. "Despite the strong showing, the room for a takeoff is limited as turnover failed to expand accordingly," Huang said.
Taiwan Semiconductor Manufacturing Co rose 0.97 percent to 62.40 and United Microelectronics Corp gained 1.20 percent to 16.85. Among old-economy stocks, Nan Ya Plastics added 2.13 percent to 57.50 and Formosa Plastics advanced 1.36 percent to 67.00. In the financial sector, Cathay Financial gained 2.18 percent to 60.90 and Fubon Financial was 2.20 percent higer at 39.55.
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