TAIPEI: Taiwan stocks rose 1.06 percent to end above the 8,000-point barrier for the first time in nearly 19 months yesterday, amid hopes of growing business for Hon Hai and other tech firms as the economy recovers from a global downturn.

The main TAIEX share index closed up 84.90 points at 8,057.49, its highest close since June 18, 2008.

Hon Hai Precision was the most actively traded issue by turnover, rising 1.7 percent after a local newspaper said yesterday the island's biggest electronics parts maker was evaluating plans to list some of its affiliates.

The mainland's "demand for TVs during the coming Chinese New Year looks set to be stronger than that during the October holidays as the economy recovers," said Andrew Deng, an assistant vice president with Taiwan International Securities Corp.

Shares worth NT$140 billion ($4.3 billion) changed hands, exceeding the previous session's NT$115.6 billion, in what analysts said was a sign the market could extend its gains.

The TAIEX is expected to trade between 8,100-8,200 points this week, Deng added.

Financial shares also pushed up the broader market with a 2.3 percent jump, as a historic financial deal signed by Taiwan and the mainland will soon take effect.

There will be more and more news of Taiwanese financial firms teaming up with mainland counterparts as the memorandum of understanding between Taiwan and the mainland takes effect in January, said Michael On, managing director with Beyond Asset Management.

Yuanta Financial gained 3.9 percent. Sources said earlier this month its brokerage arm was in talks to buy a 20 percent stake in mainland counterpart Soochow Securities, a deal that would allow Taiwan's top brokerage to expand deeper into the mainland.

Cathay Financial, the island's biggest listed financial holding firm, advanced 2.2 percent.

AU Optronics, the world's No 3 flat-panel maker, was 0.66 percent higher and rival Chi Mei Optoelectronics Corp rose 1.9 percent, boosting the optoelectronics sub-index by 1 percent.

Chip makers such as TSMC gained 0.5 percent, while rival UMC jumped 2.1 percent.

Their gains came after local media reported that the Taiwan government was likely to ease restrictions on investments by local LCD makers and chip makers on the mainland next month.

Inventec, the world's No 4 contract laptop PC maker, rose 1.6 percent to a two-month closing high after the company said it would spend $800 million to build a new production facility in Chongqing, southwestern China.

Prime View International, a maker of flexible displays, climbed 2.6 percent following the company's announcement yesterday that its affiliate, Hydis Technologies, had signed a cross licensing agreement with South Korea's LG Display.

China Daily/Reuters

(HK Edition 12/29/2009 page2)