Taiwan stocks gain for 3rd week in a row

By closing, the TAIEX increased 11.75 points, or 0.15 percent, to 7,897.91. For the week, the benchmark stock index rose 149.58 points, or 1.93 percent.

Yesterday morning, the TAIEX hovered near its close Thursday, despite a rally in U.S. and Asian shares.

However, at noon time, Taiwan stocks rose after reports that a new round of negotiations on a cross-strait economic cooperation framework agreement (ECFA) will take place Mar. 29.

ECFA is in essence a free trade agreement between Taiwan and China, in the absence of formal diplomatic ties. With ECFA, Taiwan goods will compete on an equal footing with their Southeast Asian counterparts, now that China and Southeast Asian nations have entered the so-called ASEAN Plus One framework.

An ECFA will also pave way for Taiwan to sign free trade agreements with countries with which Taiwan does not have diplomatic ties.

Trade volume decreased from Thursday, although it was still above the NT$100 billion level at NT$114.239 billion.

IT shares continued to see the heaviest transactions, although investors have shifted their focus to IT channel, networking and IT service shares. Asus and Acer saw heavy buy orders at the end of trade.

MediaTek closed down on neutral outlooks by institutional investors, despite the fact the company has announced to issue cash dividends of NT$26 a share.

Financial shares went through a correction in the morning, after having gained for three days. They surged by the end of the trade, however, after buy orders from investors.

Construction, transportation and tourism shares were among the better-performing traditional shares. Transportation stocks rose after reports fares will increase. Tourism shares rose on prospects ECFA will be signed soon, an act seen as conducive to Taiwan's travel sector.

Institutional investors made a total net purchase of NT$2.453 billion, translating into net purchase of NT$2.236 billion by foreign/Chinese investors, net sale of NT$266 million by securities trusts, and net buy of NT$483 million by securities firms.

Analysts hold a positive outlook for Taiwan stocks in the short term, as a series of investment forums kicking off next week are expected to boost investors' confidence.

In other stocks, Advantech Co., a computer product maker, surged 4.6 percent to NT$68.90, the highest since Jan. 20. Spokesman William Tseng said in a phone interview with Bloomberg the company plans to propose to its board of directors to pay a cash dividend of NT$4 per share for 2009.

Wintek Corp., which supplies touch sensors for the iPad according to analysts, declined 3.8 percent, the biggest drop since Feb. 25, to NT$25.15. The Liberty Times reported the company delayed the shipment delivery of Apple's iPad.

United Microelectronics Corp., the world's second largest maker of custom chips, increased 1.2 percent to NT$16.95, the highest since Jan. 25. The company plans to hire 2,400 engineers this year, the Hsinchu, Taiwan-based chipmaker said in an e-mailed statement Thursday.

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