Stocks decline as Compeq and Elitegroup shares fall

Taiwan's TAIEX Index slumped to its lowest this year as exporters such as Elitegroup Computer Systems Co (精英電腦) fell after the New Taiwan dollar surged to a 13-month high against the US dollar, eroding the value of their overseas sales.

The TAIEX Index shed 75.64, or 1.4 percent, to 5,384.89 as about four stocks declined for every one that rose. The total value of trade was NT$58.5 billion (US$1.7 billion).

The New Taiwan dollar had its strongest closing level in 13 months, gaining 0.25 percent to close at NT$33.772 against the US dollar at the Taipei foreign exchange market.

"For those exporters who didn't hedge against the rise, their losses will be quite substantial," said Phil Chen (陳浚洧), who manages NT$900 million (US$27.8 million) in stocks at Grand Cathay Securities Investment Trust Co (大華投信). Further, "margins will be affected."

Elitegroup Computer, the nation's third-largest computer-motherboard maker, fell NT$11, or 6.5 percent, to NT$159 on a local media report that the company's June shipments may fall below expectations as customers held back from placing orders.

AU Optronics Corp (友達光電) fell NT$2.4, or 6.7 percent, to NT$33.2 after a Chinese-language newspaper said computer-monitor makers are delaying orders of flat-panel displays because they expect falling prices in July.

Printed-circuit-board maker Compeq Manufacturing Co (華通電子) fell NT$2.9, or 7 percent, to NT$38.7. The company forecasts profit this year will fall more than four-fifths from last year to NT$200.98 million.

Winbond Electronics Corp (華邦電子) fell NT$0.2, or 1 percent, to NT$20.8 on concern chip prices may slide, cutting earnings, after Micron Technology Inc and Samsung Electronics Co were accused in an antitrust lawsuit of trying to corner the market in dynamic random-access memory chips.