Stocks slump 2.5 percent, led by First International

The TAIEX yesterday suffered its largest fall in four weeks, led by Asustek Computer Inc (華碩電腦), on concern business isn't recovering from last year when global sales declined for the first time since 1985.

The TAIEX fell 120.36, or 2.5 percent, to 4,644.58. It was the biggest percentage decline since Aug. 5. Nine stocks fell for every one stock that rose. The total value of trade was NT$41.6 billion.

Asustek, the nation's biggest maker of boards that connect chips and other parts in personal computers, fell NT$5, or 6.1 percent, to a 12-month low of NT$77.5. Second-quarter profit fell by more than half to NT$1.2 billion (US$35 million) as it cut prices to boost sales.

"We are going to sell shares in companies like Asustek and Gigabyte Technology Co (技嘉科技)," said Charles Hsu, who helps manage NT$420 million (US$12 million) in stocks at First Global Investment Trust (元大投信). "Gross margins in this business are getting too thin."

Gigabyte, another motherboard maker, fell NT$4, or 5.3 percent, to NT$71.5.

First International Computer Inc (大眾電腦), a supplier of personal computers to Hewlett-Packard Co, fell NT$0.45, or 5.4 percent, to NT$7.85. The company posted a first-half loss of NT$495.55 million compared with net income of NT$149.53 million in the same period a year earlier.

Gold Circuit Electronics Ltd (金像電子), the maker of boards that connect chips and other parts in electronic products, fell NT$0.70, or the 7 percent limit, to NT$9.3. The company had a factory fire that may reduce production in the third quarter by as much as 30 percent, local newspapers reported.