TAIEX hits 10-month low

The TAIEX dropped to a 10-month low after a report showed US consumer confidence fell and the Federal Reserve Board said US economic growth is slowing.

Taiwan Semiconductor Manu-facturing Co (TSMC,台積電) declined after it said it plans to convert more of its shares into American depositary receipts. TAIEX slid 100.99, or 2.4 percent, to 4,185.95, its lowest since Nov. 13. More than 11 stocks fell for every one that rose. The total value of trade was NT$52.23 billion, 15 percent below the three-month daily average.

The index has fallen 16 percent in the past month on concern the US economic recovery may stall, damping fourth-quarter demand for computers, chips and other electronics. The US is the second-largest buyer of Taiwan's exports.

TSMC declined NT$0.30, or 0.7 percent, to NT$42. The company plans to raise US$186 million selling 93 million shares in the form of American depositary receipts priced at US$10 each, a Chinese-language Web site reported.

"Increasing the supply of ADRs when the fourth-quarter outlook doesn't look promising would put more pressure on their price, which would then hit the Taiwan-traded shares," said Max Wen, a fund manager at KGI Securities Investment Trust Co (中信投信), which manages NT$10 billion (US$288 million) in equities.

MediaTek (聯發科技), a maker of chips for DVDs, dropped NT$22, or 6.9 percent to NT$297. The com-pany's sales next month may drop from September because demand in the fourth quarter for DVD players in China is lower than expected, a local newspaper reported, citing DVD-player manufacturers.

"October sales will suffer because orders were pushed into September ahead of China's long holiday next month," said Jeffrey Hsieh, who manages NT$410 million (US$12 million) in stocks at United Securities Investment Trust Corp (聯合投信).

Chunghwa PictureTubes (中華映管) fell NT$0.75, or 6.7 percent, to NT$10.45. Falling prices and slower-than-expected demand in the fourth quarter may force Taiwan's second-largest flat-panel display maker to lower its profit forecast for the year, another Chinese-language newspaper said.

Lite-On Technology Corp (源興科技) rose NT$0.10, or 0.2 percent, to NT$42.10. The computer-monitor maker received an NT$15 billion order from Dell Computer Corp to assemble more than 3.5 million flat-panel display monitors, with shipments to start at the end of the year, the paper reported. Lite-On spokes-man Richard Yu (喻銘鐸) wouldn't comment on the report.

Gold Circuit Electronics (金像電子), which makes printed-circuit boards, fell NT$0.50, or 6.8 percent, to NT$6.85. Sales this month may fall as much as three-fifths from last month to NT$200 million after a fire on Sept. 1 disrupted production.

Asustek Computer (華碩電腦) rose NT$1, or 1.3 percent, to NT$80. The motherboard makers' shares may rise more than 15 percent in the next month as shipments in September and October gain more than expected from the previous month, UBS Warburg wrote in a report.

Shin Kong Financial Holdings Co (新光金控) fell NT$0.60, or 6.9 percent, to NT$8.10. The owner of Taiwan's No. 2 life insurer may post a loss of more than NT$24 billion this year after it failed to sell two buildings, a local newspaper reported. In July, Shin Kong forecast a NT$8.8 billion loss for the year.

CMC Magnetics Corp (中環) rose NT$0.40, or 2.8 percent, to NT$14.70. The world's second-largest maker of recordable compact discs expects its profit margin to rise to 30 percent next year after it increases prices in the next two quarters, according to local Chinese media.