Chunghwa drops again on share buy-back option

Stocks fell for the second day in three. Chunghwa Telecom Co (中華電信) dropped after the a Chinese-language newspaper said the Ministry of Transportation and Communications is in favor of letting the nation's dominant phone company buy back about 10 percent of its shares at a ``slight'' discount to the market price and writing off the stock.

This comes after the government failed four times earlier this year to sell a 5.7 percent stake to domestic investors.

China Steel Corp (中鋼) led gains on the benchmark. The steelmaker will sign a manufacturing venture agreement with Sumitomo Metal Industries Ltd in Japan later this month, a local newspaper reported, without citing anyone.

The TAIEX shed 4.70, or 0.1 percent, to close at 4,671.77. About three stocks rose for every two that fell.

Chunghwa Telecom declined NT$0.90, or 1.8 percent, to NT$48.60. On Tuesday, Chunghwa Telecom Co fell NT$0.50, or 1 percent, to NT$49.50.

China Steel surged NT$1.20, or 6.4 percent, to NT$20.

Yulon Motor Co (裕隆汽車) added another NT$2, or 4.9 percent, to NT$42.60, the highest since May 25, 1998. Yuanta Core Pacific Securities (元大京華證券) started coverage of Taiwan's second-largest automobile company with an "outperform" rating on an improved outlook for sales of cars in China.

Nanya Technology Corp (南亞科技) fell NT$1.30, or 4.5 percent, to NT$27.40. The spot price for the high-speed memory chips made by the nation's largest supplier of the semiconductors fell NT$0.04, or 0.9 percent, to $4.20, according to dramexchange.com, an online marketplace for the chips. See story below.

United Microelectronics Corp (UMC, 聯電) dropped NT$0.10, or 0.4 percent, to NT$25.80. JP Morgan Chase & Co said a venture between the company and Advanced Micro Devices Inc may be canceled.

Formosa Plastics Corp (台塑) rose NT$0.20, or 0.5 percent, to NT$41.70.

Chinese Petroleum Corp (中油) said it will increase liquefied petroleum gas prices as much as 6.2 percent to reflect rising import costs. Formosa Plastics competes with Chinese Petroleum, selling gasoline through a nationwide retail chain.