AU Optronics leads shares lower

Stocks fell, led by AU Optronics Corp (友達光電), on concern sales of computer-monitor makers will drop as customers reduce inventories after US West Coast port operators and dockworkers reached an agreement to avoid a port shutdown.

The TAIEX fell 45.27, or 1 percent, to close at 4,677.89. More than five stocks dropped for every four that rose. The total value of trade was NT$74.36 billion (US$2.14 billion), 5 percent above the three-month daily average.

AU Optronics fell NT$1.50, or 5.8 percent, to NT$24.50. BenQ Corp (明基電通), which buys panels from AU Optronics to make computer monitors for customers such as Hewlett-Packard Co, fell NT$1.80, or 3.6 percent, to NT$47.80.

US West Coast port operators and dockworkers on Sunday reached an agreement on a contract that would increase wages and benefits. The agreement ends a dispute that closed ports for 10 days last month.

"Customers won't need to keep such big inventories, so they won't order so much,"said John Liu, who manages NT$1.6 billion in stocks at Shinkong Investment Trust Co (新光投信). "We still haven't seen the worst for the flat-panel makers," he said.

Chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) fell NT$1.50, or 2.9 percent, to NT$50.5. The stock gained 13 percent in the previous three days.

TSMC chairman Morris Chang (張忠謀) said a recovery in the second quarter won't be "explosive," the cnYES.com Web site reported, without naming the source of its information.

Last month Chang predicted a "clear recovery" from the second quarter.

Macronix International Co (旺宏電子) rose NT$0.55, or 4.3 percent, to NT$13.45. The maker of flash-memory chips gained after Intel Corp said it plans to raise flash-memory chip prices by as much as 40 percent beginning Jan. 1 as demand for cellphones rises.

Chunghwa Picture Tubes Ltd (中華映管) fell NT$0.55, or 3.9 percent, to NT$13.65. The company sold 6.2 percent of its stake in its plant in Fuzhou, China.

Chunghwa is lowering its holding in the China unit, in which it now owns a 78.2 percent stake, to prepare it for a listing in China. Chunghwa plans the listing for the end of next year, a Chinese-language newspaper reported.

Fubon Financial Holding Co (富邦金控) rose NT$1.20, or 4.5 percent, to NT$28. The company said it received approval from the Ministry of Finance to take over TaipeiBank (台北銀行).

Pacific Electric Wire & Cable Co (太平洋電線電纜) fell NT$0.24, or 7 percent, to NT$3.21.

Financials remained relatively weak, with investors still cautious ahead of a decision from the government over who will be named as the fourth finance minister to serve under President Chen Shui-bian's (陳水扁) administration.

First Commercial Bank (第一銀行) ended down 1.3 percent at NT$22.4, while International Commercial Bank of China (中國商銀) was 0.5 percent lower at NT$21.4.

Chang Hwa Bank (彰化銀行) was an exception, rising 1.9 percent to close at NT$16.5. Government funds were suspected to be supporting the stock ahead of Dec. 7 elections for councilors and mayors in Taipei and Kaohsiung, said Richard Tsai, an analyst at Grand Cathay Securities Co (大華證券).