Shares in Chartered slide

Chartered Semiconductor Man-ufacturing Ltd shares fell as much as 5.8 percent on concern its underwriter, Merrill Lynch & Co, is selling its 11 percent stake in the company.

The shares of the world's No. 3 provider of made-to-order chips dropped as low S$1.13 and closed at S$1.14 on the Singapore Exchange. About 244 million shares traded, making it the most active stock by value and volume.

Merrill was left owning 275.2 million shares of Chartered Semiconductor, which it purchased at S$1 each after it failed to sell all the stock in a rights offer by the Singapore-based chip company. Merrill may have been selling the stock yesterday, said Gabriel Yap, senior vice president for dealing at Kim Eng Ong Asia Securities.

"It does make sense" for Merrill to sell, Yap said. "It's already above their price of S$1."

In one trade at 10:07am, about 213 million shares changed hands at S$1.12 each, according to data from the exchange.

Merrill may be selling its stake after Chartered Semiconductor shares rose about 32 percent in the previous two days on optimism about the company's agreement to share factories and develop chip-making systems with International Business Machines Corp.