Stocks fall after US economy shows weakness

Stocks yesterday fell a second day, paced by Compal Electronics Inc (仁寶電腦), Benq Corp (明基電通) and other exporters, on concern US economic growth won't rise after the war in Iraq ends.

The TAIEX fell 15.06, or 0.3 percent, to 4,537.39 after the latest Blue Chip Economic Indicators survey showed the US economy will probably expand 2.4 percent this year, lower than the 2.6 percent increase forecast last month.

The country's exports to the US, its second largest market after China, fell 0.8 percent last month from a year earlier, according to a Ministry of Finance report.

"The reality is that the end of the war is not a cure-all; exports are just one of the indicators that the macroeconomic and corporate fundamentals may not be as good as people expected," said Richard Huang, who manages NT$7.5 billion (US$215 million) of equities at Shinkong Investment Trust Co (新光投信).

Almost three stocks fell for every two that gained. The value of trade was NT$49.2 billion, or 26 percent less than the daily average in the past three months.

MSCI Taiwan futures for April delivery in Singapore fell 0.9 percent, to 193.20. The Taiwan Futures Index fell 0.9 percent to 4,505.

Compal fell NT$0.80, or 2.2 percent, to NT$35.90. Benq, the nation's biggest maker of mobile phones, fell NT$0.80, or 2 percent, to NT$39.30.

Compal, the world's second-largest maker of notebook computers, said March sales rose 21.6 percent from a year ago to NT$10.7 billion (US$307.4 million).

Sales were NT$8.8 billion in March last year. Sales in February this year were NT$8.9 billion.

Chi Mei Optoelectronics Corp (奇美電子) fell NT$0.60, or 2 percent, to NT$29.20. The maker of flat-panel displays used in electronic products said sales last month rose 10 percent to NT$3.83 billion from a year before.

Chunghwa Picture Tubes Ltd (中華映管) fell NT$0.30, or 2.8 percent, to NT$10.60. The company plans to raise as much as NT$50 billion to build a new plant, a local newspaper reported, citing the company's newly appointed chairman Lin Chen-hung (林鎮弘). The company wants to raise the money through overseas sales of shares convertible into stock as well as bank loans, the report said.

Chunghwa Telecom Co (中華電信) rose NT$0.50, or 0.9 percent, to NT$53.50. The phone company said last month's sales rose 5.4 percent from a year ago to NT$13.7 billion.