TAIEX declines, Chunghwa leads

The TAIEX fell, led by Chunghwa Telecom Co (中華電信) after the government sold the first portion of a NT$25 billion (US$719 million) stake in the company at a discount to its closing price yesterday.

Hua Nan Financial Holdings Co (華南金控), First Financial Holding Co (第一金控) and other banking stocks led advances after Moody's Investors Service boosted the short-term ratings of some domestic banks, including the lending units of Hua Nan and First Financial.

The TAIEX slid 10.96, or 0.2 percent, to 4,530.40. The key index moved between a 0.4 percent loss and a 0.5 percent gain in intra-day trading. The value of trade was NT$43.6 billion, almost a third less than the daily average in the past three months.

For the week, the index added 0.7 percent, its second weekly gain in three weeks.

MSCI Taiwan futures for April delivery in Singapore fell 0.1 percent to 193.90. The Taiwan Futures Index rose 0.1 percent to 4,516.

Chunghwa Telecom fell NT$2.50, or 4.8 percent, to NT$50. The government sold 4.5 percent of the 500 million shares of Chungwha Telecom on offer at NT$50 a share yesterday. The auction will continue to April 16.

"We aren't very positive on the stock," said Tom Lin, head of research at Franklin Templeton First Taiwan Securities Investment Trust Enterprise, that manages the equivalent of about US$143 million in equities. Lin cited price competition and falling call rates as damping the share's growth.

First Financial, owner of the nation's fourth-largest bank by assets, rose 50 cents, or 2.3 percent, to NT$22.40. Hua Nan Financial, owner of country's fifth-largest bank by assets, rose 50 cents, or 2.3 percent, to NT$22.30.

Moody's said it upgraded its ratings of the lenders to reflect their strong retail base, their importance as of the nation's major commercial banks and the supportive regulatory environment.

"Funds may be parking in bank stocks, whose price levels seem to be a buying opportunity now," said Lai Jan-hong, who helps manage the equivalent of US$29 million of stock at EnTrust Investment Trust Corp (永昌投信).

"Their profits after loss provisions are estimated to be even better next year," Lai said.

Hon Hai Precision Industry Co (鴻海精密) rose NT$1, or 0.9 percent, to NT$118. The country's biggest maker of electronic products for other companies said March sales rose 35 percent to NT$22.12 billion from a year earlier.