Stocks fall on SARS fears

Stocks declined for a second day amid concerns the spread of a deadly disease will hurt economic growth. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) paced the slide.

The TAIEX tumbled 141.40, or 3.2 percent, to 4,233.54. The index shed 9.1 percent this week, its biggest weekly decline since September 2001. Only 37 of 610 stocks on the Taiwan Stock Exchange gained.

MSCI Taiwan futures for April delivery in Singapore declined 3.6 percent to 180.20. The Taiwan Futures Index dropped 3.3 percent to 4,211.

"Things are getting worse," said Simon Chao (趙永宏), who manages US$17 million at President Investment Trust Corp (統一投信).

"Taiwan's efforts to contain the spread of SARS have failed," he said.

Taiwanese companies, many with manufacturing plants in China, are already experiencing disruptions. Chi Mei Optoelectronics Corp (奇美電子), the nation's No. 2 maker of flat-panel displays, banned employees from traveling to China, where many of its customers are located.

Notebook-computer maker Compal Electronics Inc (仁寶電腦) said it may relocate some production from China. Lite-On Technology Inc (光寶科技), the nation's largest maker of computer monitors, issued facemasks and took temperatures at an investors' briefing today.

TSMC dropped NT$1.8, or 3.8 percent, to NT$45.50. UMC, its biggest rival, fell NT$0.70, or 3.4 percent, to NT$19.90.

Chi Mei shed NT$1.9, or 6.7 percent, to NT$26.50. Compal fell NT$1.7, or 4.4 percent, to NT$36.60. Acer Inc fell NT$1.1, or 3.3 percent, to NT$32.

AU Optronics Corp (友達光電) fell NT$0.20, or 1 percent, to NT$19.50. The world's fourth-largest maker of flat-panel displays forecast full-year 2003 profit of NT$2.58 billion (US$74 million) on a 27 percent increase in sales to NT$96.3 billion.

Hon Hai Precision Industry Co (鴻海精密) fell NT$6.50, or 5.9 percent, to NT$103.50. The company may say first-quarter profit rose 10 percent, lagging a two-fifths rise in sales because it sold more lower-margin products.

Minister of Finance Lin Chuan (林全) stated Friday that decisions on whether the National Stabilization Fund should intervene in the market to prop up shares must be decided by the fund's committee and that he has no right to represent the fund to make that decision.