Authorities eye share movements

"But no obvious irregularities have been seen since it'll be a short-term price hike."

Mike Chow, a manager with Yuanta Core Pacific Securities Corp

Taiwan Stock Exchange Corp (TAIEX) authorities are monitoring abnormal movements of several listed companies that manufacture products now in hot demand because of the outbreak of severe acute respiratory syndrome (SARS), the local media speculated yesterday.

According to the TAIEX Web site on Wednesday, stock prices of Universal Corp (恆大) -- a local mask maker -- jumped by over 135 percent from NT$7.6 on March 28 to peak at NT$19.6 yesterday.

Prices of the Farcent Enterprise Co (花仙子), which makes disinfectants, saw share prices leap 38 percent over the past six trading days, while Mao Bao Chemical Products Inc (毛寶) -- a cleaning-product manufacturer -- also saw share prices increase 40 percent in the same period.

Medtecs International Corp (美德醫療) -- a Singaporean medical consumables company -- saw its Taiwan Depository Receipts surge by 78 percent last month.

The report said the TAIEX has been keeping a close eye on share prices of these manufacturers for fear of stock irregularities and insider trading.

But a TAIEX official yesterday refused to confirm the news, saying "the corporation doesn't comment on, or make public, secret monitoring."

Universal Corp declined charges of insider trading, but its shares still fell NT$1.2, or 6.5 percent, to close at NT$17.2 yesterday.

"The [TAIEX] warning may have eased the [Universal's] price hike yesterday, which had been exaggerated," said Mike Chow (周道中), a manager with Yuanta Core Pacific Securities Corp (元大).

Shares of Farcent gained NT$0.9, or 6.8 percent, to close at NT$14.15 while shares of Mao Bao also rose NT$0.9, or 6.7 percent, to close at NT$14.35.

Medtecs shares rose NT$1.7, or 6.7 percent, to close at NT$27.

Chow said that SARS has rescued a few poor-performing traditional manufacturers including Taiwan Fluorescent Lamp Co (台光), whose ultraviolet lamps boast virus-killing capability and have been selling well recently.

Taiwan Fluorscent shares hit a low of some NT$2 last October, but rebounded to NT$4.76 last month and closed at NT$5.7 yesterday, the stock analyst said.

Taiwan Fluorscent shares yesterday saw turnover of some NT$167 million, up from NT$6.7 million on a single day in March according to Chow.

He said that the recent hike in prices of SARS-related equipment manufacturers was the result of the spread of the virus although it's inevitable that some speculative investors took advantage of the worsening situation and profited from the speculative value of the shares.

"But no obvious irregularities have been seen since it'll be a short-term price hike," the analyst said.

Chow said that related share prices may continue to head north for a month before declining to normal price levels.

These shares may fall by up to 50 percent, he said. In the long run, he estimated that the disease may be contained by the third quarter.

As investors are still taking a wait-and-see approach, Chow said the TAIEX may decline further to hit another new low of 3,845 points in May from yesterday's finish of 4,191.25.