Wed, Jul 16, 2003 - Page 11 News List

Stocks fall as BenQ hits JP Morgan road bump

BLOOMBERG

Stocks declined yesterday. BenQ Corp (明基電通), the nation's largest mobile-phone maker, dropped after JP Morgan Chase & Co said the stock's 33 percent surge this year outweighs its profit growth.

The TAIEX shed 14.08, or 0.3 percent, to 5,335.86 on turnover of NT$133.25 billion (US$3.87 billion). July futures on the index fell 1.6 percent to 5,328. About 11 stocks gained for 10 stocks declined.

BenQ fell NT$0.90, or 2.1 percent, to NT$42.30. J.P. Morgan Chase analyst Johnny Chan, who has an "underweight" rating on BenQ said its share price has "run ahead of its fundamentals."

BenQ has gained 33 percent this year, as of yesterday, compared with a 20 percent climb in the TAIEX. BenQ said in May its second-quarter sales may slip 5 percent from its NT$23.4 billion (US$675 million) forecast.

"The recent rally is a reflection of optimism about the technology industry recovery this year," said Mike Shiao, who manages the US$12 million Taiwan Select Growth Fund at Invesco Taiwan Ltd (景順投信).

"Investors will need to see solid profit figures before they are willing to move the share prices higher," he said.

Compeq Manufacturing Co (華通電子), which also makes mobile-phone parts, shed NT$0.80, or 4.1 percent, to NT$18.60. Its shares had surged 84 percent since May 2, when it plumbed this year's low.

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