TAIEX declines for a third day, led by Hon Hai, Acer

The TAIEX declined for a third day yesterday. Companies such as Hon Hai Precision Industry Co (鴻海精密) and Acer Inc that haven't reported second-quarter earnings yet dropped amid concern their results may disappoint.

The TAIEX shed 30.31, or 0.55 percent, to 5,523.12. The futures contract for September delivery was unchanged 5,548. About six stocks declined for every one that gained.

About 3.9 billion shares changed hands, or 20 percent below the average volume in the past three months. Shares worth NT$90.6 billion (US$2.7 billion) were traded.

"Investors are on the edge waiting for earning reports,"said Simon Chao (趙永宏), who manages US$17 million at President Investment Trust Corp (統一投信).

"Many companies with poor scorecards tend to want to hold off the announcement until the last minute," he said.

Hon Hai Precision Industry, the nation's largest electronics manufacturer, fell NT$1, or 0.8 percent, to NT$132. Acer fell NT$1.20, or 2.4 percent, to NT$48.80.

Semiconductor shares rose after a report from the Semiconductor Equipment Association of Japan showed global orders for Japanese-made equipment used to make computer chips increased 27 percent last month from a year ago. It was the second gain after three months of declines, the group said.

Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電) gained NT$1.50, or 2.3 percent, to close at NT$65.50.

Rival United Microelectronics Corp (UMC, 聯電) rose NT$0.10, or 0.4 percent, to NT$26.30.

TSMC and UMC both rose on American depository receipt gains and foreign investor interest.

Asustek Computer Inc (華碩電腦) was steady at NT$88.00 after profit-taking put lid to early gains after a Chinese-language newspaper reported that the firm secured contract-manufacturing orders from Fujitsu for server motherboards and from Samsung Electronics for notebook computers.

China Airlines Co (華航) was unchanged at NT$14 after it posted a net loss of NT$905 million for the first half as people shunned travel due to the SARS outbreak. The airlines had a loss for the six months ended June 30, compared with a profit of NT$1.34 billion last year.

Formosa Plastics Corp (台塑) was unchanged at NT$50. Formosa posted a 46 percent increase in second-quarter profit on investment gains.

Net income rose NT$4.21 billion from NT$2.87 billion a year earlier. Three-month sales rose 19 percent to NT$19.3 billion.