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TAIEX falls 0.4 percent as TSMC, UMC decline

The TAIEX fell yesterday, led by makers of computer chips such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), on concern their stock gains may have outpaced profit growth.

The TAIEX shed 22.06, or 0.4 percent, to 5,623.22. Six stocks rose for every five that declined. The futures contract for September delivery fell 0.3 percent to 5,652.

About 2.4 billion shares changed hands, or 47 percent below the average volume in the past three months. Shares worth NT$61.2 billion (US$1.8 billion) were traded.

Shares of TSMC fell NT$1, or 1.5 percent, to NT$67. The stock has gained 70 percent this year, compared with the TAIEX's 26 percent advance. UMC has risen 44 percent. UMC shares yesterday lost NT$1, or 3.3 percent, to NT$29.30.

"The semiconductor industry recovery is indisputable, but TSMC's and UMC's recent rally has already adjusted for it," said Phil Chen, a fund manager at Grand Cathay Securities Investment Trust Co (大華投信).

"Investors will need a bigger boost to propel semiconductor shares higher," he said.

Construction was the only sector to trade in positive territory throughout the session. It rose 3.1 percent overall. Analysts said preferential loans recently launched by the government for home buyers should help boost property sales.

Flat-panel display makers such as AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子) rose on optimism that they will need to expand to meet stronger demand. AU Optronics and two rival flat-panel display makers plan to sell debt totaling NT$54 billion (US$1.5 billion) to help fund expansion, a Chinese-language newspaper reported on Saturday, citing unidentified bankers.
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