TAIEX declines on reports of sagging demand for LCDs

Stocks dropped for the third day yesterday. AU Optronics Corp (友達光電) and Quanta Display Inc (廣輝電子) led declines after a Chinese-language newspaper said prices of flat computer monitors will "crash" in the first quarter next year.

"Electronic shares are under pressure, because industry growth is in doubt," said Liu Juming, a fund manager at Fuh-Hwa Financial Holdings Co (復華金控).

"Demand may not be as strong as people had hoped," he said. Liu plans to reduce his holdings in electronics shares.

The TAIEX shed 73.96, or 1.3 percent, to 5,865.51, extending a two-day, 1.7 percent drop. The Taiwan Futures Index fell 2 percent to 5,865. About three stocks declined for every one that gained.

AU Optronics, the world's No. 3 maker of flat-panel displays for personal computers, tumbled NT$2, or 4.8 percent, to NT$39.50. Quanta Display, a smaller rival, lost NT$1.10, or 6.5 percent, to NT$15.90.

Chi Mei Optoelectronics Corp (奇美電子), the country's second-largest maker of flat-panel displays, fell NT$1.90, or 4.7 percent, to NT$38.70.

Chunghwa Telecom Co (中華電信) was unchanged at NT$50.50. The government plans to sell 180 million shares of Chunghwa this month, a Chinese-language newspaper reported. The government plans to hold auctions to raise NT$9.1 billion (US$267.7 million) selling a 1.8 percent stake, it said.

SinoPac Holdings Co (建華金控), the 10th-largest financial holding company by market value in Taiwan, fell NT$0.50, or 2.7 percent, to NT$17.90. SinoPac said it prefers to merge with a domestic rival to increase size and reach instead of being taken over.