Fri, Nov 28, 2003 - Page 11 News List

TAIEX has biggest fall in three weeks on China fears

BLOOMBERG

Stocks fell yesterday, dragging the TAIEX to its biggest loss in three weeks. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), led declines after China stepped up threats of action against Taiwan if the legislature passed a referendum bill yesterday.

Taishin Financial Holdings Co (台新金控) and China Development Financial Holding Corp (中華開發金控) dropped after a newspaper said the government may slow plans by state-controlled lenders to merge or acquire smaller banks before the March presidential election.

The TAIEX dropped 120.04, or 2.1 percent, to 5,740.57. The decline was the biggest since Nov. 6. About seven stocks fell for every one that gained.

The total value of trade was NT$57.9 billion, 37 percent lower than the daily average in the past three months. The Taiwan Futures Index fell 1.5 percent to 5,818.

"The stock declines reflect the more cautious mood in the market with regard to the referendum," said Lin Kuan-ho, a fund manager at the First Global Investment Trust Co (元大投信). "If the referendum bill is passed, the negative impact will be quite big."

TSMC dropped NT$2, or 3.1 percent, to NT$63.

Taishin Financial fell NT$1.10, or 4.2 percent, to NT$24.90. China Development dropped NT$0.40, or 2.6 percent, to NT$15.10.

Chinatrust Financial Holding Co (中信金控) fell NT$0.90, or 2.6 percent, to NT$33.60 after the company said it may take a charge of NT$10 billion for bad debt taken on when it acquired Grand Commercial Bank (萬通銀行).

Chinatrust will decide next month whether to book the bad-loan costs at one time or take the charge this year and next, Chinatrust financial controller Perry Chang (張明田) said.

Hon Hai Precision Industry Co (鴻海精密) fell NT$4.50, or 3.3 percent, to NT$132.

Hon Hai denied a Chinese-language newspaper report on Wednesday that it won its first order from Wal-Mart Stores Inc to supply about 300,000 portable DVD players to the US retailer for the Christmas season, according to a statement filed to the Taiwan Stock Exchange.

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