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■ China Steel downgraded
Shares of China Steel Corp (中鋼), Taiwan's largest steelmaker, were downgraded to "underperform" from "neutral" by Credit Suisse First Boston as cost increases may outpace a rise in product prices. Credit Suisse First Boston analysts Jim Hung and Catherine Chen said in a report yesterday that costs will probably rise 28 percent this year, larger than a projected 17 percent increase in steel prices. The rise in product prices "cannot offset the increase in costs," the analysts said. The downgrade came after Kaohsiung-based China Steel said on Feb. 24 that it will increase prices for customers in Taiwan in the second quarter by NT$1,000 (US$32.10) to NT$2,100 a tonne, a range Credit Suisse First Boston said was "at the low end of market expectations."

■ AU Optronics sales fall
AU Optronics Corp (友達光電), the world's third-largest maker of flat-panel displays used in computers and televisions, said last month's sales fell 7.8 percent to NT$11.5 billion (US$373 million) from NT$12.5 billion a year earlier, the company said in a statement to the Taiwan Stock Exchange. Rival Chi Mei Optoelectronics Corp (奇美電子), said sales for the company and its units fell 3.5 percent last month to NT$8.8 billion (US$285 million) from a year earlier. Sales for Chi Mei alone rose 7.1 percent last month to NT$8.2 billion from NT$7.7 billion, the company said in a statement to the stock exchange.

■ CAL launches Chiang Mai flights
China Airlines (CAL, 華航) said yesterday it will launch passenger flights to Chiang Mai, Thailand, starting the thrice-weekly service on March 29. Chiang Mai would be the airline's third destination in Thailand along with Bangkok and the southern tourist resort of Phuket, a company statement said. Chiang Mai, a popular destination for Taiwanese tourists, has become Thailand's second air transport hub after Bangkok.

■ Formosa expects P&G orders
Formosa Plastics Corp (台塑) expects a factory it's building in China's eastern port city of Ningbo to win orders from Procter & Gamble Co, a Chinese-language newspaper reported, citing unidentified Formosa executives. The factory would contribute the equivalent of NT$35 billion (US$1.1 billion) to sales, or about a quarter of the Taiwanese company's revenue, when it starts production next year, the Taipei-based newspaper reported.

■ Firms must list currency losses
Taiwanese companies must include foreign-currency losses in their earnings statements starting in the current quarter, a Chinese-language newspaper reported, citing unidentified government officials. The Taipei-based newspaper didn't say whether companies must include foreign-exchange gains. Banks and auditors will be required to comply with the new policy on reporting earnings, the newspaper reported, citing the Financial Supervisory Commission.

■ NT dollar pares gains
The New Taiwan dollar pared gains on speculation the central bank sold its currency to slow the appreciation and help preserve exporters' profits. The NT dollar closed little changed at NT$30.875 after rising as much as 0.2 percent, according to Taipei Forex Inc. Turnover was US$694 million, compared with US$799 million the previous day. "The Taiwan dollar wasn't particularly strong yesterday, so any sales by the central bank would just be to slow the appreciation," said Joseph Lee, a currency trader in Taipei at Cathay United Bank (國泰世華銀行).

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