TAIEX declines on concerns over foreign investors

Share prices closed down 0.59 percent yesterday, after early gains on Wall Street's rise and falls in oil prices gave way to concerns over the stance adopted by foreign investors, dealers said.

They said that as electronic stocks led declines on high price-to-earnings ratios, interest shifted to companies with the potential to post improved earnings, including thin-film-transistor liquid crystal display panel makers.

The TAIEX closed down 36.83 points at 6,205.09, on turnover of NT$73.15 billion (US$2.28 billion).

Kai Yuan Securities Investment Consultant Co (開元投顧) president Tom Tang (湯建源) said some highly-priced electronics stocks suffered a correction and led the broad electronics sector lower.

"There were worries over high P/E ratios and increased share flows," he said.

Rotational plays dominated the local bourse on the lack of solid fundamental leads, he said.

The market "was directionless because they [investors] are waiting for a clearer industrial picture," Tang said.

AU Optronics Corp (友達光電) closed up 0.10 at NT$50.80, Chi Mei Optoelectronics Corp (奇美電子) was up 1.10 at NT$43.70, Chunghwa Picture Tubes Ltd up 0.15 at NT$11.85 and HannStar Display Corp (瀚宇彩晶) up 0.28 at NT$9.44, after a report that second-tier panel firms have decided to either cut back on production or raise prices for selected products in a bid to limit supply growth.

China Airlines (華航) fell 0.10 to NT$15.95, as the company said it has decided to reduce its earnings per share forecast for this year due to rising oil prices.

Evergreen Marine Corp (長榮海運) rose 0.75 to NT$23.50, after its shares went ex-dividend, following a NT$2 cash dividend per share and a 10 percent stock dividend.

Hon Hai Precision Industry Co (鴻海精密) gained NT$1 to NT$170, after a report that the Hon Hai Group has doubled the mobile-phone production capacity of its factory in Hungary.