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FTSE Group's decision sends stock market down

Shares fell yesterday on disappointment over index provider FTSE Group deciding against upgrading Taiwan to developed market status.

The TAIEX dropped 66.14 points, or 1.1 percent, to 6,082.56, on turnover of NT$58.70 billion (US$1.79 billion).

The index saw 759 stocks ending lower, with 154 higher and 144 unchanged.

FTSE said on Wednesday it decided not to upgrade Taiwan and South Korea to developed market status from their current emerging market status, because the two economies need to ensure a "free and well-developed foreign exchange market."

Pessimism

"Some investors see no reason to put their money into the market because of the FTSE decision," said Alex Huang, an assistant vice president at Barits International Securities (倍利證券).

Panel shares were among the biggest decliners yesterday.

AU Optronics Corp (友達光電), the world's third-largest thin-film-transistor liquid crystal display maker by revenue, fell 6.9 percent to NT$44.5. Chunghwa Picture Tubes Ltd (中華映管) dropped 6.9 percent to NT$9.26.

Chi Mei Optoelectronics Corp (奇美電子) fell 6.75 percent to NT$36.65 and Quanta Display Corp (廣輝電子) was down 6.66 percent at NT$11.25 on panel industry concerns after Samsung Electronics Co of South Korea said it might cut investment in the sector.

Bank privatization

The government's failure to sell the state-run Taiwan Business Bank (台灣企銀) dealt a further blow to market sentiment, analysts said.

The Ministry of Finance announced late on Wednesday the sale of the bank would not go ahead because the top bidder -- which it didn't identify -- had withdrawn after a four-day strike by the bank's union.

Shares in Taiwan Business Bank fell by the maximum daily limit of 7 percent yesterday to NT$9.49, while E.Sun Financial Holding Co (玉山金控), which reportedly pulled out of the negotiations for the bank, was up 6.75 percent at NT$22.95.

Traders said investors will likely stay on the sidelines until next month, when listed companies issue their September revenue numbers.
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