■ Shares down on profit-taking
The TAIEX fell 23.47 points, or 0.3 percent, to 6,757.17, as investors locked in profits after a recent rally. The index had gained 6.6 percent from March 23 to last Friday. Turnover was NT$86.09 billion (US$2.66 billion). Electronics shares were among the biggest decliners with a 0.6 percent fall overall, while the financial subindex slid 0.6 percent on continued investor concern over the banking sector's consumer loan problem. Cathay Financial Holding Corp (國泰金控), the nation's largest financial group by assets, slipped 0.7 percent to NT$59.10 yesterday. On Monday, the group reported a net loss of NT$11 million last month.
■ CEOs need to lead in creativity
Innovation is the key to sustaining a company's profitability, and chief executives should take the lead in initiating these creative waves, industry insiders said yesterday. Organizations should dispose of stereotypes that research and development engineers are the only source of creative inspiration, said Charles Kau (高啟全), president of computer-memory maker Inotera Memories Inc (華亞科技). Kau made the remarks at a press conference in which IBM Taiwan Corp revealed the results of its global CEO survey. The survey suggested that companies must inject new ideas into their operations if they intend to stand out in today's competitive business environment. To ensure success in business, CEOs should take the lead in making the creative juice flow by continuously observing people, pursuing new ideas and drafting appropriate policies to fit their employees' needs, Kau said.
■ Lin calls for more clarity
China Development Financial Holding Corp's (中華開發) chairman Lin Cheng-yi (林誠一) ruled on Monday that the company should tender a detailed report to the board of directors to clarify its controversial hostile takeover bid of its smaller rival Taiwan Interna-tional Securities Corp (金鼎證券). Lin, a senior adviser to President Chen Shui-bian (陳水扁) and former chairman of the now defunct Macoto Bank (誠泰銀行), took over China Development Finan-cial's chair from Chen Mu-tsai (陳木在) on March 31, after the latter was ousted for allegedly failing to perform his duties in accordance with his position as a government-appointed board director in the wake of the company's disputed acquisition bid. The directors also decided at the meeting to distribute NT$0.2 in cash dividends and NT$0.3 in stock dividends to shareholders this year. The shareholders' meeting is scheduled to be held on June 30, the company said.
■ Fitch may downgrade AUO
AU Optronics Corp (AUO, 友達光電) may have its long-term debt rating cut by Fitch Ratings due to the company's plan to buy rival Quanta Display Inc (廣輝電子) for US$2.2 billion in stock. AUO's long-term issuer default rating of BB and national long-term rating of BBB+(twn) were placed on negative watch, Fitch said in a statement yesterday. AUO said on Friday that it would issue one share for every 3.5 of Quanta Display. Fitch estimates AUO will acquire around NT$55 billion (US$1.7 billion) to NT$60 million of net interest bearing debt from Quanta Display, according to the statement. The ratings company "does not expect any possible downgrade of the rating will exceed one notch," according to the statement. The review of the rating will be conducted in the next three to six months, the statement said.
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