Stocks dropped after a report showed overseas investors were net sellers of the nation’s shares for nine straight days. Hon Hai Precision Industry Co (鴻海精密) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) fell.
“Foreign investors are heavyweights in markets, so their recent selling is hurting stock prices as well as local investor confidence,’’ said Liu Juming, a fund manager at Ta Chong Investment Trust Corp (大眾投信), which manages $730 million in assets.
“Stocks of large companies are more vulnerable because foreigners are draining liquidity from the market,’’ Liu said.
The TAIEX lost 15.36 points, or 0.2 percent, to close at 6,861.65. The index earlier rose and fell as much as 0.5 percent. About three stocks dropped for every two that gained. Futures due in June declined 0.5 percent to 6,855.
Overseas investors sold US$151 million more shares than they bought on Wednesday. They were net sellers for the ninth trading day, reducing their holdings by a net US$2.9 billion on the Taiwan Stock Exchange, according to data compiled by Bloomberg.
Hon Hai, the nation’s largest electronics company by sales, lost NT$5.50, or 2.7 percent, to NT$198. TSMC, the world’s biggest supplier of custom-made chips, fell NT$1.20, or 2 percent, to NT$59.80. AU Optronics Corp (友達光電), Taiwan’s largest maker of flat-panel displays used in computers and televisions, dropped NT$1.30, or 2.7 percent, to NT$47.50.
Cathay Financial Holding Co (國泰金控) advanced after the Commercial Times said the nation’s insurers are raising rents on their properties.
“Rising rent prices will boost property holders’ income without additional costs,’’ said Tom Fu, who manages US$70 million in assets at PCA Securities Investment Trust Co in Taipei.
“Insurance companies that have large holdings of commercial buildings will be the biggest beneficiaries,’’ he said.
Cathay Financial, the nation’s biggest insurance company, climbed NT$1.50, or 2.1 percent, to NT$72. Shin Kong Life Insurance Co (新光人壽), the insurance unit of Shin Kong Financial Holdings Co (新光金控), rose NT$1.75, or 5.3 percent, to NT$35.
A 5 percent increase in rent at Shin Kong’s 180 commercial properties will boost its profit by NT$50 million (US$1.6 million), the report said. Cathay Financial, which has 154 commercial buildings in Taiwan, will add about NT$100 million in income this year after raising rents, the newspaper said.
Elsewhere, Tatung Co (大同) surged 85 cents, or 6.6 percent, to NT$13.70. United Microelectronics Corp (UMC, 聯電), the world’s second-largest made-to-order chip supplier, said it paid NT$583 million for 47 million Tatung shares, bought through its investment unit from May 22 to May 24.