Investors spooked by possibility of Shih protest unrest

Share prices closed 1.25 percent lower in thin trading yesterday, with concerns about domestic political developments weighing on sentiment, dealers said.

The worries were largely directed at a campaign by former Democratic Progressive Party chairman Shih Ming-teh (施明德), who is calling on President Chen Shui-bian (陳水扁) to resign over a string of corruption scandals.

The sit-in protest starts on Sept. 9.

Chen has denied any wrongdoing and indicated he is determined to stay in office until his second term ends in 2008.

The weighted index lost 81.46 points at 6,444.76, after trading between 6,422.38 and 6,515.08, on turnover of NT$51.03 billion (US$1.55 billion).

"Share prices lost ground in light turnover, indicating cautious sentiment ahead of the planned protest," said Frank Lin, senior vice president with Fubon Securities (富邦證券). "There were fears about whether the protest may turn violent ... investors chose to take a cautious approach."

Besides the uncertain political backdrop, concerns about capital outflows have weighed on sentiment. Recent data showed ongoing outflows of domestic funds.

United Microelectronics Corp (聯電) fell NT$0.25 to NT$18.00.

AU Optronics Corp (友達光電) closed up NT$0.50 at NT$47.50 after a report that it had secured sufficient contracts for LCD TV panels to utilize capacity fully in the fourth quarter to December.

Compal Electronics Inc (仁寶電腦) rose NT$0.15 to NT$28.10 after news that it would acquire a 69 percent stake in Arcadyan Technology Corp (智易科技) at NT$37 a share.

Accton Technology was limit-down NT$1.25 at NT$16.95.