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Shares close lower

Taiwanese shares closed 1.78 percent lower yesterday following last week's Wall Street slide and amid high oil prices as fears of a US recession grow, dealers said.

The weighted index closed down 149.89 points at 8,262.87, after moving between 8,147.27 and 8,265.85, on turnover of NT$134.71 billion (US$4.35 billion).

"We apparently had a sell-off converging in heavily weighted electronics and financial shares," Mega International Investment Services (兆豐國際投顧) assistant vice president Alex Huang (黃國偉) said.

Despite their relatively light weighting, the solid gains of old-economy industrials put a floor under the broader market, he said.

Barring a free fall on Wall Street, the pattern is likely to continue in the near term, he said.

Fire damages Asustek unit

Asustek Computer Inc (華碩電腦), the world's biggest maker of boards connecting electronic parts in a personal computer, said a fire damaged some of a unit's production lines in China.

Three production lines at a factory of Pegatron Technology Corp (和碩聯合科技) that makes motherboards were destroyed in the fire on Saturday, Taipei-based Asustek said in a filing to the exchange yesterday.

The damage has "little impact" on the company's business, Asustek said, without elaborating.

Pegatron is a manufacturing unit spun off from Asustek this year. The unit has 30 to 40 lines at the factory, which makes Asus-brand motherboards, Taipei-based Apple Daily reported yesterday. Insurance companies would cover the loss from the fire, estimated at NT$50 million to NT$100 million, the newspaper said.

Chi Mei to build in Vietnam

Chi Mei Optoelectronics Corp (奇美電子), the nation's second-largest flat panel display maker, yesterday said it is planning to build a panel assembler in Vietnam in order to be close to customers and the market, said a company official, who requested anonymity.

Chi Mei's move came after Taiwanese companies including Compal Electronics Inc (仁寶電腦), the world's No.2 laptop computer maker by contract, looked to lower-labor-cost Vietnam for their next manufacturing site after rising cost in China.

"We have to go after our customers to supply them more efficiently. Also, the market is big there," the Chi Mei official said. Neither timetable, nor partners were decided yet, the official said.

The Chinese-language Economic Daily News reported yesterday that Chi Mei planned to kick off an investment plan in June, collaborating with local notebook computer maker Wistron Corp (緯創) to develop a massive piece of land provided by Vietnamese government in capital Hanoi.

Uni-President arm buys stake

The China-based subsidiary of Uni-President Enterprise Corp (統一企業), the nation's leading food maker, spent US$50 million in taking up a 4 percent stake in Want Want China Holdings (旺旺控股), aiming to form a strategic alliance to tap into Chinese markets, a Chinese-language media report said yesterday.

There's a lot of room for both companies to cooperate with each other so as to create synergy in its China expansion, a Commercial Times report said, without citing sources.

Want Want plans to go public in Hong Kong later this month.

NT dollar weakens

The New Taiwan dollar yesterday weakened by NT$0.152 to trade at NT$31.102 against the greenback on turnover of US$1.367 billion.
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