Shares drop on profit-taking
Share prices closed down 3.43 percent yesterday as investors took advantage of recent strong gains, unloading electronic and financial heavyweights, dealers said.
The weighted index fell 184.65 points to 5,206.05 on turnover of NT$107.43 billion (US$3.17 billion).
The market opened down 0.52 percent after a Wall Street retreat on Friday and the downside extended with profit taking accelerating as investors saw major regional markets plunge, dealers said.
Investors also feared Wall Street would suffer additional losses yesterday amid lingering concerns over the global economic climate, they said.
“Today’s fall was widely expected,” said Arch Shih (施博元), a Taiwan International Securities (金鼎證券) analyst. “The market had scored substantial gains recently. It was time for a correction.”
Before yesterday, the local bourse rose more than 18 percent.
While yesterday’s fall has made the market weaker technically, adequate liquidity is expected to lend some support at around 5,100 points, Shih said.
“But, we have to watch closely how Wall Street will react to the declines in Asia,” Shih said.
Selling focused on financial and electronic stocks, which outperformed the broader market, dealers said. Cathay Financial (國泰金) fell 6.89 percent to NT$29.05, Chinatrust Financial (中信金) lost 6.72 percent to NT$12.50 and Mega Financial (兆豐) shed 5.60 percent to NT$11.80.
“Investors have turned cautious towards high tech stocks, in particular, before they release the first quarter results from April,” Shih said. “Many are wondering how recent large orders from China would boost the sector’s bottom line.”
Foxconn falls on report
Foxconn International Holdings Ltd (富士康), the world’s biggest contract maker of mobile phones, fell the most in three weeks in Hong Kong trading after Digitimes said customer Nokia Oyj will grant fewer handset orders to suppliers.
Foxconn shares fell 11 percent to HK$3.18 (US$0.41) as of 3:17pm, the biggest decline since March 9. Yesterday’s loss trimmed the stock’s gain this year to 24 percent, compared with a 6 percent decline in Hong Kong’s benchmark Hang Seng Index.
Nokia will produce more handsets itself, resulting in the loss of more than US$5 billion of revenue to suppliers, the Taipei-based Digitimes said on its Web site yesterday, citing researcher ISuppli Corp.
Chinese firm eyeing AGV
AGV Products Corp (愛之味), a Taiwanese drinks maker, rose by the daily limit on a report Hangzhou Wahaha Group Co (娃哈哈) may buy a stake in the company.
AGV rose by 7 percent to NT$7.49 at 10:39am on the Taiwan stock exchange, its highest in over five months.
Closely-held Wahaha may buy a stake in AGV, the Chinese-language Economic Daily News reported yesterday, without saying where it got the information from. A tie-up with AGV would help the Chinese company expand its range of cold drinks, including bottled teas, the newspaper said.
Wahaha spokesman Shan Qining (單啟寧) declined to comment on the report. Chen Che-fang (陳哲芳), a spokesman for Chiayi-based AGV denied the report of a possible stake sale.
ProMOS silent on buyback
ProMOS Technologies Inc (茂德科技), the nation’s third-largest computer memory chipmaker, said yesterday that more than 80 percent of its bondholders had agreed to the firm’s offer to buy back US$335 million in convertible bonds.
ProMOS had to win 79 percent of bond holders’ approval for the transaction in order to obtain NT$3 billion in bank loans to repay the debt and to avoid default.
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