Thu, Jan 07, 2016 - Page 13 News List

TAIEX plummets to below 8,000 points

Staff writer, with CNA

The TAIEX trended sharply lower to close below the 8,000-point mark yesterday as Taiwanese firms in the Apple Inc supply chain came under heavy pressure amid lingering concerns over sales of the latest iPhone models, dealers said.

The fears were raised by a disappointing sales report from smartphone camera lens supplier Largan Precision Co (大立光), which reported a 30 percent month-on-month decline in revenue for last month, despite the launch of new iPhone models in September, they said.

Led by Largan, the most expensive stock in the local market, high-priced stocks also encountered a sell-off to drag down the weighted index, but airline stocks showed strength after China announced a plan to allow some of its nationals to transit in Taiwan while on overseas trips, dealers said.

The selling was also sparked by rising geopolitical tensions after North Korea announced it had conducted a hydrogen bomb test, they said.

The weighted index on the Taiwan Stock Exchange closed down 84.72 points, or 1.05 percent, at 7,990.39, after moving between 7,948.43 and 8,076.54, on turnover of NT$98.45 billion (US$2.94 billion).

The market opened down 0.13 percent on follow-through selling from a day earlier as investors shrugged off a relatively flat Wall Street overnight.

Selling escalated after the Largan sales report, which dented investor confidence.

Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said that even though the North Korea nuclear test shook regional markets, the selling in Taiwan was mostly tied to economic fundamentals and Largan’s disappointing sales report.

“Largan is one of the most important suppliers to Apple and its sales have served as a barometer of the new iPhones’ sales,” Huang said. “Its lower-than-expected sales for December have left many investors worried about the iPhone shipments.”

“Many investors fear that these Taiwanese suppliers may have an even worse first quarter of this year because of slowing demand for the new iPhones,” Huang said.

Largan fell 7.11 percent to close at NT$1,960 after the company on Tuesday reported consolidated sales of NT$3.98 billion for last month, down about 30 percent from NT$5.71 billion in November.

Last month’s figure was also 31 percent lower than a year earlier, and marked the lowest level since February, when it had NT$2.62 billion in sales.

“Largan is a benchmark for other high-priced stocks in the local equity market so its heavy losses caused many other high-priced stocks to trend lower throughout the session,” Huang said.

Among them was Catcher Technology Co (可成), a metal casing supplier to Apple. It shed 5.28 percent to end at NT$251 after announcing on Tuesday that its sales last month were down 17.1 percent from a month earlier, but up 14.4 percent from a year earlier at NT$6.91 billion.

Integrated circuit designer MediaTek Inc (聯發科), a smartphone chip supplier, fell 6.39 percent to close at NT$227 after a foreign brokerage suggested that investors avoid the stock amid worries over weakening demand for smartphones.

Bucking the downturn on the broader market, the transportation sector closed up 0.77 percent in the wake of China’s announcement on Tuesday to allow a small number of Chinese travelers to transit to third countries through airports in Taiwan.

China Airlines (華航) gained 1.76 percent to close at NT$11.55, while EVA Airways (長榮航) added 1.67 percent to end at NT$18.25.

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