Taiwan stocks decline for sixth straight day

Taiwan's key stock index fell for a sixth day, led by exporters such as Taiwan Semiconductor Manufac-turing Co (台積電), on concern ebbing demand for electronics in the US may hurt earnings.

The TAIEX dropped 174.83, or 3.1 percent, to 5,499.86.

Four stocks fell for every one that rose. The total value of trade was NT$73.8 billion (US$2.3 billion), a drop of 10 percent from this year's daily average of NT$81.5 billion.

Growth in the US, the nation's biggest export market, slowed in the last quarter of last year to the slowest in more than five years. Gross domestic product expanded at a 1.1 percent annual pace during the fourth quarter, the Commerce Department said.

"People are worried the US economy is going to have a tough time," said Simon Chao, who manages NT$700 million (US$21.7 million) at President Investment Corp (統一投信) in Taipei.

"I'm selling to lower my risk because I think the market will be unstable," he said.

Chao has cut the percentage of stock he holds in his fund to 85 percent from 90 percent and the remaining 15 percent is in cash.

Anand Aithal, a strategist at Goldman Sachs (Singapore) Pte, said concerns about earnings of technology companies will weigh on Taiwan's share prices. Electronic stocks make up 56 percent of the market value of the index.

"The environment for technology companies has worsened," Aithal said.

"We no longer expect a dramatic earnings recovery in the second half of the year. We don't expect an earnings recovery until 2002," he added.

Chipmakers who make chips on a made-to-order basis declined on concern demand from US companies is sliding along with the North American economy.

A Conference Board report on Tuesday showed consumer confidence in the US economy reached its lowest level since June 1996, reflecting a drop in expectations for business and employment conditions over the next six months.

TSMC, the biggest chipmaker to customers' design, fell NT$6, or 6.7 percent, to NT$84. United Microelectronics Corp (聯電), TSMC's biggest rival, fell NT$2.50, or 4.7 percent, to NT$50.50. Acer Communications & Multimedia Inc (明電) fell NT$2.80, or 6.9 percent, to NT$37.90.

Goldman Sachs Group Inc said slowing computer and mobile phone handset sales may force it to revise its earnings forecast for the company.

Chunghwa Telecom Ltd (中華電信) fell NT$2, or 3 percent, to NT$65. Taiwan's dominant telecommunications company is looking to borrow up to NT$40 billion (US$1.2 billion) to upgrade its network.

Silicon Integrated Systems Corp (矽統科技) fell NT$2.70, or 5.4 percent, to NT$47.80 after the US International Trade Commission voted this week to investigate whether the company has violated two patents owned by UMC.

Twinhead International Corp (倫飛電腦) fell NT$0.55, or 6.9 percent, to NT$7.40 after the computer notebook maker announced on Tuesday that it will fire 117 full-time employees and about 60 foreign workers at a Kaohsiung plant.

VIA Technologies Inc (威盛電子) fell NT$7, or 2.4 percent, to NT$286 after the computer chip designer announced plans to sell up to US$500 million in shares to overseas investors to help finance an acquisition.