Stocks fall for the fourth day in five, led by Chunghwa Telecom

Taiwan stocks fell for the fourth day in five, led by Chunghwa Telecom Co Ltd (中華電信), on concern the government may sell its shares in the company at a price below last year's initial public offering.

The TWSE Index fell 34.90, or 0.7 percent, to 5013.96, bringing its decline this week to 3 percent. Three stocks fell for every one that rose. The total value of trade today was NT$36.7 billion (US$1 billion), less than half this year's average of NT$88.7 billion.

Stocks also fell on concern about rising tensions between Taiwan and China. Beijing-based Qianlong Web Site reported China is planning to conduct a military exercise in the Taiwan Straits this month as a show of force following President Chen Shui-bian's (陳水扁) visit to the US.

Chunghwa Telecom fell NT$1, or 1.6 percent, to NT$60. The government will sell 480 million shares in the country's biggest telephone company probably starting June 7, said Jing Hsu, president of Capital Securities Corp(群益證券), which is managing the sale. The price the shares will be sold is likely to reflect Chunghwa's stock price on that day, Hsu said. Chunghwa shares have never traded above their initial public offer price of NT$104 and have fallen 42 percent since they started trading on Oct. 26.

China Development Industrial Bank (中華開發工銀), the biggest lender by market value in Taiwan, rose NT$0.50, or 1.9 percent, to NT$27.30.

Acer Laboratories Inc (揚智科技) rose NT$2.30, or 6.6 percent, to NT$37.10. Wu Chin (吳欽智), the president of the chipset designer, said he expects computer demand to rise in the fourth-quarter, boosting the company's earnings.

Asustek Computer Inc. (華碩電腦) rose NT$3, or 1.8 percent, to NT$168 bringing its gain to 17 percent since May 5.

Investors have been buying shares in Asustek on expectations the biggest computer motherboard maker will receive orders from US computer manufacturers.

Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電) fell NT$0.50 or 0.6 percent, to NT$89. The biggest maker of chips to other companies' specifications may build or buy a plant in Japan to be closer to its customers, senior Vice President Chiang Shang-yi (蔣尚義) said.

Via Technologies Inc (威盛電子) fell NT$2, or 0.8 percent, to NT$258. Taiwan's biggest chip designer said it agreed with Acreo AB, a private institute in Sweden, to set up a design unit there for wireless electronic products.