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Thu, Aug 23, 2001 - Page 18 News List

TAIEX slumps 1.7%, chip stocks lead fall

BLOOMBERG , TAIPEI

The TAIEX slumped to its lowest level in two weeks, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), as it tracked a drop in US chip stocks on concern demand for semiconductors may remain weak if economic growth doesn't improve.

Declines in share prices accelerated after the Taiwan government said yesterday that orders for Taiwan exports fell in July and manufacturers cut production, suggesting the economy may be in recession.

The TAIEX dropped 75.21, or 1.7 percent, to 4487.52, its lowest level since Aug. 10. Within the index, 225 stocks rose and 217 fell. The total value of trade today was NT$46.93 (US$1.36 billion), more than a third less than the year to date average of NT$73.43 billion.

Chipmakers dropped after the Philadelphia Semiconductor Index, a price-weighted index of 16 companies that design and make chips, fell 4.3 percent Tuesday. The TAIEX and the Philadelphia Semiconductor Index have a correlation of 0.9 over the last 12 months, according to Bloomberg analysis. A correlation of "one" indicates the two indexes move in tandem.

TSMC, the largest contract chipmaker, fell NT$4.50, or 6.8 percent, to NT$62. TSMC's American depositary receipts fell 6.5 percent.

United Microelectronics Corp (UMC, 聯電), the second-largest contract chipmaker, fell NT$0.70, or 1.8 percent, to NT$38. UMC's ADRs declined 4.2 percent.

Government controlled banks rose. Taiwan plans to cut its stake in banks to less than 20 percent within five years, the Asian Wall Street Journal reported, citing Finance Minister Yen Ching-chang (顏慶章).

A 200-member council made up of academics, company executives and government officials, will hold a three-day conference beginning tomorrow to discuss the proposal and other policy recommendations, the paper reported.

Chang Hwa Commercial Bank (彰化銀行), the third-largest listed lender by assets, rose NT$0.30, or 2.3 percent, to NT$13.35. China Development Industrial Bank (中華開發銀行), the biggest listed lender, rose NT$0.30, or 1.3 percent, to NT$22.80. International Commercial Bank of China (中國商銀), the fifth biggest listed lender by assets, rose NT$0.40, or 2.3 percent, to NT$17.50. Hua Nan Commercial Bank (華南銀行), the second-biggest listed lender by assets, rose NT$0.20, or 1.2 percent, to NT$16.50.

Some computer parts makers and assemblers fell on concern an extended slump in the US may trim orders from Taiwan, causing sales and earnings to slide. Asustek Computer Inc (華碩電腦), a computer motherboard and notebook computer maker, fell NT$4, or 2.8 percent, to NT$139. Hon Hai Precision Industry Ltd (鴻海精密), which makes everything in a computer except chips, fell NT$2, or 1.2 percent, to NT$163.

Acer Inc (宏電) fell NT$1.20, or 6.5 percent, to NT$17.40. The computer maker said yesterday it will buy its distribution and services unit Acer Sertek Inc (宏科) for NT$11.9 billion (US$345 million) in shares and debt based on Acer's closing price of NT$18.60 yesterday. Acer Sertek fell NT$1.10, or 2.6 percent, to NT$41.90.

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