Hon Hai falls with demand

Taiwan's electronic makers such as Hon Hai Precision Industry Ltd (鴻海精密) fell on concern demand for technology products isn't going to improve anytime soon.

Leaving the broad market mixed, Via Technologies Inc (威盛電子) rose as investors deemed its 13 percent drop over the last two trading days as too far, too fast.

The TWSE Index fell 16.17, or 0.4 percent, to 4368.38. Within the index, 199 stocks fell and 221 rose. Trade at NT$36.4 billion (US$1.05 billion) was half the average daily volume this year of NT$72.67 billion.

"Technology demand may take a longer time to recover," said Michele Cavagna, a portfolio manager at Gestielle Asset Management who manages a US$50 million global technology fund in Milan.

"Buying stocks now you can't expect to make a reasonable amount of money in two to three months." Electronic makers fell on concern demand for their computer and telecommunication parts isn't going to pick up soon as inventory for some products remains high, while companies are cutting costs and spending less on technology.

Hon Hai Precision, which makes everything in a computer except chips, fell NT$5, or 3.2 percent, to NT$152. Acer Communications & Multimedia Inc (明電), a mobile phone and computer monitor maker, fell US$0.60 cents, or 1.8 percent, to NT$33.30. Asustek Computer Inc (華碩電腦), which makes computer mother-boards and notebook computers, fell NT$2, or 1.6 percent, to NT$125.

Via Technologies rose NT$2, or 1.1 percent, to NT$182. The second-biggest chipset seller's shares had fallen 13 percent in two days.

Some government-controlled banks fell after Fitch IBCA, Duff & Phelps lowered its ratings yesterday on First Commercial Bank (第一銀行), Hua Nan Commercial Bank (華南銀行) and the International Commercial Bank of China (中國商銀), saying conditions in the financial industry are deteriorating with the economy. Bad debts in the financial industry will reach 13 percent by the end of the year.

The Taiwan Stock Exchange's Banking and Insurance Index rose 3.5 percent yesterday, its biggest one-day gain in percentage terms since August 13.

First Commercial Bank, the biggest listed lender by assets, was unchanged at NT$17.30, after falling as much as 1.2 percent. Hua Nan Commercial Bank (華銀), the second-biggest listed lender by assets, fell US$0.20, or 1.2 percent, to NT$16.80. International Commercial Bank of China (中國國際商業銀行) fell US$0.20, or 1.1 percent, to NT$18.20.

China Steel Corp (中鋼) fell US$0.25, or 2 percent, to NT$12.05 after Taiwan's biggest steelmaker said it may cut its full-year profit forecast for 2001 because of lower-than-expected margins.

Chunghwa Telecom Ltd (中華電信) fell US$0.50, or 1.2 percent, to NT$42.10 on concern business conditions aren't improving, causing more companies to cut back on their telecommunication spending. About 52 percent of companies surveyed said they see no improvement in business conditions in July, up 2 percentage points from June, a survey by the Council for Economic Planning and Development shows.

Ritek Corp (錸德) fell US$0.10, or 0.3 percent, to NT$38.70 after the recordable compact disc maker said profit in the second quarter fell 65 percent as prices of its products slumped.

Net income in the three months to June fell to NT$754 million (US$22 million) from NT$2.2 billion in the year-ago period, company spokesman Echo Yu said. That's lower than the NT$976 million average estimate of three analysts surveyed.