Taiwan stocks fell, led by Asustek Computer Inc (
The key TWSE Index fell 82.33, or 2.2 percent, to 3698.84, after falling as much as 2.3 percent. Two stocks fell for every one that rose. On Tuesday, the Taiwan government cut the daily limit on stock declines to 3.5 percent from 7 percent through Sept. 28.
Some companies told us "that there will be a 3 percent to 5 percent sales shortfall in September based on company guidance because for three days flights were interrupted" after the attacks, said Teresa Chen, an analyst at Deutsche Bank Securities in Taiwan. "The terrorist attacks may have affected consumer confidence and people may delay purchases of computers."
Analysts said the index may drop further as earnings of Taiwanese companies will suffer from slower US economic growth.
The US is Taiwan's biggest trading partner, taking more than a fifth of the nation's exports.
"Taiwan's corporate fundamentals and economy could suffer more than other Asian markets given its relatively high leverage to the US economy," said Credit Suisse First Boston Inc in a report to clients.
Dresdner Kleinwort Benson expects US gross domestic product growth will slow to 0.7 percent in 2002 from 1 percent in 2001.
The total value of shares traded yesterday was NT$27.79 billion (US$803 million), less than half the year to date daily average of NT$70.1 billion.
Acer Inc (
Chipmakers declined. United Microelectronics Corp's (UMC, 聯電) Chairman Robert Tsao (曹興誠) reiterated the company's third-quarter sales will drop by as much as a fifth from the previous quarter. Tsao made the same forecast in July.
UMC, the second-biggest made-to-order chipmaker, fell NT$1.10, or 3.4 percent, to NT$31.20. UMC's American depositary receipts fell 6.9 percent Wednesday. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the biggest made-to-order chipmaker, fell NT$1.50, or 2.8 percent, to NT$52.50. TSMC's ADRs Wednesday fell 2.9 percent.
Banks fell on concern that credit growth will take a long time to recover, depressing earnings prospects, even as their non-performing loan burden may be alleviated by the rate reduction this week.
China Development Industrial Bank (
Memory chipmakers dropped on concern about slowing demand and as the spot price for their main product remains below the cost of production. The spot price for the 64Mbz dynamic random access memory chip fell to US$0.73, according to DRAM Exchange, a market place for memory chips.
Winbond Electronics Corp (
Insurers slipped on concern claims for damages and personal injury following Typhoon Nari may increase, depressing earnings.
Cathay Life Insurance Co (國泰人壽), the biggest insurer by market value, fell NT$1.30, or 3.4 percent, to NT$37. Taiwan Life Insurance Co (台灣人壽), the third-biggest insurer by market value, fell NT$0.90, or 3.2 percent, to NT$27.30.
Chunghwa Telecom Co (
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