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Chunghwa leads dive as stocks plunge to 8-year low

Ouch * Chunghwa Telecom, the nation's largest telephone company, fell NT$0.30, or 0.7 percent, to NT$42. * China Airlines Co fell NT$0.80, or 6.7 percent, to NT$11.15. * EVA Airways Corp fell NT$0.50, or 6.6 percent, to NT$7.05. * Cathay Life Insurance Ltd fell NT$0.90, or 2.6 percent, to NT$33.50.

Taiwan's key stock index dropped to its lowest point in more than eight-and-a-half years, led by Chunghwa Telecom Co (中華電信), after it said it suffered NT$870 million (US$25 million) in losses caused by damage from Typhoon Nari.

The TWSE Index fell 39.73, or 1.1 percent, to 3493.78, its lowest close since Jan. 30, 1993. Within the index, 226 stocks rose and 209 fell. The total value of trade today was NT$61.9 billion (US$1.79 billion), just below this year's average of NT$69.6 billion.

"Stocks probably have more downside, though not much," said Michael Ding (丁予嘉), chief investment officer at International Investment Trust Ltd (國際投信) in Taipei, which manages US$2.8 billion in investments.

"Our assessment is that the short-term bottom, the lowest point in a month, is 3,300."

Chunghwa Telecom, the nation's largest telephone company, fell NT$0.30, or 0.7 percent, to NT$42. The loss from the typhoon, which swept across Taiwan last week, may cause Chunghwa's net income this year to fall to about NT$39.7 billion from a previous forecast of NT$40.6 billion.

Damaged equipment from the storm accounted for the bulk of the NT$870 million in losses that may be spread over the third and fourth quarters, said Shen Fu-fu, the director of investor relations at Chunghwa.

Airlines fell after underwriters decided to impose a US$50 million-per-plane cap on damages caused by aircraft brought down by acts of war effective from midnight.

Airlines have said they can't keep flying unless they fill the gap left by the new insurance rules. Taiwan hasn't said it will provide coverage for the nation's airline industry.

China Airlines Co (華航), the nation's biggest airline, fell NT$0.80, or 6.7 percent, to NT$11.15. The stock has dropped 32 percent since the Sept. 11 terrorist attacks on the US. EVA Airways Corp (長榮航空), the second-biggest airline in Taiwan, fell NT$0.50, or 6.6 percent, to NT$7.05. EVA Air's shares have dropped 32 percent since Sept. 11.

Some computer stocks rose after the relative strength measure of the TWSE Electronics Index fell to 15.2 yesterday. A value of 30 or below indicates an index is poised to rise.

Hon Hai Precision Industry Co (鴻海精密), which makes everything in a computer except chips, rose NT$4, or 4.1 percent, to NT$102.

Quanta Computer Inc (廣達電腦), Taiwan's biggest notebook computer maker, rose NT$1.50, or 2.5 percent, to NT$60.50.

Cathay Life Insurance Ltd (國泰人壽) fell NT$0.90, or 2.6 percent, to NT$33.50. The biggest insurer by market value slipped on concern claims for damages and personal injury following Typhoon Nari may increase, depressing earnings.

Taiwan Semiconductor Man-ufacturing Co (TSMC, 台積電) fell NT$0.10, or 0.2 percent, to reach NT$47.40. The biggest made-to-order chipmaker's profit will lag forecasts as orders will fall, said TSMC spokesman Tzeng Jih-hao (曾智皓). TSMC did not provide a forecast or elaborate.

United Microelectronics Corp (UMC, 聯電), plunged NT$1.70, or 6.1 percent, to NT$26.40.

Yang Ming Marine Transport Co (陽明海運) fell NT$0.35, or 5.4 percent, to NT$6.10. The nation's third-biggest shipping company by market value said it had agreed to form a joint venture with four other shipping companies in an effort to cut costs and expand services.
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