Four-day gain ends, Cathay Life leads slide

Taiwan stocks fell for the first day in five, led by Cathay Life Insurance Co (國泰人壽), as the nation's largest insurer reported a third-quarter loss after a 26 percent tumble in the stock market slashed the value of its equity investments.

"Lots of companies are reporting bad results, but most are within expectations," said Jeremy Chang, who manages NT$840 million (US$24.3 million) in stocks at Cathay Securities Investment Trust (國泰投信). "The bad news from Cathay exceeded expectations, and its loss will widen if the market falls further."

The TWSE Index fell 149.49, or 3.7 percent, to 3915.61 in its biggest one-day decline since Oct. 2. Within the index, 393 stocks fell and 68 rose. The total value of trade was NT$48.8 billion (US$1.4 billion), 5 percent more than the six-month daily average of NT$46.3 billion.

Cathay Life Insurance fell NT$1.80, or 4.3 percent, to NT$40.30 after Taiwan's largest insurer said its third-quarter loss widened to NT$9 billion as falling stock prices slashed the value of its investments.

Chipmakers fell on concern growth in the biggest economies may take longer than predicted to recover, crimping a revival in chip demand. The Philadelphia Semiconductor Index, an index tracking 16 companies involved in the design and production of chips, fell 7 percent yesterday.

Taiwan Semiconductor Man-ufacturing Co (TSMC, 台積電), the biggest made-to-order chipmaker, fell NT$4.50, or 6.7 percent, to NT$62.50. TSMC's American depositary receipts fell 4.2 percent to NT$13.31.

United Microelectronics Corp (UMC, 聯電) fell NT$2.20, or the maximum-permitted 7 percent, to NT$29.30. After the market closed, UMC said it posted a third-quarter loss of NT$4 billion, in line with expectations, compared with a NT$14.6 billion profit a year ago. Yesterday, its American depositary receipts fell 2.6 percent to US$5.90.

Companies that make up the Formosa Group (台塑集團), Taiwan's biggest industrial company, dropped after they reported a slump in third- quarter earnings. Taiwan Ratings Corp (中華信評) said support for "financially weaker subsidiaries" may erode Formosa Plastics' and Nan Ya Plastics Corp's (南亞塑膠) earnings this year.

Formosa Plastics (台塑), the group's flagship company whose third-quarter profit fell by almost half to NT$2.4 billion, dropped US$0.90, or 3.1 percent, to NT$28.40. Nan Ya Plastics, a unit of the group whose third-quarter profit fell 72 percent to NT$1.9 billion, shed US$0.70, or 3.6 percent, to NT$18.70. Formosa Chemicals & Fibre Corp (台灣化纖) lost US$0.50, or 2.5 percent, to NT$19.50. Nanya Technology Corp (南亞科技), which is half owned by Nan Ya Plastics and posted a NT$3.8 billion loss in the third quarter, fell US$0.65, or 6.5 percent, to NT$9.30.

Chunghwa Telecom Co (中華電信) lost US$0.40, or 0.9 percent, to NT$45.70. Delta Electronics Inc (台達電子) fell NT$1.30, or 3.2 percent, to NT$39. The largest maker of power supplies for personal computers said third-quarter profit fell to NT$530 million from NT$1.4 billion a year ago.

Mitac International Corp (神達電腦) rose US$0.40, or 3.5 percent, to NT$11.95. Third-quarter profit fell 89 percent to NT$68.3 million. Mitac received an order from Dell Computer Corp. for PCs the biggest computer maker plans to sell for US$599. Powerchip Semiconductor Corp (力晶半導體) fell US$0.55, or 6.8 percent, to NT$7.55. The maker of computer memory chips for Mitsubishi Electric Corp posted a NT$4 billion loss in the third quarter, compared with a NT$2.5 billion profit a year earlier.