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TSMC leads tumble as stocks plunge; airlines suffer blow after US crash

Taiwan stocks fell, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after the chipmaker yesterday said a government fund will sell US$289 million of its American depositary receipts at current prices.

The TWSE Index slid 36.09, or 0.9 percent, to 4136.54, after earlier rising as much as 0.5 percent. Seven stocks fell for every three that rose. The total value of trade today was NT$69 billion (US$2 billion), a 3 percent increase from this year's daily average.

"The Development Fund selling ADRs may put some pressure on the underlying stock but won't have a big impact," said Ming Kai Cheng, an analyst at CLSA Ltd in Taiwan. "The premium of the ADRs over the underlying stock is too high that people may sell the ADRs and move into the local shares."

TSMC fell US$0.50, or 0.7 percent, to NT$67.50. Its ADRs shed 0.3 percent to US$14.45. The government's Development Fund, which has about a 12 percent stake in TSMC, will sell 20 million ADRs in the biggest made-to-order chipmaker at a date still to be decided, TSMC said. As of yesterday, TSMC's ADRs traded at a 47 percent premium to the local shares.

United Microelectronics Corp (UMC, 聯電), whose ADRs trade at a 41 percent premium, fell US$0.30, or 0.9 percent, to NT$33.70.

Airline stocks fell after an American Airlines Airbus A300 jetliner carrying 255 people crashed in Queens, New York, renewing fears fewer people will fly in the aftermath of the Sept. 11 attacks. US authorities say the crash was an accident.

China Airlines Co (華航), the nation's biggest airline, fell US$0.30, or 2.5 percent, to NT$11.75. Eva Airways Corp (長榮航空), Taiwan's second-biggest airline, lost US$0.25, or 3.5 percent, to NT$7.

Some memory chipmakers gained as spot prices rose on evidence of improved demand for computers. The spot price for the 133 megabit DRAM chips has climbed 15 percent from its year low of US$1.48 to US$1.70, according to DRAM Exchange, a market place for memory chips. Mosel Vitelic (茂矽) rose US$0.10, or 1.3 percent, to NT$7.75. Nanya Technology Corp (南亞科技) rose US$0.80, or 6.9 percent, to NT$12.40.

Chih Lien Industrial Co (志聯工業) fell US$0.04, or 6.2 percent, to NT$0.61. The maker of steel wires, whose total debt is 19 times its market value, said it's seeking a loan from First Commercial Bank (第一銀行) to repay NT$200 million (US$5.8 million) of bonds due next month.

Hon Hai Precision Industry Co (鴻海精密) fell NT$1.50, or 1 percent, to NT$144. Ajay Kapur, chief Asian equity strategist at Morgan Stanley Dean Witter & Co, recommends investors sell the company, which makes everything in a computer except chips, because its stock is up 52 percent in less than two months.
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