TSMC leads as market plunges 3.8%

The TAIEX had its biggest decline in nine weeks, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), following a report government funds will sell NT$26.4 billion (US$754 million) of the chipmaker's shares.

The TWSE Index slid 199.86, or 3.8 percent, to 5,109.24, its biggest decline since Oct. 2. Seven stocks fell for every one that rose. For the week, the index lost 6.9 percent.

"We are reducing our position on stocks," said Cheng Yi-sheng, who helps manage about NT$1.5 billion (US$43 million) in investments at Taiwan Securities Co (台証證券).

Taiwan Securities has sold TSMC shares following their 87 percent gain since their year-low on Oct. 3.

In the last three months, the index gained 41 percent in US dollar terms, making it the world's third-best performing market. Total trade was NT$109.3 billion (US$3.1 billion), up 7.9 percent from yesterday's NT$101.3 billion.

TSMC fell NT$5.50, or 6.4 percent, to NT$80.

The National Stabilization Fund plans to sell 130 million TSMC shares, while the Cabinet's development fund plans to sell another 200 million shares, local newspapers reported, citing the Securities and Futures Commission. The sale will take place in the US, where one TSMC US share is worth five of its Taiwan-listed shares.

US Securities and Exchange Commission and Taiwan Semiconductor officials couldn't be reached for comment.

Other chipmakers declined after the widely watched Philadelphia Semiconductor Index slumped 5.6 percent on Thursday.

The index is down 11 percent in the last two days.

United Microelectronics Corp (UMC, 聯電), whose US shares fell 0.2 percent, fell NT$2.40, or 5 percent, to NT$45.60.

Powerchip Semiconductor Corp (力晶半導體), a memory chipmaker, fell NT0.10, or 0.6 percent, to NT$16.70.

Banks declined after Moody's Investors Service said on Thursday that the intense level of competition in the financial industry limits banking profitability. With analysts forecasting a 2.6 percent contraction in the economy this year, banks' non-performing loans are set to rise further.

Chinatrust Commercial Bank (中國信託銀行), the second-biggest lender by market value, fell NT$0.90, or 4.3 percent, to NT$20. Chang Hwa Bank (華南銀行), the second-biggest listed lender by assets, tumbled NT$1, or 6.7 percent, to NT$13.85. First Commercial Bank (第一銀行), the biggest listed lender by assets, dropped NT$1.40, or 6.5 percent, to NT$20.

Hon Hai Precision Industry Co (鴻海精密) fell NT$3, or 2 percent, to NT$151. Taiwan's largest computer parts maker is reportedly planning to invest US$1 billion in an industrial park in Beijing.