TAIEX drops on competitive fears

Taiwan's key stock index fell for the first day in four, led by Asustek Computer Inc (華碩電腦), on concern Japanese and Korean electronics may be more attractive than the island's after both the yen and the won slid.

The TAIEX dropped 59.45, or 1.1 percent, to 5332.98, after rising as much as 2.1 percent. Within the index, 381 stocks fell and 134 rose. The total value of shares traded was NT$160.2 billion (US$4.6 billion), the heaviest trading day since Dec. 13.

Some companies are selling shares in an effort to boost their profits through one-time gains, traders said.

"Companies are seeking to boost their earnings at year-end through sales of their own stock holdings," said Peter Griffith, a salesman at Entrust Securities Co (永昌證券) in Taipei.

The index is the third-best performing index in the world in the last three months, up 47 percent in US dollar terms. The Taiwan dollar was recently trading at 35.13, close to five month lows.

The following stocks made significant gains or losses: Computer makers and computer parts makers fell on concerns the drop in the yen and the Korean won may make their products more attractive to buyers than Taiwan's computers. The South Korean won shed 0.4 percent to 1,322.95 against the US dollar, its weakest level since April 30. The Japanese yen dropped to ?131.42, a three-year low against the US dollar.

Acer Inc (宏電) , a computer maker, fell US$0.50, or 2.8 percent, to NT$17.10. Asustek Computer Inc., the biggest computer motherboard maker in Taiwan, fell NT$9, or 5.6 percent, to NT$151. Compal Electronics Inc (仁寶電腦), a notebook computer maker, fell NT$3.10, or 6.9 percent, to NT$41.80. Quanta Computer Inc (廣達電腦), Taiwan's biggest computer notebook maker, fell NT$6.50, or 5.7 percent, to NT$107.

Memory chipmakers gained after the price of the 128-megabit dynamic random access memory chip rose 7.5 percent yesterday to US$2, according to DRAM Exchange, a market place for memory chips.

Hynix Semiconductor Inc. Chief Executive Park Chong Sup will brief creditors this week on his trip to the US, where he had talks with larger rival Micron Technology Inc. about a possible tie-up which may mean less supply of chips if an agreement between the two companies is reached.

Winbond Electronics Corp (華邦電子) rose NT$1.40, or 6.7 percent, to NT$22.30.

China Airlines Co (華航) fell NT$0.35, or 2.7 percent, to NT$12.60. Taiwan's biggest airline dropped after Moody's Investors Service, in a report on Northwest Airlines Inc, said the industry faces "significant risks" given the "current difficult" operating environment following the Sept. 11 terrorist attacks in the US. EVA Airways Corp (長榮航空), Taiwan's second-biggest airline, fell NT$0.15, or 1.6 percent, to NT$9.25.

Hon Hai Precision Industry Co (鴻海精密) rose NT$7, or 4.5 percent, to NT$162. The company, which makes everything in a computer except chips, won an order from Dell Computer Corp. to make computer motherboards that could help it boost its output to 16 million units next year, local media reported, without citing sources.