Taiwan's stocks fell for a fourth day in five, paced by Quanta Computer Inc (廣達電腦). Margins at makers of notebook computers will narrow next year because of a production glut, a local newspaper said, citing a report by the government-funded Market Intelligence Center.
"Companies in the US and Japan are placing more orders in Taiwan and the Taiwan notebook makers are trying to increase volume production," said Luc Ko, who helps manage NT$2 billion [US$57 million] of equities at Taiwan Securities Co (台証證券). "Whether they can cover lower margins with higher sales is a question mark."
The TAIEX fell 20.05, or 0.4 percent, to close at 4547.32. About the same number of stocks gained as dropped. For the week, TAIEX has fallen 1.1 percent. Trading was valued at NT$58.6 billion.
"The year-end window-dressing buying by local fund managers may continue to boost non-electronic stocks. The effect is expected to help the market recoup some of the losses recorded for this week," said Jacky Tam, an analyst with Yuanta Core Pacific Captial Management (元大京華投顧).
Tam said non-electronic stocks, in particular China plays, have appeared attractive to bargain hunters amid year-end window dressing.
"But, I do not think the buying will be strong enough to help the market get out of the current consolidation mode. Investors remain worried about the global economic climate," he said.
A dealer with a local brokerage said the electronics sector is expected to lose ground on fundamental worries.
"Fund managers have been wary of the sector's fat year-end bonus policy which is expected to erode their profitability," the dealer said. Quanta, Taiwan's largest notebook-computer maker, fell NT$2, or 3.3 percent, to NT$58.50.
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