Taiwan's stocks dropped the most in almost five months, paced by Hon Hai Precision Industry Co (
"Weakening US demand will be reflected in Taiwan's export figures," said Murphy Huang (
Catcher Technology Co (
The Taiex index slumped 337.73, or 4.1 percent, to close at 7,883.37 in Taipei, its biggest decline since Aug. 16. About 19 stocks dropped for every one that gained. January futures fell 4.6 percent.
Hon Hai, Taiwan's biggest electronics exporter, dropped NT$11.50, or 6.3 percent, to NT$171.50. Taiwan Semiconductor Manufacturing Co (台積電), the world's biggest supplier of made-to-order chips, slipped NT$4.20, or 7 percent, to NT$55.80. Taiwan Semiconductor makes about three quarters of its sales to US buyers. Acer Inc, the biggest Taiwanese maker of personal computers, lost NT$4.20, or 7 percent, to NT$56.
US payrolls rose by 18,000 last month, the fewest new jobs since 2003, after economists had forecast a rise of 70,000. The unemployment rate jumped to a two-year high of 5 percent, compared with an estimate of 4.8 percent. The US is Taiwan's biggest export market after China.
Harvard University economist Martin Feldstein, head of the group that dates economic cycles in the US, said on Saturday the odds of a recession are more than 50 percent as a result of the jobs report.
Catcher dropped NT$11, or 6.8 percent, to NT$150.50, its lowest in almost two years. Investors should sell Catcher shares because its revenue of NT$1.2 billion (US$37 million) last month was less than the market's expectations of NT$1.7 billion, Tony Tseng (
Tseng downgraded shares of Catcher, which reported December sales on Friday, from "buy," citing disappointing sales growth. He cut his 2007 earnings estimates for Catcher by 6 percent to NT$6.98 billion, and for 2008 by 32 percent to NT$6.78 billion.
Credit Suisse Group cut its recommendation for the stock to "underperform" from "neutral," and reduced its 12-month price target to NT$160 from NT$262. Credit Suisse analyst Pauline Chen cited falling gross margins, rising labor costs, slower growth in Catcher's main business of magnesium casings and the low December sales as reasons for the downgrade.
Asustek Computer Inc (
The US International Trade Commission said it will investigate claims by International Business Machines Corp that the Taiwan-based computer maker violated three patents for computers, motherboards and graphics cards.
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SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
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