Taiwan’s stock market dipped to a three-month low yesterday as investors cut holdings amid concerns over production disruptions and a fall in tourism revenue after the devastation wrought by the earthquake in Japan on Friday.
The TAIEX pared 0.56 percent to close at 8,520.02, dragged by heavy losses in automobile, tourism and insurance shares, Taiwan Stock Exchange statistics showed. Turnover was NT$129.12 billion (US$4.38 billion), with net sales by foreign institutional investors and proprietary traders reaching NT$3.1 billion and NT$1.72 billion respectively. Local mutual funds also sold a net 482.6 million in shares.
“Sentiment will remain cautious as investors size up the impact of the earthquake and the ensuing nuclear crisis,” Capital Securities Corp (群益證券) analyst Alan Tseng (曾炎裕) said.
Automakers bore the brunt of the fall, with the sub-index plunging 5.9 percent amid worries that a shortage of supplies from auto part makers in Japan would curb shipments, Tseng said.
Yulon Motor Co (裕隆汽車), which assembles and sells cars for Yulon Nissan Motor Co (裕隆日產), tumbled 6.8 percent to NT$54.50, its steepest fall since February last year.
China Motor Corp (中華汽車) fell by its 7 percent daily limit to NT$23.25, its lowest since July 1999, even though the automaker said in a stock exchange filing that the earthquake would not have a serious impact on its business.
Hotai Motor Co (和泰汽車), the nation’s largest automobile vendor and distributor of Toyota and Lexus cars, dropped 4.4 percent to NT$83. Toyota Motor Corp has said it was halting production in Japan from yesterday to tomorrow to inspect its facilities, Hotai said in a stock exchange filing.
The TAIEX opened higher, but selling pressure sent it slumping to the day’s low of 8,359.11 at around 10:30am. The tourism sub-index fell 5.29 percent on local media reports that the number of Japanese visitors shrank 10 percent over the weekend and more are expected to cancel trips to Taiwan.
Formosa International Hotels Corp (晶華酒店) ended down 6.94 percent at NT$469, while Ambassador Hotel Ltd (國賓飯店) and the Leofoo Development Co (六福開發) plunged 6.99 percent and 6.89 percent to NT$41.90 and NT$18.25 respectively, stock exchange data indicated.
“Hotel shares are likely to remain depressed a bit longer as Japanese will cut travel spending in the near term,” Winson Wang (王榮旭), a stock analyst at Marbo Securities Consultant Co (萬寶證券投顧), said by telephone.
Wang expects the TAIEX to fluctuate between 8,400 and 8,600 this week, with fallout from the quake affecting the index’s direction.
Concern over the effect of the disaster also extended to financial shares amid worries over their exposure to Japan.
Shares of Shin Kong Financial Holding Co (新光金控), whose major shareholder is Japan’s Dai-Ichi Life, dropped 6.72 percent to NT$11.80, while shares of Cathay Financial Holding Co (國泰金控), the nation’s largest by assets, fell 3.56 percent to NT$46.05.
Shin Kong Financial said in a statement to the stock exchange that its exposure to Japan was low, including less than NT$1 billion in Japanese shares.
Cathay Financial said in a statement that its exposure to Japan amounted to NT$8.62 billion, including NT$7.7 billion in stock and debt investments, or a mere 0.7 percent of its overseas portfolio.
Several other domestic lenders also filed statements saying they did not expect the quake to have a major impact on their finances or business.
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