Lo­cal mar­ket ends be­low 9,600 points af­ter TSMC plunges

The China Post - - BUSINESS -

Shares in Tai­wan closed be­low the 9,600-point mark Fri­day as Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. ( TSMC, ) took a beat­ing af­ter the world’s largest con­tract chip-maker gave a cau­tious sec­ond-quar­ter sales fore­cast, deal­ers­said.

Led by TSMC, the semi­con­duc­tor sec­tor came un­der pres­sure and sell­ing spread to other high­tech stocks. The fi­nan­cial sec­tor was un­able to re­sist the over­all bear­ish mood and also slid, drag­ging the mar­ket down fur­ther by the end of the ses­sion, they said.

Lar­gan Pre­ci­sion Co. ( ), a smart­phone cam­era lens sup­plier to Ap­ple Inc., was one of the few high-tech stocks to buck the broader mar­ket’s down­turn af­ter it an­nounced a higher than ex­pected gross mar­gin for the Jan­uary-March pe­riod, they said.

The weighted in­dex on the Tai­wan Stock Ex­change (TWSE) ended down 85.94 points, or 0.88 per­cent, at the day’s low of 9,570.93, off an early high of 9,615.52, on turnover of NT$ 97.70 bil­lion( US$ 3.13 bil­lion).

The mar­ket opened down 0.58 per­cent on heavy sell­ing of TSMC shares as in­vestors were un­nerved by the worse-than-ex­pected sales guid­ance for the sec­ond quar­ter TSMC gave at an in­vestor con­fer­ence on Thurs­day, deal­ers said.

Sell­ing es­ca­lated to send the in­dex to the day’s low at the close as cau­tion over the in­te­grated cir­cuit sec­tor and the en­tire elec­tron­ics sec­tor mounted amid fears that more neg­a­tive leads will emerge as U.S.-listed com­pa­nies re­port the earn­ings, they said.

TSMC’s Gloomy Fore­cast

“In­vestors were shocked by TSMC’s sec­ond quar­ter guid­ance. Many of them are afraid that TSMC’s gloomy fore­cast is just the be­gin­ning and that more neg­a­tive news will fol­low from other high- tech firms dur­ing the U. S. earn­ings sea­son,” an­a­lyst Eric Lai said.

“So they sim­ply seized on the news to cut their hold­ings for the mo­ment, which pushed down the in­dex. I sus­pect that for­eign in­sti­tu­tional in­vestors shifted to the sell side to­day,” Lai said.

Ac­cord­ing to the TWSE, for­eign in­sti­tu­tional in­vestors sold a net NT$ 3.81 bil­lion in shares on the main board Fri­day af­ter a net pur­chase of NT$ 10.46 bil­lion in shares Thurs­day.

TSMC shed 3.06 per­cent to close at NT$ 142.50, with 76.86 mil­lion shares chang­ing hands, re­flect­ing the dis­ap­point­ing sales fore­cast for the sec­ond quar­ter.

TSMC said Thurs­day it ex- pected its sec­ond- quar­ter con­sol­i­dated sales to range be­tween NT$ 204 bil­lion and NT$ 207 bil­lion, down 7- 8 per­cent from a quar­ter ear­lier and weaker than the mar­ket con­sen­sus fore­cast of a 5 per­cent decline.

Other Elec­tron­ics Shares

Among other IC stocks, TSMC ri­val United Mi­cro­elec­tron­ics Corp. ( ) fell 2.72 per­cent to close at NT$14.30, while IC pack­ag­ing and testing ser­vices providers Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. ( ) and Sil­i­con­ware Pre­ci­sion In­dus­tries Co. ( ) closed down 0.92 per­cent at NT$42.90 and 1.88 per­cent at NT$49.65, re­spec­tively.

TSMC’s de­ci­sion to cut its 2015 cap­i­tal ex­pen­di­ture bud­get to US$ 10.5 bil­lion- US$ 11 bil­lion from US$ 11.5 bil­lion- US$ 12 bil­lion also hurt shares of semi­con­duc­tor pro­duc­tion equip­ment providers. Her­mes Mi­cro­vi­sion Inc. (

), a l ead­ing Tai­wan­based semi­con­duc­tor in­spec­tion tool and equip­ment sup­plier, shed 4.30 per­cent to close at NT$ 1,780.00 on the over- the­counter mar­ket.

Out­per­form­ing the broader mar­ket, Lar­gan closed 0.90 per­cent higher at NT$ 2,810.00 af­ter the com­pany an­nounced a first quar­ter gross mar­gin of 56.7 per­cent, up about 6 per­cent­age points from the pre­vi­ous quar­ter.

In the fi­nan­cial sec­tor, Mega Fi­nan­cial Hold­ing Co. (

) fell 0.76 per­cent to close at NT$ 26.20, and CTBC Fi­nan­cial Hold­ing Co. ( ) lost 0.67 per­cent to end at NT$ 22.35.

“I ex­pect more sell­ing will fol­low be­cause of the cau­tious sen­ti­ment, lead­ing the in­dex to test 9,500 points soon,” Lai said.

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