Tai­wan shares plunge 207.89 points, led by elec­tron­ics

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan took a hit Thurs­day af­ter the bell­wether elec­tron­ics sec­tor came un­der heavy pres­sure as in­vestors took cues from a move by for­eign in­sti­tu­tional in­vestors to raise the num­ber of net short po­si­tion con­tracts in the fu­tures mar­ket, deal­ers said.

Since for­eign in­vestors tended to profit from fu­tures by cut­ting their hold­ings in the spot mar­ket, sell­ing fo­cused on high tech heavy­weights, led by smart­phone cam­era lens sup­plier Lar­gan Pre­ci­sion Co. (

), which suf­fered a more-than 7 per­cent fall, the deal­ers said.

The weighted in­dex on the Tai­wan Stock Ex­change closed down 207.89 points, or 2.17 per­cent, at 9,348.63, af­ter mov­ing be­tween 9,325.01 and 9,558.77 on turnover of NT$135.17 bil­lion (US$4.37 bil­lion).

The mar­ket opened down 0.20 per­cent on fol­low-through sell­ing from a ses­sion ear­lier as Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC, ) trended lower amid con­cern about the chip maker’s sales growth, the deal­ers said.

Down­ward Pres­sure on High

tech Stocks

Sell­ing es­ca­lated as down­ward pres­sure spread to other high tech stocks, in par­tic­u­lar Lar­gan — the most ex­pen­sive stock in the lo­cal mar­ket — and other elec­tron­ics firms, while non-high tech stocks, in­clud­ing fi­nan­cials, also faced sell­ing, which pushed down the in­dex even lower at the close, they said.

“This was fu­tures-driven sell­ing to­day af­ter for­eign in­sti­tu­tional in­vestors added a net of about 10,000 short po­si­tion con­tracts yes­ter­day,” Mega In­ter­na­tional In­vest­ment Ser­vices Corp. an­a­lyst Alex Huang said. “To make profit in the fu­tures mar­ket, it was no sur­prise that for­eign in­sti­tu­tional in­vestors rushed to dump large-cap high tech stocks to­day,” he added.

“Af­ter the lo­cal main board con­sol­i­dated for about three weeks with­out mak­ing a break­through, many in­vestors ap­peared impatient and un­loaded their hold­ings in­stead,” he said.

TSMC Fell 1.40 Per­cent

TSMC, the most heav­ily weighted stock in the lo­cal mar­ket, fell 1.40 per­cent to close at NT$141.00 af­ter HSBC Se­cu­ri­ties fore­cast that the chip maker’s sales growth rate could fall to 10-15 per­cent over the next few years from a 20-30 per­cent in­crease seen in the past few years, due to higher cus­tomer con­cen­tra­tion risks.

Among other fall­ing elec­tron­ics stocks, con­tract chip maker United Mi­cro­elec­tron­ics Corp. ( ) shed 2.54 per­cent to end at NT$13.45 and in­te­grated cir­cuit pack­ag­ing and testing ser­vices provider Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. ( ) lost 2.70 per­cent to close at NT$41.50.

“More sig­nif­i­cantly, Lar­gan took a beat­ing and trig­gered a sell­off in other high-priced stocks, prompt­ing in­vestors to con­cen­trate on sto­ploss sell­ing through­out the ses­sion,” Huang said.

Lar­gan fell 7.24 per­cent to close at NT$3,205.00 as in­vestors locked in their re­cent gains and left be­hind op­ti­mism to­ward its earn­ings re­sult­ing from or­ders placed by Ap­ple Inc. in the sec­ond half of this year. The elec­tron­ics sub-in­dex ended down 2.23 per­cent.

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