Tai­wan shares end down; shares in Lar­gan de­crease by 10 per­cent

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan took a beat­ing Thurs­day as in­vestors were un­nerved by heavy losses in­curred by smart­phone cam­era lens maker Lar­gan Pre­ci­sion Co. ( ) to dump their hold­ings in the bell­wether elec­tron­ics sec­tor, deal­ers said.

Shares of Lar­gan, which is the most ex­pen­sive stock in the lo­cal mar­ket, fell 10 per­cent, the max­i­mum daily de­cline, in re­flec­tion of its cau­tious sales out­look for Au­gust, which damp­ened mar­ket sen­ti­ment and trig­gered fears over fur­ther volatil­ity down the road, they said.

Selling also spread to the fi­nan­cial and old econ­omy sec­tors which had posted gains Wed­nes­day as in­vestors rushed to pocket their ear­lier prof­its to send the en­tire mar­ket even lower, they said.

The weighted in­dex on the Tai­wan Stock Ex­change ended down 92.71 points, or 1.08 per­cent, at 8,449.56, af­ter mov­ing be­tween 8,404.67 and 8,586.24, on turnover of NT$89.08 bil­lion (US$2.82 bil­lion).

Selling High-tech Stocks

The mar­ket opened up 0.28 per­cent and rose to the day’s high in line with the gains posted by the lo­cal fu­tures mar­ket, but with the in­dex mov­ing closer to 8,600 points, selling fol­lowed with the high-tech sec­tor be­ing the main cul­prit, led by Lar­gan’s down­turn, deal­ers said.

Down­ward pres­sure es­ca­lated as in­vestors took a cue from Lar­gan’s 10 per­cent fall seen right be­fore Thurs­day noon to sell, and the weak­ness of the broader mar­ket con­tin­ued into the end of the ses­sion, they said.

“Af­ter fall­ing be­low 8,500 points, the lo­cal main board has be­come very frag­ile tech­ni­cally,” Concord Se­cu­ri­ties an­a­lyst Kerry Huang said. “Due to the lack of con­fi­dence in the lo­cal econ­omy, it is pos­si­ble that the lo­cal eq­uity mar­ket will see more losses.”

Lower-than-ex­pected Ex­ports

In the sec­ond quar­ter of this year, Tai­wan’s econ­omy grew only 0.64 per­cent from a year ear­lier, far be­hind an ear­lier gov­ern­ment es­ti­mate of a 3.05 per­cent in­crease due to lower-than-ex­pected ex­ports at a time when global de­mand has showed signs of weak­en­ing.

“To­day, mar­ket sen­ti­ment was also hurt by Lar­gan’s plunge. I think that the selling in Lar­gan largely came from for­eign in­sti­tu­tional in­vestors and the Lar­gan losses sparked fears that for­eign in­vestors will sell more,” Huang said.

Lar­gan, a sup­plier to Ap­ple Inc., shed NT$300 or 10 per­cent to close at NT$2,720.00 af­ter the com­pany said that its Au­gust sales could stay lit­tle changed from July, which showed a cau­tious tone com­pared with its pre­vi­ous fore- cast that the Au­gust fig­ure would sur­pass July’s.

Huang said that Lar­gan’s losses prompted in­vestors to sell other “Ap­ple con­cept stocks” amid fears that the next gen­er­a­tion of iPhones, which could be un­veiled in Septem­ber, will un­der­per­form its pre­de­ces­sors.

Fall­ing Ap­ple Sup­pli­ers

Among other fall­ing sup­pli­ers to Ap­ple, Pe­ga­tron Corp. ( ), an as­sem­bler of the iPhone 6, fell 4.51 per­cent to close at NT$80.50, and Flex­ium In­ter­con­nect Inc., a printed cir­cuit board sup­plier, shed 7.54 per­cent to end at NT$92.00.

“The sil­ver lin­ing was that Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC, ) ap­peared re­silient, pre­vent­ing the broader mar­ket from fall­ing fur­ther,” Huang said. “It was pos­si­ble that TSMC shares got sup­port from gov­ern­ment-backed funds.”

TSMC, the most heav­ily weighted stock in the lo­cal mar­ket, closed un­changed at NT$134.00 with 38.74 mil­lion shares chang­ing hands, while Hon Hai Pre­ci­sion In­dus­try Co. ( ), which as­sem­bles iPhones and iPads, out­per­formed the broader mar­ket, down only 0.56 per­cent to end at NT$88.50.

In the fi­nan­cial sec­tor, Fubon Fi­nan­cial Hold­ing Co. ( ) lost 1.21 per­cent to close at NT$57.30, and First Fi­nan­cial Hold­ing Co. (

) shed 1.78 per­cent to end at NT$16.60.

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