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