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Taiwan shares fall below 9,800 points amid earnings concerns

2018/12/14 18:47:12

Taipei, Dec. 14 (CNA) Shares in Taiwan moved lower to close below the 9,800 point mark Friday amid rising concerns over corporate earnings after a Taiwanese flat panel maker announced it will seek bankruptcy protection and a local solar energy firm announced debt restructuring a day earlier, dealers said.

In response, investors dumped shares in electronic heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), while financially troubled Chunghwa Picture Tubes Ltd. and multicrystalline solar wafer supplier Green Energy Technology Inc. shed 10 percent, the maximum daily decline, they said.

Turnover remained thin as many investors stayed on the sidelines, watching closely for positive developments in talks between the United States and China on resolving their trade disputes, they added.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended down 84.60 points, or 0.86 percent, at 9,774.16, after moving between 9,718.94 and 9,818.95, on turnover of NT$95.55 billion (US$3.10 billion).

The market opened down 0.40 percent in a reaction to the mixed U.S. market, where the Dow Jones Industrial Average closed up 0.29 percent, while the tech savvy Nasdaq index ended down 0.39 percent overnight, dealers said.

Selling escalated, with the bellwether electronics sector in focus and the Taiex plunged more than 100 points at one point as concerns over corporate earnings were raised by loss incurring Chunghwa Picture Tubes and Green Energy, they said.

"Amid worries over the business outlook, investors shifted to the sell side today, largely punishing large cap electronics stocks and pushing the broader market below 9,800 points at the close," Concord Securities analyst Kerry Huang said.

On Thursday, Chunghwa Picture Tubes said its board of directors approved a plan to seek bankruptcy protection as the company has NT$34.8 billion in debt, while Green Energy, which has NT$11.43 billion in total debt, said it will file a debt restructuring application with the Ministry of Economic Affairs.

Following the announcement, Chunghwa Picture Tubes fell 10 percent to close at NT$1.17 and Green Energy shed 10 percent to end at NT$5.52 on the local market Friday.

"In addition, caution dominated the local main board before Washington and Beijing end their on-going trade talks (by March 1)," Huang said. "For the moment, investors are keeping as much cash as possible amid uncertainty."

Selling in large cap tech stocks emerged, pushing down shares in TSMC, the most heavily weighted stock on the local market, by 1.55 percent, which closed at NT$222.50 with 38.64 million shares changing hands.

Led by TSMC, the bellwether electronics sector closed down 1.15 percent and the semiconductor sub-index sector ended the day down 1.44 percent.

Among other falling tech heavyweights, shares in iPhone assembler Hon Hai Precision Industry Co. lost 2.05 percent to close at NT$71.50, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., fell 1.81 percent to end at NT$3,260.00.

Non-tech stocks were generally weaker Friday with food brand Uni-President Enterprises Corp. down 1.99 percent to close at NT$68.90, and Formosa Petrochemical Corp. down 1.77 percent to end at NT$111.00.

In the financial sector, which closed down 0.38 percent, Fubon Financial Holding Co. fell 1.25 percent to end at NT$47.45, Cathay Financial Holding Co. lost 1.45 percent to finish at NT$47.55, while CTBC Financial Holding Co. rose 1.74 percent to end at NT$20.45.

"Investors should pay close attention to a policymaking meeting scheduled by the U.S. Federal Reserve next week for more clues about how the Fed will carry out its rate hike next year, which could move global financial markets," Huang said.

According to the TWSE, foreign institutional investors sold a net NT$6.82 billion worth of shares on the main board Friday.

(By Frances Huang)
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