For some time now, I have maintained that Asia would start to show cracks and this would be a new element to this economic slowdown. Here is an article on Taiwan showing exactly that. Taiwan has had a nice bounce above 5,000 from the high 4,000s but this was due to government intervention in the buying of stocks. Note now the worldwide consensus forming that the second half will show some kind of turnaround. I think this is more and more likely that stabilization will take place but the real issue is whether growth will return in any meaningful way:
Taiwan Stocks Fall; Chunghwa Telecom, Chipmakers Lead Decline
Brett Cole
Taipei, May 25 (Bloomberg) -- Taiwan stocks fell on concern the island's first-quarter economic growth expanded at its slowest pace in more than 25 years. Chunghwa Telecom Ltd. led declines.
The TWSE Index fell 56.71, or 1.1 percent, to 5170.08, though it rose 1.1 percent in the week. Six stocks fell for every two that rose. The total value of trade today was NT$56.1 billion ($1.7 billion), 38 percent less than the year-to-date average of NT$91.2 billion.
``We don't think economic statistics will show any improvement until the second half of the year,'' said Cheng Yi- sheng, who manages NT$1.5 billion ($44 million) at Taiwan Securities Ltd. ``We're not in a hurry to build positions as 70 percent of our portfolio is in stocks.''
After the market closed, the government said gross domestic product grew 1.1 percent from a year earlier, slowing from the fourth quarter's 4.1 percent pace.
That compares with economists' expectations of 3 percent growth and was the slowest since 1975.
The following stocks made significant gains or losses:
Chunghwa Telecom Ltd. (2412 TT <Equity>) fell NT$1.50, or 2.4 percent, to NT$62 on concern lower economic growth will depress consumer spending on telecommunications. Mobile telephone customer numbers will probably not grow as fast as in the past as more than 50 percent of the island's population have mobile telephones.
Some banks fell on concern a government directive today to make banks keep lending to companies may increase their non- performing loans. The government estimates banks' non-performing loans are less than 6 percent of their total loans, though Goldman Sachs Group Inc. estimates it could be as high as 15 percent.
China Development Industrial Bank (2804 TT <Equity>), the country's biggest lender by market value, fell 70 NT cents, or 2.5 percent, to NT$27.60. Chinatrust Commercial Bank (2815 TT <Equity>), the second biggest, fell 70 NT cents, or 2.8 percent, toNT$24.20. First Commercial Bank (2802 TT <Equity>), the fifth biggest, fell 40 NT cents, or 2 percent, to NT$20.10. Hua Nan Commercial Bank (2803 TT <Equity>), the sixth biggest, fell 50 NT cents, or 2.4 percent, to NT$20.60.
Memory-chip makers declined. Thomas Weisal Partners, a U.S. brokerage, said the spot price of the 64-megabyte dynamic random access memory chip yesterday fell 4 U.S. cents, or 2.5 percent, to $1.53. The spot price of the 128-megabyte DRAM fell 4 U.S cents, or 1.3 percent, to $3.01.
Nanya Technology Corp. (2408 TT <Equity>) fell NT$1.30, or 5 percent, to NT$24.70. Pro Mos Technologies Inc. (5387 TT <Equity>) fell 60 NT cents, or 1.8 percent, to NT$32.70. Winbond Electronics Inc. (2344 TT <Equity>) fell NT$1.40, or 4.3 percent, to NT$31.
Asustek Computer Inc. (2357 TT <Equity>) rose NT$5, or 3.1 percent, to NT$166. Goldman Sachs Group Inc. said computer motherboard shipments may rise.
Elitegroup Computer Systems Ltd. (2331 TT <Equity>) rose NT$7, or 6.7 percent, to NT$111.50, up 20 percent in the last three days. The company's unit, Alpha-Top Corp., will make Apple Computer Inc.'s new iBook computer and will make a larger screen version later this year, the company said.
Formosa Chemical & Fibre Corp. (1433 TT <Equity>) fell 70 NT cents, or 2.4 percent, to NT$28.30 after the stock's 18 percent rally since May 15.
Mosel Vitelic Inc. (2342 TT <Equity>) fell NT$1.10, or 5.2 percent, to NT$20. The memory chipmaker said it plans to raise as much as $200 million selling shares to build a chip wafer plant.
Pacific Construction Co. (2506 TT <Equity>) rose 29 NT cents, or 6.9 percent, to NT$4.51, up 17 percent in the last three trading days. The Carlyle Group Inc. bought a 40 percent stake in a unit of Pacific Construction that operates six department stores in China. The U.S. buyout company agreed to pay about $40 million to Taiwan's third-largest publicly traded property company for the stake in Pacific China Holding Ltd.
05/25/2001 6:06 |
