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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Gary Korn who wrote (37737)	3/5/1998 8:30:00 AM
From: Glenn D. Rudolph	Respond to of 61433

Taiwan electronics sales seen up despite Intel new Reuters Story - March 05, 1998 03:47 %TW %ELC %DPR %STX %TRD %RESF INTC V%REUTER P%RTR By James Peng TAIPEI, March 5 (Reuters) - U.S. giant Intel's warning of slowing earnings hammered Taiwan's electronic shares on Thursday, but analysts said they were expecting healthy February sales for the island's electronic firms. "I believe many Taiwan electronic firms will report more than 40 percent or even 50 percent increases in their February sales despite Intel's gloomy outlook," said Beyond Asset Management president Michael On. Intel said after Wall Street's Wednesday close that sales and earnings would be below expectations for the current quarter due to sluggish demand for personal computers. The news dragged the stock market to close down 2.36 percent at 8,765.32 and prompted analysts to warn of further declines. The electronics sector, whose opening fall was cushioned by an overnight rise on the U.S. Nasdaq index, ended 4.12 percent lower. Brokers said the index might fall to test support around at 8,500-8,600 if Wall Street falls on Thursday on the Intel news. Intel's fortunes have great implications for Taiwan's high-technology sector, a powerful exporter. If Intel feels demand slowing, Taiwan will likely feel the same, analysts say. "Intel's impact could be quite serious as the Nasdaq index likely will fall on Thursday, which in turn will dampen Taiwan's electronics and the overall index," On said. Some analysts saw a silver lining in Intel's news, saying the factor that was hurting Intel -- a market shift to lower-priced personal computers -- would help Taiwan exporters, whose low-end production efficiency is high. "Intel's slowing profits are mainly due to the popularity of low-priced personal computers, which, on the contrary, will benefit Taiwan's electronic makers," On said. Analysts said many Taiwan electronic firms were expected to report leaping February sales. "The Intel news surely will dampen sentiment, but I see some contradictions here as most Taiwan electronic firms are reporting sound sales and profit performance," said Jardine Fleming Securities vice-president George Hou. A Reuters Poll of Taiwan economists on Thursday projected a 31.18 percent rise for the island's February exports and they noted that electronics always outperforms other sectors. Economists said they expected surging exports in February mainly because the month had three more work days than February 1997 because of how the lunar new year holidays fell. Taiwan listed firms are expected to report their February sales around March 10. Originally, economists had expected mediocre performance by Taiwan's exporters in the first quarter, especially for the star electronics and information industry after its hot-sale season ended before the Christmas holiday. But Yuanta Securities economist Yu Mei-hsiang said the electronics and information industry performed better than expected. "Unaffected by the Asian financial crisis and the slow-sale season, the electronics and information industry has secured the market and its sales have continued growing," Yu said. Despite an overall Taiwan export orders decline of 14.28 percent year-on-year in January, the electronics and information industry enjoyed a 11.53 percent year-on-year growth that month, the economics ministry said in late February. Taiwan's index, fuelled by prospects of an Asian economic recovery and a robust local economy, had gained 26 percent by Monday since January 12 following an early-year correction. By Thursday, the index had fallen 5.5 percent over three sessions since Monday's 9,277.09 close, but still remained 19 percent above the January 12 level.