Taiwan Stocks Decline Most in 11 Weeks on Nuclear Power Concerns
Taiwanese stocks fell the most in 11 weeks on concern the opening of a planned nuclear plant will be delayed, pushing up electricity prices.
Taiwan Semiconductor Manufacturing Co. (TWSE), the world’s largest custom chip maker, dropped 2.1 percent and HTC Corp., a maker of smartphones, tumbled 3.5 percent. Pou Chen Corp. plunged 7 percent as a strike at a Chinese shoe factory operated by unit Yue Yuen Industrial Holdings Ltd. entered a 10th day.
The benchmark Taiex index lost 1.9 percent to 8,774.12 at the close, after touching its highest level since June 2011 this week. President Ma Ying-jeou failed to reach an agreement today on the future of the plant with Su Tseng-chang, leader of the Democratic Progressive Party, which opposes further construction of the facility in northern Taiwan, Apple Daily reported.
“Investors are using the nuclear talks as an excuse to take profit,” Diana Wu, a vice-president at Capital Securities Co., said by phone in Taipei. “The rationale is, if you shut down the plant, there will be a shortage of electricity which will lead to higher costs of companies and higher inflation, dragging on the economy.”
The Taiex trades at 14.7 times estimated earnings, compared with 10.8 for the MSCI Emerging Markets Index.
To contact the reporter on this story: Weiyi Lim in Singapore at firstname.lastname@example.org