Asian LCD Makers Mostly Down on EU Fine

By Aries Poon

The four Taiwanese makers of liquid-crystal display panels fined by the European Commission for operating a price-fixing cartel said Thursday the fines won’t have a significant impact on their operations.

Despite their optimism, many of those affected by the decision saw shares lower Thursday.

Chimei Innolux, which faces the heaviest fine at €300 million, is down 3% at 39.25 New Taiwan dollars (US$1.30), and AU Optronics, which faces a €117 million fine, is down 1.1% at NT$30.45. South Korea’s LG Display is up 0.5% at 40,450 won (US$35.39) despite its €215 million fine.

Morgan Stanley analyst Frank Wang said the charges are substantial, particularly to Taiwan firms.

“It’s a negative surprise that Chimei is fined more than LG…Chi Mei will need to take an earnings bath in” the fourth quarter this year, Mr. Wang said.

He added that AUO’s settlement should be viewed as a positive for finally being resolved, as the company had already booked the fines as expenses in its 2009 account.

Chunghwa Picture Tubes, which faces a much smaller €9 million penalty, is up 0.2% at NT$4.27. It said in a statement that it had set aside funds for the fines as expenses last year, and that the company hasn’t decided whether it will appeal the ruling.

HannStar Display is down 0.5% at NT$5.61 on its €8 million penalty.

The EU commission fined several LCD panel makers, saying they met monthly in Taiwanese hotels to agree on prices and share other commercially sensitive information.

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Asian Stocks Retreat as Euphoria over Fed’s Stimulus Fades

Most of Asian stock markets posted losses Tuesday as euphoria over the Fed’s stimulus faded, pulling back from rally that drove some benchmarks to record highs.

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Japan\'s Nikkei 225 stock average tumbled 0.5 percent to 9,689.28. Australia\'s S&P/ASX 200 lost 0.9 percent to 4,736.40. China\'s Shanghai Composite Index shed 0.6 percent to 3,141.079.

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Hong Kong shares were in red Tuesday afternoon with Hang Seng Index was down 0.5 percent to 24,852.30. Real-estate stocks were weak, with Sino Land Co. falling 5.9% after its announcement of share sale.

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On the contrary, markets in Singapore, Taiwan, and South Korea were higher.

The Kospi edged up 0.1 percent to 1,944.26.

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Indexes in Indonesia, India, Malaysia, and the Philippines have hit new highs recently. Global stocks and commodities gained extension last week thanks to the U.S. Fed’s approval of $US600 billion worth of Treasuries over the following eight months to stoke the sluggish economy.

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Gold price set a new record high, above $1,400 an ounce as investors are turning to precious metals to preserve their wealth. They remain worried about inflationary pressures. According to Miguel Perez-Santalla, vice president of sales at Heraeus Precious Metals Management, gold price is going to set new highs if investors continued buying precious metals in stead of other recourses.

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Gold futures edged higher on Globex during Asia’s Tuesday morning trading, hiking to a fresh intraday high of $1,410.10 an ounce.

Futures prices marked a record closing high of $1,403.20 in New York on Monday.

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In Monday’s trading, U.S. stocks retreated from more than two-year highs amid resurfacing worries about Europe’s unsettled debt issues.

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The Dow Jones Industrial Average left six straight sessions higher, falling 0.3% to 11,406.84. The S&P 500 Index shed 0.2% to 1,223.25 while the Nasdaq Composite Index closed up 1.07 points to 2,580.05.

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Tyco International Ltd, Sempra Energy, and Marsh & McLennan Cos are among the companies whose shares are projected to see active trade in Tuesday’s session.

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