Taipei shares -- 3 (laggard correction after MSCI changes)

At 12:10 pm, the weighted index was down 172.06 points at 4,939.61, off a low of 4,937.05, on turnover of 27.60 bln twd. 

	    The Taiwan dollar was at 33.381/dollar, off a low of 33.45.  

    	    The head of regional IT research with a foreign house said the market sustained a relatively sharp downturn this morning mainly on the back of laggard selling in the wake of the MSCI changes which came as a disappointment. 

	    Sentiment was also undermined by the fact that there were no positive policy changes to coincide with the first anniversary of President Chen Shui-bian's inauguration on May 20, he said. 

	    "Expectations of favourable MSCI changes and government support in the run-up to May 20 had enabled the market to hold up pretty well previously."

	    Investors have also started cashing out of the market on the expectation that few positive corporate leads will emerge in coming months, he said.

	    Other than the MSCI disappointment, foreign investors also moved to offload holdings after a reported proposal by the Taiwan Research Institute to tolerate a dramatic downturn in the Taiwan dollar to 38.00-40.00/dollar, he added.

	    "Despite the institute's later denial, people were worried about the consequences of such a scenario actually taking shape."    

	    Macronix was down 2.40 twd at 40.40 on volume of 26.84 mln shares before going ex-stock dividend for 3.00 twd tomorrow. 

	    Cathay Life was down 2.20 at 43.00 on 6.97 mln shares after a stock buyback on Friday. 

	    UWCCB was down 0.80 at 22.30 on 1.75 mln shares on reports it may choose either the Lin-Yuan group or Fubon group as a partner to jointly form a holding company. 

	    Fubon Insurance was down 0.30 at 27.70.

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