Shares in Taiwan closed below the 9,000-point mark Monday due to a drop in financial stocks, led by Mega Financial Holding, and a heavy depreciation of the Taiwan dollar against the greenback, dealers said.
The weighted index on the Taiwan Stock Exchange ended down 52.46 points, or 0.58 percent, at 8,981.81 Monday. Turnover totaled NT$68.49 billion (US$2.15 billion) during the session.
It was the first time since July 29 that the index closed below 9,000 points and was the lowest closing level since July 15 when it ended at 8,949.85.
The drop was led by Mega Financial Holding Co. , which opened at NT$22.6 then plunged 6.3 percent to end at NT$22.3.
Overshadowed by Mega Bank's alleged violations of U.S. anti-money laundering laws, the stock at one point dropped 7.35 percent to NT$22.05, the lowest level since April 12.
Mega Bank is the flagship banking unit of Mega Financial Holding.
The plunge in Mega Bank shares dragged other financial stocks, and the financial index closed 1.41 percent lower, dealers said.
The New York branch of Mega Bank, formerly the International Commercial Bank of China, has agreed to pay a US$180 million penalty to New York State's financial regulator for violating the U.S. Bank Secrecy Act and anti-money laundering regulations and paying lax attention to risk exposure in Panama, according to the U.S. state's Department of Financial Services (DFS).
The fine is part of a consent order entered into with the DFS, pursuant to which, Mega Bank must take immediate steps to correct the violations, including engaging an independent monitor to address serious deficiencies within the bank's compliance program and implementing effective anti-money laundering controls, the DFS said in a statement issued Aug. 19.
On Sunday, Premier Lin Chuan (??) ordered the Financial Supervisory Commission to form a task force to probe the alleged violations, saying that the perpetrators must be held responsible.
Among the falling large-cap financial stocks Monday, Cathay Financial Holding Co. dropped 1.33 percent to close at NT$37, Fubon Financial Holding Co. lost 1.21 percent to end at NT$40.7, and CTBC Financial Holding Co. (???) closed down 1.59 percent at NT$18.6.
Led by these large-cap stocks, the financial sub-index ended down 1.41 percent.
Taiwan Semiconductor Manufacturing Co. , the most heavily weighted stock on the local market, lost 0.86 percent to close at NT$173, while Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., shed 0.14 percent to end at NT$3,605.
The Taiwan dollar fell NT$0.2 against the US dollar at one point during Monday's trading.
Source: Focus Taiwan