Taiwan's Taiex index fell 38.36, or 0.5 percent, at 7,760.63 at the close of Taipei trading at 1:30 p.m. The benchmark was little changed for the week and rose 5.9 percent in July, the biggest gain since March.Chang Hwa Commercial Bank (2801 TT) gained 2.7 percent to NT$16.90 and Taiwan Business Bank (2834 TT) advanced 1.8 percent to NT$9.47. The two companies rose on speculation the two financial services companies may be first to be merged in a government-driven consolidation of the industry, said Deutsche Bank AG's analyst Nora Hou.
Investors may be buying on anticipation the companies will be merged at a premium, Hou said. Chang Hwa spokesman James Shih said the company doesn't currently have any plans for mergers. Taiwan Business Bank spokesman Hsu Ching-Hua said in a telephone interview he hadn't heard about the matter.
HTC Corp. (2498 TT) increased 3.2 percent to NT$588. The world's largest maker of mobile phones using Microsoft Corp. and Google Inc. operating systems said it expects third-quarter revenue to climb to almost NT$70 billion (US$2.2 billion) in the third quarter. The average of 19 analyst estimates compiled by Bloomberg was for profit of NT$36.5 billion.
Taiwan Semiconductor Manufacturing Co. (2330 TT) declined 1 percent to NT$62.40, the most since July 12, after the world's largest custom manufacturer of chips missed analysts' estimates for gross margin. The company's gross margin was 49.5 percent for the three months ended June 30, compared to 50.6 percent, the median estimate of four analysts polled by Bloomberg.
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