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Pegatron shares stall on labor report

Pegatron shares stall on labor report

Taipei, Oct. 23 (CNA) Shares of Pegatron Corp. (??) came under pressure Friday morning, after China Labor Watch (CLW) accused the Taiwanese firm of failing to provide a safe and legal working environment at its Shanghai factory, which rolls out iPhones for Apple Inc., dealers said. While the weighted index rebounded in the wake of a strong showing on Wall Street overnight, the Pegatron stock remained stagnant following the labor report and amid a cautious outlook on sales of the new iPhone models due to slowing global smartphone demand, dealers said. As of 11:16 a.m., shares of Pegatron had dropped 0.49 percent to NT$81.60 (US$2.51). The weighted index on the Taiwan Stock Exchange was up 0.92 percent at 8,687.33 points. "Judging from the stock's movement, I think that investors reacted negatively to the latest labor report from the CLW," MasterLink Securities analyst Tom Tang said. "But the impact may be short-lived." In a report released Thursday, the New York-based CLW said employees at Pegatron's Shanghai factory work 12-hour shifts, six days a week, are forced to work overtime, and have inadequate meal breaks. After their long shifts, Pegatron workers take a 30-minute shuttle bus back to their dorms where up to 14 people are crammed into a room, said CLW, which hired an undercover investigator to observe working conditions at the factory. "Mold grows pervasively along the walls. Bed bugs have spread throughout the dorm, and many workers are covered in red bug bites," the report stated. The labor watch group also reported that workers in Pegatron's factory received inadequate training in safety and prevention measures, a situation that it said had been covered up by Pegatron through fraudulent documentation. In response to the CLW report, Pegatron said it has launched an internal investigation to review the working conditions at its China factory. However, Pegatron said that since CLW's investigation of the factory's working conditions two years ago, many improvements have been made. Pegatron said it always tries hard to protect its workers' welfare, and works closely with Apple to provide a good working environment. Shares of Pegatron came under pressure Friday, not just because of the CLW report, but also due to investors' caution about sales of the new iPhones, Tang said. "Although the supplier reported good sales for the third quarter due to the launch of the new iPhones, investors remained worried about sales in 2015 and even in 2016," he said. In the third quarter, Pegatron posted NT$308.67 billion in consolidated sales, up 41.6 percent from a quarter earlier and 30.4 percent from a year earlier. For September, Pegatron's consolidated sales hit a monthly high of NT$166.08 billion. Tang said foreign institutional investors have been on the sell side of the stock in recent sessions due to worry over iPhone sales. Since the beginning of September, foreign institutional investors have sold a net 56.86 million Pegatron shares, he said. (By Frances Huang)


Updated : 2021-09-27 05:12 GMT+08:00